Steel prices would go up from January-end: India Infoline

Tarang Bhanushali, Research Analyst, India Infoline spoke to ET NOW about the impact of the deal signed by Bhushan on the steel sector

How are you reading into this announcement that Bhushan has just made?

I believe this is a win-win situation for both the companies as Bhushan Steel would be benefited by the technology from the foreign partner as well as the international company would get something from the domestic market which is quite lucrative and would continue to stay lucrative over the years because of the raw material front in India. So I believe it is a win-win situation for both the companies and with Bhushan expanding capacity next year, so a marketing base given by the international player would again allow them to sell their products across the globe.

Now again steel prices are expected to go up, now what should be expect for the steel sector in light of that, the fact that there is an expectation that a number of companies are going to consistently announce price hikes in the months ahead?

Yes, we believe that steel prices would go upwards from end of January and start of February. This month we believe that prices would stay firm and not move up largely. This is because if you look at the last two months performance prices were quite lower due to seasonal factors. European consumption was not as high as the previous quarter and the European markets as well as US markets would come back and buy in Q4 FY10. So again a rise in demand as well as cost pressures have gone up. The prices of iron ore as well as coking coal has gone up largely over the last one month. So due to cost pressure as well as some increase in uptake from European as well as US players, I believe prices would go up from end of January.

We are just seeing that flash on Bhushan Steel. There is no plan of a stake sale at this point in time to Sumitomo. Let’s just get back to Bhushan in particular in terms of earnings estimates, I mean when do you expect the synergies to kick in and are you changing your estimates, what are they on Bhushan and in terms of your targets on the share price?

We do not have a coverage on Bhushan Steel, so we do not have any estimates. I would not be able to give much info on the number fronts on Bhushan Steel.

SEBI to AMCs: No investor documentation, no commission

The Securities Exchange Board of India (SEBI) has said that asset management companies (AMCs) would now have to ensure they have all investor documentation from distributors. Maintaining documentation is now the responsibility of AMCs and this documentation would include know your client (KYC) and power of attorney (POA) documents.The market regulator has said that mutual fund distributors would not be paid commission if they do not comply with the aforementioned norms.SEBI further said that AMCs would have to seek documents for all past transactions and ask for confirmation of folios from investors.It is also being learnt that the regulator has slammed AMCs for inconsistent practices. However, it has prohibited no objection certificate (NOC) requirement for change in MF distribution.SEBI has slammed AMCs on two accounts that have been concerning the regulator for a very long time. The first being the asset management companies demand for a NOC for investors wanting to change their MF distributors. SEBI says no NOC is required for a change in MF distributors. SEBI also says that this is an inconsistent practice causing hardships to investors. It has asked Associations of Mutual Funds in India (AMFI) which is the industry body to ensure that this practice is discontinued.Earlier in 2007 AMFI had come out with a set of guidelines to discontinue this practice but some AMC’s had insisted on asking for the NOC. The second development is that SEBI has asked AMCs to maintain documents relating to the KYC and the POA of all investors. SEBI says that maintaining documentation is a responsibility of the AMC, now distributors have been asked to provide all the relevant documents to the AMC and SEBI has taken a tough stance saying that no commission would be paid to distributors who do not comply with this.AMC’s have also been asked to seek documents of all past transactions and what they are doing is to send a statement across to investors to get a confirmation on the folio and transactions.AMC’s are also being asked to set up an investor grievance mechanism to redress investor grievances. These two matters have been bothering SEBI for a while have now seem to be sorted.

Central Bank launches reverse mortgage loan for elderly

State-run lender Central Bank of India in association with Star Union Dai-chi Life Insurance launched a loan product that will provide regular income to senior citizens throughout their lives against the house as an asset.

"Central Bank of India and Star Union Dai-chi Life Insurance Co have launched reverse-mortgage enabled loan annuity product branded as CENT Swabhiman Plus," the bank chairman and managing director S Sridhar said.

The product will help senior citizens avail of regular payments throughout their lives by mortgaging their house with the bank.

The scheme is open for senior citizens above the age of 60 and a spouse with a minimum of 55 years.

"They can also continue to stay in the house as long as the last surviving spouse is alive," Sridhar added.

This annuity product is an improvement to the reverse mortgage loan product, Cent Swabhiman, offered by Central Bank and by some other banks and Housing Finance Companies.

The new product assures lifetime payment against a maximum of 20 years in the existing similar products. Besides, the quantum of monthly payment is significantly higher.

Vineet Nayyar is Satyam’s chief

Mahindra Satyam has announced the appointment of Vineet Nayyar as the company’s chairman. Nayyar was so far heading the company as vice chairman.
Announcing this after the company’s board meeting, a Mahindra Satyam statement also said that the company had appointed former Sebi chairman M Damodaran and Gautam Kaji as additional directors with immediate effect, expanding its board to eight members.

Meanwhile, the company said it had appointed Deloitte Haskins & Sells as the company’s statutory auditor for fiscal year ended March 31, 2009 as well as fiscal year ended March 31, 2010. Deloitte Haskins & Sells, one of the two audit firms roped in by the postscam Satyam Board to restate accounts, will vet the accounts of Mahindra group company for the 2008-09 and 2009-10 fiscals as statutory auditor.

The company, which was acquired by Tech Mahindra in April, has secured time until June 2010 from the Company Law Board to file financials

, including quarterly results.

Volkswagen to buy 19.9% stake in Suzuki

Volkswagen AG, Europe's largest car maker and Suzuki Motor Corporation, Japan's third largest automaker have reached a common understanding to establish a comprehensive partnership, a release from the Japanese giant stated.

A framework agreement has been signed by representatives of both companies today.The companies plan a joint approach to the growing worldwide demand for environmentally friendly vehicles.

VW will purchase 19.9 per cent stake in Suzuki's issued shares, while the Japanese major intends to invest up to one half of the amount received from VW into the shares of German carmaker.

"The management of Volkswagen and Suzuki have concluded that the complementary strengths of each company make for a perfect fit in exploiting their respective advantages as well as rising to the challenge of the global market", stated the release.

The deal is expected to close by January 2010 subject to approval of relevant authorities."Both parties are focused on achieving synergies in the areas of rapidly growing emerging markets as well as in the development and manufacturing of innovative and environmentally friendly cars", Suzuki said.

VW's move comes just days before the German giant's scheduled opening of its massive production facility at Chakan, Pune. VW will start production of the Polo hatchback from this new facility shortly.

"In terms of global presence and product diversity, the partnership marks an important step towards the future for both the companies. In terms of product portfolio global distribution and manufacturing capacities, VW and Suzuki ideally complement each other", said the release.
It should be noted that Suzuki holds 54 per cent stake in Maruti Suzuki, India's largest car maker by volume.

New phones: Nokia 2710 & LG Chocolate BL40

The options for cellphone buyers have just got wider, with both Nokia and LG expanding their cell phone portfolio.
Mobile phone giant Nokia has boasted its low-end portfolio with the unveiling of Nokia 2710. The Navigator branded handset comes pre-loaded with Nokia Maps with a lifetime maps license.
Other features include turn-by-turn driving navigation with full voice guidance, which recalibrates routes depending on the driver's current GPS location.
On specs front, Nokia 2710 boasts of a 2.2 inch display and a 2 megapixel camera. There's a 2GB MicroSD card with the phone,which claims an 18 day standby time and a 4.3 hour talktime.
The Nokia phone sports a 3.5mm jack as well as a car cradle that users can use while on the move. The 2710 Navigation Edition is expected to be hit the stands by the second quarter of 2010 for $163 (approximately Rs 7600).
No. 3 handset maker LG too expanded its Chocolate Edition mobile phone range in the Indian market with the launch of LG BL40.
LG BL 40 Chocolate comes with a 4-inch LCD screen, with 800x345 resolution and a 21:9 aspect ratio. The slim phone comes with a 5 megapixel camera with Schinder-Kreuznach lens and flash. Connectivity options include Wi-Fi, Bluetooth and an FM transmitter.
The device also comes with S-Class UI, which offers finger-friendly 3D graphics and according to the company is capable to offer faster email and internet services.
Courtesy LG's deal with Twentieth Century Fox, the new Chocolate phone will feature content from James Cameron's 3D fantasy, Avatar.
The LG Chocolate BL40 is available at a price tag of Rs 30,000.

Gold nosedives on heavy selling

Gold prices nosedived by a whopping Rs 500 per ten grams to Rs 17,600, the steepest fall ever since the yellow metal started its record breaking journey.here, on aggressive selling triggered by a sharp plunge in its prices in the overseas markets.
Silver

too witnessed high amount of selling by stockists. "Domestic gold bore the brunt of a sharp fall in the yellow metal in the international markets as the dollar took a sudden u-turn by appreciating against basket currencies," traders said.
Ever since gold crossed the psychological 18-K level, the market started experiencing nervousness and resistance at higher levels due to its astronomical value, they added.
Pure gold (99.9 purity) tanked by a margin of Rs 500 (like standard gold) per ten grams to end at Rs 17,690 from Rs 18,190 on Friday. Silver ready (.999 fineness) dropped by Rs 265 per kg to finish at Rs 29,445 as against Rs 29,710 earlier.
In New York, gold futures crashed by 4% on Friday sustaining their first major loss in a run that began early in November as the US dollar rose sharply after an upbeat US jobs data.
Gold for December delivery fell by $48.60 to end at $1,168.80 an ounce on the Comex Division of the NYMEX. December silver fell by 60.6 cent to $18.496