After witnessing a strong start, the Indian stock markets remained relatively upbeat during the previous two hours of trade. However, the indices pared some of the opening gains on account of profit booking in the telecom and FMCG sectors. Currently, persistent buying activity is being witnessed in sectors like oil & gas, realty, metal and banking which has kept the indices well above the dotted line.
The BSE Sensex and the NSE Nifty are trading in the positive, up by 60 points and 25 points respectively. Midcap and small cap stocks are also trading in the positive, up by 1.01% and 1.4 respectively. The rupee is trading at 45.55 to the dollar.
As per a leading business daily, Mumbai based pharma major Wockhardt has won USFDA's tentative approval to market 'Levofloxacin', a generic used for treating a broad spectrum of bacterial infections. The company will be able to market this drug in the strengths of 250 mg, 500 mg and 750 mg in the US. It may be noted that according to estimates this widely used drug has a potential market of US$ 1.6 bn. It is currently marketed in the US by Johnson & Johnson which holds a patent which will expire in June 2011. Wockhardt plans to launch this drug immediately after the expiration of the patent. The company has won a couple of tentative approvals from US FDA since the start of this year. We believe these FDA approvals will help the company augment its product portfolio and bolster sales from the highly competitive US generics market.
However, the company still has a lot of issues to resolve in terms of its balance sheet debts and FCCBs. The latter especially has been a persistent woe for the company. More so when the other pharma companies have been able to reduce their cumulative FCCB burden by 60%, giving them better financial stability and more avenues for funding expansions. Currently the stock is trading in the green.
According to a leading business daily, state-owned Union Bank of India is in talks with a couple of small Indonesian banks for potential acquisitions. The bank's board has approved its strategies for overseas acquisitions probably in geographies like Indonesia, Africa, Europe and the UK. However, with Indonesian banks, talks are in the preliminary phase as of now. The bank will have to seek regulatory nods from RBI and Indonesian banking regulators once it identifies the target for acquisition. The bank's overseas acquisition strategy aims at assisting Indian entities operating in the target geographies. It also aims at facilitating trade financing and offering retail banking services to local clients there. It may be noted that at present the bank's overseas presence is limited in Hong Kong, where it has a full-fledged branch. It also has four representative offices abroad.
We believe that going forward, with technological upgradation and aggressive growth strategies, the growth prospects of the bank appear enthusing. However, excessive reliance on treasury income and inability to grow its fee income base remain lingering concerns. The bank is trading in the green along with other peers in the banking space.