The sensex was obviously closed over the weekend, so we'll just look at some of the financial effects of events earlier in the week.
The Satyam fiasco keeps getting gloomier; apparently Ramalinga Raju had mortgaged his shares (he and his family hold about 8.61% stake in the company) to institutional lenders, who might have sold them already. This has put added pressure on the board of directors, who were already under duress after academician Mangalam Srinivasan, an independent board member, had resigned on Dec 25.
Inflation is down to 6.61%; and with news of a possible reduction in repo rates, reverse repo rates and the CRR by RBI, experts predict that inflation can reach as low as 2% in March next year.
I had mentioned RIL's new venture in Jamnagar - Reliance Petroleum Limited (RPL) gained over 6 percent a day after the refinery started. Although Mukesh Ambani had to deal with the Petroleum Ministy's decision to turn down RPL's request to export LPG, citing that the country still has LPG deficit.
Also, business magnate Vijay Mallya announced that with approximately 500 crores turnover in December, Kingfisher airlines will break-even the losses it had sustained earlier.
Showing posts with label reliance. Show all posts
Showing posts with label reliance. Show all posts
Sunday, December 28, 2008
Thursday, December 25, 2008
Maruti, TATA Motors incorporate production cuts, Oil Majors prepare for losses
The market is showing no signs of improving as the Sensex continued its slide for the third day in succession - 118 points down from yesterday's close. Profit bookings remain the major culprit, while hope festers for an improvement in the next earning season starting January 13.
The auto market is perhaps one of the worst hit from the recession. TATA Motors announced their 4th block closure of the year - from December 28th to 31st. This is because they have to match production with demand, and right now most people are postponing purchases due to the financial crunch.
Close on its heels follows Maruti - who had already taken a production cut of around 6% in November. If sales continue to fall as they are right now, Maruti is likely to go in for more production cuts this month-end, somewhere in the range of 5-7%.
The three major oil companies IOC, HPCL and BPCL are getting ready to receive net losses in the third quarter of this fiscal. After a bad first quarter where only IOC netted barely any profit and then huge losses in Q2 (especially where the IOC was badly hit), things are not looking up for the big three in the third quarter either. Even though crude oil prices have fallen to $35 a barrel, the irony is that these companies have the burden of still holding stocks which they had bought at over $100 a barrel, and which are depleting gradually - hopefully by January-end they'll have exhausted those stocks. Even if the fourth quarter does bring some respite, it'll not be enough and they'll have to deal with annual net losses for this fiscal - which will be a new experience for the three oil companies.
On a different note altogether, Reliance Industries Ltd began processing crude oil in a refinery in Jamnagar, Gujarat which will probably become the world's single biggest supplier of fuel - it also has an advantage over other export-oriented rivals in Europe and Asia.
The auto market is perhaps one of the worst hit from the recession. TATA Motors announced their 4th block closure of the year - from December 28th to 31st. This is because they have to match production with demand, and right now most people are postponing purchases due to the financial crunch.
Close on its heels follows Maruti - who had already taken a production cut of around 6% in November. If sales continue to fall as they are right now, Maruti is likely to go in for more production cuts this month-end, somewhere in the range of 5-7%.
The three major oil companies IOC, HPCL and BPCL are getting ready to receive net losses in the third quarter of this fiscal. After a bad first quarter where only IOC netted barely any profit and then huge losses in Q2 (especially where the IOC was badly hit), things are not looking up for the big three in the third quarter either. Even though crude oil prices have fallen to $35 a barrel, the irony is that these companies have the burden of still holding stocks which they had bought at over $100 a barrel, and which are depleting gradually - hopefully by January-end they'll have exhausted those stocks. Even if the fourth quarter does bring some respite, it'll not be enough and they'll have to deal with annual net losses for this fiscal - which will be a new experience for the three oil companies.
On a different note altogether, Reliance Industries Ltd began processing crude oil in a refinery in Jamnagar, Gujarat which will probably become the world's single biggest supplier of fuel - it also has an advantage over other export-oriented rivals in Europe and Asia.
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