What's Happening, and Where, on Apr 2

BOARD MEETING of ARSHIYA INTERNATIONAL to consider preferential issue of shares under debt recast.

PRESS MEET of
NHB, CMD Verma to speak. 1200 IST, Mumbai.
PETRONET LNG, foundation day. Oil Minister Moily, Oman's Oil Minister Al-Rumhy, Petroleum Secretary Chandra, Petronet MD Balyan to be present.1030 IST, New Delhi.

POLITICAL DIARY
AAP leader Yogendra Yadav to speak to media on manifesto for Gurgaon.1130 IST, Gurgaon.

DATA ALERT
From OVERSEAS
UK NATIONWIDE HOUSE PRICE INDEX for Mar. 1130 IST
UK CIPS/MARKIT CONSTRUCTION PMI for Mar. 1400 IST.
EU PPI for Feb. 1430 IST.
EU GDP THIRD ESTIMATE for fourth quarter. 1430 IST.
US MBA WEEKLY MORTGAGE APPLICATIONS SURVEY for wk to Mar 28. 1630 IST.
US ADP NATIONAL EMPLOYMENT REPORT for Mar. 1745 IST.
US ISM-NY REPORT ON BUSINESS for Mar. 1915 IST.
US MANUFACTURERS' SHIPMENTS, INVENTORIES & ORDERS for Feb. 1930 IST.
US EIA WEEKLY PETROLEUM STATUS REPORT for wk to Mar 28. 2000 IST.

CONFERENCES
LECTURE SERIES: Planning Commission Deputy Chairman Ahluwalia to speak at National Council of Applied Economic Research's Distinguished Lecture Series.1730 IST, New Delhi.
MSME MEET: National Small Industries Corp CMD Kumar to speak at a seminar on MSME Prosperity. 1130 IST, New Delhi.

RBI COUNTER
DAILY LAF TENDERS: One set of 1-day reverse repo (at 7.00%) and 1-day repo(at 8.00%). Bids for repo tender may be submitted between 0930 IST and 1030 IST, and reverse repo between 1900 IST and 1930 IST.
T-BILL AUCTIONS: RBI to hold auctions of 90 bln rupees of 91-day T-bills, and 60 bln rupees of 364-day T-bills.

MARKETS
Call: Likely to open sharply lower, as demand from banks may remain subdued. 1-day call: 7.50-8.50% vs 11.00% 4-day Saturday.
Bonds: Seen slightly weaker ahead of RBI gilt auction Friday. 10-year bond yield: 8.78-8.94% vs 8.80% Friday.
Rupee : Seen opening higher on bunched up inflows. RBI policy move may keep sentiment positive. Shares eyed. Range: 59.50-60.20/$1 vs 59.91/$1 Fri.
Stocks: Seen opening higher on positive overseas cues. Nifty range 6650-6750; Tuesday-end 6721.05, up 16.85 points.

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Highlights of RBI's First Bi-Monthly Monetary Policy Statement FY15

MUMBAI - Following are the highlights of the Reserve Bank of India's First Bi-Monthly Monetary Policy Statement for 2014-15 (Apr-Mar) that was detailed today:

* Repo rate unchanged at 8.00%
* CRR kept unchanged at 4.00%
* To up liquidity under term repo to 0.75% of NDTL
* LAF borrowing cut to 0.25% of each bank's NDTL
* Reverse repo rate unchanged at 7.00%
* MSF, Bank Rate remains unchanged at 9.00%
* Going ahead vegetable prices softening is unlikely
* Vegetable prices softening unlikely due to seasonal factor
* To have downward pull on CPI due to base effects
* Policy stance to focus on keeping econ on disinflationary path
* Policy stance to focus on disinflationary glide path
* Global activity has moderated since January policy
* Don't see near-term hike if inflation continues on glide path
* Global growth may strengthen in 2014 with risks on downside
* Term repo liquidity increase aimed at improving transmission
* Real GDP growth continued to be modest in Oct-Dec
* Term repo evolved as useful indicator of liquidity conditions
* Industrial activity continues to be drag on economy
* To propose measures to reduce year-end window dressing by bks
* Going ahead, boost from farm output growth in 2013 will wane
* Overhaul of regulatory framework for NBFCs is underway
* Outlook for 2014 south-west monsoon appears uncertain
* Need to revitalise productivity, competitiveness
* Excluding food and fuel, CPI inflation sticky at 8%
* CAD expected to be around 2% of GDP in FY14
* Export growth has slowed recently
* Need to see if slower exports continue going ahead
* To monitor liquidity to ensure credit flow to key sectors
* Jalan panel on new bks has submitted recommendations
* Will issue new bank licences after nod from poll panel
* To also start work on framework for on-tap bank licences soon
* To start work on framework for differentiated bk licence soon
* Open to bk mergers if competition, stability not compromised
* To issue norms for domestic systemically key banks by end-May
* To issue norms for liquidity coverage ratio by end-May
* To seek greater priority sector loan details from bks from Jun
* May consider limited re-repo of repoed gilts subject to risk

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Highlights of RBI's First Bi-Monthly Monetary Policy Statement FY15

MUMBAI - Following are the highlights of the Reserve Bank of India's
First Bi-Monthly Monetary Policy Statement for 2014-15 (Apr-Mar) that
was detailed today:

* Repo rate unchanged at 8.00%
* CRR kept unchanged at 4.00%
* To up liquidity under term repo to 0.75% of NDTL
* LAF borrowing cut to 0.25% of each bank's NDTL
* Reverse repo rate unchanged at 7.00%
* MSF, Bank Rate remains unchanged at 9.00%
* Going ahead vegetable prices softening is unlikely
* Vegetable prices softening unlikely due to seasonal factor
* To have downward pull on CPI due to base effects
* Policy stance to focus on keeping econ on disinflationary path
* Policy stance to focus on disinflationary glide path
* Global activity has moderated since January policy
* Don't see near-term hike if inflation continues on glide path
* Global growth may strengthen in 2014 with risks on downside
* Term repo liquidity increase aimed at improving transmission
* Real GDP growth continued to be modest in Oct-Dec
* Term repo evolved as useful indicator of liquidity conditions
* Industrial activity continues to be drag on economy
* To propose measures to reduce year-end window dressing by bks
* Going ahead, boost from farm output growth in 2013 will wane
* Overhaul of regulatory framework for NBFCs is underway
* Outlook for 2014 south-west monsoon appears uncertain
* Need to revitalise productivity, competitiveness
* Excluding food and fuel, CPI inflation sticky at 8%
* CAD expected to be around 2% of GDP in FY14
* Export growth has slowed recently
* Need to see if slower exports continue going ahead
* To monitor liquidity to ensure credit flow to key sectors
* Jalan panel on new bks has submitted recommendations
* Will issue new bank licences after nod from poll panel
* To also start work on framework for on-tap bank licences soon
* To start work on framework for differentiated bk licence soon
* Open to bk mergers if competition, stability not compromised
* To issue norms for domestic systemically key banks by end-May
* To issue norms for liquidity coverage ratio by end-May
* To seek greater priority sector loan details from bks from Jun
* May consider limited re-repo of repoed gilts subject to risk

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What's Happening, and Where, on Apr 1 Main events scheduled today.

RBI POLICY
Reserve Bank of India to detail first bimonthly monetary policy review for 2014-15 (Apr-Mar). 1100 IST, Mumbai.

DEVELOPMENT OUTLOOK
Asian Development Bank to release Asian Development Outlook 2014. India Country Director Kho to be present. 1030 IST, New Delhi.

POLITICAL DIARY
Aam Aadmi Party chief Arvind Kejriwal to interact via Google Hangout 2000 IST.

DATA ALERT
From OVERSEAS
JAPAN STEEL IMPORTS & EXPORTS STATISTICS for Feb. 1030 IST.
JAPAN AUTO SALES for Mar. 1030 IST.
ITALY MANUFACTURING PMI for Mar. 1315 IST.
FRANCE MANUFACTURING PMI for Mar. 1320 IST.
GERMANY MANUFACTURING PMI for Mar. 1325 IST.
EUROZONE MANUFACTURING PMI for Mar. 1330 IST.
ITALY UNEMPLOYMENT for Feb. 1330 IST.
GERMANY LABOUR MARKET STATISTICS for Mar. 1330 IST.
UK CIPS/MARKIT MANUFACTURING PMI for Mar. 1400 IST.
EU UNEMPLOYMENT for Feb. 1430 IST.
FRANCE OECD CPI for Feb. 1530 IST.
US ICSC-GOLDMAN SACHS CHAIN STORE SALES INDEX for wk to Mar 29. 1715 IST.
US JOHNSON REDBOOK RETAIL SALES INDEX for wk to Mar 29. 1825 IST.
US MANUFACTURING PMI for Mar. 1830 IST.
US CONSTRUCTION SPENDING for Feb. 1930 IST.
US IBD/TIPP ECONOMIC OPTIMISM INDEX for Apr. 1930 IST.
US ISM MANUFACTURING REPORT ON BUSINESS for Mar. 1930 IST.
US GLOBAL MANUFACTURING PMI for Mar. 2030 IST.

From INDIA
MANUFACTURING PMI for March, by HSBC.

MARKETS
Call  : Not to trade today. On Wed, rates seen around RBI repo rate in absence of year-end demand. 1-day call: 7.50-8.50% vs 11.00% 4-day Saturday.
Bonds : Not to trade today. On Wed, to take cues from RBI policy stance. 10-year bond yield: 8.74-8.88% vs 8.80% Friday.
Rupee : Not to trade today. On Wed, to take cues from RBI policy. May track euro, Asian units at open. Range: 59.80-60.50/$1 vs 59.91/$1 Friday.
Stocks: Seen opening up; to take cues from RBI policy review post 1100 IST. Nifty range 6650-6750; Monday-end 6704.20, up 8.30 points.

SPORTS
BCCI complies with SC order, removes all India Cements staff.
Netherlands hand shock defeat on England at T20 world cup.
Saina faces toughest draw in 4th India open.

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What's Happening, and Where, on Mar 31

Main events scheduled today.

BANK LICENCES

Election Commission to take a call on issuance of bank licences by Reserve Bank of India.

CORPORATE EVENTS

* AGM of

+ ALKA INDIA

+ FE (INDIA)

+ KEMROCK INDUSTRIES AND EXPORTS

* EGM of

+ OMKAR OVERSEAS

+ PASUPATI ACRYLON

+ WINSOME DIAMONDS AND JEWELLERY

DATA ALERT

* from OVERSEAS

JAPAN AUTO EXPORTS in Feb. 0930 IST

JAPAN AUTO PRODUCTION in Feb. 0930 IST

JAPAN PRELIMINARY REPORT ON PETROLEUM STATISTICS for Feb. 1000 IST

JAPAN CONSTRUCTION ORDERS for Feb. 1030 IST

JAPAN HOUSING STARTS for Feb. 1030 IST

GERMANY RETAIL TRADE for Feb. 1130 IST

ITALY CITIES CPI for Mar. 1430 IST

ITALY PROVISIONAL CPI for Mar. 1430 IST

EU FLASH ESTIMATE EURO AREA INFLATION for Mar. 1430 IST

CANADA PAYROLL EMPLOYMENT, EARNINGS & HOURS for Jan. 1800 IST

CANADA MONTHLY GDP for Jan. 1800 IST

* from INDIA

GOVERNMENT FINANCES for Apr-Feb to be detailed by CGA.

CPI FOR INDUSTRIAL WORKERS for February to be detailed by Labour Bureau.

CORE SECTOR GROWTH for February to be detailed by commerce ministry.

MARKETS

Call :  Shut Mon, Tue. On Wed, rates seen around RBI's repo rate in absence of financial year-end demand.1-day call: 7.50-8.50% vs 11.00% 4-day Sat.

Bonds : Not traded Mon, Tue. On Wed, to take cues from RBI policy stance. 10-year bond yield: 8.74-8.88% vs 8.80% Fri.

Rupee : Not traded Mon, Tue. On Wed, to take cues from RBI policy. May track euro, Asian units at open.Range: 59.80-60.50/$1 vs 59.91/$1 Fri.

Stocks: Seen opening up on positive cues from overseas markets. Nifty range 6650-6750; Friday-end 669590, up 54.15 points.

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MARKETS TO OPEN NEW SERIES ON POSITIVE NOTE ON GOOD FII DATA . EYE ON BANKS AS RBI EXTENDS BSEL III NORMS

      Indian markets are expected to start new series and last day of the week on positive note. US stocks closed lower. S&P 500 lost 0.19% to 1,849 on selling in shares of banking and information. Asian markets are trading mixed. Back home, RBI extended the deadline for Indian banks to meet capital requirements under the so-called Basel III norms by a year to 31 March 2019.The extension offers relief to an industry burdened by bad loans. FIIs data yesterday too was very encouraging as they bought Rs 2192 crs in cash market and Rs 740 crs & Rs 284 crs in index and stock futures. However, breaking four straight sessions of gain, the rupee on Thursday dropped 15 paisa to close at 60.32 against the dollar due to demand for the US currency from banks and importers. RBI's suspected intervention in the forex market by way of dollar purchasing also weakened the rupee. Nifty garnered 40.35 points or 0.61% to settle at 6,641.75, a record closing high. Foreigners have bought $8.8 billion of local shares and bonds this year, the highest among eight Asian markets. Banking, Oil & Gas, Capital Goods and Realty stocks witnessed smart rally. Tech and Pharma stocks declined. Continued FIIs buying, USDINR at near 8-month low and hope of stable government boosted the market sentiment. PSU Banks witnessed smart rally on upgradation of rating by Goldman Sachs. SBI gained 4% to close at Rs1837. Others like PNB, BOB, Allahabad Bank, Canara Bank gained 2-4. Oil and gas stocks like ONGC gained 3% to close at Rs332. BPCL, IOC and HPCL gained 2-3%. Realty stocks recorded smart rally. HDIL surged 8% to close at Rs54. Prestige Realty and India Bull Real gained 3% and 2% respectively. Lupin declined by 1% to close at Rs934. The company's acquisition of Mexican Pharma Company. Dr Reddy declined by 2% to close at Rs2588; Among tech stocks TCS, Infosys and HCL Tech witnessed profit booking. Nifty ended the March series on a strong note up by 6.46% from its previous expiry. Opening at 6613 with an upward gap, Nifty moved up to register fresh all time high at 6674 & eventually ended the session at 6641 up by 40 points. Nifty continues its higher top higher bottom structure on the intraday scale as well. On the medium term scale the undercurrent stays positive until Nifty stays above 6430 but upside may remain capped until 6660 is not breached convincingly. On downside support exists at 6624 & 6600 level.

Talwalkars Better Value Fitness: Shares in Talwalkars Better Value Fitness surged 8.74% to Rs 173.50 on media reports that UK’s health and fitness group The David Lloyd eyes minority stake in the company.The stock opened at Rs 167 and touched a 52-week high of Rs 182 on the BSE.UK's health and fitness group The David Lloyd has begun talks with the management of Talwalkars Better Value Fitness to acquire around 20% stake in the company, media report suggests.In 2012, the company has entered into an agreement with David Lloyd Leisure Limited for consulting, execution, management and operations of leisure and sports clubs in India.David Lloyd Leisure Limited, which started its operations in 1982, is Europe's leading premium sports, health and leisure group.

SBI Banking shares mainly public sector undertakings (PSUs) gained on Thursday after Goldman Sachs upgraded ratings of state-owned banks.State Bank of India (SBI), Oriental Bank of Commerce, Indian Overseas Bank, Bank of Baroda and Punjab National Bank closed up .Syndicate Bank, Canara Bank, Bank of India, Union Bank of India, IDBI Bank, Allahabad Bank and Andhra Bank are up 1% each.The NSE PSU bank index CNX PSU Bank index, the largest gainer among sectoral indices, up 1.8% compared to 0.5% rise each in benchmark CNX Nifty and Bank Nifty at 1035 hours.A global investment bank expects that the stress asset quality should reduce for public sector banks including SBI, Bank of Baroda and Punjab National Bank. Hence they should see a gradual reduction in stress loans on lower slippages as well as higher recoveries.Goldman Sachs says state-owned banks may see bad loans fall by 3ppt in fiscal yr 2016 after increasing to 17.5% of total in fiscal year 2015, the Bloomberg report suggests.Goldman Sachs raised its rating on SBI and Bank of Baroda to buy from neutral, while Punjab National Bank raised to neutral from sell, added report.

Jet Airways : Shares of Jet Airways soared 3.09 % on Thursday as Compat dismissed plea against Jet-Etihad deal. In a major relief, Competition Appellate Tribunal dismissed the appeal challenging fair trade watchdog CCI's approval for the Rs 2,060 crore Jet-Etihad deal. It said that the appellant does not have locus standi" to file the plea. Former Air India ED Jitendra Bhargava had filed the appeal questioning the decision of CCI to approve the Jet-Etihad deal without carrying out a detailed assessment. Meanwhile, other aviation stock SpiceJet too jumped 3.53 % as RBI extended ECBborrowing window for airlines. The central bank has extended the deadline for aviation sector to raise funds through ECBs route till March 2015. The scheme was valid till December 31, 2013. "On a review, it has been decided that this scheme of raising ECB for working capital for Civil Aviation Sector will continue till March 31, 2015”, the RBI notification said.

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UNDERLYING MOMENTUM STRONG. NIFTY SUPPORT AT 6672; RESISTANCE AT 6628. HIGH VOLATILITY EXPECTED AS EXPIRY TODAY

   Indian markets are seen opening flat to moderately higher. High volatility may persist on account of expiry of March F&O contracts as traders rollover positions from March to April series. Asian markets are trading lower; tracking overnight losses in the US equities fell after US president Barack Obama warned that the crisis in the Ukraine may escalate. The US and the European Union agreed to work together to prepare ossible tougher economic sanctions in response to Russia’s behavior in Ukraine. Also data released on Wednesday showed an unexpected drop in US capital-goods orders. Together the concerns are weighing on investor sentiment. S&P 500 lost 0.7% to 1,852. Back home, Rupee continued its advance by 34 paisa to close at 60.14. Heavy foreign buying has sent domestic shares to record highs, with net purchases reaching a $3.1 billion so far this year. Net inflows into the debt market stand at $5.85 billion. Yesterday also FIIs bought Rs 1004 in cash markets and 885 crs in index futures (mainly short covering). They sold Rs 554 crs in stock futures. DIIs selling has reduced. On Wednesday, small gains pushed key benchmark indices to record closing high. Nifty garnered 11.65 points or 0.18% to settle at 6,601.40, a record closing high. However, the market was moving narrow range ahead of March F&O expiry. There was a positive sentiment in the market after USDINR fell to 8-month low at 60.14, expectation of stable government in forth coming Union Election and continued FIIs buying interest. Metal, Auto, Capital Goods and Banking stocks witnessed smart rallies. However, Pharma and Tech stocks declined. Asian market gained half to one percent on account of impressive US data. Many momentum midcap stocks like Ashok Leyland, Arvind Mills, Srei Infra, Oberei Hotel gained 3-8%. Metal stocks like SSLT, Hindalco, Tata Steel and SAIL surged 2-6%. Base metal prices on LME have gained 1-2%. Banking stocks gained after 10-year G-Sec yield fell to 8.78%. Opening at 6615 with an upward gap, the Nifty moved up to 6627 and the saw selling which took it below the high of the preceding day to reach 6580 and then revived to end above the psychological mark at 6601, up 11 points for a 0.18% gain. On medium term, Nifty continues to be in the 6430 to 6660 range, waiting for a breakout. Supports are at 6500 & 6430 respectively. Intraday resistance and supports are at 6628.

MARKET MOVERS
Oberoi Realty : Shares in Oberoi Realty rallied 9.69% to Rs 217.95 on the BSE after the real estate developer has acquired Tata Steel’s Mumbai land for Rs 1,155 crore.Tata Steel, on Tuesday, sold its 25-acre Borivali land parcel in Mumbai for Rs 1,155 crore to Oberoi Realty through e-auction.“The Committee of Independent Directors appointed for the oversight and governance of the sale process by the Tata Steel Board today declared Oberoi Realty Limited as the highest bidder of the auction on the basis of their final bid of Rs 1,155 crore, after several rounds of bidding,” the steel giant said in a statement.Oberoi Realty won the tough bid defeating other realty majors to acquire the property. Educomp Solutions: Shares in Educomp Solutions rallied 5.32% to Rs 24.75 on Wednesday on getting approval for its corporate debt recast package from CDR panel. "The request for restructuring debts outstanding on reference date (July 08, 2013) comprising working capital debt of Rs 399.04 crore and long term debt of Rs 83.05 crore with CDR lenders has been approved by CDR Empowered Group vide letter of approval dated March 19, 2014," the company said in its filing. The company further said the restructuring package agreed with CDR lenders (led by State Bank of Patiala) envisages extended repayment tenure of 10 years including moratorium period of 2.5 years from cut off date (April 01, 2013) and funding of interest for a period of 2 years from cut off date. The education solutions provider had approaced CDR cell for restructuring of its debts on June 27, 2013. Then the CDR cell had admitted the flash report of company in its meeting held on July 25, 2013. Sun Pharma: Shares in Sun Pharma felled 2.23% to Rs 566.40 as Johnson & Johnson (J&J) has resumed supplies of Doxil in the US with the release of first lot. The earlier-than-expected launch by J&J is negative for Sun Pharmaceuticals , as the Street had anticipated the latter’s sole supplier status for a longer period. Analysts have reduced Sun Pharmaceuticals'sFY15E earnings 5% factoring in lower Doxil sales.

FUNDAMENTAL PICK
We expect Dabur’s volume growth to remain in the 8-10% band. Project CORE would provide an additional catalyst for FY15 and FY16. Gross margin expansion of 100bp and operating leverage in International division would help achieve 19% EPS CAGR over FY14-16. Dabur offers the best earnings visibility in the tier-II Consumer space. Buy. No material change in demand; expect 8-10% volume growth: According to the management, demand conditions have not changed materially over the last six months. Early signs of pick-up in urban demand, which the management had alluded to during the 3QFY14 Conference Call, are still evident. If there is no further worsening of the macro environment, we believe Dabur should sustain its 8-10% volume growth band in FY15. Project CORE: Doubling urban chemist reach: Dabur has launched Project CORE (Chemist Outlet & Range Expansion) to drive penetration of its Healthcare portfolio in urban chemist outlets. It intends to more than double its reach to 75k outlets. We draw comfort from Dabur’s superior execution of Project DOUBLE, where it more than doubled its rural reach in two years without diluting margins. Focus areas for FY15: F&B, Healthcare and Hair Care: We expect Dabur to focus on Food & Beverages (F&B), Healthcare and Hair Care in FY15. We expect new launches/renovations in these categories. Dabur is test-launching Milk Shakes and Drinking Yoghurt; one of these could see national rollout in FY15, in our view. Mix improvement to drive up margins: We expect gross margin to expand 100bp in FY15, driven by portfolio mix improvement coupled with annual price hikes of 4-5%. However, the gross margin expansion is unlikely to flow through to operating margin in entirety, as we expect Dabur to remain competitive on ad spends to support new launches. We build in 70bp operating margin expansion in FY15. Buy, with a target price of Rs 200: Consistent volume growth with steady margin expansion should drive our expected 19% EPS CAGR over FY14-16. We like the management’s strategy of building long-term growth drivers by enhancing distribution reach and driving portfolio innovation. Dabur offers the best volume led earnings growth visibility and remains our top pick in our tier-II consumer coverage. Maintain Buy with a target price of Rs 200.

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