MARKET UPDATE : HOT FROM THE PRESS

* BANKING : bank credit dips for the forthnight ended 15 Jan after rising for 3
consecutive fortnights.. On YoY basis credit grew 13.8% v/s RBI projection of
18% for FY10.. Separately Moody’s changes fundamental credit outlook for
Indian banking system to stable from -ve on bk of favourable trends in
economic indicators

* BHARTI : invites bids to outsource the management of its 120k km of inter-city
optic fibre cable network.. deal estimated to be worth upto $1bn over 5yrs

* WIPRO : enters into multi year outsourcing agreement with British American
Tobacco for its global biz ops

* NTPC : to miss power capacity addition by 70% this fiscal year, to add 990Mw
this fiscal v/s target of 3,300Mw

* POWERGRID : board approves plan to sell 10% of equity.. also plans to invest
Rs2.16bn for a 1000MW project to be commissioned in 28 months

* AHLUWALIA CONTRACTS : wins order worth Rs 5bn

* ONGC : signs accord on oil exploration with Sonangol of Angola

* BHEL : to sign JV with MP Power generation Co to setup 2X800Mw super critical
power plant in Khandwa, Madhya Pradesh

* CADILA : CFO says sales may climb 22% to $1bn next year

* ADANI GRP : Min of Environment & Forest denies co nod for coal mining for
setting up a 1980mw power plant in Maharashtra

Corporate News – Industry trends

– Global cues and fears of tightening monetary measures by the central bank
pulled down the benchmark BSE Sensex 490.6 points (2.92%), marking the
sixth day the market has been in a bear grip. (BS)

– Lower input costs and growth in sales have helped Steel Authority of India
Ltd (SAIL) almost double its net profit for the third quarter ended December
31, 2009; the company’s net profit stood at Rs16.7bn, almost double the
Rs8.4bn in the same quarter last fiscal. (BL)

– Banks and financial institutions are on a resource mobilisation spree overseas
to take advantage of the current low interest rates; Bank of Baroda, Union
Bank of India, IDBI Bank, and Export Import Bank of India plan to tap the
overseas debt market to mop up $1.5-2bn in the next month or so. (BL)

– Hindustan Unilever’s (HUL) advertising expenses simply galloped in the
December quarter, even as both its sales and net profits grew at a modest
pace. To put it in context, the sum of Rs6bn that HUL set aside towards
advertising and promoting its brands was three times what it spent on its
employees (Rs2bn) and nearly equal to the operating profit (Rs6bn) it
generated for this quarter.(BL)

– The Steel Minister is set to take up the issue of making operational the joint
venture International Coal Ventures Ltd (ICVL) with his coal counterpart.
(BL)

– DLF Ltd posted a 30.2% drop in its consolidated net profit for the third
quarter ended December 2009 to Rs4.6bn, but said that demand was robust
across all segments of housing and there are signs of recovery in leasing of
office space. (BL)

– Tata Communications said that it plans to invest about US$50 mn over the next
two years into its newly-formed Global Media & Entertainment Solutions (GMES)
group. (BL)

– India’s leading sea carriers, Shipping Corporation of India, GE Shipping and
Mercator Lines, are looking at buying ships for resale from yards, as their
original buyers succumb to the downturn in shipping cycles and cancel purchase
contracts. (BS)

– Lanco Infratech Ltd has secured contracts worth Rs56.7bn from its subsidiary,
Lanco Mahanadi Power Pvt Ltd, in connection with the setting up of a 2×660-Mw
pulverised coalfired power plant in Maharashtra. (BS)

– Jaypee Group firm Jaiprakash Power Ventures said it will raise up to
US$300mn by issue of bonds for meeting capital expenditure of the company,
its joint ventures and projects being implemented through company’s
subsidiaries. (BS)

– NTPC, India’s largest power utility, plans to sell at least 15% of its additional
capacity through power exchanges to third-party buyers, which would be outside
the purview of a power purchase contract. (ET)

– The government is considering selling its stakes in engineering company Larsen
& Toubro (L&T) and consumer goods maker ITC in tranches to state-run
financial institutions, as it walks a tightrope between raising funds to tide over
fiscal deficit and keep lobby groups in good humour. (ET)

– As many as four telecom proposals were deferred and two rejected by the
Foreign Investment Promotion Board (FIPB) at its last meeting on January 18. The
deferred proposals include those from Etisalat DB Telecom (UAE), Verizon
Communications (US), Arkadin SAS (France), and Telecordia Technologies (US).
Applications filed by Telstra Telecommunications (Australia) and Global Holding
Corporation have been rejected. (DNA)

Economic/Regulatory development

– The Ministry of Communications and Information Technology has pitched for
a modified Software Technology Park Scheme in the forthcoming Union Budget
(2010-11) in order to facilitate the uninterrupted growth IT and IT Enabled
Services (ITeS), particularly as the industry’s growth has dipped to 15% in 2008-
09 from an average growth of over 30% in the last decade. (BL)

– Imports of sensitive items rose 34.5% in April-October 2009 at Rs354bn from
Rs263bn during the corresponding previous period, according to official data
released on Wednesday. (BL)

– Sugar mills have told the Centre that the country would need to import only
another 15-16 lakh tonnes of sugar to meet the current 2009-10 season’s
(October-September) consumption requirements along with ensuring the
reasonable opening stock. (BL)
International trends

– Toyota Motor Corp’s American depositary receipts tumbled the most in a year
after the company halted US output and sales of eight models because of a part
that spurred a 2.3 million vehicle recall. Toyota’s move covers the topselling
Camry and Corolla sedans, along with the Avalon and Matrix cars; RAV4,
Highlander and Sequoia sport-utility vehicles; and Tundra pick-ups. (ET)