Funds winding up investments in low grade CPs

Slowing economy has increased the risks on investments in Commercial Papers – CPs of companies with low investment ratings.

Companies with low investment rating are going to find it even more difficult to raise money in the already liquidity hungry market. Mutual fund houses are reducing the exposure to commercial papers issued by companies with low investment rating.

Slowing economy has increased the risks on such investments and fund managers are in no position to take any chances. Total investment liquid and liquid plus schemes and FMPs in these instruments has declined to around Rs 1670 crore at the end of July this year compared to Rs 3000 crore at the end of January this year.

Poor liquidity conditions prevailing in the market has also given more space to the fund managers to concentrate only on high investment rating companies. Usually these companies pay lower rate of return which forces fund managers to diversify in high risk investments. However, during the current high interest rate regime, even the companies with top investment ratings are willing to pay at par with the market rates.

Lupin + Forest Labs – AeroChamber Plus Products

Pharmaceutical major Lupin Laboratories has entered into a multi-year promotion and marketing agreement for the AeroChamber Plus line of products with Forest Laboratories. The company will be promoting and marketing the AeroChamber Plus line of products

Under the terms of the agreement, Lupin Pharmaceuticals Inc, USA, will use its 50-person sales force to promote the product to pediatricians.

AeroChamber Plus is a Valved Holding Chamber (VHC) device that is used with metered dose inhalers to improve the delivery of medication to the lungs in the treatment of asthma and COPD. It also reduces the deposition of medication in the mouth and throat and makes metered dose inhalers easier for patients to use by reducing the need to coordinate actuation of the inhaler with inhalation.

Telcos, ISPs on cross roads with net telephony

Fearing decline in revenue, telecom companies are set to oppose TRAI’s recommendation on net telephony within India.

Telecom regulator TRAI’s recommendation regarding allowing the net telephony has brought the ISPs and telcos on a battle field. Cellular Operator’s Association of India (COAI) has said that the telecom companies have paid hefty amounts to get telecom licenses and some of the new players are waiting for allocation of spectrum to roll out their services. In such wake it will be unfair to allow ISPs to start net telephony without paying any fees. COAI has further said that the assumption of little effect on account of low penetration of broadband is faulty. It fears that as the broadband users will increase, the concept of level playing field will become even bigger issue.

However, countering the arguments of COAI, the ISPs association has said that level playing field should not be used as an agreement to prevent technological advancement. The association further said that instead of taking ISPs as competitors, telecom companies should see it as an opportunity to cash in on untapped areas as the ISPs will depend on telcos for interconnectivity.

TRAI has also rubbished the resentment of telecom companies, saying that telcos have not provided net telephony in spite of having the license to do so. Therefore the move of allowing ISPs to offer the same was essential to provide consumers with advantages of latest technology.

Reliance faces flack from public city gas companies

Public city gas companies protest the expression of interest by RIL in cities where the government companies have interests.

Government-controlled city gas companies including Indraprastha Gas, Avantika Gas and Maharashtra Natural Gas have protested against the expression of interest submitted by Reliance Industries (RIL) for cities where these companies have interest (EOI). These include Gurgaon, Noida, Indore, Faridabad, Gwalior, and Pune.

RIL had earlier submitted EOI for 54 cities including the above mentioned. The public sector gas companies are now demanding that they should be given exclusivity of operations in these cities.

Indraprastha Gas for example, has been providing piped natural gas in Delhi since 1999. The company has been expanding its operations into the national capital region. As such, it has asked the Petroleum and Natural Gas Regulatory Board to stop its proceedings towards inviting private companies for Noida, Gurgaon and Faridabad. Indraprastha feels that it has been given the right to supply piped gas exclusively in the region by the oil ministry.

12.44% Inflation – Who Leaked Data ?

A Month ago, the Finance Ministry changed the timing of releasing Inflation data citing that the sensitive data would be ready by Thursday of every week and should be released by evening on the same day. However, I don’t agree with the Finance Ministry’s argument and I think it was directly related to rampant sell-offs on Friday’s in the Stock Market where the Inflation figures kept on rising and older numbers revised upwards in retrospect. (more…)

HSBC’s Duggal Buying Defensive Growth Stocks

India’s biggest bull, Sanjeev Duggal a Sr. Fund Manager with HSBC AMC who was the first to ask his investors to cash out in December-2007 has said that India is all set for long term growth and is reducing cash position to BUY into defensive growth stocks.

Mr. Duggal said,

Solid domestic consumption, favourable demographics and increasing investment in infrastructure remain the key growth drivers for India. The Indian economy is also less vulnerable to external shocks than other economies in Asia because exports account for less than 15% of the country’s GDP.While macro conditions are expected to remain tight in the near term, most of the bad news should have been discounted.

As the recent interest rate hikes need time to take effect, inflation may rise further before peaking later this year, and then fall.

We have already initiated coverage on HSBC Equity Fund through SIP options and consider top-ups on market corrections.

1 35 36 37 38 39 135