Young Investor

Markets in a Minute

K. VENKATASUBRAMANIAN | Updated on May 28, 2011

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It was a quiet week at the markets, as is the case mostly in May. Yet there were some corporate happenings that still cornered attention. A slice of the conversation in the studio:

Apoorva: The Finance Minister has sent out a disturbing message saying he is worried about the rising bank loan defaults.

Ritvik: Yeah true, this is especially so among the public sector banks. With higher inflation and interest rates, it remains to be seen if growth would be stifled.

Apoorva: I don't know how inflation is going to be contained, given that after the steep Rs 5 hike in petrol, there is speculation about a steep hike in diesel and LPG prices as well.

Ritvik: Anyway…Mahindra Satyam has reported a decent set of numbers, with revenue going up steeply. Cause for some cheer, though with some one-time payments, including the recent $125 million payout towards litigations, the company reported losses.

Apoorva: Most bad news seems to be behind it. The focus would now be on expanding margins and the merger with Tech Mahindra at a price that is hopefully lucrative to shareholders.

Ritvik: Talking about good results, Cairn India reported a fabulous set of numbers with profits up tenfold! But what a shame that the Cairn-Vedanta deal is still not through with the Ministry dithering on it.

Apoorva: Yeah…but DLF still does not appear to be out of the woods, with rising cement and steel prices dragging its profits down by 19 per cent. The real estate and construction pack don't seem to be seeing any light at the end of the tunnel!

Ritvik: Yup…reports suggest that Rs 30,000 crore is sought to be raised in 2011-12 through another round of spectrum auction. One can only term this as being ambitious. With many analysts expressing concern even during the 3G auction about some companies possibly having overpaid, one wonders whether telcos would be enthusiastic participants this time around.

Apoorva: The Finance Ministry seems to be of the opinion is that the telecom sector is the milch cow for all seasons. Have a tax deficit? Go and extract it from the telcos. Don't you think so?

Ritvik: Absolutely! Meanwhile, there is some trouble for IT Bluechip Infosys as a US Court has asked the company to provide details on the usage of B1 business visas. The company has said that it intends to comply with regulations.

Apoorva: Its competitor, TCS, is going on an expansion spree with reports suggesting that Ukraine, Belarus and Russia being the destinations where there is likely to be a big thrust.

Ritvik: Russia is considered a big market with some analysts pegging the IT spend there being close to $17 billion. With the results season largely coming to a close, action on the global, political and macro fronts may largely determine the markets' course of action.

Published on May 28, 2011

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