Friday, April 29, 2011

The outlook for natural gas

Size of US debt

How big is US debt 

Monday, April 25, 2011

US dollar under pressure, EURUSD rose to 1.46

The Indian rupee steadied against US dollar on Thursday after an early rise. On futures market,
the April contract closed the session unchanged at 44.37.The dollar extended broad losses
against major currencies on Thursday, lifting the euro to a 16-month peak above $1.46 as
market players seized on the upbeat mood in equities to sell the greenback for riskier assets.
The USDINR dropped to 44.26, but later recovered on short coverings. Friday Indian markets
were closed due to Good Friday.
The EURUSD gained above 1.46 marks and later corrected towards 1.4530 and currently in
Asia is trading around 1.4540 levels. The Euro and counterpart GBP was lifted by positive
sentiment in global stock indices. Better than expected first quarter earnings helped push the
Dow Jones Industrial Average to its highest level in over three years. The upbeat earnings
announcements overshadowed somewhat lackluster housing market data released during the
week. The GBPUSD rose to 1.66 levels On Thursday and now trading around 1.65 levels in Asia.
The UK official data is likely to demonstrate that Britain's economy has returned to growth
after the shock 0.5% contraction at the end of last year and this may be slightly supportive for
the cable. The contraction in the economy in the last quarter of 2010 was blamed on the
unusually heavy snow; without the impact of the weather the growth in the economy would
have been flat.
For today, the US dollar may see some mild recovery against the Indian rupee, Euro and then
British pound after sharp selling from past few days. Asian stocks are slightly higher today
along with Dow future which is up by just 9 points as of now.

USDINR Apr: The market is expected to stay firm as long as it holds the support of 45.35 levels. The immediate resistance is seen at 45.60 levels. We recommend buying on dips towards
the support of 45.35 levels for intraday. In the short term, pullback is possible in the pair towards 44.75 levels.
EURINR Apr: The EURUSD has a support at 1.4500 levels and breach of the same may push the pair lower towards 1.4420 levels and hence the EURINR lower. Technically, the EURINR is
expected to see some correction if it breaches the support of 64.50 levels. Trend remains bullish but the market is at overbought levels.
GBPINR Apr: The pair has a support at 73.20 levels and as long as it holds the same firm moves can be expected for intraday. The resistance is seen at 73.55 and then 73.70 levels. We
recommend buy on dips on GBPINR for intraday.

Saturday, April 23, 2011

Cairn Vedanta deal

Vedanta Resources has bought a 10.4 percent stake in Cairn India, pushing ahead with plans to take control of the Indian oil and gas company despite regulatory delays plaguing the $9.6 billion deal.
Vedanta's move to acquire Cairn India is part of London-based mining magnate Anil Agarwal's plans to grab a slice of India's oil reserves and get exposure to surging demand.
But its agreement to buy a 40 percent to 51 percent stake from Cairn Energy has yet to be cleared by the Indian government. London-listed Vedanta said on Tuesday it expected to own between 51 and 70.4 percent once the deal and an ongoing open offer to Cairn India minority shareholders were complete.
Vedanta said on Tuesday that it bought the stake -- 200 million shares -- from Malaysia's national oil corporation Petronas for 331 rupees ($7.40) a share, below the price being offered to minority shareholders in the open offer by Vedanta unit Sesa Goa and reflecting a 1.6 percent discount to Cairn India's closing price on Monday.
Vedanta said it was offered only the shares it eventually bought. Petronas sold the remainder of its stake, around 4 percent, to foreign portfolio investors, a source familiar with the matter told Reuters.
Analysts said Vedanta's stake purchase in Cairn India would be useful if it failed to get a big response from minority shareholders for its open offer.
"This is a strategic move by Vedanta, and it makes the open offer inconsequential," said Jagannadham Thunuguntla, head of research at brokerage SMC Global Securities.
"Vedanta will now be able to get a comfortable controlling stake in Cairn India even if the open offer response is very poor," he said. "But all this is subjective to the government clearing the deal, and that is an unknown factor."
Cairn India did not respond to calls seeking comment on the block deal. Petronas confirmed it had sold its stake.
"What this says is (Vedanta) are serious about the deal. They are putting their money where their mouth is, signalling intent and perhaps subtly turning up the pressure (on the Indian government)," a London-based analyst told Reuters.
Vedanta's deal to buy a majority stake in India's No. 4 oil and gas firm has been caught up in a dispute over royalty payments, and the two sides have been waiting for government approval for eight months.
The offer by Sesa Goa to buy up to a 20 percent stake in Cairn India was launched on April 11 and closes on April 30.
Thunuguntla said many investors would not tender their shares because the gap between the open offer price and the market price had narrowed significantly.
Cairn India shares rose as much as 3 percent after the block deal on Tuesday to touch 346.15 rupees.
At 1330 GMT, Cairn Energy shares were up 1.7 percent in a FTSE index up 0.7 percent. Vedanta shares were up 1.8 percent.
Cairn India saw 283 million shares, or 14.9 percent of its share capital, changing hands in block share market deals on the Bombay Stock Exchange on Tuesday.
Vedanta will join BHP Billiton as the only miners with large oil interests.
It has said Cairn India has the potential to almost double current production to about 240,000 barrels of oil per day -- around a quarter of India's output -- allowing it to benefit from rising demand spurred by industrialisation, economic growth and an expanding population.
Bank of America Merrill Lynch represented Petronas in the deal.
Vedanta's deal to buy Cairn's India assets, which would be the biggest acquisition in the Indian oil sector, is widely seen as a litmus test for foreign investment into India.
Vedanta and Cairn Energy have extended the deadline to seal the deal to May 20 after they failed to get the approval from the Indian government within the previous deadline of April 15

Tuesday, April 5, 2011

Rupee to gain on firm Asian peer

The Indian rupee appreciated v/s the US dollar on Thursday last week with the March
USDINR contract closed down 20 paisa at 44.75. Today, the pair has opened lower after
two days holiday supported by firm local shares and Asian peer. The rupiah hit a fresh 4-
year high against the US dollar and strengthened to as much as 1,184.0 per dollar recently
to support the rupee appreciation.
Asian currencies have enjoyed solid gains recently as foreign investors resumed buying
stocks in Asia and other riskier assets. The rupee has been moderately weaker compared
to other Asian currencies. The rupee has gained a mere 0.4 % against the dollar so far this
year on worries about the country's current account deficits amid higher oil prices, while
the won and the rupiah have jumped 4 %. Today, the USDINR is expected to trade weaker
on firm Asian stocks.
In case of Euro, the market focus is on ECB meeting due on 7th April, 2011. The European
Central Bank is expected to raise interest rates by a quarter point from a record low of 1 %
at its meeting on Thursday to rein in inflationary pressures, with two more 25 basis point
hikes priced in by the year-end. The EU PPI data is expected today which is likely to show
YoY producer prices grew 6.7%.
In case of pound, the weak economic data is expected to put pressure on cable coupled
with high inflation. BoE is still not in the favour of rate hike on weak growth. UK GDP in
the 4th quarter fell 0.5%.