India Economic Scan | 12 May 2009

12-May-2009

India Economic Scan

In this edition: India grew 6.5% in FY09 says PM, SBI Chief says worst over for Indian economy, ICICI gains on potential increase in stake by Temasek/Singapore, BSE hires BoA's Madhu Kannan, Indian stocks fall to one week low.

Top headlines

India grew 6.5 pct in FY09, CPI inflation to fall - PM

• India's economy grew an estimated 6.5% in the just-ended 2008/09 fiscal year and consumer price inflation is expected to moderate in 5-6 months, Prime Minister Manmohan Singh said.
• "The wholesale price inflation is already down to around 1 percent and there is a time lag for the consumer price inflation to also fall," said Singh.
• India's wholesale price index rose 0.70% in the 12 months to April 25, above the previous week's annual rise of 0.57%. But annual CPI inflation stood at 9.63% in February, as prices of food products remained firm.

Worst is over for Indian economy: SBI chief

• O P Bhatt, chairman of the country's largest lender State Bank of India (SBI), said 'The worst is over for the economy. Auto and housing loans have started picking up already,'
• SBI, which accounts for about 25% of all loans and deposits in the country, has posted a net profit of Rs 9,121 crore for 2008-09 as against Rs 6,729 crore the year before, a rise of 35.5%.
• On the overseas operations of the bank, he said SBI would concentrate on 'consolidating the existing business network'. The bank is present in 33 countries. It has plans to increase its Singapore operations from the present five branches to 12 this year and to 20 next fiscal.

ICICI Gains on Report That Singapore Seeks Clarity

• ICICI Bank Ltd., India’s second- largest, climbed in Mumbai following a report that the Singapore government has asked if a mandatory open offer to buy more shares would be triggered by its funds increasing their stakes.
• Temasek, through Allamanda Investments Pvt., owns 7.6% of ICICI, and the Government of Singapore Investment, known as GIC, holds 2.3% as of March 31, according to regulatory filings. The Life Insurance Corp. of India owns 9.4%.
• ICICI last traded up 0.499% at 523.35 rupees.

Bombay Bourse Hires Bank of America’s Madhu Kannan

• The Bombay Stock Exchange, Asia’s oldest bourse, named Madhu Kannan as managing director and chief executive officer, filling a vacancy nine months after Rajnikant Patel quit.
• Kannan previously worked at Bank of America-Merrill Lynch as a managing director for global strategy. Prior to that, he was a senior vice president in the global corporate client group at NYSE Euronext, in charge of the Asian, Middle East and North African markets.
• The BSE, founded in 1875, has lost ground to its younger rival, the NSE, which handles twice as many share trades and is the world’s largest single stock futures market.

Indian Stocks Fall to One-Week Low, Led by Reliance Industries

• The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell -1.6% to 11,682.99. The S&P CNX Nifty Index on the NSE declined -1.8% to 3,554.60. The BSE 200 Index dropped -1.6% to 1,381.24. SGX Nifty futures for May delivery retreated 2% to 3,555.5.
• Reliance Industries retreated -2% to 1,861.6 rupees. Larsen & Toubro declined -2.8% to 963.8 rupees. The two companies made up 32% of the Sensex’s decline.
• Hindustan Unilever fell -2.9% to 226.05 rupees. The company posted a 3.7% increase in profit in the quarter ended March after a one-time charge for retirement benefits and restructuring. Net income increased to 3.95 billion rupees ($80 million), lagging the 4.51 billion rupee analyst estimate. Net income before one-time items rose 20%, the company said.

Source: India Economic Scan