Breaking News & Stocks

Yes Bank shares surge 6% on fund raising plans

Mumbai, March 11: Shares of Yes Bank on Tuesday surged nearly six per cent following the private sector lender's announcement to raise funds through share issue to institutional investors for expanding its business operations.

The shareholders at the extraordinary general meeting had approved the allotment of up to two crore shares to qualified institutional buyers, the bank said in a filing to the Bombay Stock Exchange.

The scrip closed at Rs 194.80, up 5.58 per cent after touching an intra-day high of Rs 204.20 on the BSE. A total of 11.98 lakh shares changed hands on the bourse.

Last week, Yes Bank's Managing Director and CEO Rana Kapoor had said the bank would raise USD 150-170 million (about Rs 640 crore) in the first quarter of next fiscal.

The bank is planning to raise a total of Rs 1,100 crore through a mix of equity and debt in Fy'09, Kapoor had said.

Further, the bank is mulling to raise up to Rs 500 crore as tier-ii capital (debt), in multiple trenches , between April and September, he had added.

The share sale would mean a dilution of 6.36 per cent and would reduce the promoters' holding in the bank from 34.2 per cent to 32 per cent.

The bank has been approached by foreign institutions to pick up a five per cent stake, the maximum allowed to a foreign entity to acquire under local laws.

"We are in talks with a couple of institutions...It could be either the financial investment arm of a bank, a private equity player or QIP," Kapoor had said.

A tie-up would help yes bank add muscle to its trade-finance and cross-border transaction capabilities besides enhancing its global distribution reach.

TATA motors plans to raise Rs 4,000 crore

Mumbai, March 11: TATA group firm TATA Motors today said, it plans to raise up to Rs 4,000 crore through issue of securities in the domestic and international markets, for business expansion plans.

The company`s board of directors approved the proposal to raise additional long-term resources up to Rs 4,000 crore by way of issuing securities.

In a filing to the Bombay Stock Exchange, the firm said it plans to expand its position in the domestic and global markets in both the commercial vehicle and passenger vehicle business.

"This will be achieved by upgrading and enhancing the company`s product portfolio, expanding manufacturing facilities in India and strategic acquisitions/alliances in India and abroad," it added.

According to the company, the funds are being raised to part-finance overall funding requirements of some of the strategic plans.

In late afternoon trade, shares of the firm were trading at Rs 659, down 2.21 per cent on the BSE.

Fed increase liquidity in markets to ease crunch

Washington, March 11: In a fresh effort to ease a global credit squeeze, the US Federal Reserve acted on Tuesday in concert with other central banks to pump hundreds of billions of dollars of liquidity into financial markets.

One of the initiatives announced by the Fed is a new auction program for commercial banks and brokerages, which will be able to swap thinly traded mortgage securities and other collateral for safer Treasury obligations.

It was the latest in a series of steps to help get credit flowing in the global financial system, which has been gridlocked by concerns about market turmoil linked to a collapse in US real estate securities.

The squeeze had spread to various institutions that are imperiled by a frozen market for many types of securities.

The Fed said it was offering USD 200 billion in a new Term Securities Lending Facility auction, with a term of 28 days instead of overnight under an existing program.

This allows primary dealers, including commercial banks and securities brokers, to obtain Treasury securities by pledging collateral such as mortgage-backed securities and other debt. Auctions will be held on a weekly basis, beginning on March 27.

The Fed also said it has authorized increases in its existing temporary reciprocal currency arrangements or swap lines with the European Central Bank and the Swiss National Bank. The Fed will provide up to USD 30 billion to the ECN and six billion to the SNB.

The move was coordinated with the ECB and SNB along with the Bank of Canada and Bank of England. Each of the central banks "are announcing specific measures" to deal with the liquidity crunch in the global system, according to a Fed statement.

The new lending auction "is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally," the Fed said in a statement.

The Fed action is designed to get more funds to banks hit by the credit crunch and thus cautious about interbank loans. By coordinating with other global central banks, the move will help provide dollars to overseas banks.

The latest action expanded an initiative announced by the Fed in December to create a Term Auction Facility (TAF) that allows commercial banks to bid for loans without the stigma of using the Fed's discount rate.

The Fed just last week boosted the size of the TAF to USD 100 billion and announced repurchase transactions worth another USD 100 billion to help get credit moving.

Analysts said this could help get cash to institutions that need it.

"The Fed is now getting creative with solutions to the credit crunch," said Andrew Busch, analyst at BMO Capital Markets.

"The market can now provide to the Fed the stuff that they don't want ... (such as federal agency mortgage-backed securities) ... for the stuff they want (US Treasury securities)."

Stephen Gallagher, economist at Societe Generale, said the move is aimed at helping banks stuck with mortgage securities that cannot easily be traded.

The moves offer "liquidity to the mortgage security sector while limiting the overall amount of reserves in the banking system to maintain the federal funds rate target," Gallagher said.

Robert Brusca at FAO Economics said the Fed announcement "broadens the asset classes it is dealing with for its dealer financings and extends credit under swap line arrangements with foreign central banks."

The European Central Bank said Tuesday it would continue to offer US dollar funding to Euro zone banks, the third time it had done so in conjunction with the Federal Reserve in a new operation with a value of USD 15 billion (9.8 billion euros).

In Zurch, the Swiss National Bank said it would inject USD 6 billion into the financial system.

The Bank of Japan said it "welcomes these measures and hopes that they will contribute to maintaining the functioning of the international financial markets."

it seems bears time over .bulls to roar now.

AP
Stocks Boom on Fed's Bank Booster
Tuesday March 11, 7:54 pm
Fed Announces $200 Billion in Help for Banks, Leading Dow to Biggest Day in 5 Years
NEW YORK (AP) -- The Fed promised a $200 billion booster shot for ailing markets -- and Wall Street answered with its biggest bounce in more than five years.
The Dow Jones industrials shot up more than 416 points, the biggest single-day point gain since July 2002, after the Federal Reserve announced the move as part of a worldwide effort to help struggling banks and mortgage providers.
Hoping to ease the credit crisis, the Fed -- acting with the European Central Bank, the Bank of Canada and the Swiss National Bank -- agreed to loan investment banks money in exchange for debt, including slumping mortgage-backed securities.

The idea is to create a market for assets that investors have recently been too scared to buy. That freeze in demand had sent asset values plunging and caused huge losses for some of the world's biggest banks.

After a series of hefty losses in stocks, the market hopes the central banks' decision Tuesday might be more effective than previous moves -- like rate cuts, which had led to initial stock pops that later fizzled.

"It's not just a rate cut. I think it's a very creative way to do financing," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group. "It shows the Fed is willing to do things that are a little out-of-the-box to shore up credit issues. I really think they went to the heart of the issue."

Investors certainly seemed to like it: The Dow rose 416.66, or 3.6 percent, to 12,156.81. It was the biggest point jump in the Dow since a 447-point rise on July 29, 2002, and its widest one-day percentage gain since March 2003.

The Dow had lost more than 500 points in the past three sessions and is still down about 2,000 points from its October 2007 record high.

Broader stock indicators also soared. The Standard & Poor's 500 index rose 47.28, or 3.7 percent, to 1,320.65, while the Nasdaq composite index surged 86.42, or about 4 percent, to 2,255.76.

It was the S&P's biggest point gain since April 5, 2001, and the Nasdaq's biggest since May 8, 2002.

The latest step by the central banks was seen as a direct lifeline to investment banks, which previously couldn't borrow beyond already established Fed liquidity plans.

The plan basically allows Wall Street's biggest institutions to put up troubled assets as collateral for loans, use the new capital to make money in the market, and then pay back the loan up to 28 days later.

Though eventually banks would be forced to take the troubled mortgage-backed debt back on their books, the plan still takes short-term pressure off them. Many of these banks will release first-quarter earnings reports next week.

"The big problem has been the financials, and this helps supply money directly to the banks and may take some of the need for aggressive rate cutting off the table," said Peter Dunay, chief investment strategist at Meridian Equity Partners. "The Fed is basically going to take the bad loans off the banks' books, and the market seems to be loving that idea."

The Fed may have avoided dramatically slashing interest rates again when it meets next week. Economists remain concerned about the unrelenting rise in oil prices and the dollar's weakness, which contribute to inflation -- and cutting rates only adds to those pressures.

Government bond prices fell as stocks rallied. The yield on the 10-year Treasury note, which moves opposite its price, spiked to 3.60 percent from 3.46 percent late Monday.

Financial sector stocks, many of which have dipped to multiyear lows in recent days on liquidity concerns, led the market higher Tuesday.

Citigroup Inc. rose $1.42, or 7.2 percent, to $21.11, Washington Mutual Inc. rose $1.72, or 17 percent, to $11.76, and Bank of America Corp. rose $1.33, or 3.8 percent, to $36.64.

Morgan Stanley rose $4.19, or 10.9 percent, to $42.49, Lehman Brothers rose $3.33, or 7.8 percent, to $46.31, and Merrill Lynch rose $2.76, or 6.4 percent, to $45.60.

Bear Stearns Cos. rebounded from losses to rise 67 cents to $62.97, even after an analyst said the No. 5 U.S. investment bank might need to sell itself, or layoff more staff, to stay afloat. The cost to insure Bear Stearns bonds has been spiking to all-time highs. A spokesman for Bear Stearns didn't immediately return telephone calls.

The Fed's announcement overshadowed a report from the Commerce Department that showed the United States' trade deficit grew larger in January. The latest snapshot of the economy showed that the trade gap increased to $58.2 billion -- the highest since November.

The primary reason behind the widening trade deficit is high oil prices. Crude rose as high as $109.72 in premarket trading on the New York Mercantile Exchange before ending at a new settlement record of $108.75. The weak dollar has contributed to oil's rally from $87 a barrel in January.

Gold prices rose, while the dollar edged up against most other major currencies.

The only sector posting major losses Tuesday was health care, which has been strong in recent months. WellPoint Inc. fell after Goldman Sachs trimmed its ratings in the managed care sector to neutral from attractive. The investment bank singled out WellPoint's performance amid pricing pressures. The stock plunged $18.66, or 28 percent, to $47.26.

Google Inc. shares spiked after European Union regulators cleared the Internet company's $3.1 billion bid for online ad tracker DoubleClick. Shares of Google rose $26.22, or 6.3 percent, to $439.84.

The Russell 2000 index of smaller companies rose 29.84, or 4.63 percent, to 673.81.

Advancing issues surpassed decliners by more than 5-to-1 on the New York Stock Exchange. Consolidated volume came to 5.17 billion shares, up sharply from 4.15 billion shares Monday.

Stocks overseas rebounded. Japan's Nikkei 225 stock average rose 1.01 percent, while Hong Kong's market closed up 1.28 percent higher. Britain's FTSE-100 rose 1.7 percent, Germany was up 2.01 percent, and France added 1.61 percent.

sensex to recover 500- 700 points. thanks god

CAG seeks tightening of revenue leakage in SEZs

New Delhi, March 11: Making a strong case for amendment in the SEZ Act, the CAG on Tuesday said government had to forego revenue amounting to around Rs 2,000 crore as SEZ units are allowed to treat their domestic sales as exports.

"SEZ units have been achieving the prescribed net foreign exchange earnings (nef) mainly through domestic sales defeating one of the sub-objectives of the scheme, which was to augment exports," said the comptroller and auditor general of India in its report presented to Parliament.

It said the government had to forego Rs 1,043 crore only on account of customs duty exemptions to these units. It pointed out that duty of Rs 106.71 crore along with interest of Rs 46.17 crore was recoverable from 24 units in special economic zones (SEZs) which had failed to achieve positive NEFs.

The duty foregone by the government on the SEZ scheme during 2000-01 to 2005-06 was Rs 8,842 crore, it said, adding for 2006-07 duty foregone would be Rs 2,146 crore as per Budget estimates.

Referring to disadvantage to export oriented units vis-a-vis SEZ units, it said duty of Rs 681.38 crore was foregone on the inputs used in manufacture of mobile phones cleared into the domestic tariff area (DTA) at nil rate of duty in the SEZs.

This duty could not be recovered, in the absence of provisions to pay back the duty foregone on inputs utilised by manufacturers of such goods when cleared at nil duty in the DTA.

Nath shows ray of hope for troubled exporters

New Delhi, March 11: Exporters disappointed with the Union Budget for not addressing their concerns, may hope for some relief next month when the government unveils the annual review of the foreign trade policy.

"We are examining measures to neutralise some of the levies which are not being refunded at the moment," Commerce and Industry Minister Kamal Nath told reporters on the sidelines of a FICCI function. He said the measures to be announced in the FTP review would be WTO-compatible.

He said the ministry is working on new schemes to ensure that exporting sectors, which are hit by rupee appreciation but have potential for quantum growth, are given support.

"We are examining what relief can be given to exporters especially in the employment generating sectors and the sectors to which we want to give a priority," Nath said.

Asked whether the country would be able to achieve the 160 billion dollar export target in the wake of US slowdown and rupee rise, Nath said, "I am still hopeful... But we may be a little bit short".

However, he was confident that exports of 152-155 billion dollars would be achieved as indicated by the present rate of above 20 per cent growth.

Along with exporters' body FIEO, Nath had expressed his disappointment over the Union Budget not giving any relief to the exporting sector.

Gammon Infra IPO subscribed 75%

Mumbai, March 11: The initial public offer of Gammon Infrastructure Projects Ltd (GPIL) got subscribed 0.75 times on the second day of its book building process with most of the bids coming from institutional investors.

The issue received bids for over 1.24 crore shares against over 1.65 crore shares on offer, latest data available on the National Stock Exchange show.

The company is planning to raise up to Rs 331 crore from the capital market. The price band of the issue has been fixed between Rs 167 and Rs 200 per equity share. The issue would close on March 13.

The portion reserved for qualified institutional investors got subscribed 92 per cent while that of the non-institutional investors got subscribed two times of the shares on offer.

The issue proceeds would be utilised in the design, construction and maintenance of the projects under construction.

The offer comprises a net issue of 1.49 crore equity shares to the public (net issue) and a reservation of 16.55 lakh equity shares for employees.

Meanwhile, the IPO of wheat and pulses processor Sita Shree food products today received bids for 24,800 shares against 1.16 crore shares on the first day of its offer.

The company is planning to raise Rs 31.50 crore from the capital market. The price band of the issue has been fixed between Rs 27 and Rs 30. The issue would close on March 14.

The issue proceeds would be utilised for part funding the company`s Rs 48.12 crore expansion plans.

stock market in green for whole day.......wonder.............