Stocks In Action For August 23, 2012

According to economic times, the proposals of telecom PSUs BSNL and MTNL to reduce their workforce by 1.21 lakh by offering voluntary retirement scheme to staff will cost them over Rs 17,445 crore. Further the report said that MTNL, which offers services in Delhi and Mumbai, has also planned a VRS aimed at reducing its workforce by 21,000 and the estimated expenditure likely to be incurred is about Rs 5,074 crore. BSNL and MTNL have requested the Department of Telecom (DoT) to finance their VRS and refund the BWA spectrum charges paid by them. On the back this we believe there could be some volatility with a negative bias in the share price of MTNL in today’s trading session.

IDBI Bank yesterday launched a customer-friendly product in the form of Floating Rate Interest on Retail Term Deposit (FRTD). This is intended to help the customer leverage the upside of an increase in interest rates and also hedge floating rate borrowings. The minimum amount of deposit would be Rs. 10,000 and thereafter in multiples of Rs. 1000 with a cap of Rs.1 crore, coinciding with the definitional threshold of a Retail Deposit. On the back of this news one may see volatility in the share price of IDBI bank in today’s trading session.

According to economic times, Central trade unions cutting across political affiliations yesterday post market hit out at the Maruti Suzuki management for sacking 500 workers at Manesar plant and deployment of police at the factory. According to the reports, in a joint statement major trade unions also accused Haryana government of "condoning the illegality being perpetrated by the management". On the back of this news one may see volatility with a negative bias in the share price of Maruti Suzuki in today’s trading session.

According to business standard, issued clarification on reports of withdrawal of 27 approved Abbreviated New Drug Applications (ANDA) in the US market. According to reports, company determined that certain products with negligible commercial impact should be withdrawn to enable the organization to focus resources on other applications that are of greater importance and value to the US business and healthcare system. On the back of this news yesterday the stock had closed higher 4.12 per cent and for today also we expect the stock to probably move higher.

According to business line, banking services across the financial capital of India were hit as employees from all public sector banks stayed away from work on Day 1 of the nation-wide strike called by the United Forum of Bank Unions (UFBU). Cheque clearing transactions will be delayed by at least two days and would delay the cheque transactions worth at least Rs 14,000 crore till tomorrow. The strike has been called primarily to oppose the Government’s proposal to increase the shareholders' voting rights from 1 per cent to 10 per cent in public sector banks and to 26 per cent (10 per cent) in private banks. The strike is expected to continue today also and we may continue seeing some pressure in PSU banking stocks in today’s trade.

According to business line, the Oil Ministry is likely to ask the Cabinet to decide on proposals of Reliance Industries (RIL) and Cairn India to drill exploration wells in already producing oil and gas fields. While RIL has proposed to drill an exploration well on the flagging D1&D3 gas fields in the KG—D6 block to study reservoir characteristic, Cairn wants to drill new probes to help raise output from the Rajasthan block to 300,000 barrels per day from 175,000 bpd. On the back of this news one may see volatility in the share price of RIL and Cairn in today’s trading session.