Not much scope to cut retail lending rates; to watch if deposit rate fall sustains: ICICI Bank

ICICI Bank MD Chanda Kochhar said that she does not see much scope to cut retail lending rates and it is to be watched if deposit rate fall sustains. She further said that at least $ 35 billion outbound M&As were seen in FY08.

Kochhar said that 15% of ICICI Bank home loan clients'' EMI have gone up. She doesn't see ICICI Bank's NPA rising in home loan segment. About 8% of ICICI fee income comes from remittance operations. ICICI Bank's corporate loan growth is seen at 25% in FY08. She said that share price of ICICI Bank is undervalued.



US Jobs data not as bad as headline numbers show; RBI is unlikely to cut the interest rates in the near future: Morgan Stanley

Chetan Arya of Morgan Stanley, said that concerns remains in the US on account of non farm payroll numbers are justified. He said that the US Jobs data is not as bad as headline numbers show. He is sure that there will be one rate cut from the Fed. Fed futures show 80% probably of 50 bps cut and he is betting on rate cut of 25 bps on Sep 18 by the Fed.

He further said that the US Jobs data is not as bad as it looks. About Asian markets, he said that the best outlook for Asia would be a soft landing in US. He also sees a rate hike in Europe in the latter half of the year. He is expecting the Asian Central Banks to adopt wait and watch policy even if Fed cuts the rates. There is a clear evidence of soft landing In India and the overheating concerns are over. He further said that the RBI is unlikely to cut the interest rates in the near future and the rate cut may take place in 2008.




ABN AMRO AMC: Risk appetite to remain high, Prefer to stay invested for a medium to long term basis

Investors will now focus on policy response from central banks, particularly FED. Investors will now factor in US slowdown. Select Asian economies may suffer, but overall growth looks intact. India, china, Indonesia may be insulated from US slowdown.


Asian markets have shown resilience over the last 2 weeks to global cues. Global markets have shown resilience to weak news from US. Asian markets growth drivers are intact which may support markets.

Growth drivers are intact; Capex and consumption are likely to be strong. Capital investments are likely to be strong. Indo-china fund is going to invest 65% in India and 35% in china. Markets can't decouple completely from US.

Long-term secular themes are still attracting investment. Risk appetite has been high; markets will see some more corrections. Dips would continue in the market leading to buying opportunities for the investors. They Prefer to stay invested for a medium to long term basis.




Reliance acquires Polyester assets of Malaysia-based Hualon; Acquisition to add about $ 1 bln to revenues

Reliance Industries announced today that it reached an agreement with the Receivers and Managers of Hualon Corporation (M) Sdn Bhd (Receivers and Managers Appointed) [Hualon] in Malaysia, to acquire assets of Hualon. Hualon is a leading polyester producer in Malaysia with a polyester (fibre, yarn and resin) manufacturing capacity of half a million tons per annum along with downstream textile manufacturing capabilities spread over two locations in Malaysia namely, Nilai and Malacca. It is one of the largest exporters in Malaysia. This agreement is an important step towards the acquisition of assets of Hualon. The agreement to acquire is subject to certain conditions and regulatory approvals.

This acquisition, when consummated, will be the second international acquisition in the polyester sector of RIL after the successful takeover of Trevira in Germany in 2004. This will help RIL consolidate its position further as the World’s largest polyester manufacturer with 2.5 million tonnes capacity, 25% increase from the current capacity and increase in revenue by around US$ 1 billion. This acquisition will bestow RIL with more than 7% global market share in polyester fibre and yarn.

Commenting on this development Mukesh Ambani, Chairman, Reliance Industries, said “Reliance celebrates its silver jubilee in polyester business with the acquisition of Hualon. The integrated assets of Hualon will help RIL to strengthen its position in the entire textile value chain and RIL will graduate to become a solution provider to the global textile industry. This acquisition reiterates our strong commitment to the growth of polyester.”

This acquisition will help to achieve global vision of Reliance polyester sector through easy access to other Western markets. Reliance’s existing R&D will help the industry in Malaysia to launch innovative products catering to high value premium segments. The integrated facility at Hualon will help RIL to comprehend the entire textile value chain and hasten new product developments in polyester.

Established in 1989, Hualon is an integrated polyester to textile manufacturing company in Malaysia with half a million tons of polyester capacity, 250 000 spindles for spun yarn manufacturing, 5800 shuttleless looms for weaving along with processing facilities. The company also has nylon filament manufacturing capability. The company has highly automated plants, cutting edge technology and the most advanced machinery.