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Stocks to Watch: Tata Motors, Tata Steel, Infosys, Bharti, Swiss Re, Wockhardt

This article was posted on May 28, 2009 and is filed under Stock News

MUMBAI: Stocks are likely to open weaker and close on a negative note Thursday, tracking the pullback in US and Asian markets. The stocks to be watch in this market would be:

Shares of infrastructure companies are likely to buck any downtrend with the Securities and Exchange Board of India said to be considering a proposal to exempt the current rule that restrains parent companies from raising money through public issue of debentures for funding group companies. The move is aimed at boosting the corporate debt market by making it easier for companies to tap this mode of fund raising. Most infrastructure companies follow the holding company and special purpose vehicle (SPV) structure because of the nature of the business. Funding requirements vary from project to project, and so the company undertakes different projects in various SPVs.

The Tata Group is fortifying itself to face the future, with new teams to steer its flagships, Tata Motors, Tata Steel and Tata Consultancy Services. The first two are facing management and financing challenges arising from the acquisitions of Jaguar Land Rover and Corus, while TCS has to cope with shrinkage in demand in its core overseas market.

The group is close to finalising its succession plan for Tata Motors and Tata Steel, as the terms of the current heads of the two firms come to an end in May and September respectively. Prakash Telang, currently head of the commercial vehicle strategic business unit at Tata Motors is set to succeed current MD Ravi Kant after Mr Kant retires on May 31. Mr Kant will likely assume the role of non-executive VC. Mr Telang will report to the board with Mr Kant playing a wider role, mainly involving overseeing the restructuring of British automaker JLR.

Tata Motors share ended 5.55% higher at Rs 343.55 on the BSE, Tata Steel was up 3.39% at Rs 373.25, and TCS gained 3.34% to Rs 645.05.

Infosys Technologies is chasing new contracts worth $100-250 million from another existing customer, British Petroleum (BP), as it seeks to grow revenues from almost $15 billion outsourcing market in the UK. Europe’s third-biggest oil company, BP, which started outsourcing its back office functions years ago, is currently fleshing out new contracts for outsourcing business application maintenance, development and support, as the oil major plans to bring down its operational costs and ensure better focus on its core business. On Wednesday, Infosys shares closed 2.68% higher at Rs 1584.60 on BSE.

Shares of Wockhardt Ltd could see some action amid reports that the debt-ridden company is in advanced talks to sell its German business, Espharma GmbH, to another German player, Lindopharm GmbH. The stock ended 6.62 per cent higher at Rs 122.35 on the BSE.

The collapse of negotiations between Bharti Airtel and MTN last year turned out to be a boon for the former. Had the deal fructified last year,
Bharti would have paid around $7-8 billion for a 40% stake in MTN. Now, the Sunil Mittal-promoted firm is making a net payment of just $4 billion for 49% stake and controlling interest in the South African giant that has presence in 21 geographies.

Bharti share closed 0.2% lower Wednesday at Rs 768.90 on the BSE.

Swiss Re, the world’s second-largest reinsurer, is in talks with Religare Enterprises for a health insurance joint venture with an initial investment of up to Rs 500 crore. Shares of Religare, which ended 10.42 per cent higher at Rs 454.55, may see some upside on the reports.

source: Economictimes

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