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GE Shipping preparing for next upturn
Tue, 12 Jan 01:30 pm

Indian markets continued to remain volatile in the last two hours of trade and failed to make inroads into the positive territory. Currently stocks in the IT, media and oil and gas space are trading firm while stocks in all the remaining indices are trading weak. The realty sector is the top loser with heavyweights weighing on the indices.

The BSE-Sensex and the NSE-Nifty are currently trading under the dotted line by around 11 points and 10 points respectively. BSE-Midcap Index fell sharply during trade and is trading lower by 15 points. The BSE-Smallcap index continues to trade in the green up 26 points. The rupee is trading at 45.41 to the US dollar.

According to a leading daily, Great Eastern (GE) Shipping is planning to acquire new ships. The company had sold 15 ships and cancelled orders for 3 new ships in the last 18 months. However a sharp correction in asset prices has prompted the company to start building assets for the next upturn. The company has a cash reserve of Rs 30 bn which it plans to use for its new acquisitions. At present, GE Shipping has 37 vessels while the company’s order book consists of 7 vessels, of which 5 are dry bulk carriers and the remaining 2 are Suezmax tankers. These 7 vessels are expected to be delivered in 2011 and 2012. The new acquisitions will help grow GE shipping’s top line without putting pressure on the company’s balance sheet.

The BSE Bankex is trading lower by almost 1%. Yes Bank is planning to set up a private equity firm under the name Yes Ventures. This firm is expected to be set up in 2010-2011. While the initial target proposed for the fund was US$ 500 m, the fund had to be scaled down to US$ 200 m due to the muted economic conditions. The bank intends to invest this money in clean technology focused funds in South East Asia. Yes Bank has indication that the company intends launching a new fund in 2010-2011. This fund will focus on small and medium enterprises in the sunrise sector. We believe that with a number of private sector banks like ICICI, Kotak and Axis Bank already present in the private equity space, the competition will be tough for Yes Bank.

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