Indian stocks are expected to open on a firm note on higher Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could surge 49 points at the opening bell. Asian markets edged higher on Thursday, 19 December 2013, after the US Federal Reserve expressed enough confidence in the US labor market to taper asset purchases while still promising to hold interest rates close to zero in the world's biggest economy.
HDFC Bank announced after the market hours on Wednesday, 18 December 2013, that it has filed an application with the Foreign Investment Promotion Board (FIPB) seeking approval for increasing foreign shareholding limit in the bank in accordance with the now prevailing guidelines as the total foreign shareholding in the bank (FII and FDI) has crossed 49%.
The Reserve Bank of India had recently notified that the foreign shareholding through Foreign Institutional Investors (FIIs)/Non Resident Indians (NRI)/Persons of Indian Origin (PIO)/Foreign Direct Investment (FDI)/ADRs/GDRs in HDFC Bank has crossed the overall limit of 49% of its paid-up capital and that no further purchases of shares of HDFC Bank would be allowed through stock exchanges in India on behalf of FII/NRI/PIO/FDI/ADRs/GDRs.
Total foreign shareholding in the bank as on 13 December 2013 was 52.18% of its paid-up capital. This includes investments through the FDI route in ADRs/GDRs of 17.01% which were raised in accordance with the then applicable guidelines, and other foreign holdings made under the FII route of 35.17%. Necessary approval from the shareholders is in place for FII investments up to 49%, HDFC Bank said in a statement.
Power Grid Corporation of India (PGCIL) will be in focus as shares allotted in the company's follow-on public offer (FPO) will be admitted for trading on the bourses today, 19 December 2013. PGCIL had priced the FPO at Rs 90 per share, the top end of the Rs 85-90 per share price band, following strong investor response for the issue. Retail investors and employees were allotted the shares at Rs 85.50 per share, which is a discount of Rs 4.50 per share on the issue price.
The FPO was subscribed 6.74 times. The portion reserved for institutional investors i.e. Qualified Institutional Buyers (QIBs) was subscribed 9.09 times. Category wise subscription data showed that foreign institutional investors (FIIs) put in bids for a total of 186.93 crore shares, compared with 39.20 crore shares reserved for the QIB category as a whole. The portion reserved for retail individual investors was subscribed 2.17 times. The portion reserved for non-institutional investors was subscribed 9.7 times.
The PGCIL FPO was a combination of fresh issue of 60.18 crore shares by the company and disinvestment by the Government of India (GoI) of 18.51 crore equity shares held by the President of India, acting through the Ministry of Power. After the successful divestment, GoI's holding in PGCIL has dropped to 57.89% from earlier 69.42%.
PGCIL, a navaratna public sector undertaking under the ministry of power, is the country's central transmission utility (CTU). The company owns and operates more than 90% of India's inter-state and interregional electric power transmission systems (ISTS). As principal electric power-transmission company of the country, it owns and operates 102109 circuit kilometers of electrical transmission lines and 172 electrical substations with a total transformation capacity of 172378 MVA as end of 30 September 2013.
Bank of Baroda after market hours on Wednesday, 18 December 2013, said it has privately placed non convertible, redeemable, un-secured Basel III compliant Tier-II Bonds (Series XVII Coupon 9.73% per annum) aggregating Rs 1000 crore for which allotment process has been completed.
DLF announced after market hours on Wednesday, 18 December 2013, that post completion of all the conditions precedent including regulatory approvals, DLF has completed the sale of its 74% stake in the insurance joint venture with Prudential Financial, Inc. of USA to Dewan Housing Finance Corporation (DHFL) and its group entities. The transaction is in line with DLF's ongoing strategy to divest non-core businesses.
Shares of Strides Arcolab turn ex-dividend today, 19 December 2013, for special dividend of Rs 500 per share. The company announced the large special dividend after concluding the sale of its Agila Specialties Division to Mylan Inc. early this month.
Key benchmark indices surged on Wednesday, 18 December 2013, as the Reserve Bank of India (RBI) surprised markets by keeping its main lending rate viz. the repo rate unchanged at 7.75% after mid-quarter monetary policy review. The Sensex garnered 247.72 points or 1.2% to settle at 20,859.86, its highest closing level since 12 December 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1198.60 crore on Wednesday, 18 December 2013, as per provisional data from the stock exchanges.
Asian markets edged higher on Thursday, 19 December 2013, after the US Federal Reserve expressed enough confidence in the US labor market to taper asset purchases while still promising to hold interest rates close to zero in the world's biggest economy. Key benchmark indices in Taiwan, Hong Kong, Singapore, Japan, Indonesia and South Korea rose by 0.07% to 1.2%. China's Shanghai Composite fell 0.08%.
The Bank of Japan (BoJ), which buys more than 7 trillion yen ($67.6 billion) of Japanese Government Bonds (JGBs) every month in its bid to stoke inflation, holds a two-day monetary policy meeting which begins today, 19 December 2013.
US markets soared with the Dow Jones Industrial Average and the S&P 500 closing at all-time highs on Wednesday as markets interpreted the Federal Reserve's decision to begin the tapering of bond purchases in January as confidence in the underlying strength of the economy and welcomed its commitment to low rates for a considerable time.
The Federal Reserve on Wednesday took the first step to exiting from its controversial bond-buying program, showing greater confidence that the US economy will grow faster and hiring will pick up over the next year. Starting in January, the Fed will reduce the pace of asset purchases to $75 billion from $85 billion a month. And if the economy improves at the pace the Fed expects, outgoing Chairman Ben Bernanke said in a press conference that he could foresee the bond-purchase program coming to an end by late next year. "We are hopeful the economy will continue to show progress," Bernanke said, and return to a "more normal" path of growth. The central could taper at each meeting if the economy continues to improve. He didn't rule out pausing if the economy stumbles or tapering more quickly if growth surprises to the upside.
The Fed split the reduction in asset purchases evenly between Treasurys and mortgage-backed securities. It will now purchase $40 billion per month of Treasurys, down from $45 billion, and $35 billion of mortgage-related securities, down from $40 billion.
In an effort to keep market rates stable, the Fed stressed that it will be in no hurry to raise short-term interest rates. The central bank added new language that it plans to maintain the target Fed funds rates "well past the time that the unemployment rate declines below 6.5%".
The US Senate on Wednesday, 18 December 2013, cleared and sent to President Barack Obama a $1.01 trillion budget deal, lowering the US deficit over 10 years and easing $63 billion in automatic spending cuts. The plan keeps in place about half of the reductions known as sequestration for next year, and about three-quarters of the planned cuts for 2015.
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