Governments disinvestment plan to begin with SAIL: HDFC Securities

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After a lot of false starts (read SAIL OFS opens today: Floor Price is Rs 83 a share) the Government?s disinvestment plan is finally under way. While it may not raise much funds, a symbolic start has been made. Finally, this would remove the Damocles sword hanging over SAIL by end of today.

The sentiment is likely to be lukewarm in the morning. Axis Bank could be in focus as it has raised Rs 5,705 crore through infrastructure bonds in a single closure since the instrument was introduced in July.

Coal India too is likely to be in focus due to the raising of the production targets over the next five years.

ONGC Videsh is likely to soon acquire stakes in two Russian oil fields, Vankor and Yurubcheno-Tokhomskoye, which might help ONGC breathe a bit easy despite another slip in crude.
Attention is likely to be back in select mid-caps.

SAIL OFS opens today: Floor Price is Rs 83 a share

The Government has finally got its disinvestment going with SAIL. The Government plans to raise Rs 1,700 crore by selling 5% stake. The OFS floor price of Rs 83 is at a 2.75% discount to the closing price of Rs 85.35 on the BSE.

The government will give a discount of 5% to retail investors. The disinvestment programme was originally supposed to begin with SAIL. At that time, when the Government first mooted the idea of disinvestment in SAIL around June 23, the price of the stock was around Rs 93. By September, the stock dipped to around Rs 66.

The Government then had a change of plan and wanted to disinvest ONGC first. The Government then paved the way for the disinvestment by clearing the fog on KG Gas pricing. However, the subsequent slide in international crude prices, made the stock tumble and the Government had to revise its strategy and therefore SAIL was brought to the front burner.
SAIL OFS is finally seeing the light of the day.

Government should rethink its Partial Disinvestment policy

The above example is a clear case of how a stock loses its value the moment you mention the word disinvestment. Instead of partial disinvestment, if the Government worked towards a strategic sale of companies, it will get a higher price and secondly it will improve the market sentiment.
Let?s say for instance, if the Government were to say, no more partial disinvesting, only strategic disinvesting and it would pick a small PSU company, which any way does not bring much profit, the other PSUs could rise in sentiment.

Today the moment you speak about partial stake sale, the stock tumbles, spoiling the sentiment. 

Government asks RBI to relax rules for reviving shipbuilding industry

The government said it has requested the Reserve Bank of India (RBI) to relax norms for restructuring of shipyards in view of shipping being a highly capital intensive industry.

"The government has requested RBI and the Ministry of Finance to sanction a special dispensation for five years i.e. up to March 31, 2020, to treat repeat restructuring of shipyards, after failure of first Corporate Debt Restructuring (CDR), as equivalent to first restructuring," Minister of State for Shipping Pon Radhakrishnan informed the Lok Sabha in a written reply.

NMDC cuts iron ore prices

Demand for iron ore has come down in line with the fall in steel production. In a relief to major domestic steel firms, state-run iron ore miner NMDC has reduced price of lumps by Rs 200 a tonne and Rs 100 a tonne for fines for the current month, on tumbling global prices and lower demand.

NMDC, India's largest iron ore producer, had reduced the price for lumps by Rs 200 a tonne in November. It, however, did not change the price for fines last month. Global iron ore prices have nosedived to five-year low at around $70 a tonne mainly because of subdued demand from China, the largest producer of steel in the world.
 
Zuari group unveils Rs 282-crore open offer for Mangalore Chemicals and Fertilizers

Kolkata-based industrialist Saroj Poddar-led Zuari group will spend up to Rs 282 crore to buy over three crore shares in UB Group firm Mangalore Chemicals and Fertilizers Ltd (MCFL) through a new open offer.

The voluntary open offer for 3.07 crore MCFL shares constitutes 25.90 per cent of the company's fully diluted voting equity share capital. The open offer price of Rs 91.92/share represents about 7 per cent premium to MCFL's closing price of Rs 86.15 yesterday.

The offer is not conditional upon any minimum level of acceptance. It sets the stage for another bidding war for control of MCFL, which is target of an intense takeover battle between Zuari group and Pune-based Deepak Fertilisers.

In the battle for control of MCFL, Mallya had sided with Zuari group and launched the counter an earlier open offer to ward off the takeover bid of Deepak Fertilizers.
Deepak Fertilisers' now holds about 32 per cent and the Zuari-UB group's combined stake is 38.4 per cent.

Though the open offer is higher than the market price, it is lower than Deepak's last offer price. 
The open offer is likely to come as a cropper, though it may force Deepak to come out with a better offer.

Mastek signs contract with UK Financial Co Unum

Mastek announced that Unum, one of the UK's leading providers of financial protection has selected Mastek's Elixir platform as the core administration platform for their Group Protection business in the UK.

Unum will implement Elixir across its Group Protection business in order to create and adapt products more quickly

Railways Ministry to meet investors today for FDI

Shares of companies such as Texmaco Rail & Engineering, Titagarh Wagons and Kalindee Rail Nirman Engineers will remain in focus on Friday as the Railways Ministry has called for an investors' meet. 

Those who are likely to attend the meet include financial majors such as HSBC, Morgan Stanley and JP Morgan, and advisory firms Delloite and PwC. The meeting focus will be on increasing investments through the FDI and PPP routes.

Wall Street Does A YoYo as ECB  Holds back stimulus

Key U.S. Indices fell in the morning, rose in the afternoon, fell again and then revived towards the end, closing with modest losses on Thursday. Both the Dow Jones Industrial Average and the S&P 500 briefly flirted with their intraday highs during the day.

The Dow Jones Industrial Average shed 13 points or 0.07% at 17,900. The S&P 500 gave up 2 points or 0.11% at 2,072 while the Nasdaq Composite lost 5 points or 0.11% at 4,769.

Europe was back on the front burner as investors wondered just when European Central Bank President Mario Draghi might finally pull the trigger on economic stimulus. Much to the market's dismay, the ECB punted any decision until early next year. When pressed about how early, Draghi resorted to the kind of statements worthy of former Fed chairman Alan Greenspan.

"Early means early," Draghi said. "It doesn't mean the next meeting. It depends very much on how our assessment will go." Still, analysts remained confident that the ECB would act sooner than later.

Europe is in a bit of soup. The region has suffered widespread deflationary concerns and high unemployment, even in its most robust economies such as Germany. The ECB cut its 2015 growth forecasts for the Eurozone to 1% from a September forecast of 1.6%. Eurozone inflation is expected to come in at 0.7%, down from a previous estimate of 1.1% and far from the ECB's 2% target.

The ECB announced earlier Thursday that it was leaving its key rate unchanged at 0.05% in its final meeting of the year. Last month, the central bank announced it had begun to purchase asset-backed securities in a move to stimulate the Eurozone.

U.S. jobless claims came in just above economists' estimates for a total 295,000. A week earlier, claims climbed above 300,000 for the first time since September. The release comes ahead of the Labor Department's monthly jobs figures on Friday. Economists expect 230,000 jobs to have been added over the month, higher than October's 214,000 total. The unemployment rate is forecast to remain at 5.8%.

Thursdays choppy action came after both the S&P 500 and the Dow bagged record closes on Wednesday. The dollar fell against a basket of major rivals while gold for February delivery the most active contract, settled lower.

Crude oil prices were falling again with West Texas Intermediate dropping 0.74% to below $67 a barrel. Oil majors, which had climbed earlier in the week, were falling again on Thursday. Exxon Mobil slid 0.61%, Chevron dropped 1.3% and BP fell 2.2%.

Airlines were again receiving the benefits of sliding commodity prices. JetBlue added 1.8%, Southwest Airlines climbed 0.83%, Hawaiian Holdings increased 6.2% and United Continental spiked 4.1%.

Earlier Chinas Shanghai Composite soared 4.3%, the biggest rise in two years, as retail investors piled in and banks upgraded prospects for Chinas economy.