FIIs downgrade Indian stocks
Mumbai: A number of FIIs and overseas brokerages are downgrading Indian stocks. This includes JP Morgan which has downgraded India to `underweight' from `neutral' in both emerging markets and Asia Pacific ex-Japan context. The brokerage says the combination of elections, fuel price hikes and higher interest rates will limit returns from Indian stock markets.

JP Morgan Securities' (Asia Pacific) report, titled `Bharat PE Achieved', says India was trading at 18.9 times forward earnings, a premium to the US, emerging markets and Asian markets ex-Japan and asked investors to switch to other emerging markets. "The other markets include China, Russia, Taiwan, South Africa within emerging markets, and China, Singapore and Taiwan within Asia-Pacific ex-Japan mandates," it said.

The report says, "India is the most expensive market in Asia, ex-Japan, based on either 12-month forward PE or dividend yield... India's expensive equity valuations make this market relatively more at risk in an emerging market sell off," it cautioned. Other brokerages like Citigroup and Morgan Stanley have expressed similar sentiments.
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DLF to file draft prospectus for IPO
New Delhi: Real estate major DLF group would file the draft prospectus for its IPO with the Securities and Exchange Board of India by next week and hit the market some time in June or July.

DLF plans to raise over Rs10,500 crore from the largest ever public issue. Before coming out with 20 crore equity issue by June-end, the company would issue 7 bonus shares against each held by the existing shareholders, split stocks of face value of Rs10 into Rs2 and place 3.5 crore shares with foreign institutional investors or domestic institutional investors.
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Rural Electrification to float IPO by December
New Delhi: State-run Rural Electrification Corporation plans to float an initial public offer (IPO) to offload 10 per cent of its equity by December this year.

Anil K Lakhina, chairman and managing director, said the company was looking at selling 10 per cent of its equity. However, he did not say how much amount the company was expecting to raise through the issue.

REC, which primarily funds rural electrification projects in the country, posted a net profit of Rs800 cr in 2004-05. The company has an authorised capital of Rs1,200 crore, paid up capital of Rs800 crore and net worth of about Rs3,800 crore.

REC is the latest power sector utility to consider coming out with the IPO. Another public sector company Power Finance Corporation is expected to come out with the IPO next month, while National Hydroelectric Power Corp and transmission utility Power Grid Corporation also plan to hit the market by the end of this year. So far, NTPC Ltd is the only public sector power company that is listed on the bourses.
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Prudential ICICI top private player among mutual funds
Mumbai: Prudential ICICI is again at the top among private players in the mutual fund industry, in terms of assets under management. UTI MF remains India's largest mutual fund.

For April 30 2006 Pru ICICI fund house had an AUM of Rs27,503 crore, while the nearest competitor Reliance MF has an asset base of Rs24,669 crore. Pru ICICI's AUM has increased by Rs4,001 crore (17 per cent) over the month of April, even as Reliance's dropped by around Rs1,751 crore (6 per cent).

In March 2006, Reliance MF had become the top private sector player for the first time with record subscriptions for its Reliance Equity Fund.

Data at the end of March showed that Reliance MF had assets worth Rs26,420 crore, while Pru ICICI clocked in second with Rs23,502 crore.

Pru ICICI AMC currently has a presence in 69 cities, with 74 offices. Razdan said that he hoped to increase that to 88 cities by the end of this fiscal.
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RBI allows primary dealers to do short selling in g-secs
Mumbai: Reserve Bank of India has allowed limited short-selling in government securities to primary dealers. It has issued guidelines for trading in securities on a 'when issued' basis, which allows primary dealers to take short positions.

Trading is allowed only on existing securities that are being reissued. These transactions will be allowed only on the notified day of the issue and cease on the working day immediately preceding the issue. Besides, all WI transactions for all trade dates will be contracted for settlement on the date of issue. RBI has said that at the time of settlement on the date of issue, trades in the WI security can be netted off with trades in the existing security.

There are several restrictions on 'when issued' trade. For instance, only PD can take short positions. Any WI trade must have a Primary Dealer (PD) as a counterparty (both counterparties can be PDs). In other words, non-PDs cannot be both buyer and seller in a WI transaction.

To ensure transparency, the RBI has said that all deals must be routed through the Negotiated Dealing System. Before participating in the WI market, all participants are required to have in place a written policy on WI trading, which should be approved by the board of directors.
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Gold touches Rs.10k-mark for first time
Mumbai: Gold prices have touched the magic figure of Rs10,000 per 10 gm in Kolkata on persistent buying from jewellers, stockists and investors and gained Rs230 in a single day in Delhi. Globally the yellow metal soared to touch a new 25-year high of $676 an ounce on fund buying.

A softer dollar, firm oil prices and concern about the West Asia crisis also boosted buying sentiment. Gold has gained around 30 per cent this year as investors diversified into precious metals on global tensions, firm oil prices and uncertainty over the dollar's outlook.

The domestic bullion markets registered gains between Rs215 and Rs240 and gold prices. Kolkata recorded a life-time high of Rs10,000, However, it was Delhi where the metal gained the highest - Rs230 on aggressive buying and closed at Rs9,950.

In Chennai, it shot up by Rs215 at Rs9,930. In Mumbai, both standard (99.5) and pure (99.9) varieties marched towards Rs10,000 on sustained demand and recorded whooping gains of Rs215 each at Rs9,840 and Rs9,890 per 10 gm respectively.
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Apollo Sindhoori fields bonus issue
Chennai: Apollo Sindhoori Capital Investments, the Chennai based stock broking firm has announced a bonus issue in 1:1 ratio and a 60 per cent dividend. The company's board had also approved for 1:1 rights issue at Rs100 per share, a company release said.

The company reported an income of Rs5,584.02 lakh during 2005-06 as against Rs3,685 lakh during the previous year, posting a growth of 51.51 per cent.
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