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Intraday calls for 30-01-09

Markets likely to open weak.Short sell: DLF at 164, target: 157, stoploss: 166 If markets show recovery later during the day, buy: Jaiprakash Associates.

Wall Street employees’ bonus dips 40%

Deepening financial crisis has hit hard the employees of Wall Street, whose yearly bonuses were down 44 per cent in 2008, and that in turn hit the New York state, which would lose USD one billion in tax revenues. A report issued by State Comptroller Thomas DiNapoli on Wednesday showed that New York City employees' bonuses last year were USD 18.4 billion, down from USD 33 billion in 2007. The decline will cost New York City USD 275 million, he said. Besides, media reports have said several restaurants, which catered to Wall Street, too are feeling the pinch and even high-end ones are reducing their prices, cutting items and offering special to entice customers. "The securities industry has already lost tens of thousands of jobs, and the industry is still continuing to write off toxic assets," DiNapoli said, projecting another painful year for the industry. The decline, analysts say, is the largest percentage decline in more than 30 years. Some analysts say that the companies cannot simply do away with bonuses if they are to retain talent but others do not agree, arguing that the employees would have nowhere else to go as the job market is already very tight. The New York State used to get 20 per cent of its revenue from income tax collected from Wall Street and the city 20 per cent before the market meltdown.

Maruti Q3 profit down 54.3 per cent

Maruti Suzuki India Ltd, the country's largest car maker, said quarterly profit fell 54.3 per cent, lagging forecasts due high raw material costs, lower volumes and adverse impact of currency changes. New Delhi-based Maruti said on Thursday net profit fell to 2.14 billion rupees ($43.8 million) in its fiscal third quarter ended December. Net sales fell 2.8 per cent to 46.26 billion rupees, it said. That compared with a net profit forecast of 2.48 billion rupees on net sales of 43.22 billion in a Reuters poll. Maruti, 54.2 per cent owned by Japan's Suzuki Motor Corp, holds almost half the Indian car market with models such as the best-selling Alto and Swift hatchbacks. Shares in Maruti, valued at $3.2 billion, fell 24.3 per cent in the December quarter in line with the main index.

Inflation at 5.64 pct, up for second week

Rising prices of food items, jet fuel and alcohol pushed up inflation marginally for the second consecutive week, to 5.64 per cent. Inflation for the week ended January 17 inched up by 0.04 per cent from 5.6 per cent a week ago, even as beer and alcohol became dearer by 25 per cent. It was 4.45 per cent a year ago. Some of the food items that became expensive during the week due to the eight-day truckers' strike include maize, bajra, jowar, rice, sugar and gur. The truckers' strike, which began on January 5, restricted the movement of goods, leading to shortage and price rise. Among manufactured items, prices of caustic soda, zinc and sacking bags became expensive during the week. In the fuel goods category, jet fuel and furnace oil became dearer by 4 per cent and one per cent, respectively. While the prices of fruit and vegetables remained unchanged during the week, those of cement and iron and steel declined marginally. Inflation, which declined for ten consecutive weeks, rose marginally for the week ended January 10 to 5.6 per cent. Inflation for the week ended November 22 was revised downwards to 8.26 per cent from 8.40 per cent in the provisional estimates.

Intraday Calls 29/01/09

Buy Great Offhsore at 256, target: 266. Stoploss: 252. Buy Power Finance Corporation at 133.10, target: 137. Stoploss: 131 Buy ORIENTAL BANK OF COMMERCE. at Rs. 125-130. SL-120. TRGT 140-150. Buy MTNL at Rs.68-70. SL-65. TRGT 75-80. Buy KOTAK BANK at Rs.270-275. SL-260. TRGT 300-320. Buy JAIPRAKASH ASSOCIATE(J.P) at Rs.63-66. SL-61.TRGT 75-80. Buy G.E.SHIPPING at Rs.160-165. SL-150.TRGT 180-190. Buy BAJAJ AUTO at Rs.225-230.SL-215. TRGT 250-260.

Pfizer-Wyeth may climb to No 2 spot

The merger of Pfizer and Wyeth is expected to create the second-biggest drug maker among multinational companies in India. The world's largest drug maker Pfizer yesterday announced a $68-billion acquisition of US-based Wyeth. The combine will have sales of more than Rs 1,000 crore in India, overtaking Aventis Pharma, Abbott India and Novartis. Aventis last year reported sales of Rs 873 crore, Abbott Rs 594 crore and Novartis Rs 553 crore. More than that, the combined entity will have cash reserves of over Rs 700-900 crore, which can be potentially utilised for acquisition of brands or units in India. Pfizer alone had a net profit of Rs 331 crore last year. The Pfizer- Wyeth combine will, however, lag GlaxoSmithKline (GSK), which recorded sales of Rs 1,577 crore in 2007-08. Independently, Pfizer, the maker of erectile dysfunction drug Viagra, is ranked 27th and Wyeth 37th in 2007-08. Pfizer last year reported net sales of Rs 672 crore while Wyeth had sales of Rs 331 crore. Still, the combined entity will lag much behind its local Indian rivals and is expected to rank 19th among all the drug makers in the country. In India, Pfizer employs close to 2,000 people and Wyeth employs 860, which includes 627 sales representatives. "It is early to say whether Pfizer will trim Wyeth employees in India as India is a key geography for any drug company in the changing global pharmaceutical landscape," said Sujay Shetty, associate director, pharmaceutical and life sciences of PriceWaterhouseCoopers. Both Pfizer and Wyeth have only one manufacturing unit in India, in Mumbai and Goa, respectively. Analysts point out that the deal will bring together a wide basket of drugs, complimenting each other with synergistic benefits in the Indian market. "While Pfizer has a good portfolio of established brands in respiratory and cough syrups, Wyeth has strength in vaccines and certain key antibiotics which Pfizer is not operating in at present," said Sarabjit Kaur Nagra, vice-president, research with Angel Broking. Though Pfizer has indicated the acquisition process is targeted to be completed by mid-2009, the merger of India-listed entities require a lot of regulatory clearances from Sebi, RBI and the shareholders of both companies, experts say. Pfizer and Wyeth also have independent privately-held arms in India. While the share price of Wyeth closed at Rs 434.20 today on BSE with a marginal 0.57 per cent rise, Pfizer rose 2.11 per cent to close at Rs 525.50.