Earnings Lift Infosys

123jump.com Staff
13 Jan, 2009
New York City

Indian government orders criminal probe in Satyam scandal. Wipro was banned for from the World Bank. The largest real estate developer in India, DLF raised 1,700 crore rupees in the debt market lifting other real estate stocks. Infosys surged on better than expected earnings.

[R]10:00AM New York, 7:30 PM Mumbai - Indian government orders criminal probe in Satyam Scandal. DLF raised 1,700 crore rupees in the debt market lifting other real estate stocks.[/R]

In Mumbai, the BSE 30-share Sensex Index fell 0.4% or 38.69 to 9,071.36 and CNX Nifty declined 1% or 28.15 to 2744.95.

Of the stocks traded on the BSE, 881 rose, 1,538 declined, and 91 were unchanged.

Trading Statistics

Daily turnover on the BSE increased to 3,465 crore rupees from 3,212.66 crore rupees yesterday.

Indian Government Orders SFIO to Probe Satyam

Minister of Corporate Affairs Prem Chand Gupta said the government has ordered the Serious Frauds Investigation Office (SFIO) to investigate the Satyam scandal.

The SFIO, which has representations from the ministry of home affairs and Enforcement Directorate and Intelligence department, is expected to submit its report in 3 months.

The Registrar of Companies in Hyderabad has since inspected the company''s books of accounts and collected evidence against Satyam and its eight group companies.

World Bank Bars Wipro, Awards Contracts to TCS

Economic Times of India reported today that the World Bank has blacklisted Wipro after the company awarded shares to its staff while working with the bank.

Satyam was blacklisted last week on revelations that the company has been fudging accounts for the past seven years.

“Wipro should have known that awarding shares to the staff while working with the Bank is against its regulations. However, the ban was imposed only after the policy came into effect in 2006,” the Bank was quoted as saying.

Analysts estimate that the total value of World Bank''s outsourcing business given to Indian companies annually is around $25 million.

All the contracts that were being handled by Satyam and Wipro have now been handed over to TCS, the largest software service provider from India.

Gainers & Losers

IT stocks rose after Infosys said net profit increased 14.6% to 1,641 crore rupees in the third quarter ended December 30 from the previous three months. The company''s revenue also increased 6.8% to 5,786 crore rupees in the review period.

The company expects 27.6% growth in earnings per share at 101.30 rupees for 2009 from 100.51 rupees forecasted earlier. The stock climbed 6.5% to 1,232 rupees.

Other IT stocks rose as the rupee weakened to 48.99 against the dollar from 48.84 yesterday. MphasiS edged up 0.7%, HCL Technologies gained 0.5% and Sonata Software jumped 2.3%.

Reliance Industries shed 1.2% to 1,086.10 rupees on news the government will file an affidavit today before the Bombay High Court stating that the natural gas price of $4.2 per million British thermal unit will be applicable to all buyers irrespective of whether they are government-owned or private entities.

Tata Power Company rose 3.9% to 756 rupees after signing a pact with the state government of Gujarat for setting up power plants.

Energy stocks fell after crude oil prices fell 34 cents to $37.24 per barrel. Oil and Natural Gas Corporation plunged 2.9% to 633.90 rupees and Cairn India lost 7.3% to 152.95 rupees.

State run oil marketing companies increased. HPCL soared 4.3%, BPCL gained 3.7% and IOC edged up 3.5%.

Larsen & Toubro rose 0.7% to 700 rupees.

Realty stocks increased after DLF raised 1,700 crore rupees in debt in the current diffuclt market environment. Indiabulls Real Estate increased 5.6%, Housing Development & Infrastructure gained 1% and Unitech jumped 1.5%.

Tata Steel rose 3.2% to 206.60 rupees and Sterlite Industries climbed 3.1% to 268 rupees.

Private sector companies soared. ICICI Bank fell 2.5% to 427 rupees and HDFC Bank shed 1.7% to 987.65 rupees.