Weekly Stock Picks - May 30 2008

Buy Nicholas Piramal Buy STER Buy GSK Pharma Buy Bharti Airtel Buy Educomp

 

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Weekly Newsletter - May 30 2008

While GDP numbers were better than expected, inflation continues to haunt the bulls. For the coming week, there are no firm triggers except domestic handling of the oil prices. While some decisions could be expected over the weekend, a lot will depend on how the political parties react. Given the current political situation, it is unlikely that the government will take a tough call. The markets will continue to swing at start more to the global beats. Over the day domestic issues and stock specific action will dominate. Any voices on monsoon could improve sentiment. Else bulls may have to wait longer before some stability sets in

 

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Mumbai slips in global office rent sweepstakes

London's West End continues to be the world's most expensive location for hiring commercial space while Moscow and Tokyo have risen two places each, pushing Mumbai to the fourth spot, according to the latest survey of global office rents by CB Richard Ellis.
Office space in Moscow costs an average of US $232.37 per square foot per year compared with US $299.54 in the West End of London, CB Richard Ellis said in the survey. The other costliest markets are Inner Central Tokyo, Mumbai and Outer Central Tokyo.
Office rents in the Russian capital jumped by an average of 93% in dollar terms in the 12 months ended March 31, the second-biggest gain among 173 cities tracked by CB Richard Ellis. Moscow overtook Mumbai, where rents gained 41%.
"Office occupancy costs are continuing to defy sluggish economic conditions and the credit crunch as they rise faster than global inflation," Raymond Torto, CB Richard Ellis's chief economist, said in today's report.
The cost of occupancy, which includes service charges and taxes, jumped 94% in Vietnam's Ho Chi Minh City, more than any other location. It was followed by Moscow, Singapore, Nicosia and Oslo.

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Inflation spurts as fuel price hike looms

Technorati Tags: Inflation,Fuel,Fuel price hike,WPI,Wholaesale Price Index,Manmohan Singh,Pranab Mukherjee,Deora,Petrol,Diesel

India's inflation, based on the Wholesale Price index (WPI), climbed further in the third week of May even as the Government remained in a soup over high crude oil prices and its adverse impact on public sector oil marketing companies. The annual point-to-point inflation rose to 8.1% in the week ended May 17 from 7.82% in the previous week, the Commerce & Industry Ministry said. Economists had expected a reading of 7.95-8%. Meanwhile, the Government revised the inflation rate for the week ended March 22, to 7.85% from the provisional forecast of 7%. Inflation may accelerate further as the Government may revise preliminary estimate in two months. Also, with the Government almost making up its mind on effecting a small hike in fuel prices, inflation is bound to go up.
The impending fuel price hike was postponed till the weekend. Prime Minister Dr Manmohan Singh finalised details of the package to bail out public sector oil marketing companies (OMCs), who are suffering due to surging crude oil prices. The Prime Minister discussed the issue with External Affairs Minister Pranab Mukherjee, Finance Minister P Chidambaram, Petroleum Minister Murli Deora and Planning Commission Deputy Chairman Montek Singh Ahluwalia. "We discussed the various options... hopefully, by tomorrow or by day after tomorrow, we will have a solution," Deora told reporters on May 29 after two rounds of talks with the Prime Minister.
Though Deora refused to say what transpired in the meetings, reports suggested that a combination of a hike in petrol and diesel prices along with a minor duty rationalisation and according SLR status to oil bonds could form part of the package. It would be a climb down from the proposed increase of Rs10 a litre in petrol, Rs5 per litre in diesel and Rs50 per LPG cylinder sought by the Petroleum Ministry, along with a cut in customs duty on crude oil and lower excise duty.
"International prices touching US$135 a barrel has forced down our throat Rs2.25 trillion revenue loss on the sale of petrol, diesel, LPG and kerosene. Unless we act, companies will not be left with cash to import crude," Deora said. "The Prime Minister and Finance Minister saw papers of projected revenue loss and options thereof. They realise very much that we need to help PSU oil firms on a war footing," he said.
Meanwhile, there was some relief for the bleeding oil PSUs as the Reserve Bank of India (RBI) came to their rescue. The central bank allowed banks to lend more money to them. The central bank told banks they can lend up to 25% of their capital funds to the cash-starved state-run oil marketing companies as against 20% earlier. This limit can be increased to 30% on board approval.

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