Banks, realty aid the upward move

Mon, 21 Dec 12:30 pm

   Previous Close   

   Pre-Open   

   10:30 am   

   02:30 pm   

   Closing   

After starting on a weak note, the Indian stock markets managed to move up to the dotted line during the previous two hours of trade. Currently, stocks from consumer durables, oil & gas realty and banking sectors are managing to garner investors' interest. However, selling activity is being witnessed across capital goods, power, FMCG and auto sectors.

The BSE-Sensex is trading up by around 5 points and the NSE-Nifty is up by around 2 points. Currently, the BSE-Midcap and BSE-Smallcap indices are trading marginally up by 0.7% and 0.9% respectively. The Rupee is trading at 46.80 to the Dollar.

According to a leading business daily, NTPC, Indian largest power generation utility is planning to enter into deal with an African country, Ghana for securing gas supplies. As per this deal, NTPC proposes to build a power project in Ghana in exchange of 2.5 m tonnes per annum (mtpa) of liquidified natural gas (LNG) for 25 years. The power project can be coal-based or gas-based depending on the availability of fuel. The proposal is in the discussion stage. This is company's third attempt in Africa after being unsuccessful at to striking such deals with Nigeria and Yemen. Africa has 10% of the world's hydrocarbon reserves.

It may be noted that NTPC has a power generation capacity of 30,144 MW and plans to raise it to 50,000 MW by 2012. It has a total gas requirement of 16 m cubic meter per day and needs to source a part of its requirement from spot market as long term contract are not available due to surge in global demand. Many of its plants are running at below full capacity due to shortage of fuel. For this purpose, it is aggressively scouting for gas blocks overseas. This move is also driven by the aim to be ahead of China in procuring fuel supply.

In another news, ITC is planning to launch smaller Choupal Saagars, its rural hypermarkets. The company aims to boost its presence in rural India and is trimming its hypermarket size to half so that it can penetrate smaller villages and towns where big plots for building rural malls are unavailable. It may be noted that ITC already has 24 hypermarkets, each of an average size of 10,000 sq. ft. Smaller Choupal Saagars will substantially bring down company's operational costs in terms of staff, maintenance, depreciation etc.

ITC's agri-business division is the country's second largest exporter of agri-products with exports of over Rs 10 bn. It also earns around Rs 15 bn in domestic sales of agri-products. We believe, smaller, cost effective formats will aid the company in enhancing its penetration to the two-third of the Indian population which resides in the rural areas. No doubt, Rural retailing has attained utmost attention by all the FMCG players.