market outlook 7th march 2012
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8/2/2019 Market Outlook 7th March 2012
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Market Outlook | India Research
March 7, 2012 2
Assembly poll results 2012
Market is more disappointed with the clear verdict in UP as it makes the
assumption of Congress playing kingmaker redundant. Market worries more
about the morale of the central government to carry out crucial reforms than
individual poll outcomes. Considering the altered political landscape, it seems
status quo for the pace and urgency of economic decision making for the
moment.
Congress was never the front runner in UP and Goa was facing anti incumbency.
Electoral setbacks have come in Punjab while Uttarakhand is too close to call on
the composition of the new government. However as the political equations alter
both in the coalition and in the Rajyasabha in the next 6 months, cold logic might
prevail over ideology which might dampen its enthusiasm to carry out some of the
reforms. One is likely to see a more circumspect Congress acting in a much
calibrated manner on reforms which might be a dampener for the free market
liberals.
Union Budget 2012-13 will see revenue enhancing measures while keeping some
restraint on expenditure (mostly plan) while announcing new grandiose schemes
such as Food Security Act to cater to its social constituency. It might look
somewhat similar to last year’s budget but with greater degree of purpose. The
government might attempt some fiscal consolidation through asset sales
(divestments) and spectrum sale before readying giveaways in 2013-14.
Initiatives such as GST and DTC which have bipartisan support will continue to
make progress towards legislation by 2013-14. Expect a flurry of activity ondivestments and PSU buybacks to raise resources to meet the needs of the social
sector schemes. Investor sentiment is contingent upon global liquidity conditions
and incremental policy actions. If investors see a credible medium term fiscal
consolidation plan along with the implementation of GST and DTC in the
backdrop of declining interest rates, they will be enthused to invest in India.
Ranbaxy launches Atrovastatin in Italy, Sweden andNetherlands
Ranbaxy Labs has launched the generic versions of Atorvastatin tablets, 10mg, 20
mg, 40mg and 80mg in Italy and Sweden and 10mg, 20mg and 40mg in the
Netherlands, after receiving approval from the respective local Regulatory
Authorities. In accordance with its settlement agreement with Pfizer, Ranbaxy has
introduced the product ahead of the applicable patent expiries. Pfizer’s patent
expires in Italy on May 8, 2012 and in the Netherlands and Sweden on May 06,
2012. Atorvastatin, a cholesterol reducing drug, is the largest selling
pharmaceutical product in Italy with sales of US$ 377mn (IMS MAT December,
2011). The market size for Atorvastatin in the Netherlands is US$164.4mn (IMS
MAT December, 2011) and in Sweden is US$55mn (IMS MAT December, 2011)
and is the largest selling Statin product in these two markets. Ranbaxy will be
promoting the drug directly to all channel partners including retail pharmaciesand wholesalers in Italy and the Netherlands. In Sweden the company will be
offering its drug through the official pricing and reimbursement scheme covering
generic medicines, to all retail pharmacies. These are small markets for Ranbaxy
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Market Outlook | India Research
March 7, 2012 3
for selling Lipitor, and the main upsides would accrue to the company through
sale in US. Moreover the upside from Liptior is fully captured in our estimates. We
maintain our neutral stance on the stock.
NIIT IFBI and Axis Bank launch PG Diploma program in retailbanking
NIIT Institute of Finance, Banking and Insurance Training Ltd. (IFBI), India's largest
banking training institute, and Axis Bank have launched a post graduate diploma
program in retail banking (PGDRB), an exclusive career program designed for
Axis Bank.
PGDRB aims to build a pool of modern banking professionals for Axis Bank. The
program covers an overview of the entire industry and key players in each sector.
All the key products and services offered by the banking, financial services andinsurance sector are also covered in brief by the program. IFBI has designed a
comprehensive program that builds competencies on four dimensions – domain,
application, technology and customer-service – needed by new-age banking
professionals. Admission to the program will be through an admission test and
interview. Selected candidates would be provided with provisional appointment
letters at the time of enrolment, and after successful completion of the program
will join Axis Bank at the officer level. We maintain our Buy rating on NIIT with a
target price of `55.
Economic and Political News Electricity export to India possible, says Iran
Government could aim at fiscal deficit of 4.3% in FY2013: Finance Minister
Oil companies push for ` 5/litre hike in petrol price
SP parliamentary board meet to decide CM tomorrow
Corporate News
Government stake in ONGC down to 69% post sale
SAIL hikes prices by up to 2% on rising demand
Subex signs a multi-million dollar deal with Gulf-based telecom company
Tata Steel hikes prices by ` 1,000 per tonne
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
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Market Outlook | India Research
March 7, 2012 4
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