Readings: Reliance results, Steel & cement prices, Interest arbitrage
Reliance Industries Ltd., India’s biggest company by market value, reported profit that missed analysts’ estimates for the first time in nine quarters after earning less from making chemicals. Net income rose 24 percent to 39.1 billion rupees ($979 million) in the three months to March 31 from 31.6 billion rupees a year earlier.
Reliance will complete the refinery this year in Gujarat, western India, to process oil into gasoline, diesel and naphtha for export to the U.S., Europe and the Middle East. Ambani earns more from each barrel of oil than overseas refiners by processing cheaper, lower grades of crude at a plant two days away by ship from Middle East oil fields.
Reliance Petroleum Ltd., the unit that’s building the refinery, said on April 16 the project will be completed before December. Reliance Petroleum spent 233.2 billion rupees as of March 31, against a projected 221.3 billion rupees.
The 580,000-barrel-a-day refinery, when combined with the adjacent, 660,000-barrel-a-day plant owned by the parent in Jamnagar, will make it the world’s biggest refinery complex
- Business Standard: Steel, cement firms face capacity addition hurdle
Leading companies in both these sectors are doing a roaring business if we go by their bottom line. Delayed capacity additions and rising demand have supported the price increase in both these commodities.
In news for the last two-three months due to rising prices, the steel industry has announced huge capacity additions. It plans to add another 50 million tonnes (mt) capacity over the next four years while the addition in the last four years has been barely 20 mt.
Steel along with iron has a weight of 3.64 per cent in the wholesale price index, while cement’s weight is 1.73 per cent.
- Hindu Business Line: RBI likely to clamp down on arbitrage trade by foreign banks
In a bid to curb money supply expansion, the Reserve Bank of India is expected to put the squeeze on arbitrage operations by some of the foreign banks operating in the country. Top bankers said that among the steps expected are widening of the corridor between the reverse repurchase rate of 6 per cent and the repo of 7.75 per cent.
. . . some of the foreign banks were resorting to variants of the carry trade. This essentially implied raising short duration dollar funds, parking them in the reverse repo window of the RBI. Such operations resulted in spreads of about 2 per cent for them. Bankers said that such flows were one of the major factors that helped keep the rupee under Rs 40 against the dollar.
Related Posts:
