Live Chart 18

NEW DELHI - The government is seeking legislative approval to sell down its stake in top lender State Bank of India (SBI) to 51 percent, which could raise about $2.5 billion, a quarter of what the bank needs to grow over the next five years.

On Monday, Finance Minister Pranab Mukherjee introduced a bill in the Lok Sabha seeking approval for cutting the government's stake in SBI, and for the bank to raise capital by issuing shares or through a rights issue.

"This is an operational matter to see that SBI does not face capital constraints as the economy grows over 8 percent, resulting in lending growth rates rising at 25 percent or above," Ananda Bhowmick, an analyst at Fitch Ratings, said.

SBI has said it plans to raise $4.3 billion through a rights issue in 2010/11, half of its requirement to sustain growth over the next five years with Asia's third largest economy poised to expand at 8 to 9 percent in coming years.

The government, which owns 59.41 percent of SBI, can bring its holding down to 55 percent under current rules. Selling the stake all the way down to 51 percent would generate $2.5 billion at SBI's current market price.

Shares in SBI extended gains to 3.3 percent after the news, before closing 1.2 percent higher at 2,070.25 rupees, outpacing the broader market's 0.64 percent rise and a tad over the 1.1 percent uptick in the sector index.

SBI raised $4 billion in 2008 through a rights issue with the government issuing bonds to the bank in lieu of cash. With a 16-year high fiscal deficit that India is committed to cut, a repeat of this move is unlikely, analysts said.

The government has said it plans to bring down its holdings in banks but would keep majority control, a plan that has faced political and union opposition.

Source

Inflow of Rs 2259.50 crore on 8 March 2010

Foreign institutional investors (FIIs) bought shares worth a net Rs 2259.50 crore on Monday, 8 March 2010, higher than Rs 1879.10 crore on Friday, 5 March 2010.

FII inflow of Rs 2259.50 crore on 8 March 2010 was a result of gross purchases Rs 4461.30 crore and gross sales Rs 2201.80 crore. There was an inflow of Rs 1090.60 crore into secondary equity markets which was a result of gross purchases Rs 3275.60 crore and gross sales Rs 2185 crore. The BSE Sensex rose 108.11 points or 0.64% to 17,102.60 on that day.

There was an inflow of Rs 1168.90 crore in the category 'primary market & others', which was a result of gross purchases Rs 1185.70 crore and gross sales Rs 16.80 crore.

FII inflow in March 2010 totaled Rs 8473.20 crore (till 8 March 2010). FII had bought equities worth Rs 2311 crore in February 2010. FII inflow in the calendar year 2010 totaled Rs 9189.60 crore (till 8 March 2010).

There are a total of 1,703 foreign funds registered with the Securities & Exchange Board of India (Sebi).

NEW YORK  - Technology bolstered Wall Street slightly on Monday, as investors bought shares after analysts' comments on BlackBerry maker Research in Motion and Cisco Systems.

Sentiment also got a lift from American International Group Inc's deal to sell its Alico foreign life insurance unit to MetLife Inc for about $15.5 billion.

MetLife's stock rose 4.7 percent to $40.74 and AIG gained 3.6 percent to $29.10.

"The news continues to signal there's more (deals) to come and helps put a floor in the market," said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.

Research in Motion shot up 6.1 percent to $73.75, leading the Nasdaq higher after an analyst upgraded the stock on expectations the company will report strong quarterly results and issue a robust outlook.

Sprint Nextel shares climbed 4.6 percent to $3.43 and led the S&P telecommunications sector's index higher after the company's chief financial officer said he hoped to see revenue declines slowing this year and a turn to revenue growth several quarters ahead.

Shares of Clearwire Corp, which is majority owned by Sprint, jumped 12 percent to $7.58 on Nasdaq.

The market move "is more news-specific today than anything in a broad sense," Brunner said. 

Source

BASEL - Inflation in India should moderate in the coming months and the central bank will ensure interest rate levels do not have a negative impact on the competitiveness of the economy, the head of Reserve Bank of India said on Monday.

"I believe that inflation will moderate in the weeks and months ahead," RBI Governor Duvvuri Subbarao told reporters in Basel.

Subbarao declined to comment on possible interest rate moves in the future, but said that the central bank would ensure that their levels would not have any negative impact on the competitiveness of the economy.

Source

MUMBAI/NEW YORK  - LyondellBasell filed a restructuring plan on Monday, rejecting a takeover bid from Reliance Industries Ltd in favour of commitments from private equity firms, including Apollo Management LP, to help the chemicals maker exit bankruptcy.

Lyondell filed for bankruptcy more than a year ago, hobbled by billions in debt, a sharp increase in oil prices and a decline in demand for its polymers and chemicals due to the global economic crisis.

Since then, LyondellBasell has reached agreement with its creditors to shed billions in debt, issue equity to debtholders and raise about $2 billion to finance its bankruptcy exit.

"We will have a new management team in place, we will have considerably less debt, and we will be adequately capitalized with the equity from the rights offering as well as exit financing," said company spokesman David Harpole. "We will be a much leaner, more efficient company and a stronger competitor in the global chemical and polymers industry."

The company has rejected several offers from Reliance Industries, the most recent of which valued the petrochemicals firm at $14.5 billion, in favour of a plan supported by key creditor groups, said Harpole.

"The amended plan provides superior value, improves the financial stability of the reorganized company and is a confirmable plan," said Harpole.

The company in February reached a $450 million settlement with unsecured creditors over a lawsuit stemming from its 2007 leveraged buyout. The settlement helped clear the way for the company to put the final touches on its reorganization plan.

LONDON- State-owned refiner Indian Oil Corp (IOC) has tendered to buy one or more cargoes of crude oil for loading in May, a tender document showed on Monday.

The tender, issued on Friday, specified up to 88 crudes or combinations of crudes to be offered into the tender, which will close on March 10 and March 11 with validity until March 12. Traders said they expected news of the award on Friday.

Most of the specified crude oil grades were Nigerian or Angolan. In the past IOC has tended to buy large volumes of West African crudes.

Source

Essar Oil can test Rs 190-200, says Dheeraj Dhawan ( Live Chart 18 ).

Buy Essar Oil @ 141-142 - For 2-3 Months ( For 3-6 Months Tgt 230)

Target @ 200 – 210

Stop Loss @ 135 - 127