Indian stocks rise, Bharti Airtel leads gains on merger reports
Friday, 28 August 2009
MUMBAI, Aug. 27 (Bloomberg): India's benchmark stock index rose for a sixth day, its longest winning streak in more than four months. Bharti Airtel Ltd. gained on reports that it may agree on a potential $23 billion merger deal sooner than expected.
Bharti, India's largest mobile phone company, advanced the most in two weeks after reports it would conclude a tie-up with South Africa's MTN Group Ltd. before a Sept. 30 deadline. Wipro Ltd. and Infosys Technologies Ltd., software services exporters, advanced after they won orders from BP Plc.
The Bombay Stock Exchange's Sensitive Index, or Sensex, added 63.22, or 0.4 per cent, to 15,833.07 at 1:38 p.m. in Mumbai. The gauge swung between gains and losses at least five times. The S&P CNX Nifty Index on the National Stock Exchange added 0.3 per cent to 4,696.05. The BSE 200 Index gained 0.4 per cent to 1,936.61. The Sensex may rise to 20,000 by March 2011, helped by a recovery in the economy and company earnings, UBS AG said.
"Despite the rally in Indian markets, we believe fundamentals and liquidity are likely to support higher valuations," Suresh Mahadevan, an analyst at UBS, said in a note to clients yesterday.
UBS estimates earnings will grow 21 per cent in the year ending March 2012 and expects the index to trade at 14.9 times 2012 earnings.
Bharti rose 3.4 per cent to 419.1 rupees, set for its highest close in a month. The New Delhi-based company may conclude a merger deal with MTN Group by the middle of September, Reuters reported late yesterday.
Bharti and Johannesburg-based MTN, Africa's largest wireless carrier, Aug. 20 extended talks for a second time over the deal that would challenge Vodafone Group Plc's push into India and Africa. Bharti parent Bharti Enterprises Ltd. made no comment on the status of the talks.
Wipro, the No. 3 software services provider, gained 2.1 per cent to 568.75 rupees. Infosys Technologies Ltd., the second- largest, added 0.5 per cent to 2,191 rupees.
BP, Europe's second-biggest oil producer, awarded Wipro, Infosys and Tata Consultancy Services Ltd. multi-year orders, all three said in separate statements. The contracts may help improve earnings at the technology firms that are trying to weather a global recession as customers slash spending.
"The downward pressure on the software companies has been arrested," said Gopal Agrawal, head of equities at Mirae Asset India Investment Co. in Mumbai. "The best is yet to come for the Indian IT industry."
Tata Steel Ltd. slid 1.1 per cent to 455 rupees after China said it may cut production in its steel industry to purge overcapacity that has depressed prices of the alloy.
Hindalco Industries Ltd., the biggest aluminum producer, lost 0.6 per cent to 106.45 rupees after aluminum for three-month delivery slumped 1.8 per cent on the London Metal Exchange.
Overseas funds sold a net 536 million rupees ($11 million) of Indian stocks on Aug. 25, the Securities and Exchange Board of India said on its Web site. The funds have bought 368 billion rupees of Indian stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.
Bharti, India's largest mobile phone company, advanced the most in two weeks after reports it would conclude a tie-up with South Africa's MTN Group Ltd. before a Sept. 30 deadline. Wipro Ltd. and Infosys Technologies Ltd., software services exporters, advanced after they won orders from BP Plc.
The Bombay Stock Exchange's Sensitive Index, or Sensex, added 63.22, or 0.4 per cent, to 15,833.07 at 1:38 p.m. in Mumbai. The gauge swung between gains and losses at least five times. The S&P CNX Nifty Index on the National Stock Exchange added 0.3 per cent to 4,696.05. The BSE 200 Index gained 0.4 per cent to 1,936.61. The Sensex may rise to 20,000 by March 2011, helped by a recovery in the economy and company earnings, UBS AG said.
"Despite the rally in Indian markets, we believe fundamentals and liquidity are likely to support higher valuations," Suresh Mahadevan, an analyst at UBS, said in a note to clients yesterday.
UBS estimates earnings will grow 21 per cent in the year ending March 2012 and expects the index to trade at 14.9 times 2012 earnings.
Bharti rose 3.4 per cent to 419.1 rupees, set for its highest close in a month. The New Delhi-based company may conclude a merger deal with MTN Group by the middle of September, Reuters reported late yesterday.
Bharti and Johannesburg-based MTN, Africa's largest wireless carrier, Aug. 20 extended talks for a second time over the deal that would challenge Vodafone Group Plc's push into India and Africa. Bharti parent Bharti Enterprises Ltd. made no comment on the status of the talks.
Wipro, the No. 3 software services provider, gained 2.1 per cent to 568.75 rupees. Infosys Technologies Ltd., the second- largest, added 0.5 per cent to 2,191 rupees.
BP, Europe's second-biggest oil producer, awarded Wipro, Infosys and Tata Consultancy Services Ltd. multi-year orders, all three said in separate statements. The contracts may help improve earnings at the technology firms that are trying to weather a global recession as customers slash spending.
"The downward pressure on the software companies has been arrested," said Gopal Agrawal, head of equities at Mirae Asset India Investment Co. in Mumbai. "The best is yet to come for the Indian IT industry."
Tata Steel Ltd. slid 1.1 per cent to 455 rupees after China said it may cut production in its steel industry to purge overcapacity that has depressed prices of the alloy.
Hindalco Industries Ltd., the biggest aluminum producer, lost 0.6 per cent to 106.45 rupees after aluminum for three-month delivery slumped 1.8 per cent on the London Metal Exchange.
Overseas funds sold a net 536 million rupees ($11 million) of Indian stocks on Aug. 25, the Securities and Exchange Board of India said on its Web site. The funds have bought 368 billion rupees of Indian stocks this year to date, compared with record net sales of 530 billion rupees for the whole of 2008.