Crude oil crosses US$100
Crude oil futures backed off after crossing the US$100 per barrel mark in anticipation of a decline in job creation in the United States, stoking concerns that demand for fuel would fall in the world's biggest energy consumer. Earlier, crude oil surpassed the three-digit mark on nagging concerns about global supply following a latest militant strike on Nigerian oil facilities, a weakening dollar and drop in US crude inventories for a seventh consecutive week. Crude oil for February delivery fell as much as 0.7%, to US$98.50 in electronic trading on the New York Mercantile Exchange. It traded at US$98.72 at 9:52 a.m. in London, on Friday. Yesterday, the contract set a record US$100.09 before closing down 44 cents at US$99.18 a barrel. Oil prices are up 77% from a year ago level. Crude oil prices jumped 58% last year, the biggest annual gain this decade amid rising demand from countries such as China and India, thinning supplies in the US, a weakening dollar and geopolitical risks. Oil prices have nearly tripled since 2003.
Major consuming nations have no intention of releasing strategic fuel stocks to curb a five-year rally in crude. Despite oil prices hitting US$100, the White House said it would not open up the nation's emergency crude oil reserves to bring down prices. The International Energy Agency (IEA), adviser to the world's top industrialised countries, echoed the White House in saying there was no need to release emergency crude. Two OPEC members expressed the cartel's inability in softening prices. OPEC kept its production targets unchanged at its last meeting Dec. 5, spurning calls by the US to pump more oil. The group next meets on Feb. 1. Commodities such as gold and platinum also hit record highs partly due to the struggling dollar, which makes dollar-denominated assets relatively cheap in non-US currencies. The dollar slid after a key index of the US manufacturing sector last month tumbled to its lowest since April 2003, raising expectations of more rate cuts from the Fed. The dollar's 11% fall last year against the euro helped boost oil prices because it made commodities cheaper for buyers outside the US.
Reliance Power IPO
After overcoming a few legal and regulatory impediments along the way the Reliance-Anil Dhirubhai Ambani Group (ADAG) finally launched the multi-billion dollar mega IPO of Reliance Power Ltd. Earlier, SEBI had cleared the Reliance Power IPO with a few riders. The capital market regulator had asked the promoters to lock-in the entire 20% of their contribution to the IPO for five years. The SEBI directive came while disposing off the case that it was hearing following an order of the Bombay High Court on a Public Interest Litigation (PIL). Reliance Power has fixed the price band of Rs405-450 per share.
To enable large participation by retail investors, Reliance Power will offer a discount of about 5% to the retail investors. Reliance Power has also fixed convenient payment terms for all categories of investors. While QIBs are required to pay 10% on the application, the HNIs and retail investors will have the option to pay Rs115 on the application, i.e. only about 25% of the issue price. The balance amount will be payable on allotment. The IPO is scheduled to open on January 15, and will close on January 18.
Reliance Power, through this IPO proposes to raise about Rs105-115bn - the largest IPO in the history of the Indian capital markets. Reliance Power proposes to issue 260mn shares of Rs10 each, including a promoters' contribution of 32mn shares which will be allotted at the IPO price to the promoters. The balance 228mn shares would constitute the net issue to the public. The IPO will constitute 11.5% and the Net Issue will constitute 10.1% of the post-issue paid-up capital of Reliance Power.
Reliance Power is currently engaged in the construction and development of various gas and coal based thermal power projects and hydro power projects in various parts of the country, of over 28,000 MW capacity - the largest development pipeline in the country. The issue proceeds are proposed to be utilised for funding subsidiaries to part-finance the construction and development costs of the various projects under development and for general corporate purposes.
Crude oil futures backed off after crossing the US$100 per barrel mark in anticipation of a decline in job creation in the United States, stoking concerns that demand for fuel would fall in the world's biggest energy consumer. Earlier, crude oil surpassed the three-digit mark on nagging concerns about global supply following a latest militant strike on Nigerian oil facilities, a weakening dollar and drop in US crude inventories for a seventh consecutive week. Crude oil for February delivery fell as much as 0.7%, to US$98.50 in electronic trading on the New York Mercantile Exchange. It traded at US$98.72 at 9:52 a.m. in London, on Friday. Yesterday, the contract set a record US$100.09 before closing down 44 cents at US$99.18 a barrel. Oil prices are up 77% from a year ago level. Crude oil prices jumped 58% last year, the biggest annual gain this decade amid rising demand from countries such as China and India, thinning supplies in the US, a weakening dollar and geopolitical risks. Oil prices have nearly tripled since 2003.
Major consuming nations have no intention of releasing strategic fuel stocks to curb a five-year rally in crude. Despite oil prices hitting US$100, the White House said it would not open up the nation's emergency crude oil reserves to bring down prices. The International Energy Agency (IEA), adviser to the world's top industrialised countries, echoed the White House in saying there was no need to release emergency crude. Two OPEC members expressed the cartel's inability in softening prices. OPEC kept its production targets unchanged at its last meeting Dec. 5, spurning calls by the US to pump more oil. The group next meets on Feb. 1. Commodities such as gold and platinum also hit record highs partly due to the struggling dollar, which makes dollar-denominated assets relatively cheap in non-US currencies. The dollar slid after a key index of the US manufacturing sector last month tumbled to its lowest since April 2003, raising expectations of more rate cuts from the Fed. The dollar's 11% fall last year against the euro helped boost oil prices because it made commodities cheaper for buyers outside the US.
Reliance Power IPO
After overcoming a few legal and regulatory impediments along the way the Reliance-Anil Dhirubhai Ambani Group (ADAG) finally launched the multi-billion dollar mega IPO of Reliance Power Ltd. Earlier, SEBI had cleared the Reliance Power IPO with a few riders. The capital market regulator had asked the promoters to lock-in the entire 20% of their contribution to the IPO for five years. The SEBI directive came while disposing off the case that it was hearing following an order of the Bombay High Court on a Public Interest Litigation (PIL). Reliance Power has fixed the price band of Rs405-450 per share.
To enable large participation by retail investors, Reliance Power will offer a discount of about 5% to the retail investors. Reliance Power has also fixed convenient payment terms for all categories of investors. While QIBs are required to pay 10% on the application, the HNIs and retail investors will have the option to pay Rs115 on the application, i.e. only about 25% of the issue price. The balance amount will be payable on allotment. The IPO is scheduled to open on January 15, and will close on January 18.
Reliance Power, through this IPO proposes to raise about Rs105-115bn - the largest IPO in the history of the Indian capital markets. Reliance Power proposes to issue 260mn shares of Rs10 each, including a promoters' contribution of 32mn shares which will be allotted at the IPO price to the promoters. The balance 228mn shares would constitute the net issue to the public. The IPO will constitute 11.5% and the Net Issue will constitute 10.1% of the post-issue paid-up capital of Reliance Power.
Reliance Power is currently engaged in the construction and development of various gas and coal based thermal power projects and hydro power projects in various parts of the country, of over 28,000 MW capacity - the largest development pipeline in the country. The issue proceeds are proposed to be utilised for funding subsidiaries to part-finance the construction and development costs of the various projects under development and for general corporate purposes.
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