Metal Stocks Outlook for the week – 16 to 20.06.2014
(www.rupeedesk.in)
(www.rupeedesk.in)
Stocks in the metal space are
expected to move in tandem with the broader market and
see profit-booking next week, amid
rising tensions in Iraq. However, like for the market,
the underlying bias for metal stocks
remains positive. On Thursday, a subsidiary of
Jindal Steel and Power, Wollongong
Coal, terminated its coal purchase agreement with
Gujarat NRE Coke due to non-payments.
On the same day, Steel Minister Narendra
Singh Tomar approved a 17% wage hike
for 85,000 employees of state-owned Steel
Authority of India Ltd, according to
a media report. We have for long contended that
one of SAIL's bigger issues is its
employee wages which are higher than industry
standards.
The report, quoting sources, said
that the immediate outgo will be over 23 bln rupees,
including arrears. SAIL has already
made the required provisions for paying out majority
of the arrears, it said. On that very
night, SAIL's Bhilai plant witnessed a gas leakage,
leading to the death of six employees
and injury to 46. The company said that the unit
is more or less running normally with
only a few units being affected by the accident.
The Supreme Court-appointed
committee's comments on penalties imposed by the
Odisha government are a positive for
Tata Steel. For, this will provide relief to investors
worried about large cash outflow from
the company, estimated at 60 bln rupees, and
delay in renewal of mining leases.
The panel had said that the amount could be cut to
around 18 bln rupees instead.
The central empowered committee will
submit its report by July to the Supreme Court,
which will hear the case again in
August. The CNX Metal Index will witness profitbooking
and sees it falling to 3280-3250
points.
