India’s largest public sector bank SBI was in for a rude shock this week. Just ahead of posting it’s 2nd quarter earnings, Global credit rating agency Moody’s downgraded its stand-alone rating. Moody’s ranked SBI from C- to D+. This implies that, SBI which earlier had adequate financial strength might need some outside financial support. According to the rating agency, Modest capital and weakening asset quality were the chief reasons for this downgrade. Moody’s also noted that SBI’s non-performing assets could continue to rise in the near term, warranting the action.
But SBI is hopeful on receiving some help from the govt. The bank expects from Rs 30 to 100 billion of fresh government capital in the current fiscal year. SBI has also outlined scenarios in which it would need about Rs 210 billion of state capital over five years.
The HSBC India Manufacturing Purchasing Managers’ Index slid more than two points to 50.4 from 52.6. The September Finding, showed the index plunging its sharpest level in a month since November 2008, from 56.0 to 51.1. The PMI no’s for the service sector were equally disappointing. Released early this week, the index plunged from 53.8 in August to 49.8 in September. This is its lowest reading since April 2009 and below the 50 mark.
Mukesh Ambani led RIL may cut it’s gas supply to four fertilizer plants in Uttar Pradesh from Thursday. Opposing UP govt’s demand, of a local sales tax of 21 %, RIL now wants the four firms namely, Indo Gulf Fertilizer, IFFCO, KRIBHCO, Shyam Fertilisers and Tata Chemicals, to cover for this additional burden. But the companies in questions are opposing this move, saying it would increase their cost of production.About 2 million tonne of urea is produced from gas sourced from RIL. So far only NTPC has enhanced its financial guarantee. Fertilizer Association of India is hoping the Oil and Fertilizer Ministry to intervene.
In the low cost airline segment , where other companies are posting not so impressive numbers, Indigo’s profits rose to 650 crores from last year’s 550 .Jump in revenues and premiums from aircraft sales is the main reason behind the profits.Indigo that kick started its international operations last month and plans to continue its focus on the domestic market.
However, in pursuit of its overseas forays, it plans to deploy about 18% of its feet capacity on international routes.The company feels that its low cost model is the principal driver of its profitability.
The telecom sector also made headlines this week, though for the wrong reasons. To begin with, the telecom department is set to issue a notice to Etisalat. This notice might cancel the 13 telecom licenses of the company. The department views Etisalat as having been an ’associate’ of Reliance Telecom at the time it had applied for spectrum in 2007. Interpreting a law ministry ruling, on the term “associate” Swan was a front for Reliance, which isn’t allowed. Etisalat’s been charged by the CBI in the 2G scam.
The trouble doesn’t end here, The law ministry also gave a green signal to the Department of Telecom to issue show cause notices to Idea cellular and spice. The two companies will be charged on violations in rollout obligations. In the case of Idea, the show cause notice is issued to the Punjab license, For Spice, it is for the Haryana and the Maharashtra license. Idea Cellular already has an ongoing tussle with the DoT.
Apple Inc lost it’s 56 year old CEO Steve Jobs. Jobs was battling pancreatic cancer. Though the exact reason for his demise is still unclear, Steve jobs’s death is a huge loss to the silicon valley. Jobs will be remembered for turning Apple into one of the world’s most valuable companies.
Two days, before Apple lost Jobs, the iPhone 4s was launched. New CEO Tim Cook did the honors. The new model is expected to be faster, thinner and larger-screened. Loaded with the updated iOS5 software, Apple Inc is looking at keeping competitors like Google’s android & Samsung Electronics at bay.
State run BHEL has secured a contract from Dainik Bhaskar Power Ltd to set up a 1,320 MW thermal power plant in Madhya Pradesh. The deal is worth Rs 3, 800 crore is to set up the power plant in Singrauli district of the state. This is the second deal that BHEL has struck with DBPL after Chattisgarh.
The export data was released this week. August exports India’s August exports rose 44.25% to $24.3 billion from a year earlier. The imports for the month rose 41.82 % to $38.4 billion, leading to a trade deficit of $14 billion.
Auto sales number also came out. Maruti Suzuki bucked the trend as production suffered following the strike in its Manesar plant. It sales tumbled 21% from a year ago period. Commercial vehicles also posted profits, Commercial sales for M&M was up by 29%.Two wheeler companies also showed strong growth signs.