Corporate News/Results Corner
RIL makes changes in gas contracts; likely to benefit additional 10% by the move. Positive in the short to medium term for RIL.
Reliance Industries Limited (RIL) has circulated to urea manufacturing fertilizer units a new Gas Sale and Purchase Agreement (GSPA) in which it has proposed to charge government- fixed rate for natural gas on Gross Calorific Value (GCV) basis instead of current practice of billing $4.205/ mmbtu on Net Calorific Value (NCV). One GCV equals to 0.9 NCV and so on a like to like basis billing urea plants the new price of $8.3 per mmBtu on GCV would mean an actual rate of $9.13 per mmBtu on NCV basis. If the move is implemented RIL is l ikely to benefit in the short to medium term.
Economic and Other News
Ministry moves Cabinet note; to trim potash subsidy
After receiving Election Commission’s nod, the Fertilizer Ministry has moved a Cabinet note to reduce potash fertilizer subsidy for 2014-15 fiscal, which would result in savings of Rs 9bn to the exchequer. The ministry has moved a proposal to fix subsidy of P&K (phosphatic and potassic) fertilizers for next fiscal wherein it has recommended constant subsidy rates for all the complex fertilizers, barring potash.
West spreading El Nino rumors: IMD
Weather scientists from Australia to the US are seeing ominous signs of a ‘monster El Nino’ that heightens the risk of a drought in South Asia this year, but India Meteorological Department is snarling at these forecasters and accusing them of conspiring to rattle the country’s commodities and stock markets. American scientists say meteorological data point to a repeat of the ‘monster El Nino’ that struck in 1997-98. They also say the dreaded phenomenon, which can last a year or more, would make 2015 the warmest ever.
China Manufacturing PMI Hits Eight-Month Low – HSBC
China’s manufacturing sector fell deeper into contraction in March. The index came in with a seasonally adjusted score of 48.1, touching an eight-month low. The headline figure is down from 48.5 in February and it was well shy of forecasts for 48.7 and it moves the index further below the mark of 50 that separates expansion from contraction. Among the key components of the survey, the output index sank to 47.3 from 48.8 in the previous month, hitting an 18-month low.
U.K. February Budget Deficit Exceeds Expectations
U.K. budget deficit exceeded expectations in February as expenditure increased more than revenues. Public sector net borrowing excluding interventions increased to GBP 9.3bn in February compared to GBP 9.2bn registered a year ago. The budget deficit was seen at GBP 8.6 billion. Revenue increased 4.9% from the last year, while expenditure jumped 7.8%.