Market Commentary Monday, March 12, 2012 08:59 Hrs IST

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Bank stocks may rally after CRR cut

Bank shares may edge higher after the Reserve Bank of India (RBI) after market hours on Friday, 9 March 2012, cut the cash reserve ratio (CRR), which is the amount of cash the banks have to maintain with the central bank as a percentage of their net demand and time liabilities (NDTL), by 75 basis points to 4.75% from 5.5%, effective the fortnight beginning 10 March 2012. A reduction in CRR will ease tight liquidity in the banking system.

Hero MotoCorp is reportedly building in-house capabilities to make its own engines by teaming up with the world's largest privately-owned engine developer, AVL of Austria. According to reports, the technology tie-up with AVL will allow Hero MotoCorp to develop technology for its 100cc bikes such as Splendor and Passion. The tie-up will also help it take the 150cc CBZ and Hunk to the next level to meet intensified competition from rivals such as Honda and Bajaj Auto in this high-margin segment.

The board of Coal India will meet today, 12 March 2012, to consider payment of interim dividend, if any, for the financial year ending March 2012.

Shipping Corporation of India said it sold a handymax bulk carrier, m.v. Pataliputra (47,304 deadweight tonnage), and a chemical tanker, m.t. Sabarimala (33,056 deadweight tonnage), and handed over their physical deliveries to the respective buyers.

Allahabad Bank said it launched a special domestic term deposit scheme at an interest rate of 9.25% per annum on deposits of Rs 5 crore and above, having maturity period ranging from 15 days to 120 days, with immediate effect. Validity of the scheme is upto 31 March 2012.

The board of Jaypee Infratech and Jaiprakash Power Ventures will meet on Wednesday, 14 March 2012, to consider raising funds through various options, including qualified institutional placement (QIP)/external commercial borrowings (ECB)/foreign currency convertible bond (FCCB)/American depositary receipt (ADR)/global depositary receipt (GDR)/follow on public offer (FPO)/optionally or compulsorily convertible redeemable preference shares, etc.

Rico Auto Industries has divested its entire 50% stake in Continental Rico Hydraulic Brakes India, its erstwhile joint venture with Continental AG, Germany, through sale of its entire stake to Continental Automotive Holding Netherlands BV. Continental Rico Hydraulic Brakes India is now entirely a Continental Group held company. The said divestment has been completed in accordance with the pricing guidelines issued by the Reserve Bank of India.

ICSA (India) said it is restructuring the foreign currency convertible bonds (FCCBs) issued in 2007, which are due for redemption in March and April 2012. FCCBs aggregating to $21 million are outstanding for redemption and the same are being restructured in consent with the bond holders. The procedural work for restructuring the outstanding bonds is already started and is under process. The company said it would duly intimate the exchanges upon completion of the entire restructuring process.

Financial Technologies (India) said that two of its subsidiary companies, Atom Technologies and Tickerplant, have applied for their capital reduction before the Bombay High Court. Subject to the approval of the court, the net impact of the reduction of capital by both subsidiaries on the company's profit & loss account would be to the extent of approximately Rs 42.30 crore.

Religare Enterprises said that its subsidiary, Religare Finvest, obtained corporate agency license from Insurance Regulatory and Development Authority (IRDA) for the procurement/solicitation of life insurance business on behalf of AEGON Religare Life Insurance Company.

The board of Asian Granito India has issued 11 lakh equity shares, along with 12 lakh convertible warrants to promoters and 8.42 lakh convertible warrants to non-promoters at Rs 50 each on a preferential basis.

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