The cost of debt protection Reliance Industries Ltd (RIL) rose the most among Asian oil companies this quarter, the most natural explorer falling gas production and decreases the profit growth.
Credit default swaps on the Mumbai-based company, controlled by billionaire Mukesh Ambani, rose 15 basis points to 165, according to CMA, which is owned by CME Group Inc. and collects the prices offered by dealers in the market OTC. Contracts of Petroleo Brasileiro SA slid 11 basis points, or 0.11 percentage point, to 132 after the company in Rio de Janeiro-based oil discovery annouDebt Increases The Risk Of Billionaire Ambani In Asia’s Largest Gas Settlement: Vote In India nced last month.
Rising global commodity prices boosted inflation in the second largest world’s fastest growing economy, emphasizing the need to ensure energy supply for 1.2 million people in the country. Bonds of India’s oil and gas explorers have fallen this year, so the difference in the yields of government debt doubled in the last six months to dependence on oil and its state rival and Natural Gas Corp.
“The Reliance gas production has declined and there is still no certainty when it will rise again,” says Manoj Kulkarni, director of research at brokerage Credit SJS Markets Ltd. in Hong Kong. “Declining output is amortized gains and Reliance has not been able to benefit from rising commodity prices. “
Natural gas production of the largest deposits of India, the area controlled Reliance KG-D6, fell 17 percent from a peak of nearly 60 million cubic meters per day in June of this year. The company’s net profit rose 14 percent from the previous year in the three months ended March, the smallest in six quarters after the fall of production.
Return on Reliance 8.75 percent bond that the rupiah in May 2020 9.37 percent today, according to data compiled by Bloomberg. It increased by 25 percentage points since the company filed last April 21 in the income statement. 4.5 per cent return on the bubble in the dollar since October 2020 has increased by five basis points this month, 5.16 per cent.
“The benefits have been hit hard as production fell,” said Raj Kothari, a trader based in London, Sun Global Fixed Income Investments Ltd., in an interview yesterday. “The production of gas that cause the growth of dependency. Everyone seems very hard to get more clarity on that.”
The yields of around 6 per cent would be an opportunity for investors to buy the debt, he said.
Obligations of ONGC Videsh, a unit of ONGC, is on track to fall in the quarterfinals of the week. Natural gas production company based in New Delhi was little changed at 23.1 billion cubic meters in the 12 months ended in March from the same period last year, according to data from Ministry of Petroleum. The yield on the 8.54 percent note due January 2020 fell by three basis points today to 9.33 percent, Bloomberg data show.
The difference in yield between the notes of nine years of dependence on government bonds and similar maturity widened 48 basis points from late November to 104, according to data compiled by Bloomberg. A similar measure for ONGC Videsh has doubled to 100 basis points.
“With ONGC, it has not been able to increase production, while Reliance has a lot of production problems,” Jagdish Meghnani, an oil analyst based in Mumbai and gas Alchemy Share & stock Brokers, said in an interview yesterday. “A year ago, we were looking for supply growth to ease, which included production of Reliance. But now the scenario has changed. “
Manoj Warrier, Mumbai-based Reliance spokesman, declined to comment on. AK Hazarika Chairman and Managing Director ONGC not return two calls on his cell phone.
The growth in dependence on credit-default swaps followed by almost 8 percent more debt is 674 billion rupees (15 billion U.S. dollars) in March than a year earlier. Contracts pay the buyer face in exchange for securities or cash if the company fails to comply with its debt agreements. starting point is $ 1,000 per contract year to protect $ 10 million in debt.
The decrease in natural gas problem is not an exit for the company because of its diversified revenue streams, according to Sun World. The unit, which receives about 38 percent of its profits from refining, also produces chemicals, clothing and has a broadband service business. The company announced in April last year it would take a stake in Deccan Express Transport and Logistics SA., A cargo plane based in Bangalore.
“Payment of the debt should not be a problem for trust and their cash flows from the refineries are very strong,” Kothari said Sun World. “When investors think about buying the debt of Indian companies, who think Reliance.”
Crude Oil Prices
Imports of energy supply has become more expensive for India after the rupee depreciation in the year. The currency has lost 0.5 per cent in 2011 to 44.93 per dollar traded yesterday, according to data compiled by Bloomberg.
Inflation in the country, which is based on imports of 75 percent of its energy needs, have accelerated the crude oil traded in New York increased by 9 percent this year. Wholesale prices in the South Asian economy grew 8.98 percent in March after rising 8.31 percent the previous month.
The yield on India’s 7.8 percent due April 2021 was 8.34 percent today, according to central bank’s trading system. The rate, which rose 14 basis points in April, rose 21 basis points this month. The yield is 514 basis points more than similar maturity U.S. Treasury, from a nine-month low of 436 reached on April 8. India’s obligations have returned 0.6 percent this year, the smallest among the 10 local currency bond markets outside Japan, according to indexes compiled by HSBC Holdings Plc.
“Reliance has spread thin by entering many areas that are not his specialty,” said Juergen based in Vienna, Maier, who helps manage about $ 1.3 billion shares of emerging market at Raiffeisen Capital Management in Vienna . ‘I’d much rather have seen more money in their gas fields to increase production. ”
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