Auto stocks are trading firm. Hero Motorcorp and Eicher Motors are the biggest gainers. According to a leading financial daily, Mahindra & Mahindra (M&M) has initiated construction of a plant in China. The new engine plant will be located at Yancheng city of China's Jiangsu province. The foundation was recently laid in the presence of India's ambassador to China Mr S Jaishankar. It is a joint venture with Yueda Group. The plant is being set up by the Mahindra Yueda Yancheng Tractor Company Ltd (MYYTCL). MYYTCL will spend an amount equal to US$ 14.6 m on this and another US$ 3.7 m on research and development. It may be noted that M&M has already invested US$ 110 m in China. It now holds 9.2% of the fast growing Chinese tractor market.
Private Banking stocks are trading mixed with City Union Bank and Axis Bank trading weak while J&K Bank and Federal Bank are the top gainers. According to a leading financial daily, the acquisition of Enam's broking and investment banking business by Axis bank will have to be an all-cash deal as directed by the Reserve Bank of India (RBI). It may be recollected that the deal was announced last November as an all-stock transaction worth Rs 20.67 bn.
Axis had earlier proposed that it would issue stocks to Enam's founders while the bank's subsidiary would take over the business operations. RBI had rejected this stating that these are two different entities. In a fresh proposal Axis has proposed issuing shares and acquiring business temporarily , and thereafter transferring it to its subsidiary. RBI feels that such a deal will encourage other
smaller banks to try and buy brokerages by offering stock to brokers.