Readings: Forex derivatives, M&A law, Infrastructure sector
- Economic Times: Cos cut new forex deals to hide derivative losses
Many firms, which have taken a hit as euro and yen rose against the dollar, are today entering into offsetting transactions in an attempt to neutralise the original deals.
These original deals, as ET had recently reported, were derivatives contacts with banks where corporates had bet that euro will weaken (or, at least not rise too quickly) against the dollar.
. . . it’s the mark-to-market (m2m) clause that swings the fortunes in a derivatives trade.a
Hmm. So it’s like buying a stock, finding that it dropped a lot & you have unbooked losses, and deciding to short it so you can offset paper profits against real losses. New corporate finance policy: ‘hope & pray’.
The extent of the activity can be gauged from the fact that there were 339 M&A deals with a total value of about Rs1.76 trillion during the first six months of 2007 against 480 deals of about Rs80,000 crore in all of 2006.
One of the important dimensions on M&A is the intent to have the merger applications heard by the National Company Law Tribunal (NCLT), as distinct from the high court, which is the position today.
Ah, to be an I-Banker in India!
- Business Standard: Building blocks
Infrastructure is the biggest opportunity today in India backed by the monetary allocation of about $500 billion in current Five Year Plan. This opportunity will cascade down to every player operating in infrastructure space, which will further require a lot of ancillary activities to support the main infrastructure activity.
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FUTURE PERFECT |
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|
Company |
Order book |
Sales FY07 |
Order book/Sales |
|
BL Kashyap |
1600 |
808 |
1.98 |
|
Punj Lloyd |
15000 |
5126 |
3 |
|
Gammon |
8000 |
1864.7 |
4.29 |
|
HCC |
9381 |
2357.6 |
3.98 |
|
IVRCL |
9500 |
2305.9 |
4.12 |
|
Jaiprakash |
7300 |
3463.9 |
2.11 |
|
L&T |
39630 |
20347.9 |
1.95 |
|
Nagarjuna cons |
7771 |
2871.1 |
2.71 |
|
Patel Engineering |
5000 |
1102.4 |
4.54 |
|
Order book in Rs crore as of June 2007 |
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