Tata Steel Starts Debt Clean-Up After Corus Purchase Mess
By Abhishek Shanker and Rajesh Kumar SinghOct 28, 2014 9:49 AM GMT+0530
Saddled with $13 billion of debt seven years after buying Corus Group Plc, Tata Steel Ltd. (TATA) is seeking to pare its liabilities. Rating companies are pleased.
India’s
largest maker of the alloy, facing depressed demand for its
construction products in Europe, started talks with Swiss investment
firm Klesch Group this month to sell some assets in the continent.
Moody’s Investors Service said the move is “credit positive,” while
Fitch Ratings said it will lower Tata Steel’s debt.
The
Mumbai-based company is counting on a successful deal with Klesch to
help it shift focus back to the group’s profitable business in India,
where a new administration is overhauling policies to revive economic
growth. The total debt of Tata Steel has jumped 36 percent
to 816 billion rupees ($13.3 billion) since 2009 after its plan to
expand in Europe through Corus was marred by the global recession.
“The sale will be credit positive for Tata Steel and would allow them to focus on the growth markets like India,”
Alan Greene, vice president at Moody’s Investors Service, said by
phone. “European steel demand is still struggling and long products are
finding it the hardest.”
Rails, Rods
The preliminary agreement signed by Tata Steel and Klesch includes Tata’s long-products manufacturing and distribution sites in the U.K., France and Germany
that employ about 6,500 people, the steelmaker said in a statement. The
long steel products are rebars, rails and rods typically used in
construction.
Photographer: Simon Dawson/Bloomberg
Buildings are seen illuminated as vapor rises from cooling towers at the steel works... Read More
Moody’s last month raised Tata Steel’s corporate family
rating to Ba2 from Ba3, while upgrading its European unit’s ratings to
B2 from B3. It also upgraded Tata Steel U.K.’s probability of default
rating. Ratings were raised on expectation the companies will continue
to get support from parent Tata Sons Ltd.
The yield on Tata
Steel’s dollar-denominated bonds due 2024 has declined 24 basis points
since the notes were issued in July to 5.71 percent, prices from
Standard Chartered Plc show, signaling improved investor confidence.
Credit-default swaps insuring the company’s euro-denominated debt
against nonpayment for five years dropped 55 basis points in 2014 to a
three-year low of 322, according to data provider CMA.
Geneva-based
Klesch Group, owned by billionaire Gary Klesch, was started in 1990 and
has units producing and trading oils, metals and chemicals. It employs
more than 2,000 people in 17 countries.
Cut Costs
In
Europe, Tata Steel’s focus will continue to be on lowering costs and
improving operational reliability, the company said while reporting
earnings on Aug. 13. Tata Steel has been shuttering sites and cutting
jobs in the U.K. since the global financial crisis and will cut about
400 jobs at its South Wales steel plant, it said on July 1.
The Indian alloy maker’s troubles started in 2007 when it beat Brazil’s
Cia. Siderurgica Nacional SA in bidding for Corus. The offer was nine
times Corus’s earnings before interest, taxes, depreciation and
amortization, or Ebitda, based on results for the 12 months ended Sept.
30, 2006. That compares with 4.46 times paid by billionaire Lakshmi N.
Mittal for Luxembourg-based Arcelor SA in 2006.
“Tata Steel
overleveraged itself after getting into a bidding war for Corus,” said
Abhisar Jain, an analyst at Mumbai-based Centrum Broking Pvt., who
advises a hold on the stock. “They overpaid substantially for an asset
that didn’t have its own raw material support. The long period of
slowdown in Europe made matters worse.”
Recovery Threatened
Steel
demand in the European Union rose 0.8 percent in 2013, according to a
report published by Worldsteel on Oct. 6. Demand may grow 4 percent this
year, it said, cautioning disinflation and geopolitical conflicts may
threaten a recovery.
Demand from automotive, appliances and
tubes industries is expected to outpace the growth in construction,
according to Eurofer, the European steel association. Bob Jones, the
spokesman for the Europe business, said in an e-mailed reply to
Bloomberg News questions that Tata Steel will focus on strip products,
which cater to these industries.
While Europe wobbled, Tata
Steel consolidated its position in India, almost doubling its capacity
to 10 million tons a year in the past seven years. Its new Odisha plant
is expected to reach an annual capacity of 3 million tons starting next
year.
Modi Pledge
The expansion hinges on optimism
Prime Minister Narendra Modi will keep his pledge to boost
manufacturing, build 100 smart cities and expand the nation’s road and
rail network.
Low valuations and an improving demand outlook in
Europe have earned Tata Steel favor from analysts. Of the 50 tracking
the stock, 34 rate it a buy, while eight suggest selling.
The shares
have gained 6.5 percent this year, trailing a 27 percent advance in the
benchmark S&P BSE Sensex index. Its biggest Indian rival Steel
Authority of India Ltd. has gained 13 percent this year, while its
larger European peer ArcelorMittal (MT) declined 24 percent.
Tata
Steel stock has returned 2 percent annually to investors since the
acquisition, lower than returns on most savings account bank deposits.
Tata
Steel reported a profit of 35.9 billion rupees for the year ended March
2014, almost a quarter of its annual earnings seven years ago, when it
bought Corus. A bulk of that profit came from its Indian operations, as
the takeover happened on Jan. 31. The period in between was marked by two annual losses.
“If
the deal doesn’t go through, it will be a disappointment for Tata, but
it’s not the end of the world,” Moody’s Greene said. “They have their
new Odisha plant coming up on stream next year, which will help them
offset the loss-making businesses in Europe.”
To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net
To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Sam Nagarajan, Indranil Ghosh
Support can be defined as a level from which a stock tends to bounce
back. Its a level which indicates that the stock is likely to witness
some fresh buying, and some upside is possible in the next coming days.
Its is an awareness of patterns associated with support zones (areas
usually associated with previous trading ranges, in which prices find
support against further decline) enables investors to more accurately
define the direction of significant market trends. Such patterns also
suggest areas in which price reversals are likely to take place.
Stock never advance in a straight line, they tend to go up in a
series of advance’s, flat or retracement period, further advance,
another flat or retracement period, and so forth.
Identifying the support level of stock is merely done by looking at
the last 3-4 low’s of the stock from which it bounced back, but it takes
some practice and is somewhat subjective because there are points that
can be considered weak support or resistance and strong support or
resistance.
Supports are areas where prices tend to consolidate and
reverse. Support provides support to prices that are declining.
Determining the strength of the Support levels also plays an
important, this is done by counting how many times did the stock price
hold prices from dipping further, in other words counting the number of
times the stock bounced back from its support levels, The more times it
appreciated, the stronger and more significant the support point.
As
seen in the left hand side chart, it shows the support level of Idea,
it faced strong support around 48 levels, it manged to touch that level
nearly 4-5 times, in a series.
Once it made a close above 49-50, it made a high of 62, this
indicates the importance of a support levels, but if the stock would
have gone below is support level of 48, it could easily see 35 levels.
A
trader should only make a buy decision once he witnesses some buying
interest in the stock.
Indian Stocks Climb to One-Month High in Special Diwali Trading
By Rajhkumar K Shaaw
October 23, 2014
Indian stocks advanced, sending the
benchmark index to a one-month high in a shortened trading
session. Energy companies led the increases.
Oil & Natural Gas Corp., India’s largest state-owned oil
explorer, climbed for the first time in three days. Reliance
Industries Ltd., owner of the world’s largest refining complex,
rose to a one-week high. Bajaj Auto Ltd. (BJAUT) rallied to a record.
Wipro Ltd. (WPRO), India’s third-biggest software exporter, fell the
most in two weeks after its profit missed estimates.
The S&P BSE Sensex increased 0.2 percent to 26,851.05 in
special Diwali trading in Mumbai, a fifth day of gains and the
highest since Sept. 22. The gauge rallied 2.8 percent this week.
Stocks rose this week, ending four weeks of decline, amid
expectation Prime Minister Narendra Modi will accelerate policy
changes to boost economic growth.
Modi ended price curbs on
diesel, raised natural-gas tariffs and moved closer to ending
the state’s monopoly on mining and selling coal to cut subsidies
and narrow the fiscal deficit.
Hacker sentenced to 21 months in U.S. prison for $15 mln scheme
(Reuters) - A
Massachusetts man was sentenced to 21 months in prison on Friday for his
role in a cybercrime scheme that hacked accounts at banks, brokerage
firms and government agencies in an attempt to steal more than $15
million, U.S. prosecutors said.
Robert Dubuc, 41,
pleaded guilty to wire fraud conspiracy, conspiracy to commit access
device fraud and identity theft in federal court in New Jersey in April.
U.S. District Judge Peter Sheridan in Trenton imposed the sentence on
Friday.
A co-defendant, Oleg Pidtergerya, pleaded guilty to the same charges and is scheduled for sentencing in December.
Prosecutors
said the two men were members of an international cybercrime ring led
by Oleksiy Sharapka and Leonid Yanovitsky of Kiev, Ukraine, who have
also been indicted but remain at large.
The
group hacked into accounts in 2012 and 2013 at global banks and other
institutions, including Citigroup Inc, JPMorgan Chase & Co, the U.S.
Department of Defense, PayPal and others, and diverted funds into
accounts and debit cards they controlled, prosecutors said.
The
group then used “cash out” crews to tap the stolen funds by withdrawing
cash from ATMS and making fraudulent purchases, according to
prosecutors. Dubuc operated a crew out of Massachusetts, while
Pidtergerya led a crew in New York, the government said.
Google bolsters artificial intelligence efforts, partners with Oxford
By Alexei Oreskovic
SAN FRANCISCOThu Oct 23, 2014 11:18pm IST
(Reuters) - Google Inc (GOOGL.O) (GOOG.O)
is expanding its artificial intelligence initiative, hiring more than
half a dozen leading academics and experts in the field and announcing a
partnership with Oxford University to "accelerate" its efforts.
Google will make a
"substantial contribution" to establish a research partnership with
Oxford's computer science and engineering departments, the company said
on Thursday regarding its work to develop the intelligence of machines
and software, often to emulate human-like intelligence.
Google
did not provide any financial details about the partnership, saying
only in a post on its blog that it will include a program of student
internships and a series of joint lectures and workshops "to share
knowledge and expertise."
Google,
which is based in Mountain View, California, is building up its
artificial intelligence capabilities as it strives to maintain its
dominance in the Internet search market and to develop new products such
as robotics and self-driving cars. In January Google acquired
artificial intelligence company Deep Mind for $400 million according to
media reports.
The new
hires will be joining Google's Deep Mind team, including three
artificial intelligence experts whose work has focused on improving
computer visual recognition systems. Among that team is Oxford Professor
Andrew Zisserman, a three-time winner of the Marr Prize for computer
vision.
The four founders
of Dark Blue Labs will also be joining Google where they will be will be
leading efforts to help machines "better understand what users are
saying to them."
Google
said that three of the professors will hold joint appointments at
Oxford, continuing to work part time at the university.
(Reporting by Alexei Oreskovic; editing by Andrew Hay)
Google's Pichai to oversee major products and services
By Alexei Oreskovic
SAN FRANCISCOSat Oct 25, 2014 4:57am IST
(Reuters) -
Google Inc Chief Executive Officer Larry Page has put Sundar Pichai, one
of his key lieutenants, in charge of the Internet company's products.
The India-born
executive will have oversight over products such as search, maps,
Google+, commerce, advertising and infrastructure, according to a Google
spokesman. Six executives who previously reported to Page, including
the heads of research, social media and search, will now report to
Pichai, according to Re/code, which first reported the change on Friday,
citing an internal memo.
The
change will free Page from having as many direct reports and product
units to oversee so that he can better focus on "the bigger picture,"
according to the Re/code report, which also cited anonymous sources.
YouTube, Google's popular video website, will be unaffected by the new structure and will continue to report directly to Page.
The
move puts Pichai, 42, in charge of many of Google's main services,
including its core search and advertising units, which generate the bulk
of the company's revenue.
Google,
the world's No.1 Internet search engine, has experienced several
high-level management changes this year. Chief Business Officer Nikesh
Arora departed unexpectedly in July to become Vice Chairman of Japan's
SoftBank Corp and was replaced by longtime Google executive Omid
Kordestani. Vic Gundotra, the head of Google's social networking
services, left in April.
Pichai,
who has risen rapidly through the ranks since joining Google in 2004,
is viewed by many industry insiders as potential CEO material. In
addition to his duties overseeing the various products, Pichai will
continue to lead Google's Android and Chrome software operating systems
as well as Google's Apps business.
(Reporting by Alexei Oreskovic; Editing by Andre and Grant McCool)
Deepawali or Diwali is certainly the biggest and the brightest of all Hindu festivals. It's the festival of lights (deep = light and avali
= a row i.e., a row of lights) that's marked by four days of
celebration, which literally illumines the country with its brilliance,
and dazzles all with its joy. Each of the four days in the festival of
Diwali is separated by a different tradition, but what remains true and
constant is the celebration of life, its enjoyment and goodness.
The Origin of Diwali
Historically, the origin ofDiwali
can be traced back to ancient India, when it was probably an important harvest
festival
. However, there are various legends pointing to the origin of
Diwali or 'Deepawali.' Some believe it to be the celebration of the
marriage of Lakshmi with Lord Vishnu. Whereas in Bengal the festival is
dedicated to the worship of
Mother Kali
, the dark goddess of strength.
Lord Ganesha
, the elephant-headed God, the symbol of auspiciousness and wisdom, is also worshiped in most Hindu homes on this day. In
Jainism
, Deepawali has an added significance to the great event of Lord Mahavira attaining the eternal bliss of
nirvana
. Diwali also commemorates the return of
Lord Rama
along with Sita and Lakshman from his fourteen year long exile and
vanquishing the demon-king Ravana. In joyous celebration of the return
of their king, the people of Ayodhya, the Capital of Rama, illuminated
the kingdom with earthen
diyas
(oil lamps) and burst crackers.
These Four Days
Each day of Diwali has its own tale, legend and myth to tell. The first day of the festival
Naraka Chaturdasi
marks the vanquishing of the demon Naraka by
Lord Krishna
and his wife Satyabhama.
Amavasya
, the second day of Deepawali, marks the worship of
Lakshmi
, the goddess of wealth in her most benevolent mood, fulfilling the wishes of her devotees.
Amavasya
also tells the story of Lord Vishnu, who in his dwarf incarnation
vanquished the tyrant Bali, and banished him to hell. Bali was allowed
to return to earth once a year, to light millions of lamps to dispel the
darkness and ignorance, and spread the radiance of love and wisdom. It
is on the third day of Deepawali —
Kartika Shudda Padyami
that Bali steps out of hell and rules the earth according to the
boon given by Lord Vishnu. The fourth day is referred to as
Yama Dvitiya
(also called
Bhai Dooj
) and on this day sisters invite their brothers to their homes.
The Significance of Lights & Firecrackers
All the simple rituals of Diwali have a significance and a story to
tell. The illumination of homes with lights and the skies with
firecrackers is an expression of obeisance to the heavens for the
attainment of health, wealth, knowledge, peace and prosperity. According
to one belief, the sound of fire-crackers are an indication of the joy
of the people living on earth, making the gods aware of their plentiful
state. Still another possible reason has a more scientific basis: the
fumes produced by the crackers kill a lot of insects and mosquitoes,
found in plenty after the rains.
The Tradition of Gambling
The tradition of gambling on Diwali also has a legend behind it. It
is believed that on this day, Goddess Parvati played dice with her
husband
Lord Shiva
, and she decreed that whosoever gambled on Diwali night would
prosper throughout the ensuing year. Diwali is associated with wealth
and prosperity in many ways, and the festival of '
Dhanteras
' ('dhan' = wealth; 'teras' = 13th) is celebrated two days before the festival of lights.
From Darkness Unto Light...
In each legend, myth and story of Deepawali lies the significance
of the victory of good over evil; and it is with each Deepawali and the
lights that illuminate our homes and hearts, that this simple truth
finds new reason and hope. From darkness unto light — the light that
empowers us to commit ourselves to good deeds, that which brings us
closer to divinity. During Diwali, lights illuminate every corner of
India and the scent of incense sticks hangs in the air, mingled with the
sounds of fire-crackers, joy, togetherness and hope. Diwali is
celebrated around the globe
. Outside India, it is more than a Hindu festival, it's a
celebration of South-Asian identities. If you are away from the sights
and sounds of Diwali, light a
diya
, sit quietly, shut your eyes, withdraw the senses, concentrate on this supreme light and illuminate the soul.
