Daily Understanding of Equity Market

Apple Brand Value at $153 Billion Overtakes Google for Top Spot

2011-05-09T15:38:00.000+05:30

Apple Inc. (AAPL), maker of the iPhone, iPad and iMac, overtook search-engine giant Google Inc. (GOOG) to become the world’s most valuable brand, WPP Plc said in a report today.

Apple’s brand value climbed 84 percent in the past year to $153.3 billion, WPP’s Millward Brown unit said. Google’s brand lost 2 percent to $111.5 billion, ending four years atop the rankings, while International Business Machines Corp. (IBM) climbed 17 percent to be the No. 3, ahead of McDonald’s Corp. (MCD)

New versions of the iPhone and iMac, and the introduction of the iPad tablet, helped Cupertino, California-based Apple almost double sales and profit for the latest quarter. Apple, which overtook Redmond, Washington-based Microsoft Corp. (MSFT), as the most-valuable technology company by market value in May 2010, boosted its share of the global phone market and is the leading seller of tablet computers.

“It’s clear that every single Apple employee, from Steve Jobs and Tim Cook to the summer interns, see protecting and nurturing that brand as a top priority,” Millward Brown Chief Executive Officer Eileen Campbell wrote in the report. “Tablet computing also drove value growth not just for Apple, but also for the providers who support yet another networked device.”

Facebook Inc., operator of the world’s largest social- networking site, had a 246 percent climb in brand value, the fastest, to become the No. 35 brand at $19.1 billion, according to the report. Baidu Inc., Google’s Chinese rival, posted the second-fastest climb at 141 percent, to be the No. 29 brand at $22.6 billion.

Twelve of the top 100 global brands were from China, led by China Mobile Ltd. (941) at No. 9 and Industrial & Commercial Bank of China Ltd. at No. 11. Amazon.com Inc. (AMZN), which ranked 14th, overtook Wal-Mart Stores Inc. (WMT), which ranked 15th, to become the most-valuable retail brand.

Real life: I ran my first marathon at 53

2011-04-10T10:00:00.001+05:30

Standing at the start line surrounded by thousands of runners I wondered what on earth I was letting myself in for. I had never run a race before in my life let alone a marathon and, until five weeks before, never imagined I would.

But here I was about to take part in one of the biggest and most popular marathons in the world, The London Marathon. It all started when two of my brothers told me they wanted to run, but were struggling to find a charity to let them take part on their behalf.

I sprang into action and, soon enough found a fantastic charity which helps people with learning difficulties – Norwood – which would let them run. But there was a catch. They said they would only let my brothers run under their name if I ran too!

Laughing at the idea I was shocked when I realised they were being completely serious.

I told them I was 53 and had never run before in my life. But they wouldn’t give up, leaving me no other option than to agree to take part. Then came the next hurdle. Unlike most of the people taking part who got their places a year before the event, I had just five weeks to train and raise £2,000.

I booked an appointment with my doctor and the response I got still makes me chuckle – he said I was mad! But, with no time to lose, I started jogging round the block. But I’m a busy woman and I found it difficult to fit in anywhere near enough training.

I contacted my family and friends and asked them to sponsor me. The response I got was very mixed. Some thought it was incredible and wished me luck, but some were shocked.

One friend even offered me double if I didn’t run because he was worried I’d injure myself.

But I won everyone round and I was overwhelmed with the amount of money I was able to raise in such a short amount of time.

Before I knew it, I was stood at the starting line about to run 26 miles.

The day was incredible.

Surrounded by people of all ages, shapes, sizes and circumstances, I began the race on a real buzz and it was that amazing atmosphere that got me through. I chatted to everyone I passed, and many people commented on the fact that I ran in a long skirt and white hat.

Half way around I noticed a TV crew filming runners and so I stopped for a chat. They looked surprised, no one ever stops mid race, but I had something I wanted to tell them.

I told them my name was Flora, and I was running the Flora London Marathon. And before I knew it I was live on TV!

Crossing the finish line I felt a real mix of emotions, from happiness to pride and relief. I finished with a time of five hours, 49 minutes and 29 seconds. The next day I received phone calls of congratulations but nothing compared to being able to give the charity a cheque for £4,000.

From that moment on running marathons became a huge part of my life. I realised how much money can be raised for amazing causes. Since that first race in 1997 I have run the London Marathon every year without fail.

But I wanted to do more. So in 2000 I travelled to America and took part in my first New York marathon. It was incredible, and I got a real buzz.

Every time I ran I raised more money, starting at £4,000 and going up by nearly £2,000 each time. I thought to myself, why stop at just two marathons a year? Why not do more?

So in January 2001 I packed my bags and boarded a place to Israel to run the International Tiberias Marathon.

The weather was a lot warmer, the wind was extremely powerful. I passed a man who was really struggling.

Unlike other marathons, the Tiberias closes its finish line at six hours, so if you miss this you don’t get a medal. I ran with him, spurred him on, and we finished in the nick of time.

I’m 68 now, a great-grandmother, and I’m about to run my 23rd marathon in April this year, taking part in the Virgin London Marathon.

In total I’ve raised over £180,000 for the Norwood charity, and I don’t plan on stopping any time soon. Running marathons keeps me feeling fresh and I plan to carry on running as long as the good Lord lets me.

Complete List Of Oscar 2011 Winners

2011-02-28T16:07:00.000+05:30

1. Best Picture: “The King’s Speech.”

2. Actor: Colin Firth, “The King’s Speech.”

3. Actress: Natalie Portman, “Black Swan.”

4. Supporting Actor: Christian Bale, “The Fighter.”

5. Supporting Actress: Melissa Leo, “The Fighter.”

6. Directing: Tom Hooper, “The King’s Speech.”

7. Foreign Language Film: “In a Better World,” Denmark.

8. Adapted Screenplay: Aaron Sorkin, “The Social Network.”

9. Original Screenplay: David Seidler, “The King’s Speech.”

10. Animated Feature Film: “Toy Story 3.”

11. Art Direction: “Alice in Wonderland.”

12. Cinematography: “Inception.”

13. Sound Mixing: “Inception.”

14. Sound Editing: “Inception.”

15. Original Score: “The Social Network,” Trent Reznor and Atticus Ross.

16. Original Song: “We Belong Together” from “Toy Story 3,” Randy Newman.

17. Costume Design: “Alice in Wonderland.”

18. Documentary Feature: “Inside Job.”

19. Documentary (short subject): “Strangers No More.”

20. Film Editing: “The Social Network.”

21. Makeup: “The Wolfman.”

22. Animated Short Film: “The Lost Thing.”

23. Live Action Short Film: “God of Love.”

24. Visual Effects: “Inception.”

Pranab's budget spares the axe, reliefs in taxes are mild

2011-02-28T16:05:00.001+05:30

The Union Budget for 2011-12 presented by Finance Minister Pranab Mukherjee to Parliament on Monday is widely seen as taxpayer- and market-friendly. While it provides tax relief to individual taxpayers and corporate assessees, it has also sought to avoid any across-the-board increases in excise and service taxes – as was widely expected following suggestions from the Prime Minister’s Economic Advisory Council. The Council had said recently that the time was ripe to withdraw the fiscal stimulus of 2008-10.

But the Finance Minister apparently disagrees. He said: "In my last Budget, I had started rolling back the fiscal stimulus implemented over 2008-09 and 2009-10 to mitigate the impact of the global financial crisis on the economic slowdown in India. In the course of the year, I have moved further on that path. I believe that a part of the current recovery must be stored away to build future resilience. Indeed, a counter-cyclical fiscal policy is our best insurance against external shocks and localised domestic factors."

So, Mukherjee is obviously not sure that growth will remain robust if he tightens the screws just now. The main highlights of his budget proposals are the scattering of reliefs here and there, with the big sting being left for later. The following are the main budget proposals, and their possible impact.

* The surcharge on corporate tax on domestic companies will be cut from 7.5% to 5%. However, the Minimum Alternate Tax goes up to 18.5% from 18% to keep the effective level of taxation for MAT companies the same. Companies will welcome the relief.

* Individual taxpayers get a higher basic deduction of Rs 1.8 lakh; every taxpayers get minor relief of Rs 2,000. It’s a minor drop in the bucket given the ravages of inflation.

* Senior citizens get a bonanza. Apart from an increase in the exemption limit to Rs 2.5 lakh, the entitlement age for senior citizens is now 60, not 65. A new class of super senior citizens aged above 80 gets an even higher IT exemption limit of Rs 5 lakh. For a young country, Pranab, 76, is obviously rooting for senior citizens.

* Service tax stays at the same level as before at 10%, but several new services have been brought within its ambit. Among them: hotels with tariffs above Rs 1,000 (5% service tax), restaurants with bar and A/C (3%), hospitals with more than 25 beds and with A/C (5%), and air travel (Rs 50 more for domestic, Rs 250 for international). Business class air travel will attract a full 10% service tax. Hotels, five-star restaurants and airlines will scream.

* The base excise rate stays at 10%, but exemptions on some 130 items are being withdrawn. A basic rate of 1% is being levied. Another 240 items that are still exempt will be attracting tax when the goods and services tax is introduced next year. One can expect inflation to get a nudge up.

* Inflation, reforms and black money generation got some mention, but nothing substantive. The amnesty scheme for bringing back black money was missing in the budget. The government is obviously not keen to be seen as reactive to public criticism of corruption.

* Subsidies on fertiliser, kerosene and cooking gas (LPG) will be cash-based by March, 2012. No measures on fuel deregulation were, however, announced. The urea subsidy will soon become nutrient-based. Good in intent, a lot will depend on political will. One can expect the Left to be critical of the proposal.

* The public sector disinvestment target has been upped to Rs 40,000 crore in 2011-12; the current fiscal’s target was reduced to 22,144 crore due to higher realisations from other sources. But it could be because of the government’s inability to reform oil prices. While Indian Oil was forced to review its further public offer due to losses, ONGC’s plans appear to have been delayed. A lot will depend on how the market fares after the budget.

* Foreign institutional and non-institutional investors get more options for investment. While the total ceiling on debt is raised to US$40 billion, individual investors who are KYC (know-your-customer) complaint can invest in Indian mutual funds. This could indirectly give a fillip to market sentiment. Positive for market sentiment, but don’t expect a flood of foreign funds to come into equity.

* Many sops for infrastructure have been announced. While Rs 30,000 crore worth of tax-free bonds will be on offer next year, the Rs 20,000 additional tax deduction available for investing in infra bonds will be retained for another year. Nothing earth-shattering in all this.

* Small sops have been offered to housing, especially low-cost housing. The 1% interest rebate will be applicable for loans upto Rs 15 lakh on houses costing upto Rs 25 lakh. Loans upto Rs 25 lakh will qualify as priority sector loans (against Rs 20 lakh now). One cannot expect any major fillip to housing with this. Realty is already beyond reach in most metros even for the middle class.

Overall, the centre’s direct tax reliefs will cost Pranab Mukherjee Rs 11,500 crore, while his indirect tax levies will bring in Rs 11,300 crore. The fiscal deficit will be contained at 4.6% next year against 5.1% this year, with the 2013-14 target being 3.5%.

Seven big Indian corruption scandals

2010-11-30T22:24:00.001+05:30

India has been rocked this year by a series of corruption scandals that have embarrassed the ruling Congress party, rattled markets and delayed reform bills as the opposition stalls parliament.

The country, 87th in Transparency International's rankings based on perceived levels of corruption, is no stranger to scandals.

Here are some of the biggest in the last two decades:

2010—Loan bribery case

The case broke after a year of investigation on November 24 when the Central Bureau of Investigation (CBI) arrested eight people, accusing them of bribery for corporate loans.

The arrests included the chief executive of state-run mortgage lender LIC Housing Finance and senior officials at state-run Central Bank of India, Punjab National Bank and Bank of India.

While the size of the scandal is not yet known, local media have reported it could run into hundreds of millions of dollars.

The CBI is probing 21 companies involved in India's booming infrastructure sector for links, but has not named them.

The bribes were allegedly paid by private finance firm Money Matters Financial Services, which acted as a "mediator and facilitator" for the loan beneficiaries, the CBI said.

Companies whose officials have been arrested have all denied any wrongdoing. Individuals arrested have not yet commented.

Government officials, including ministers, have said this is a case of individual wrongdoing and not a widespread scam.

2010—Telecoms licence row

Telecoms Minister Andimuthu Raja was sacked after a report by India's state auditor said his ministry sold licences and spectrum below market prices, depriving the government of up to USD 39 billion in revenues.

The scandal swept up as high as Prime Minister Manmohan Singh, who had to explain to the Supreme Court why he sat on a request for permission to charge Raja with corruption.

In its report, the Comptroller and Auditor General of India (CAG) also said rules were flouted when the licences were given in 2007-08 which led to many ineligible firms getting them.

The CBI has launched an investigation into alleged corruption at the ministry. Nobody has been charged yet and Raja has denied any wrongdoing.

The CAG said Unitech units got licences despite having inadequate capital, Swan Telecom got a licence even though there were monopoly issues and Reliance Communications got undue benefits as it sought permission to offer services under the more popular GSM technology.

Revenue authorities have questioned Nira Radia, a top lobbyist, as part of an investigation into whether money laundering and forex laws were broken when the licences were purchased. Radia has denied any wrongdoing and has said she is cooperating with the probe.

2010—Commonwealth Games

Allegations of corruption over the international sporting event that took place in Delhi in October are being investigated by several bodies including the anti-corruption watchdog, the state auditor, the CBI and a special committee set up by Prime Minister Singh.

The Congress-party led coalition government came under fierce criticism for mismanagement and ineptitude over the sporting extravaganza which cost up to USD 6 billion.

Allegations of corruption spanned a broad spectrum including issuing of contracts and purchase of equipment -- from treadmills to toilet rolls.

India's anti-corruption watchdog has identified more than 16 projects with possible irregularities.

The Congress party eventually sacked Suresh Kalmadi, chairman of the organising committee, as secretary of the party's parliamentary wing.

Aides have been arrested and local media has said Kalmadi could be arrested once he returns back from a foreign trip.

2010—Housing scam

Congress party politicians, bureaucrats and military officials have been accused of taking over land meant for building apartments for war widows. The CBI has begun investigating the case.

Local media say apartments with a value of USD 1.8 million were sold for as little as USD 130,000 each in the apartment block, which faces the Arabian Sea in one of the world's most expensive stretches of real estate in Mumbai.

The government has sacked the chief minister of western Maharashtra state, Ashok Chavan, who is a member of Congress.

The apartment block is also being investigated for several violations of norms, including environmental laws and land-use rules.

The government has now effectively taken back permissions allowing owners to occupy the apartments, which are required for water and power supplies, leading to the disconnection of these services.

2009—Satyam

The founder of Satyam Computer Services, one of India's top software firms, resigned in January 2009 after admitting profits were falsely inflated for years.

The fraud, estimated at USD 1 billion, was India's largest corporate scandal and was dubbed "India's Enron".

With clients abandoning it, shares were hammered down to near-penny-stock levels.

The government stepped in to save the firm by appointing a new board of directors and midwifed its sale to Tech Mahindra. The firm is now called Mahindra Satyam.

The founder chairman of Satyam, Ramalinga Raju, and other officials including the then chief executive officer and chief financial officer, were arrested under several charges including fraud. The cases continue in court. The defendants have said they were not involved in the fraud.

1992—Securities scam

Several Indian stockbrokers were accused of siphoning off over Rs 3,500 crore (USD 778 million) of funds, mostly from inter-bank transactions, to fuel a rise in the Mumbai stock market in 1992. It involved top officers of state-run and foreign banks and financial institutions, bureaucrats and politicians.

News of the scam led to an over 40% fall in shares over two months, wiping millions of dollars from market value.

Harshad Mehta, the main accused, died in 2002, convicted in only one of the many cases filed against him, for misappropriation of funds in a case involving the use of money from the bank account of carmaker Maruti Suzuki for trading in stocks.

Several bank executives were convicted for fraud in allowing bank funds to be used for trading stocks.

1986—Bofors gun deal

India's purchase of artillery guns from Swedish firm Bofors in 1986 was rocked by allegations that Rs 64 crore (USD 14.2 million) -- a huge sum then -- was paid as bribes to people close to then prime minister Rajiv Gandhi to swing the deal.

The scandal caused an uproar in parliament, led to a split in the ruling Congress party and the defeat of Gandhi in federal elections in 1989.

Its fallout has stymied India's defence expansion, with officials for years unwilling to take decisions on purchases that could later be probed for corruption.

Amongst the people probed were the London-based Indian business family of the Hindujas, who were later acquitted by a court of any involvement.

The case has dragged on for years without any result.

A Comeback in Sight for Satyam?

2010-11-30T21:22:00.000+05:30

Satyam Computer Services – normally the black sheep of Indian IT – was having a field day in India’s stock market on Tuesday, at a time of market volatility for the country’s IT industry .

On Tuesday Satyam’s stocks held steady- while its bigger IT competitors Tata Consultancy Services Ltd. and Infosys Technologies kept swaying in the Bombay stock market.

In an interview with Dow Jones Newswires, Satyam’s president of business development and customer relationships Atul Kunwar said he expects revenue from the U.S., its biggest market, to show growth from the second half of next year as it starts cashing in on increased spending in technology outsourcing .

Mr. Kunwar said the company is working on closing several deals. He said that before Thanksgiving, the company saw “a lot of action in the U.S.,” in terms of deal proposals, which the clients are likely to consider in the next month.

He added the company is also chasing large contracts worth more than $50 million over three to five years, and several smaller deals worth $30 million or less. If Satyam bags these deals in the US - which analysts agree is the biggest market for India’s IT industry - this is likely to give a big boost to the company’s revenues.

Satyam stock closed up 2.3% at 62.25 rupees ($1.35) in a Mumbai market where the benchmark Sensex was up 0.6%.

Investors were busy booking profits on larger outsourcing firms Tata Consultancy Services Ltd. which closed marginally up 0.9% at 1,076.70 rupees, while Infosys Technologies closed down 0.5% at 3,049.45 rupees.

Until recently, things were not looking so rosy for Satyam. Satyam – once India’s fourth largest software exporter by sales – plunged into turmoil in January 2009, when its founder and then chairman, B. Ramalinga Raju confessed the company had been overstating profits for years. This delayed earnings reports from the July-September period of 2008 . Last September, the company reported its first ever results after the scandal, posting net losses for the last two fiscal years. The company is still in the process of restating accounts for the previous six to seven years.

Shares of the software outsourcer had been suffering losses ever since the company posted its first quarterly earnings in November , the first since the balance-sheet scandal. The Hyderabad-based company posted a 76% drop in its July-September net profit from the preceding three months, hurt mainly by salary hikes and foreign-exchange losses as it struggled to add new clients.

With the latest quarter results, the company has become current with is financials. The makes the outsourcer eligible to bid for several contracts which it was previously barred from doing.

Investors will be keeping a close eye to see if the stock will sustain this positive sentiment in the longer term.

India's Economy Grows 8.9%

2010-11-30T21:05:00.002+05:30

NEW DELHI – India's economy grew 8.9% in the quarter ended Sept. 30, maintaining its dramatic expansion when many western economies are struggling to resuscitate growth.

The rise in Gross Domestic Product, following on from an 8.9% on-year rise in the previous quarter, marks India as one of the world's fastest growing economies and will likely allow the Reserve Bank of India to raise interest rates again soon, seeking to tame inflation, without fear of a major hit to growth.

It also prompted Finance Minister Pranab Mukherjee to revise higher his growth forecast for the year ending next March 31, to 8.75% from a previous estimate of 8.5%.

The benchmark 30-share BSE Sensex rose following the strong GDP data, ending up 0.6% at 19,521.25. Government bonds fell as investors saw a greater chance of interest rate hikes by the RBI. The benchmark 7.80% bond due 2020 ended at 98.25 rupees, compared to the previous close at 98.59 rupees.
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"Inflation is still the number one policy focus, and we continue to expect more rate hikes in the months ahead, perhaps as soon as the next meeting in December," said Brian Jackson, senior emerging markets strategist at Royal Bank of Canada. The central bank has raised its key interest rates six times since March as it tries to control inflation. It last raised rates by 0.25 percentage point Nov. 2.

The growth was confirmation that India, which is less reliant on exports for growth than many smaller Asian nations, has been able not only to shrug off the global downturn but accelerate growth while other nations are struggling to emerge from the downturn.

That's thanks to robust domestic demand. In the three months ended Sept. 30, farm output, which constitutes about 16% of GDP, rose 4.4%, quicker than the 2.5% rise in the previous quarter. Services like trade, hotels and transport grew 12.1%, while manufacturing output rose 9.8%.

The government hopes to return to its pre-crisis growth rate of 9% in the year beginning April 1, 2011. Ultimately it hopes to achieve double-digit growth and outpace its larger northern neighbor, China, the only major economy growing more quickly than India's.

The rapid expansion is expected to continue to attract a hefty inflow of foreign funds into India's stock market, which has risen sharply this year as investors worldwide seek fast-growing markets.

But some analysts say growth may be curtailed in the next year. Robert Prior-Wandesforde, a Credit Suisse economist, predicted that growth will remain strong through March but then "a combination of higher oil prices, a strengthening real exchange rate and, most importantly, the lagged impact of higher interest rates is likely to take its toll on economic activity."

He predicts GDP growth of 7.7% in the year ending March 31, 2012.

For now, however, the GDP growth will come as a fillip for the government of Prime Minister Manmohan Singh, which has faced tough times in recent weeks. A government auditor found that an allotment of second-generation mobile telephone spectrum sold in 2008 deprived the government of as much as $40 billion in potential revenue because the spectrum was sold to a few favored companies, vastly underpriced.

The government's legislative agenda has been stalled in Parliament amid opposition protests and demands for a wider probe into the scandal, which forced the telecommunications minister to resign.

Strides Arcolab Q3 PAT clocks 85% growth; revenue up 35%

2010-10-27T19:26:00.000+05:30

Strides Arcolab has announced its second quarter results. It has reported a consolidated net profit at Rs 40 crore which is an 85% growth over the previous year. The company saw its revenues at Rs 430 crore, a quantum jump of 35%.

Arun Kumar, group CEO & vice chairman, Strides Arcolab, in an interview with CNBC-TV18’s Latha Venkatesh and Reema Tendulkar spoke about the results and his outlook for the company.

Below is a verbatim transcript. Also watch the accompanying video.

Q: Can you take us through the highlights of this quarter because we only have your topline and bottomline numbers. How did the margins pan out and the Rs 19 crore that you are referring to year ago, deducts an extraordinary inflow, because the reported PAT was Rs 44 crore?

A: There is a mix up between the standalone and the consolidated numbers. Consolidated sales were Rs 430 crore, that’s a 35% growth compared to last year. EBITDA grew at 108% to Rs 88 crore and a profit after tax is Rs 40 crore which is an 85% growth over the previous year. EPS accretion is over 60% and that’s on the consolidated basis.

Q: Can you give us the standalone as well?

A: The standalone revenues for India were Rs 135 crore and PAT was at Rs 10 crore. The standalone is not comparable as we did a restructuring of our businesses to specialties in sterile. The standalone is from a boarding standpoint. The consolidated numbers will truly reflect the performance of the company.

Q: Could you walk us through how the specialties division and the pharma division have done in terms of revenue and margin picture?

A: Specialties continue to have a very solid growth. In the quarter we had a significant growth where that growth has increased from Rs 81 crore in the last year to Rs 126 crore. That is a 55% growth in specialty. Pharmaceuticals grew from Rs 237 crore to Rs 303 crore, that’s a 28% growth.

Combined both these divisions grew on an average of 35%. EBITDA growth in specialties far out beats our guidance. We continue to have a year-to-date EBITDA in our specialties business and 36% was our EBITDA for the quarter.

Q: Earlier, you had indicated a guidance of about 35% to 37% growth in terms of your revenue for the entire calendar year. Would you like to up that given the numbers are looking good for the first three quarters?

A: We would like to stay with our revenue guidance because obviously the exchange rate has a dampening impact. When we issued our guidance, on the dollar terms definitely we will reach the high end of our guidance.

What is more satisfying for Strides is that our EBITDA margins are far superior than the high-end of our guidance. We believe there is merit to up our EBITDA guidance but on the revenue considering the dollar scenario we would like to retain those numbers.

Q: What did you report in Q3 and what would your EBITDA margin guidance be?

A: For the first three quarters EBITDA is Rs 304-305 crore against the guidance of Rs 370 crore for the whole year. We are already a little ahead of that from a run rate standpoint. For the fourth quarter, traditionally, it is a very strong quarter for Strides so that should be good. On a dollar term that’s very strong. We are at about 3 percentage points more than our guidance in terms of EBITDA which is what the company’s key focus is.

Q: By way of margins, I think you had guided something around 20%, are you likely to keep the margins at 20%?

A: Yes, in fact currently our YTD is a lot more than 20%, its 23%.

Q: So you would be able to operate for the full year as well?

A: Yes.

Q: Can you give us an update in your partnership with Pfizer?

A: Our press release today reports a total licensing income from all partners including Pfizer. We have already received about Rs 265 crore of licensing income from various partners.

What is more heartening is that we would have product launches in the fourth quarter. So we have a first product going to Pfizer in Q4 which is very important for Strides. We expect the new sites to be inspected and approved soon when the ramp up happens. From our existing sites we have three product launches in Q4 for the US market to Pfizer.

UK's BT Planning To Sell Part Or Full Stake In Tech Mahindra - Sources

2010-10-27T19:22:00.000+05:30

MUMBAI (Dow Jones)--U.K. telecommunications company BT Group PLC (BT) is planning to sell a part or all of its stake in India's Tech Mahindra Ltd. (532755.BY) and has mandated investment banker Credit Suisse Group (CS) for the deal, two people familiar with the matter said Tuesday.

"The firm [BT Group] is looking at various options to exit its current holding of Tech Mahindra," one of the people familiar with the matter told Dow Jones Newswires, without elaborating. Both people didn't want to be named.

At least two private-equity investors are keen to purchase at least a part of BT's stake in Tech Mahindra, the second person said, but didn't name the interested buyers.

BT Group spokesman Dan Thomas said the company doesn't comment on rumours and speculation.

"BT has operations and investments worldwide which we regularly review. India remains a critical market both for BT and our customers," Thomas said via email.

The U.K. company owns a 30.9% stake in the Indian outsourcing firm, he added.

India's Mahindra & Mahindra Ltd. (500520.BY) holds 42.77% of Tech Mahindra, stock exchange data showed.

Tech Mahindra spokesman Prasenjit Roy said in response to an emailed query that the company doesn't comment on market speculation.

Russian tycoon offers coal mines to NMDC

2010-10-19T20:07:00.000+05:30

India's largest iron ore miner NMDC has been offered to buy coal mines in Russia's Siberian region for $400 million by Intergeo, which is owned by tycoon Mikhail Prokhorov, a media report said.

Intergeo, a mining subsidiary of billionaire Mikhail Prokhorov's Onexim Group private equity fund is in talks with India's largest iron miner National Mineral [ Get Quote ] Development Corporation (NMDC) to sell the Yakutia-based Kolmar coal company, leading business daily Kommersant reported on Tuesday.

"NMDC, Asia's third iron ore producer, is currently conducting due diligence of Kolmar, and will formulate its offer by December 1," Intergeo CEO Maxim Finsky was quoted as saying by the daily.

The Kolmar will hold IPO to attract investors if NMDC refuses to acquire it, it added. Intergeo expects to raise the amount of $400 million through Kolmar sale, USD 100 million more than the company paid for the asset, Kommersant writes.

NMDC had earlier said it was in talks to buy coking coal mines from Kolmar in Russia to feed its proposed steel plants in Chhattisgarh and Karnataka [ Images ]. However, when contacted, a top NMDC official said, "We have nothing to offer at this moment."

NMDC CMD Rana Som had earlier confirmed that talks are on, but said that Kolmar's coal mines were one of the many coal assets NMDC is looking at and nothing has yet been finalised.

The PSU has been trying to acquire mining assets overseas for the last few years to secure raw material supplies for its steel making business.

NMDC along with two other companies had submitted a $230-million non-binding bid to buy 70 per cent stake in an Australian mine owned by Perth-based Atlas Iron.

Also, the company is looking for acquiring coal assets through International Coal Ventures Ltd--the consortium of five leading PSUs, including SAIL [ Get Quote ], NTPC and RINL. The firm is also looking at developing iron ore mines in Africa in joint venture with world's largest steel maker ArcelorMittal.

It is also in partnership talks with Japan's [ Images ] Nippon Steel for a Rs 10,000-crore (Rs 100 billion) project in Karnataka, and with Kobe Steel for another project in Andhra Pradesh. The company has proposed to set up a 2-million tonne per annum (mtpa) plant in Karnataka. Besides these JVs, NMDC plans to commission its 3-mtpa integrated steel plant in Chhattisgarh by 2014.

The miner is investing Rs 3,400 crore (Rs 34 billion) to augment its annual iron ore production to about 41 million tonnes from around 22 million tonnes at present.

Rice Climbs for a Sixth Day on Speculation About Smaller Crops

2010-10-19T19:48:00.000+05:30

Oct. 19 (Bloomberg) -- Rice gained for a sixth day in Chicago on speculation that adverse weather may curb production in the U.S., the world’s third-biggest exporter of the grain, and the Philippines, the largest importer.

No rain has fallen in parts of Arkansas, the biggest U.S. rice producer, in the past 60 days, National Weather Service data show. Plants in the Philippines may have been “severely affected” by Typhoon Megi, the strongest to hit the country this year, the Department of Agriculture said today.

“The big story in rice is the extremely poor field yields in” U.S. growing regions, said Dennis DeLaughter, owner of Progressive Farm Marketing and a rice grower based in Edna, Texas. “We are now hearing 20 percent loss and going up.”

Rice futures for January delivery advanced 9 cents, or 0.6 percent, to $14.07 per hundred pounds at 11:21 a.m. London time on the Chicago Board of Trade. Prices have climbed 12 percent this month. A higher close today would mark the contract’s longest winning streak in more than two months.

The Philippines may lose 600,000 metric tons from its rice crop, Agriculture Undersecretary Antonio Fleta said yesterday. Potential crop losses may boost the island archipelago’s import needs by 500,000 tons, pushing prices higher in Chicago and Thailand, Chookiat Ophaswongse, former president of the Thai Rice Exporters Association, said yesterday.

Thai rice prices may rise by as much as $20 a metric ton, Chookiat said.

Crop losses may widen in areas affected by the typhoon, potentially increasing import needs and pushing global prices higher, said Kiattisak Kanlayasirivat, a director at Novel Commodities SA’s Thai office, which trades about $600 million worth of rice every year.

Why People Distribute Apta Tree Leaves on Dussehra and Vijayadasami day?

2010-10-18T16:41:00.000+05:30

In North and Western parts of India people distribute leaves of Apta, or Apati, tree leaves on Dussehra and Vijayadasami day. In this ritual, Apta tree leaves symbolically represents gold or sona. People present Apta tree leaves to friends, relatives and neighbors and wish happy Dasara. There is an interesting story on why Apati tree leaves are presented on Dussehra.

Legend has it that a young man named Kautsa in Ayodhya once after attaining education from Guru Varatantu asked his Guru to accept a Guru Daskhina – a present offered by students to Guru after completing their studies.

Guru Varatantu at first said he did not want any Dakshina. But young Kautsa insisted that He should take a Dakshina.

Guru Varatantu to get rid of Kautsa asked him for 14 crore (140 million) gold coins. One hundred million for each subject taught.

The student then went to Lord Ram who was ruling Ayodhya and asked for the gold coins needed to pay his Guru Dakshina. Lord Ram promised to help Kautsa and asked him to wait near the Shanu and Apta Tree in his village

In three days time, Lord Ram with the help of Lord Kuber, the God wealth, showered gold coins from the leaves of Shanu and Apati Tree. The leaves of the trees became gold coins.

Kautsa collected the coins and gave 140 million gold coins to Guru Varatantu. The rest of coins were distributed to the needy by Kautsa. This happened on a Dussehra day. To commemorate this event even today people collect leaves of Apta tree and present it as sona or gold.

Alstom's India Growth May Outpace Economy on Rail Buildup

2010-10-18T13:58:00.001+05:30

Alstom SA, the world’s second- largest trainmaker, said Indian sales growth may surpass local economic expansion as the government works on a 14 trillion rupee ($317 billion) plan to expand and modernize railroads.

The company has to be prepared for India growth “which is equal to if not higher than GDP,” Sunand Sharma, 61, Alstom’s local head, said in an Oct. 15 interview at his office in Noida, near New Delhi. He declined to give specific sales numbers.

Alstom, which also makes power-plant systems, expects to eventually get a third of India sales from transportation as the government expands the railroads 10 percent a year to support economic growth. The Paris-based company has been shortlisted with General Electric Co., Bombardier Inc. and Siemens AG as a possible partner in an Indian trainmaking venture and is considering building a rail-car plant in the country.

“India is an opportunity but not without hiccups,” said Jagannadham Thunuguntla, chief strategist at SMC Global Securities Ltd., which manages $100 million in assets in New Delhi. “For companies, it may be better to sacrifice profit margin for scale because whoever comes in now will have first- mover advantage.”

The planned trainmaking venture will produce about 120 electric locomotives a year, according to the rail ministry. Bids have to be submitted by Oct. 25, A.K. Saxena, a ministry spokesman, said by phone Oct. 15 in New Delhi. He declined to say when a decision will be made.

Railway Expansion

Indian Railways, the state-owned rail operator, has proposed to add 25,000 kilometers (15,534 miles) of new lines by 2020, compared with the 10,000 kilometers added in the past six decades, according to the rail ministry. The nation’s economy, Asia’s third-largest, will probably expand at a 9 percent annual pace by the year ending March 2012, Prime Minister Manmohan Singh said in June.

Alstom may build an Indian rail-car factory after last month winning a 14.7 billion-rupee contract from Chennai Metro Rail Ltd. to supply 168 carriages, Sharma said. He declined to say where the factory may be built or when a decision will be made.

Alstom’s India operations have mainly focused on the power sector to date. Alstom Projects India Ltd., a subsidiary, generated 97 percent of its 20.4 billion rupees of sales in the year ended March from its power division and the rest from transportation, according to data compiled by Bloomberg. Alstom has other ventures and businesses in India. Sharma declined to comment on local sales numbers.

Alstom’s power operations may boost India sales to more than 1 billion euros a year from several hundred million euros, Denis Cochet, senior vice president of sales and marketing for Alstom’s power division, said Oct. 12.

The company is building two factories with Pune, India- based Bharat Forge Ltd. that will make equipment for so-called super-critical power plants, which use less energy and generate higher pressure for greater efficiency than traditional plants. The factories will start operations in phases from April 2012, Bharat Forge said in its annual report for the year ended March.

Indian Exchanges to Start Pre-Open Session, Express Says

2010-10-10T10:30:00.000+05:30

Oct. 8 (Bloomberg) -- The National Stock Exchange and the Bombay Stock Exchange will start a 15-minute pre-trading session from Oct. 18, the Indian Express reported, citing Ravi Narain, managing director of the National Stock Exchange.

The session will be a call auction, where participants place orders before the opening of trade and will run from 9 a.m. to 9:15 a.m., the newspaper said.

The two bourses will introduce the session on a “pilot” basis, and only stocks on the Bombay Stock Exchange Sensitive Index and S&P CNX Nifty Index will be available for trading, the newspaper said.

Billionaire Jhunjhunwala-Backed Delta Plans Casinos in Sri Lanka

2010-10-04T19:57:00.001+05:30

Oct. 4 (Bloomberg) -- Billionaire Rakesh Jhunjhunwala- backed Delta Corp. plans to open casinos in Sri Lanka in the next six months to tap a surge in tourist arrivals to the island nation after the end of a 26-year civil war.

Casino operator-Delta, which also develops property and runs an aircraft charter service, will spend 10 billion rupees ($225 million) in the next three years in opening casinos in the region as well as at home in Sikkim, Daman, and Goa, Chief Financial Officer Hardik Dhebar said in an interview in Mumbai. Gambling is not allowed in most Indian states.

Delta wants to benefit from a revival in Sri Lanka’s tourist arrivals, which surged 47 percent in the first eight months of the year, according to the nation’s tourism agency. Shares of companies including John Keells Holdings Plc and Aitken Spence & Co. have more than doubled as tourist incomes boosts earnings at their hotels and resorts.

“We have not even scratched the surface yet” for casino opportunities in the region, Dhebar said. “Sri Lanka is in a hurry to start speed up the process of development and is taking steps to ensure investment flows into the country.”

Delta shares, which have risen 84 percent this year, rose 2 percent to a record 83.8 rupees in Mumbai at 11:08 a.m.

Faster economic growth in India and Sri Lanka is helping boost salaries in the region increasing demand for leisure spending, Dhebar said.

India’s economy grew 8.8 percent in the quarter ended June 30, the fastest pace in two-and-a-half years. Sri Lanka’s $42 billion economy may grow as much as 8 percent in 2010, the central bank said on Sept. 21. The nation’s troops defeated the separatist Liberation Tigers of Tamil Eelam in May last year, ending their 26-year quest for a separate homeland helping attract tourists and investors to the nation.

Billionaire Jhunjhunwala and investor Radhakrishna Damani bought an 11 percent stake in the company last month. Jhunjhunwala, with $1.15 billion in assets is India’s 57th richest man, according to Forbes magazine.

RIL's crude reservoirs not performing as per predictions

2010-10-04T19:51:00.000+05:30

NEW DELHI: Reliance Industries has seen crude oil production falling by more than 31 per cent from its MA oilfield in the predominantly gas-rich KG-D6 block off the east coast.

"The reservoir is not performing as per its predictions," a source in know of the development said. "Production has dropped from about 32,000 barrels per day achieved in May to around 22,000 bpd currently."

A company spokesperson declined to comment on the issue. Currently six wells are on production in MA field in the eastern offshore KG-DWN-98/3 (or KG-D6) block. RIL, which commenced commercial oil production from MA field in September 2008, had in its field development plan (FDP) envisaged a plateau oil output of 34,041 bpd in the 2nd year of production and 28,684 bpd in the 3rd year.

So far, the maximum production level of about 32,000 bpd was achieved for few days only during May 2010, thereafter oil production has declined gradually.

Besides crude oil, the MA oilfield produces 7-8 million standard cubic meters per day of natural gas. This output together with Dhirubhai-1 and 3 gas fields, take natural gas production from the KG-D6 block to around 60 mmscmd.

Even D1 and D3 fields have seen a two-year delay in reaching plateau output of 80 mmscmd. The fields are now estimated to hit the peak production towards end of 2012.

The source said RIL has been forced to cut output at MA oilfields because of sudden rise in water and gas production from the wells meant to produce crude oil.

Increase in gas production means the natural pressure of the reservoir, which helps push oil up to shore, is dropping. If gas comes out too quickly, crude oil, even though lying in the well pit, cannot be produced.

RIL, he said, has informed the oil regulator DGH that it will not recklessly produce oil at the cost of reservoir. It will judiciously produce from existing wells and look at raising output only by drilling at least two additional wells.

Sources said RIL and its minority partner, Canada's Niko Resources , had installed a floating production system (FPSO) to produce oil from MA fields. The FPSO, designed to process 60,000 bpd of oil, is also grossly underutilised due to the lower level of oil production.

RIL was studying the pressure at the oil and gas reservoir, he said adding the company plans to drill 2-3 more wells on D1 and D3 fields. These will be besides what the company was doing in MA field.

L&T sells 2.4% in Satyam for Rs 295 cr

2010-10-04T19:49:00.000+05:30

MUMBAI: Engineering conglomerate Larsen & Toubro has sold 2.4 per cent stake in Mahindra Satyam in September, the outsourcer said in a statement to the stock exchange.

Larsen raised Rs 295 crore ($66.3 million) from the stake sale and now holds 2.16 per cent in Satyam. It had last sold a third of its holding in the outsourcer in November 2009 for about $66 million.

L&T had built a 12 per cent holding in Satyam, but the expansion of share capital following the takeover meant it held 6.9 per cent in Mahindra Satyam.

Last April, L&T lost the race for control of Satyam to Tech Mahindra Ltd, a unit of India's Mahindra & Mahindra Ltd.

PlayStation celebrates its 15th birthday in Europe

2010-09-30T10:08:00.001+05:30

The Sony PlayStation today reached 15 years since its launch.

The original PlayStation was released in Europe on 29 September 29 1995. It was Sony’s big break into the gaming industry, taking on established giants such as Nintendo and Sega.

It was a phenomenal success, becoming the first-ever games console to sell more than 100 million units.

Some of the most iconic games to come from the console include Tomb Raider, Metal Gear Solid, Final Fantasy VII and Grand Theft Auto.

The PlayStation 2 and the PlayStation 3 followed Sony’s initial landmark console, both finding great success in the gaming market.

The PlayStation Hub

Meanwhile, the PlayStation Hub in Dublin has seen more than 2,000 gamers walk through its doors since its launch 10 days ago.

The state-of-the-art gaming hub is located at 50 South William Street in Dublin city centre and offers gamers the chance to play upcoming new games for the PS3, such as Gran Turismo 5 and Killzone 3, and lets them test out the PlayStation Move.

“We are delighted that the PlayStation Hub has proven so popular during the first two weeks of opening,” said Niall O’Hanrahan, managing director of Sony Computer Entertainment Ireland.

"Gamers of all ages are enjoying the opportunity to game for free in Dublin city centre and we hope they continue to enjoy the experience over the coming weeks."

Ayodhya case verdict today, nation on high alert

2010-09-30T09:50:00.001+05:30

With the central and state governments having taken adequate security measures ahead of the verdict on the title suits in the Babri Masjid-Ram-janmabhoomi case in Lucknow on Thursday, Home Minister P Chidambaram expressed confidence there would be no trouble after the judgment. Chidambaram said he did not “foresee any problems” as almost all political parties, religious groups and those associated with the dispute, have said they would respect the verdict of the Lucknow Bench of the Allahabad High Court.

"The India story is a much bigger story and young people recognise the bigger story should not be derailed over the dispute over a piece of land,” he said in New Delhi on Wednesday.

Notwithstanding the confidence that there would not be any problems after the judgment, Chidambaram said the government had taken the necessary measures and deployed adequate security forces all over the country.

Regarding the Uttar Pradesh government’s demand for more central forces, Chidambaram said he had convinced the state that the 1,90,000 police personnel at its disposal would be enough.

For other parts of the country, government officials said the Centre had placed paramilitary forces at 16 locations — half of them near Indian Air Force stations — to enable quick movement of forces if an emergency breaks out.

Chidambaram said the ban on bulk messaging would continue till further orders. It was imposed recently after reports of some elements spreading mischievous messages pertaining to the Ayodhya dispute.

Chidambaram said as a lawyer, he expected one or more parties would appeal to the Supreme Court on aspects of the judgment they did not find in their favour.

Among the security measures taken by state governments, Karnataka has ordered all educational institutions in the state to be closed on Thursday and Friday. The state government has also place d a ban on any kind of celebration of the Ayodhya verdict.

Mahindra Satyam: Start of a new innings

2010-09-30T09:35:00.001+05:30

There was a lot of excitement from analysts when Mahindra Satyam declared its audited FY09 and FY10 results after nearly two years. For the year ended March 2010, they reported a loss of Rs 124.60 crore on net sales of Rs 5,481 crore for. For year ended March 2009, the restated earnings showed a net loss at Rs 8,176.8 crore on net sales of Rs 8,812.6 crore.

On CNBC-TV18, three key people, Vineet Nayyar, Chairman, CP Gurnani, CEO and S Durgashankar, CFO of Mahindra Satyam took us through the numbers in detail and analysed this mix bag of numbers and what the road ahead was for Mahindra and Satyam.

Below is a verbatim transcript of their interview. Also watch the accompanying videos.

Q: Now that the FY09 and FY10 numbers are done with, can you specifically tell us how much longer would it take for the merger details and what are the loopholes that you need to figure out before the merger goes through?

Nayyar: Our intention was declared on April 13th the day we acquired or we were declared as winners of Mahindra Satyam. That intention is there but we cannot start the merger proceedings till our accounts are current and these will happen when we give up first and second quarter results which will be somewhere by November 15th.

Thereafter we will be in a position to initiate the merger proceedings which are long, which are elaborate, which requires going to the two high courts, which requires appointing of accountants for purposes of determining the swap ratio, then the swap ratios have to be proved by the board of the two respective companies and by their AGMs and then finally we will merge.

Q: Coming to clients – there has been a lot of traction, there have been exits but you have been adding clients. Tell us how strong the traction is looking in terms of the kind of contracts that are coming in right now. Are we seeing big bang contracts coming in or are they probably a smaller size of about USD 20-30 million deals?

Gurnani: The company was over the last 500 days in a revival phase and now it is in the recovery phase and in that revival phase a lot of effort was made to retain existing customers, to also build up on a roadmap for growth because if I go too early into the growth phase, the chances of Mahindra Satyam being successful but very limited.

The fundamental fact is that every CFO - when a company like a Coke or a state firm insurance or Caterpillar closes the doors on you when they say because you don’t have a statement of accounts and our risk officer considers it a risk because he has no other way of knowing whether the company is sustainable or not whether its stable or not. I think that phase is behind us.

To us this announcement of our results on September 29 is frankly a very big historic moment for us. Now we can go back aggressively and assertively into the market where we can start now talking about it. So big bang projects, till yesterday were not available to us. I do not expect them to happen overnight but fundamentally we believe that it is a sheer and a firm step to recovery.

Q: Give us a number as to the kind of deals that are coming in? A rough estimate of the kind of deals that we will see and across what verticals?

Gurnani: The fundamental fact is that our deal flow was relatively slower than others in the industry because we were also in a situation where we were differently placed. So it’s not fair for me to say what kind of a deal flow. That phase that we have just closed on September 29, was a phase in which the effort was more on revival, the effort was more on assurance and now is a phase on full recovery, full growth and for the next 18 months my full-time activity would be to focus on growth.

Q: In terms of the overall revenue contribution – geography wise, can you breakup as to what are the key geographies you are looking at. Obviously US, UK being very important but if you can give us numbers as to how the revenue contribution as per geography has been broken up so far?

Durgashankar: Our main contributors are US and Europe. It is around two-thirds from the US and around 15-20% from Europe.

Q: What are the other geographies that are leading to growth?

Durgashankar: You can see we have covered substantial part. There is Asia-Pacific, so by and large after that it will be smaller numbers.

Q: Coming to the employee count – by FY10 there is 27,000 employees. You did point out that you are going to campuses; you have been giving out hikes. Can you give us an estimate of the kind of projection intake that you would be looking at for FY11?

Nayyar: I presume we will be going to the campuses for about 3,000 more youngsters to join our company.

Q: Aside from that?

Nayyar: Aside from that there will be hiring at the experienced level also. We have not quite decided 3,000 maybe under estimate, we may have to go to a higher number but we are just working at the details.

Q: You pointed out that there has been through FY09 and FY10 voluntary as well as involuntary attrition, can you throw some more light on that?

Nayyar: You know what the numbers were when the fraud was under unraveled, you know what the numbers are now, and the difference is the attrition numbers. What was voluntary and what was not voluntary. I do believe we now have a right sized company that we are focused in reaching the competencies which we have started. The company has been reorganized in a fashion to make sure that they continue to remain the cutting edge of Satyam and that is what we are working at.

Q: Is there a number that you can give us as to how many were voluntary and involuntary for the two years?

Gurnani: I don’t think we are declaring that number because it is one of the most painful things that we went through as individuals since acquiring the company was the involuntary separations. The fundamental fact is that we have been used to growing the companies, we have been used to treating all our employees as our family members.

This separation was not an easy process. We tried easing it in a form and shape that it causes the least amount of separation pain because overall the economy wasn’t doing all that great at the time when we went through this. We decided as a management team that we will try and not talk about the involuntary part and we will also not talk about the numbers.

Q: Can you tell us in a nutshell, how was the right sizing exercise carried out?

Gurnani: If you recall, the alarm bells went out on December 16, 2008. Between December 16 and April 13, almost 190 accounts had walked out of the door or made it clear their intentions to walk out of the door. Having coming in that kind of an environment, right sizing was not only in terms of employees, it was in terms of trying to right size the operating metrics, it was the right sizing of infrastructure and it was the right sizing of communication networks. Many things that you develop and create over a period of time, to get that to an optimum level has been a fairly long and tedious journey.

Nayyar: And at times painful.

Q: Coming to your liabilities that are there right now, the Rs 1,230 crore figure that 37 creditors are asking including Maytas Infra and Maytas Properties, what is the status with these creditors? You have already said that this is unattainable – can you throw some light as to there has been any kind of discussion with them?

Nayyar: There have been no discussions with them. We believe that these are unattainable claims. They are going to court and the matter has already been taken cognizance off and so is the matter is sub-judice, I cannot talk about it any further. We will meet them in court.

Q: In terms of the UPAID transaction amount that was paid, has it been added to the P&L as yet or if not then by when are we expecting?

Nayyar: As soon as the money is transferred, we will make the necessary – but the provision has been made.

Q: Also talking about the class action lawsuits, what is the exact damage? What is the status with them, have there been discussions with them or are you willing to wait?

Nayyar: A class action suit normally has a life of about four years. We are going through that process; it is only a year and a half. I suspect this game will continue till about two-three years more. I am not very worried about it.

Q: Are there any more accounts left to be restated, any other details that need to be restated till the merger?

Nayyar: We have restated everything which had to be done. It is done and over with.

Q: Give us a final view on by when are we expecting a revival roadmap for Satyam and approximately what are the key areas that you have pointed out, obviously we are looking at a turnaround by when are we looking at a complete turnaround?

Gurnani: I think a complete turnaround will be when my growth percentage, when my utilization and when my profit percentages start getting into line with the industry. Ultimately whatever I might give you as a roadmap; the results have to speak for themselves.

What I am stating in front of you is exactly a plan or a roadmap which was submitted to the board of Tech Mahindra, which had representatives from Mahindras and independent directors about how this company would go through the stages of revival, growth and how we will start optimizing it for profit.

Q: What is the capex charted out for the next because you said that you will be expanding in Hyderabad, Chennai and couple of other areas?

Nayyar: I think at the moment it is about Rs 150 crore or so.

India court orders closure of Vedanta smelter

2010-09-29T11:42:00.000+05:30

Vedanta, the London-listed company founded by billionaire Anil Agarwal, has suffered a fresh blow in India, where a court has ordered the immediate shutdown of its massive copper smelter in the south citing violation of environmental laws in a sensitive coastal area.

Tuesday’s ruling by the Madras High Court came a month after India’s environment ministry rejected Vedanta’s plans to mine bauxite in the eastern state of Orissa, and during a sensitive time as New Delhi is considering whether to allow Vedanta to take a $9.6bn controlling stake in Cairn India, a rival which operates lucrative and strategically important oilfields in the northern state of Rajasthan.

The copper smelter in question is the Tuticorin plant in the state of Tamil Nadu, which has been operating for more than 12 years and which Vedanta has been planning to expand.

Critics had argued that the Tuticorn smelter – which is owned by Vedanta’s subsidiary Sterlite Industries – had caused unacceptable levels of air and groundwater pollution less than 25km from the Gulf of Mannar national marine park, one of the most bio-diverse coastal regions in Asia.

In their verdict, judges said the smelter was emitting noxious air pollution, that the plant’s effluents were hazardous and caused high levels of heavy metals, arsenic, and fluorides in the groundwater, and that the entire plant site was now “severely polluted.”

The judges also ruled that the plant’s location, being so close to the marine park, violated the company’s operating permissions from the Tamil Nadu Pollution Control board, which specified the smelter should be located at least 25 kms away from any ecologically sensitive area.

The judges were quoted by a local newspaper as saying that the “unabated pollution” caused by the company should be stopped, at least for now, to protect “Mother Nature”.

Established in 1996, the Tuticorn smelter has annual capacity of 400,000 metric tonnes, and the company has been aiming to double that by the middle of next year.

Sterlite’s copper business generated around $2.8bn in revenues last year, according to the annual report.

Company executives said they were awaiting a full text of the judgement before deciding how to proceed. “The Tuticorin smelter has been operating for more than 12 years and has been in compliance with necessary rules and regulations,” the company said in an emailed statement to local journalists.

India has been stepping up its efforts to more tightly enforce environmental regulation and laws, amid growing concern about the ecological cost of its current development drive.

Lafarge, the global cement giant, recently had its plan for an integrated $187m cement plant in the sensitive Himalayas blocked by an environmental watchdog.

PM to launch Unique Identification Numbers today

2010-09-29T11:40:00.001+05:30

NEW DELHI: Prime Minister Dr Manmohan Singh will launch the issue of Unique Identification Numbers (Aadhaar) nationally by distributing the first set of numbers among the villagers in Maharashtra's Nandurbar District on Wednesday.

The Unique ID Authority of India started working in August 2009. The Government had committed to issuing the first set of Unique ID numbers in 12 to 18 months.

In the ensuing period of last one year, the infrastructure for this complex project has been set up. With the launch date for the project scheduled for September 29, the Unique ID Mission has achieved its goal of on-time delivery.

The goal of the UID Mission is to deliver Unique Identification Numbers (Aadhaar) to every resident in the country. In addition, it aims to establish a cost-effective, ubiquitous authentication infrastructure to easily verify these identities online and in real-time.

Today there are a large number of residents, especially the poorest and the most marginalized, who face challenges in accessing various public benefit programs due to the lack of possessing a clear identity proof.

The Aadhaar number will ease these difficulties in identification, by providing a nationally valid and verifiable single source of identity proof.

The UIDAI will ensure the uniqueness of the Aadhaar numbers through the use of biometric attributes (Finger Prints and Iris), which will be linked to the number. This will help agencies and service providers across India clean out duplicates and fakes from their databases.

The elimination of duplicate, ghost and fake identities across various schemes is expected to substantially improve the efficiency of the delivery systems by ensuring that the leakages are reduced and the benefits reach the right people.

The Aadhaar number will also enable the delivery of various services at the grass root level in a cost effective and efficient way. An example of such an Aadhaar-enabled service is in banking for the poor.

With the Aadhaar number, residents will be able to easily fulfill the Know Your Customer (KYC) requirements of banks. They will be able to verify their identity through the Aadhaar number to banks both in person or remotely, using a mobile device.

As a result, banks will be able to provide branchless banking services to hard-to-reach rural regions, and the use of electronic transactions will further bring down costs. Similarly, electronic transfers of benefits and entitlements can be enabled through Aadhaar-linked bank accounts of the beneficiaries.

India will be the first country to implement a biometric-based unique ID system for its residents on a national scale.

The national launch of Aadhaar will herald a new chapter in the efforts of the Government in enabling inclusive growth and bringing in greater efficiency and transparency in governance.

Aadhaar has the potential to fundamentally transform the service delivery and governance in the country.

Roller Coaster Ride for Satyam Stock

2010-09-27T20:43:00.000+05:30

It’s been a roller coaster ride for the shares of Satyam Computer Services, now known as Mahindra Satyam, over the past month ahead of the company’s release of its first financial statements in two years.

The stock of the beleaguered-but-recovering software company has traded in a band between 79 rupees ($1.75) and 113.80 rupees on the Bombay Stock Exchange in the month since Aug. 27 and has surged 17.2% in last month. In comparison, the 30-stock benchmark Sensex advanced 10.2% in the same period.

The company couldn’t declare results for the past two fiscal years after its founder, B. Ramalinga Raju, confessed in January 2009 that the firm’s balance sheets were a sham, and that he had been overstating the profits of the Bombay and New York-listed firm for years to the tune of more than $1 billion.

On Wednesday, the company will disclose results for the fiscal years ended March 31, 2009 and March 31, 2010. The company is also in the process of restating its accounts for the past six to seven years, providing the first accurate look at the firm’s performance in years.

The firm’s American depository receipts took a pummeling on Friday, ending 24% down, after the Hyderabad-based company—once India’s fourth largest software exporter—said last week that it plans to de-list from the New York Stock Exchange as it expects to miss the Oct. 15 deadline to file financial statements with U.S. regulators.

On Monday Satyam closed down 3.7% at 96.45 rupees ($2.14) on BSE, while the benchmark Sensex ended 0.4% higher.

“Generally the market should be a bit wary as not too much is known about the performance,” said a Mumbai-based analyst, who asked not to be named.

Citigroup expects Satyam to post net profit of 6.18 billion rupees ($136.9 million), or 5.30 rupees ($0.12) a share, on revenue of 52.14 billion rupees for the 2010 fiscal year ended March 31, with earnings before interest, tax, depreciation & amortization, or Ebitda, margins at 13%.

The bank expects this fiscal year net profit at 9.15 billion rupees or 7.80 rupees a share, on revenue of 59.11 billion rupees, with Ebitda margins not more than 19%.

Market players expect stock to be range bound till the results are declared.

The recent run-up in the shares of the company is due to “over optimism” and expectations of a double-digit margin performance, said another analyst.

“I don’t see any fundamental trigger for the stock to go up from these levels,” he added.

The company will also report results for this year’s April-June and July-September quarters on or before Nov. 15.

Michael Douglas’ ‘Wall Street 2′ tops weekend box-office with $19m

2010-09-27T13:38:00.001+05:30

Washington, Sep 27 (ANI): Michael Douglas’ return as the formerly “greed is good”-hyping Gekko in ‘Wall Street: Money Never Sleeps’ topped the weekend box office with an estimated 19 million dollars.

And the film is the cancer-stricken actor’s first No. 1 opener since 2001’s ‘Don’t Say a Word.

However, the film is co-star Shia LaBeouf’s sixth No. 1 movie since just 2007.

However, the 100 million dollar, 3-D-priced ‘Legend of the Guardians’ got off to a non-flying second-place start, with 16.3 million dollars.

Ben Affleck’s ‘The Town’- last weekend’s No. 1-got bumped to third with 16 million dollars, reports E! Online.

Rounding up the top five were ‘Easy A’ and ‘You Again’ with 10.7 million and 8.3 million dollars respectively.

Here’s a complete look at the weekend’s top-grossing films, per Friday-Sunday estimates compiled by Exhibitor Relations:

1. Wall Street: Money Never Sleeps, 19 million dollars
2. Legend of the Guardians: The Owls of Ga’Hoole, 16.3 million dollars
3. The Town, 16 million dollars
4. Easy A, 10.7 million dollars
5. You Again, 8.3 million dollars
6. Devil, 6.5 million dollars
7. Resident Evil: Afterlife, 4.9 million dollars
8. Alpha and Omega, 4.7 million dollars
9. Takers, 1.7 million dollars
10. Inception, 1.2 million dollars (ANI)

Google Doodle: 12th birthday cake for search engine

2010-09-27T09:44:00.000+05:30

Google has marked its 12th anniversary with a 'doodle' painting of a cake by 89-year-old Los Angeles artist Wayne Thiebaud.

Users visiting the search engine's home page are greeted with a picture of a cake whose candle represents the 'L' in the Google logo.

The California-based company was first incorporated as a privately held corporation on 27 September 1998.

Thiebaud's work, reproduced by permission of VAGA, Visual Artists and Galleries Association, includes many cakes, most painted in the 1950s and 1960s.

He is associated with the Pop art movement because of his interest in objects of mass culture, although his work is earlier than the likes of Andy Warhol.

It is a more straightforward 'doodle' than the recent ball game animation that distracted millions of internet users.

Before that, Google marked the 25th anniversary of the discovery of the "buckyball", a spherical dome of exotic molecules of carbon, with a special moving design.

The animated logo replaced the logo's middle O letter with an orange ball. It then formed into the "buckyball", which is a form of carbon composed of 60 atoms.

By scrolling their mouse across the logo, users could twist and turn the ball, which has replaced the search engine's usual logo on its home page.

The new interactive doodles follow one produced in May to celebrate the 30th birthday of Pac-Man.

That design, which went public on Friday, May 21, 2010, was the first doodle to be fully interactive. The Pac-Man character could be moved by using the arrow keys on the user's keyboard.

Google Doodles have become newsworthy in their own right after the technology firm started using the customised versions of its logo to mark what it considered significant occasions.

The first of them was used in August 1998 when Sergey Brin and Larry Page, the firm's founders, designed one for the Burning Man Festival.

In October 1999, it produced a Halloween doodle: the first after the firm switched to a new logo.

The first "Christmas card" doodle was presented in 1999, on Christmas Day, featuring a snowman and flakes drifting onto the name.

Mother's and Father's Day doodles appeared in May and June 2000 respectively before the firm started noting more esoteric and, let's face it, interesting occasions.

On October 7, 2009, it did "Google" as a bar code to recognise the anniversary of its invention in 1948 by Bernard Silver, which some saw as a significant shift away from human language and towards machine language.

On Saturday, June 5, 2010, a hologram replaced the logo to honour Dennis Gabor, the inventor of holograms.

Most recently the firm marked the 71st anniversary of the Judy Garland film The Wizard of Oz with a doodle of Dorothy, the Cowardly Lion, the Tin Man and the Scarecrow walking down the Yellow Brick Road towards a landscape with "Google" on it. Perhaps it's a metaphor.

Mary Shelley, the British author of Frankenstein, had the 213th anniversary of her birth celebrated by a spooky Google Doodle late last month.

Tata Steel, JSW May Raise Prices 4% on Increasing Farm Demand, RBS Says

2010-09-27T09:43:00.001+05:30

Tata Steel Ltd., Steel Authority of India Ltd. and JSW Steel ltd., the nation’s top producers, may raise prices by as much as 4 percent next month because of lower imports from China and a surge in rural demand, RBS Equities (India) Ltd. said.

Prices, which rose an average 4 percent in September, are likely to gain for the second consecutive month, said Rahul Jain, an analyst at RBS in Mumbai. The bulk of demand may come from farmers who are expected to spend more during the festival season after a robust monsoon, said Nikhil Agarwal, an analyst at Kim Eng Securities India Ltd. in New Delhi.

An above-average monsoon, the main source of irrigation for the nation’s 235 million farmers, is expected to produce a record crop this year, boosting agricultural incomes and sales of homes, tractors and motorcycles. China’s move to restrict power supplies to mills will likely diminish exports to India, lifting demand for Indian-made steel.

“Indian steelmakers lost out to imports in the first five months of this fiscal year,” said Jain, who has a “buy” rating on shares of Tata Steel and Steel Authority and a “hold” rating for JSW. “In China, there are efforts to lower output, which may lead to a drop in shipments to India.”

Tata Steel shares rose 1 percent to 629.95 rupees on Sept. 24, while Steel Authority gained 0.8 percent to 205.95 rupees. JSW Steel advanced 1.5 percent to 1,275.80 rupees.

Diwali Demand

India’s steel demand, which grew 7.6 percent last fiscal year, is forecast to grow 10 percent in the year ending March 31, helped by demand for automobiles and spending on roads and ports, G.K. Basak, executive secretary of steel ministry’s joint plant committee, said on Sept. 6. Sales of cars, motorcycles and houses start increasing from September and peak on the day of Diwali, the festival of lights, usually in November.

“Higher international prices and estimated demand in India leaves room for some price increase in October,” JSW Marketing Director Jayant Acharya said on Sept. 23.

Benchmark world hot rolled coil prices rose 3.6 percent this month, according to Steel Business Briefing.

The monsoon this month in India has been 122 percent of the 50-year average as of Sept. 14, in contrast with last year when rains were the least since 1972. The nation may have a record corn crop in excess of 20 million metric tons in the year through June 2011, according to Adani Enterprises Ltd., the country’s biggest non-state trader of farm goods. The wheat harvest may be a record 82 million tons.

Construction companies, which stopped work in northern and western India due to excessive rains, will restart, adding to the demand, Kim Eng’s Agarwal said. India’s passenger-car sales jumped 33 percent from a year ago to a record in August.

The rise in demand since September has led to a drop in inventory levels of steelmakers, RBS’s Jain said.

Steel Authority’s inventory fell 11.3 percent to 496,127 tons as of Sept. 22 from 559,061 tons on Aug. 15, while deliveries rose 66.2 percent. JSW also expects a 100,000-ton drop in inventory by Sept. 30 from the June 30 level, Chief Financial Officer Rajeev Pai said on Sept. 23.

Satyam to delist ADRs from NYSE

2010-09-24T22:51:00.001+05:30

MUMBAI: IT firm Mahindra Satyam said on Friday it would delist from the New York Stock Exchange in mid-October due to non-compliance, adding that it would likely miss its deadline to report financial results for fiscal year 2009.

Satyam shocked investors in January 2009 when the firm's former chairman and founder Ramalinga Raju said its profits had been overstated and assets falsified in a fraud allegedly worth over $1.5 billion.

The company on Tuesday said its board will review its audited financial results for fiscal years 2009 and 2010 on Sept. 29, which analysts say will take it closer to a merger with parent Tech Mahindra. Tech Mahindra, which bought Satyam in April 2009 and is operating it as an independent company, has said it can only merge the firm into the parent after the restated results for fiscal years 2009 and 2010 are announced.

Satyam's auditor PricewaterhouseCoopers had said all Satyam audit reports from 2000 through 2008 should no longer be relied upon, after the revelation of the fraud. Analysts do not expect the company to restate numbers earlier than the 2008/09 fiscal year (April-March). Satyam, which once ranked as India's No. 4 outsourcing firm, has not reported results beyond the September quarter in 2008.

Satyam faces class action lawsuits from shareholders in the United States, which were filed after a sharp plunge in its New York-listed shares following the revelation of the fraud. The company has also received legal notices claiming a refund of 12.3 billion rupees ($265 million) by 37 companies, which Mahindra Satyam has said are "legally untenable".

Last December, Satyam agreed to pay $70 million to Britain's Upaid Systems Ltd to settle a patent suit and in August won a New York court ruling to withhold taxes on the payment.

‘Peepli Live’ makes it to the Oscars!

2010-09-24T22:47:00.001+05:30

Mumbai: Well, Aamir Khan has done it again. ‘Peepli Live’ has been selected as India’s official entry at the 83rd Academy Awards to be held in US next year in 2011.

Speaking to a news daily Supran Sen, secretary general of the Film Federation of India said, “Peepli Live has been selected as India`s official entry for the Oscars out of 27 films.”

The film produced and promoted by Aamir Khan has gone on to become India’s calling card from world’s most prestigious film awards – the Oscars! Peepli Live has been short listed in the Best Foreign Film category.

Holding the megaphone for the first time, the director of ‘Peepli Live’ Anusha Rizvi is no less than a revelation for the evolving Indian cinema. The movie is satirical take on farmer suicides in India and how media and politicians tackle the issue.

Reportedly, the film even earned appreciation from the Prime Minister of India as it was screened for him and his family members and some close friends.

This is third time lucky for Aamir Khan Production as the actor`s previous films ‘Lagaan’ (2001) and ‘Taare Zameen Par’ (2007) were also selected to represent India at the Academy awards.

‘Laagan’, which saw Aamir playing a farmer in British Raj, was shortlisted in a category of five but lost to Bosnian war film ‘No Man`s Land’.

The story of ‘Peepli Live’ follows two poor farmers who face losing their land over an unpaid debt after poor monsoon rains. A local politician suggests they commit suicide so their families get compensation.

A journalist overhears one of the farmers apparently urging the other to end his own life, triggering a media frenzy about whether he will go through with it, lampooning India`s sensationalist television news channels.

The film is a black comedy and in fact a brave attempt to expose India’s underbelly.

Finalising Mining Bill as per GoM's suggestions: Mines Secy

2010-09-22T23:33:00.001+05:30

NEW DELHI: Amid a furore over 26 per cent profit-sharing with locals under the proposed new mining law and demands for watering down the provision for PSUs, the Mines Ministry today said its final draft will go with the recommendations of the Group of Ministers.

"Based on the discussion of the Group of Ministers (GoM), the final draft of the new mining bill is being prepared by the Mines Ministry and will be placed before the GoM. After that it is to be sent to the Cabinet," Mines Secretary S Vijay Kumar told PTI.

Last week, the 10-member ministerial panel headed by Finance Minister Pranab Mukherjee arrived at a consensus on the Mining Bill, which, among other things, makes it mandatory for companies to share 26 per cent of the profits from mining with project-affected people.

The GoM will meet soon to clear the final draft of the Bill.

Steel Minister Virbhadra Singh, who is a part of the GoM, has sought a "special consideration" for PSUs like SAIL and NMDC, a proposal termed by industrialist-turned politician Naveen Jindal-led Jindal Steel and Power as discriminatory. The firm has also termed the proposed 26 per profit-sharing regime to be too high.

Besides Jindal, the Tatas have also criticised the proposed levy and asked the government not to charge it as a separate tax, saying that social obligation is part of the operating cost of the company.

The new Bill has proposed that companies share 26 per cent of the profits from mining with the locals who lose land. For such profit-sharing, the GoM has proposed creation of a District Mineral Foundation, for disbursement of benefits to the locals.

It also proposes that in case a mine is non-functional, or running in losses, the firms should compensate the people affected by land acquisition by paying them an amount equal to the royalty given to state governments.

The royalty paid by mining companies to state governments runs into hundreds of crores of rupees.

The new Bill seeks to expedite the grant of mineral concessions in a transparent manner and attract big-ticket investments in the sector.

Mines Minister B K Handique had earlier said the ministry plans to introduce the Bill in the Winter Session of Parliament to replace the existing Mines and Mineral Development and Regulation (MMDR) Act, 1957.

The new legislation is being framed at a time when UPA Chief Sonia Gandhi has voiced concerns over land acquisition norms. Gandhi had said she favours the Haryana model, where farmers are provided lucrative compensation in addition to annuity for 33 years.

Mahindra Satyam scrip scales 8-month peak, soars 15 pc on BSE

2010-09-22T23:23:00.001+05:30

MUMBAI: IT firm Mahindra Satyam scrip on Wednesday rallied by 14.90 per cent to hit an eight-month high of Rs 109.45 at the Bombay Stock Exchange, as investors anticipated strong financial performance by the company for fiscal years 2008-09 and 2009-10.

Mahindra Satyam, formerly known as Satyam Computers, will be announcing its results on September 29. It had not published its financial results since its founder B Ramalinga Raju in January 2009 admitted to fudging the company's accounts for years.

Following the revelation, the company's administration was taken over by a government-nominated Company Law Board (CLB), which subsequently cleared sale of the company to Mahindra Group.

The CLB on a request from Mahindras had allowed the company to submit the audited re-stated accounts for the last two fiscal years by September 30, after the latter failed to meet the June 30 deadline.

"The fundamentals of the company are very strong with the management of Mahindra Group, and the market is expecting excellent results from the company next week, which is triggering the upmove in the stock," Geojit BNP Paribas Assistant Vice President Gaurang Shah said.

The rise of 14.90 percent in the company scrip price was significant as the broader market turned weak during the afternoon session, before finally ending in the negative zone.

The 30-share benchmark gauge Sensex that crossed the magical 20,000-mark yesterday after 32 months, today lost momentum and closed 59.83 points lower at 19,941.72. Mahindra Satyam was trading at Rs 107.65 at the BSE, a rise of 13.02 per cent since yesterday's close.

Exactly an year ago on Sep 22, 2009, shares of Mahindra Satyam had hit a one-year high of Rs 123 on BSE.

The scrip was doing well at the National Stock Exchange too, where it ended 13.13 per cent higher at Rs 107.70 at the day's close. In terms of volume, over 16 crore shares were traded on both the bourses.

Apart from Mahindra Satyam, most of the IT stocks underperformed, in line with the weaker broad market.

IT giant Infosys Technologies, which carries the maximum weight on Sensex after RIL, remained under pressure and ended at Rs 3.011.60, down 1.53 per cent from the previous close.

Similarly, TCS also finished the day on a weak note at Rs 936.25, down 1.73 per cent from previous close.

Satyam Computers will come out with its financials for fiscal years 2008-09 and 2009-10 on September 29, for the first time since its founder B Ramalinga Raju admitted to falsifying the company's accounts.

U.S. Loses No. 1 to Brazil-China-India Market in Investor Poll

2010-09-22T23:17:00.001+05:30

Sept. 21 (Bloomberg) -- The U.S. has fallen behind emerging markets in Brazil, China and India as the preferred place to invest, a Bloomberg survey shows, though the world’s largest economy still ranks highest of all major developed countries.

The U.S. ranked first three months ago in the last quarterly Bloomberg Global Poll. Along with the slipping perceptions of the U.S. markets in the most recent survey, conducted Sept. 16-17, poll respondents say the Federal Reserve is likely to take further steps to try to bolster the economy.

In the September poll of 1,408 investors, analysts and traders who are Bloomberg subscribers, respondents rate the U.S. fourth for potential returns over the next year, behind Brazil and China, tied for first, and India, in third place.

The U.S. economic situation “is obviously unsustainable, and the concerted attempt to suspend disbelief is playing increasingly poorly abroad,” says poll respondent Eric Kraus, chief strategist for Otkritie Brokerage House in Moscow. “One can delay, but no one can forestall the unwind of a multidecade credit bubble.”

Economic reports released since the June poll show U.S. GDP growth slowed to 1.6 percent in the second quarter from 3.7 percent in the first quarter. In the final quarter of last year, GDP grew at a 5.0 percent annual rate.

Expectations for U.S. GDP growth next year have dropped to a median forecast of 2.5 percent in September from 2.9 percent in June, according to Bloomberg’s monthly survey of economists.

S&P Rise

Since the June survey, U.S. stock markets have been on the rise. The Standard & Poor’s 500 Index has risen 3.62 percent since the last investor poll was completed June 3. That’s not as much as Brazil’s Bovespa Index, which is up 10.56 percent and India’s Bombay Stock Exchange Sensitive Index, which is up 10.44 percent. The U.S. stocks still did better than China’s Shanghai Stock Exchange Composite Index, which has risen 1.41 percent since June 3.

“I think the U.S. will get back on track, but not in the next 6-12 months,” says poll respondent Thomas Knudsen, a senior trader with OW Supply & Trading in Copenhagen.

Two-thirds of investors say they believe Federal Reserve policy makers, who meet today, will ease monetary policy through bond purchases by the end of the year. A similar 65 percent majority say the Fed bond purchases won’t boost U.S. economic growth.

Overall, investors give the central bank favorable marks, with a 57 percent majority believing its monetary policy is “about right.” More say it has been too aggressive, the view of 26 percent, than say it has been too timid, a view held by 14 percent.

Popular Bernanke

Fed Chairman Ben S. Bernanke is viewed favorably by 71 percent of respondents, up from 67 percent in June. He ranks highest in a list of eight global leaders and policy makers that includes President Barack Obama, Chancellor Angela Merkel of Germany and European Central Bank President Jean-Claude Trichet.

Only 1 out of 6 investors believes the U.S. economy is currently improving, though a 45 percent plurality considers the U.S. “stable.” Another 37 percent believe the U.S. is deteriorating.

The poll also shows that confidence in the dollar has slipped since June, when 63 percent of investors believed the U.S. currency would rise against the euro during the following three months. Forecasts are now evenly divided: 34 percent now expect a stronger dollar in three months; 32 percent expect little change; and 30 percent a weaker dollar.

The Bloomberg Global Poll was conducted by Selzer & Co., of Des Moines, Iowa, and has a margin of error of plus or minus 2.6 percentage points.

No ‘Lost Decade’

Investors are confident the U.S. will avoid some of the worst outcomes. Seven out of 10 investors say they believe there is little or no risk of a U.S. double-dip recession. Six out of 10 investors see little or no risk the U.S. will endure a Japan- like “Lost Decade” of minimal or no growth.

“There is a black cloud overhead, but the worst is not yet to come,” says J. Ann Selzer, president of Selzer & Co.

Still, investors are wary of the record U.S. budget deficits. A 53 percent majority sees a big or moderate risk the budget deficit will provoke a crisis of confidence within two years that will spur “a dramatic rise” in long-term interest rates.

Poll respondent Dieter Buchholz, head of equities at Falcon Private Bank in Zurich, said market sentiment could turn against U.S. debt if the bipartisan debt commission appointed by Obama fails to spur a credible reduction in long-term deficits or Congress bucks the White House to expand the deficit by extending Bush-era tax cuts for the wealthy.

‘Confidence Crisis’

“When the non-Americans see that efforts by the administration to balance the budget are fruitless, then I think you will get a confidence crisis,” Buchholz said.

In July, the White House budget office forecast the federal deficit would be a record $1.47 trillion for 2010 and $1.42 trillion for the 2011 fiscal year, which begins Oct. 1.

Poll respondents were evenly split on whether the current U.S. Treasury bond market is a bubble. In six months, 49 percent expect yields on the 10-year Treasury note to be higher versus 26 percent who expect yields to be lower.

Their view of the U.S. stock market is bullish: 49 percent expect the S&P 500 to be higher in six months, while 28 percent say it will be lower.

Poll respondents in the U.S. are more optimistic about their nation as a place for investment; 35 percent of U.S. investors name it as a top market, just behind Brazil. Outside the U.S., that number drops to 17 percent.

Piramal starts phase-II clinical trials of diabetes drug

2010-09-20T22:53:00.001+05:30

Piramal Life Sciences today said it has started phase-II clinical trials of a molecule, aimed at treating diabetes, in Europe and India.

The company today initiated the phase-II study of 'P1736-05', an insulin sensitising compound, which is being developed for the treatment of type-2 diabetes, in India and Europe, Piramal Life Sciences said in a filing to the Bombay Stock Exchange (BSE)

"The commencement of phase-II trial of P1736-05 in India and Europe speaks of our efforts to build a diversified and strong pipeline of products to address unmet medical needs," Piramal Life Sciences Managing Director Somesh Sharma said.

He further added: "P1736-05 is likely to provide a safe and effective therapeutic option to type-2 diabetic patients."

Phase-II clinical trials are tests conducted on a small select sample of human patients after passing the Phase-I, which is done on a smaller sample.

While, the company has been granted an approval by Indian regulatory authorities, in Europe various EU regulatory authorities like CCMO of Netherlands and NIP of Hungary have granted an approval for conducting the trials, it added.

According to the World Health Organisation (WHO), Type-2 Diabetes Melitus is an emerging worldwide health crisis with an incidence rate of 300 million by 2025.

Type-2 Diabetes Melitus or non-insulin dependent diabetes accounts for about 95 per cent of the diabetic population.

Shares of Piramal Life Sciences were trading at Rs 191.40 in late afternoon trade on the BSE, up 4.99 per cent from its previous close.

IOC hikes petrol prices by 27 paise per litre from Monday night

2010-09-20T22:47:00.001+05:30

The public sector Indian Oil Corporation (IOC) today announced a marginal hike of 27 paise per litre in the price of its non-branded petrol in Delhi from midnight tonight in an effort to bring the prices to market parity.

In Delhi, the new price will be Rs 51.83 a litre against Rs 51.56 earlier. The price will go up from Rs 55.40 to Rs 55.69 in Kolkata, Rs 55.97 to Rs 56.25 in Mumbai and Rs 56.02 to Rs 56.31 in Chennai, IOC said.

Sources said the other state-owned oil marketing companies (OMCs) -- Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited -- were also likely to follow suit in the next two or three days.

An IOC official said the hike had become necessary because of the rise in the prices of crude oil.

The Centre had in June freed the prices of petrol from government control and this is the first time since then that the OMCs have hiked prices.

The different OMCs are said to have decided to announce hikes on different days in order to avoid charges of acting as a cartel.

Cotton to Extend Rally Amid Tight Supply, Trader Says

2010-09-20T22:44:00.001+05:30

Cotton, trading at more than $1 per pound in New York for the first time since 1995, may extend its rally as supplies fail to keep pace with demand, according to trader Gill & Co.

Prices may climb by a further 10 cents to 15 cents in the next 15 days to a month, Chairman and Managing Director Kantilal V. Shah said in a phone interview. Cotton jumped as much as 3.8 percent to $1.0198 today, the highest since June 1995.

“You’ve never seen such a hectic rise,” said Shah, whose Mumbai-based company has been trading cotton for more than a century. “It has broken the rules.”

Cotton has surged 62 percent in the past year on slumping inventories and as excess rain in China and floods in Pakistan damaged crops. The global stockpiles-to-usage ratio is forecast by the U.S. Department of Agriculture to decline to the lowest since 1994.

“Everybody is looking out for cotton because everybody is short,” said Shah, referring to mills that don’t have enough of the raw material. “Supplies all over the world are tight.”

The commodity is the best performer over the past year on the UBS Bloomberg CMCI Index. The most-active contract, for delivery in December, added 3 percent to $1.0118 on ICE Futures U.S. at 2:32 p.m. Mumbai time.

Futures may surge to $1.25 by January as supplies dwindle, O.A. Cleveland, a professor emeritus in agricultural economics at Mississippi State University, said Sept. 14. Prices may reach as much as $1.05 within six weeks, John Flanagan, president of Flanagan Trading Corp., said Sept. 15.

Trade Curbs

Adverse weather in China, the biggest grower and user, and export curbs in India are bolstering prices, Flanagan said.

India, the second-biggest producer and exporter, will limit shipments to 5.5 million bales in the season starting Oct. 1 and will impose “prohibitive” duties on exports above that level, Commerce Secretary Rahul Khullar said earlier this month. A bale weighs 170 kilograms (375 pounds) in India.

Global cotton stockpiles will decline 3.3 percent to 45.4 million bales at the end of the marketing year on July 31, U.S. Department of Agriculture data show. That’s equal to 38 percent of demand, the lowest ratio since 1994. A U.S. bale weighs about 480 pounds (218 kilograms).

James Bond Producers Said to Join Sahara Bid for MGM Studio

2010-09-20T22:41:00.001+05:30

The Broccoli family, producers of the James Bond movies and co-owners of the franchise with Metro- Goldwyn-Mayer Inc., are involved in Sahara India Pariwar’s $2 billion bid to buy the debt-laden studio, said a person with knowledge of the offer.

Barbara Broccoli and her stepbrother Michael G. Wilson are part of the Sahara India offer and would receive an undisclosed equity stake in MGM if it succeeds, said the person, who sought anonymity because the discussions are private.

It wasn’t clear whether Broccoli and Wilson would have a management role in the Los Angeles-based studio, the person said. Sahara India, based in Lucknow, offered $2 billion for MGM’s more than $3.7 billion in debt, the Associated Press reported on Sept. 17.

The overture comes as MGM’s creditors are scheduled to vote this week on a pre-packaged bankruptcy plan to restructure the company’s debt by converting it to equity in a merger with Hollywood producer Spyglass Entertainment. Sahara India has interests in finance, infrastructure and housing, media, consumer products, manufacturing and services, according to its website. Its entertainment operations include cable-television channels, film production and cinema chains.

The talks involve Sahara India’s “mutual interest” with MGM, Abhijit Sarkar, head of corporate communications at Sahara India Pariwar, said in an e-mailed statement yesterday. He declined to add to the statement today, saying “it’s too early to comment on the issue.”

Susie Arons, an outside spokeswoman for MGM, declined to comment, as did Stephanie Wenborn, a spokeswoman for the Broccolis’ London-based EON Productions.

Creditor Vote

Under MGM’s pre-packaged bankruptcy plan that creditors will vote on, Spyglass Entertainment co-chairmen Gary Barber and Roger Birnbaum, who produced “The Sixth Sense” and “Seabiscuit”, would operate the studio and swap the rights to their film library for a 5 percent stake in the new company.

On April 19, EON Productions, the James Bond production company controlled by Broccoli and Wilson, said they would suspend development on the next instalment in the 007 series, which was previously scheduled for release in late 2011.

“Due to the continued uncertainty surrounding the future of MGM and the failure to close a sale of the studio, we have suspended development on Bond 23 indefinitely,” EON said then in a statement.

EON has produced 22 Bond films since 1962. Broccoli and Wilson have run the studio since 1995, when they took over from the late Albert “Cubby” Broccoli, who initially controlled the franchise rights. The family owns a 50 percent stake in the franchise, with MGM’s United Artists studios owning the other 50 percent. EON controls the merchandise rights while the studio handles film-related distribution.

Broccoli and Wilson asked Time Warner Inc.’s Warner Bros. film unit to stay involved in the MGM bidding, people with knowledge of the situation said in May. A $1.5 billion bid by Time Warner was rejected as too low, people with knowledge of the matter said in March.

Silver surges by Rs 350 to record high, gold rebounds by Rs 90

2010-09-17T16:15:00.000+05:30

NEW DELHI: Maintaining its upward journey, silver surged by Rs 350 to a new peak of Rs 32,800 per kg in the national capital today on hectic buying by stockists, driven by a bullish trend in global markets.

In line with the general firming trend, gold rebounded by Rs 90 to Rs 19,440 per 10 grams on fresh buying by jewellers for the festive and marriage season amid firm global cues.

Silver, which has been on a record-setting spree over the past one week, added Rs 350 to Rs 32,800 per kg on hectic buying by industrial units and coin manufacturers.

The trading sentiment was extremely buoyant after gold surged to a record high in global markets as dollar weakness spurred demand for the precious metal as an investment haven.

In global markets, which normally set the price trend on the domestic front, silver touched a fresh 30-month high of USD 20.95 an ounce, its highest level since May, 2008.

Similarly, gold advanced by 0.4 per cent to a record high of USD 1,280.80 per 10 grams.

Silver ready remained in demand and surged further by Rs 350 to Rs 32,800 per kg, a level never seen before. Silver weekly-based delivery jumped up by Rs 410 to an all-time high of Rs 32,435 per kg. Silver coins also gained Rs 200 to Rs 35,200 for buying and Rs 35,300 for selling of 100 pieces.

Gold of 99.9 and 99.5 per cent purity rebounded by Rs 90 each to Rs 19,440 and Rs 19,340 per 10 grams, respectively. The precious metal had lost Rs 150 in the previous trading session.

However, sovereigns remained flat at Rs 15,200 per piece of eight grams in restricted trade.

Govt raises DA to 45%; to cost exchequer Rs 9,303 cr per annum

2010-09-16T17:15:00.000+05:30

New Delhi: Ahead of the festive season, the central government today raised Dearness Allowance by 10 percentage points to 45 per cent of basic pay, benefiting about 88 lakh employees and pensioners.

The decision to provide higher DA to employees will cost the exchequer an additional Rs 9,303.2 crore per annum, an official spokesperson said after a meeting of the Union Cabinet, where it was decided to raise the allowance.

The new DA will be paid to central government employees and pensioners with effect from July 1, 2010, and the burden during the current fiscal has been estimated at Rs 6,202.1 crore.

"Increase in DA is in accordance with the formula based on the recommendations of the Sixth Pay Commission," the spokesperson added.

The existing rate of DA, which is paid as percentage of basic pay to compensate employees for the rising cost of living, is 35 per cent.

Inflation stood at 8.5 per cent in August, while food inflation is hovering above 15 per cent, according to the new WPI indices.

The increase in DA comes ahead of the Dussehra and Diwali festivals in October and November, respectively. The decision will benefit about 50 lakh central government employees and about 38 lakh pensioners.

.DLF May Start Apartment Sales at Its First Mumbai Project Before December

2010-09-16T17:13:00.000+05:30

DLF Ltd., India’s biggest developer, may start selling residential apartments at its first project in Mumbai by December, said Saurabh Chawla, executive director for finance.

The New Delhi-based company plans to develop 4 million square feet (371,612 square meters) of homes on former textile mill land in Lower Parel in central Mumbai, and may start offering the apartments this year, Chawla said.

“We are waiting for all our approvals and will launch the project only when we receive all the sanctions,” Chawla said in an interview in New Delhi yesterday. “It should happen sometime by the end of the third quarter” of this financial year ending March 31.

Lower Parel has emerged as an office district after defunct textile mill land was sold for commercial development. High-end residential projects such as Lodha Developers Ltd.’s World One, which claims to be India’s tallest residential tower, are being built in the area.

DLF may earn as much as $2 billion from the project by selling apartments for more than 20,000 rupees ($431) a square foot, CLSA Asia-Pacific Markets estimated in a note to clients dated Aug. 25.

The rush of developers to the area signals there may be an oversupply, analysts Suhas Harinarayanan, Suman Memani and Arun Aggarwal at Religare Capital Markets Ltd., said in a June note.

“Lower Parel is likely to see a supply of over 10 million square feet in the next 3 to 4 years, making it an over-supply zone ” the analysts said.

DLF, whose main developments are in Gurgaon near New Delhi, expects to reduce its net debt levels by 40 billion rupees to 145 billion rupees in the year ending March 31, Chawla said. DLF will earn annuity and rental income of about 18 billion rupees in the period, he said.

The developer also is seeking to sell a stake in the luxury Aman Resorts chain to a strategic partner and expects to complete the transaction this financial year, Chawla said.

RBI raises policy rates, loans may get costlier

2010-09-16T17:11:00.001+05:30

The Reserve Bank of India raised its main lending rate by 0.25 percentage point on Thursday and its borrowing rate by a larger-than-expected 0.50 percentage point, as it continues with the monetary tightening measures to cool inflation.

These hikes would be effective with immediate effect. Bankers said that there is possibility of a hike in lending rates and deposit rates.

An NDTV poll suggested that the RBI could increase repo and reverse repo rates by 25 basis points.

The Reserve Bank of India's repurchase rate (repo), or its overnight lending rate, now stands at 6 per cent, while the reverse repurchase rate, or borrowing rate, is at 5 per cent.

This is the first mid-quarter review of the central bank since it announced in July that the rate-setting meeting would be held at six-week intervals, instead of every quarter. This will help the Reserve Bank of India avoid making surprise moves between meetings.

Recent inflation and indusial growth numbers suggested that the central bank may continue with its monetary tightening measures. The strong economic growth has also given the central bank some headroom for tightening rates.

Despite a slight easing trend in inflation, it still remained at uncomfortable levels. The headline inflation for August remained elevated at 9.5 per cent, according to the old index.

Food prices, the main driver of Indian inflation, have again shown an upward trend after a brief period of moderation in July and first half of August. Food inflation accelerated to above 15 per cent in the first week of September. And food prices are not expected to ease significantly until the summer-sown crops boost supplies.

Industrial output growth for July was at a better-than-expected 13.8 per cent, making a case for further monetary tightening. India's GDP grew by 8.8 per cent in the first quarter, against 6 per cent in the April-June period last fiscal.

Finance Minister Pranab Mukherjee, commenting on the August inflation numbers, said, "There is no room for complacency... we must continue to be vigilant and be prepared with the instruments of fiscal and monetary policy to use them as and when the need arises."

Exports in Aug up 22.5%; trade gap a concern

2010-09-15T22:57:00.000+05:30

Exports grew by an annual 22.5 per cent to $ 16.64 billion in August on improved global demand for Indian merchandise, giving policy makers confidence about achieving the $ 200 billion target for the fiscal.

Imports jumped at a higher pace of 32.2 per cent to $ 29.7 billion in August, leaving a trade deficit of $ 13.06 billion, which is a cause for worry.

"Things are going so far according to our plan and we should be able to reach over exports target of $ 200 billion," Commerce Secretary Rahul Khullar said.

Expressing optimism, exporters body FIEO said that with this growth rate, exports would even surpass the $ 200 billion target and reach $ 210 billion.

Meanwhile, industry reported a 13.8 per cent growth in July, beating by a wide margin the market estimates of a single digit growth.

However, the rate of "heady growth" witnessed in the first quarter of the year has clearly decelerated, Khullar said.

He said while there is a marked improvement in exports during 2010-11 over the previous year "you are well below the $ 17.8 billion which was achieved in August 2008-09".

With imports rising on the back of 8.8 per cent economic growth in the first quarter of the fiscal, ballooning gap between exports and imports (trade deficit) remains the main area of concern for the government.

For the April-August period, the trade deficit aggregated $ 56.62 billion with a monthly average of $
11.2 billion.

The year may end with a trade gap of $ 135 billion. "The gap will be very very large, even compared to $ 118 billion, that we had two years ago."

During April-August this fiscal, exports posted a growth of 28.6 per cent to $ 85.27 billion on a year-on-year basis. Imports during the period grew by 33.1 per cent to $141.89 billion.

The sectors, which registered a healthy rate of exports growth during the first four months of the current financial include cotton yarn and fabric (41 per cent), gems and jewellery (28 per cent), iron ore (84 per cent), chemicals (23 per cent), engineering (40 per cent) and petroleum, oil and lubricants (POL) (50 per cent).

However, segments like readymade garments, handicrafts, handlooms and carpets are still in a bad shape, he said.

During April-August 2010-11, segments that witnessed a good growth rate include POL, which was up 31.7 per cent, fertilisers (79 per cent), vegetable oil (67 per cent), coal (43 per cent), iron and steel (64 per cent), gold (27.7 per cent) and machinery (20 per cent).

Advance tax numbers indicate good show by finance, auto cos

2010-09-15T22:54:00.000+05:30

MUMBAI: Advance tax collections for the second quarter, July-September, 2010-11 indicated on Wednesday that while sectors like banking, finance and auto have done well, cement and pharma were down as compared to last year's numbers.

As for individual corporate, Mukesh Ambani-led Reliance Industries and Larsen & Toubro paid Rs 1,306 crore and Rs 280 crore respectively, higher than Q2 FY10.

RIL had paid Rs 1,157 crore in the year-ago period, indicating that it is steaming ahead. L&T's had paid Rs 210 crore in Q2 FY 10.

Similarly, Kumar Mangalam Birla-owned Hindalco's tax outgo doubled to Rs 140 crore.

However, it was a mixed bag from the Tata Group as Tata Power Rs 60 crore and Tata Motors Rs 95-crore paid less to the exchequer vis-a-vis last year.

Country's financial capital Mumbai, which contributes a major chunk of direct tax collection, clocked over 13 per cent growth, which a top Income Tax official said was below expectations.

"Our expectations were more...some companies in sectors like cement are not showing good numbers," Chief Commissioner of Income Tax Mumbai, P P Srivastava, told PTI here, after the advance tax collections for September quarter ended on Wednesday.

The Mumbai region of Income Tax Department has been assigned a direct tax collection target of Rs 1,50,480-crore for the current financial year, which is 35 per cent of the all India collection target of Rs 4,30,000-crore.

Asked if the target (Mumbai circle) would be met, Srivastava said that "we are hopeful. However, we will have to take extra measures to achieve it."

IT-major Tata Consultancy Services paid Rs 260 crore in advance tax as compared to the previous year's Rs 220 crore, while the payment by Tata Chemicals remained unchanged at Rs 60 crore.

Driven by high growth, advance tax payments in the auto sector were good.

Bajaj Auto paid Rs 243 crore in Q2 FY11, as against last year period's Rs 170 crore, while Mahindra & Mahindra paid Rs 158 crore, up from Rs 112 crore, the source said.

Barring some names, the banking and financial sector witnessed high tax payouts, led by State Bank of India (Rs 1,924 crore), ICICI Bank (Rs 600 crore), HDFC Bank (Rs 600 crore), Central Bank of India (Rs 206 crore), Union Bank of India (Rs 308 crore) and Yes Bank (Rs 105 crore).

Home-loans lender HDFC shelled out Rs 400-crore this quarter, as against Rs 320 crore in the year ago period.

Life Insurance Corporation's payout increased by Rs 128 crore to Rs 1,067-crore, while in the case of General Insurance Corporation, it almost doubled to Rs 92-crore.

The sector which appears to have suffered the most in Q2 FY11 since last year is cement, as payouts by a majority of companies in this segment have fallen sharply.

From last fiscal's Q2 of Rs 150 crore, Ambuja Cement's advance tax payment fell to Rs 90 crore, while UltraTech's payout more than halved to Rs 60 crore.

Cement major Lafarge's advance tax payment declined from Rs 67 crore to Rs 40 crore. In the case of ACC, its advance tax payment plummeted to Rs 60 crore from last fiscal's Q2 of Rs 150 crore.

Consumer electronics major, Videocon, saw its advance tax outgo increase to Rs 35 crore, from last year's Rs 30 crore while state-owned fertiliser company RCF showed a decline to Rs 19 crore from Rs 33 crore in Q2 last fiscal.

Biscuit maker Parle saw its advance tax outgo increase by Rs 3 crore to Rs 12 crore this quarter and Johnson and Johnson paid Rs 22 crore, up from last year's Rs 18 crore.

Two pharma majors -- Lupin and Cipla -- have registered lower payouts at Rs 45 crore and Rs 65 crore respectively as compared to Rs 50 crore and Rs 75 crore, respectively, in the year-ago period.

In the media and entertainment space, Zee Entertainment's payout almost doubled to Rs 60 crore from Rs 32 crore in the year-ago period.

RIL regains Rs 1,000-mark; soars 2.25 pc on BSE

2010-09-15T21:47:00.000+05:30

MUMBAI: Market leader Reliance Industries today rose over 2 per cent and regained the Rs 1,000-level mark after more than a month, helping the BSE benchmark Sensex extend its winning streak to the seventh day in a row.

Reliance Industries ended the session at Rs 1,010.45, a gain of 2.3 per cent, on the Bombay Stock Exchange. It touched the intra- -day high of Rs 1,016.

The last time it had closed above Rs 1,000-level was on August 6, when it ended at Rs 1,000.30.

With today's jump in its share value, the company's market valuation surged to Rs 3,30,524 crore.

Marketmen said RIL, which enjoys the maximum weight in the Sensex, attracting good buying support also helped the broader market to extend its gains for the seventh day in succession.

They said reports of RIL was seeking a hike in gas price helped the stock rise. They further said today's rise is significant as RIL had not participated in the recent market rally. Yesterday, the company had lost 0.45 per cent.

Reports of company paying higher advance tax for the second quarter, too, fulled the rally.

Other oil and gas counters, however, ended mixed after a volatile session.

Shares of ONGC gained 1.14 per cent to hit its lifetime high at Rs 1,451.90, while HPCL ended 0.58 per cent lower, after hitting a new high of Rs 555.45.

IOC too erased early gains to finish 0.19 per cent down after touching a lifetime high of Rs 448.55.

BPCL settled down by 0.46 per cent, while Essar Oil ended 0.54 per cent higher.

The BSE oil and gas index settled the day with a gain of 193.26 points at 10,655.13.

Carrying forward the gaining momentum, the BSE benchmark Sensex Sensex finished the day higher by 155.15 points at 19,502.11.

India moves into mobile phone shares trading

2010-09-12T01:38:00.000+05:30

Millions of Indian investors will be able to trade shares using their mobile phones after the South Asian nation approved the move and the Bombay Stock Exchange unveiled plans for the service.

Trading on mobile phones is catching on globally, especially in Asia, where mobile phone penetration is growing rapidly.

Interactive Brokers, one of the largest US-based brokers, launched trading on mobile devices in 2002, including in the US and Britain.

But the phenomenon’s arrival in India is a sign that Asia is taking the lead in opening up the capital markets to the masses.

Mobile phone trading has made inroads in Japan and South Korea, where the local stock exchange says it accounts for 3 per cent of trading volume.

Madhu Kannan, chief executive of the Bombay exchange, said on Friday it had received approval from the Securities and Exchange Board of India (Sebi), the market regulator, for internet-based trading via mobile handset.

“We’ll be launching very soon,” he told the Financial Times. “This is something very core to our technology focused strategy. We’re trying to bring more people close to the market.

“It has the ability to significantly advance the concept of financial inclusion and the penetration of capital markets throughout the entire country,” Mr Kannan said.

Vinay Agrawal, executive director at Angel Broking, said that Sebi’s approval of mobile trading would have a significant impact on his business “because mobile penetration around the country is very high.”

India is the world’s fastest growing large mobile market by user numbers and the upcoming introduction of third-generation cellular services could make it easier for investors to access the markets.

The country’s subscriber base was 652.4m users as of the end of July, with 17m users added that month alone, according to the Telecom Regulatory Authority of India.

The National Stock Exchange, India’s biggest exchange, is also expected to receive Sebi’s approval for mobile phone trading and has lined up about 800 brokerage houses to launch its wireless facility.

In South Korea mobile phone share trading is growing as more people use smartphones to trade stocks. But the portion is still small as smartphones were introduced in Korea relatively late with the adoption of the iPhone late last year.

Mobile phone trading amounted to Won5,619bn as of March, according to Korea Exchange. The industry predicts that the current 3 per cent share of all trading done by mobile phone could rise to around 10 per cent in a couple of years.

Most retail, or individual, investors still prefer trading at home on their personal computers.

Gerald Perez, London-based managing director at Interactive Brokers, said his company planned to offer mobile phone trading India shortly. In September last year it launched iPhone and Blackberry apps to allow customers to log into their account and non-customers to view free stock, option, futures and forex quotes around the world. “I think growth is pretty good especially in Asia, everyone has mobile phones and everyone is on the go,” he said.

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Suzlon turns to emerging markets growth

2010-09-12T01:26:00.000+05:30

Suzlon Energy, the world’s third-largest turbine supplier, is embarking on a significant push for new business in emerging markets as it battles a depressed market in the developed world, where it built its reputation.

The group, with headquarters in Pune in India’s Maharashtra state, plans to refocus its business more sharply on the fast-growing emerging markets of its own country, China, South Africa and Brazil, amid a dismal outlook for wind turbines in the US and Europe.

A senior executive said on Monday the lossmaking company might position Repower Systems, Suzlon’s German subsidiary, to supply more developed markets such as the US, Europe and Australia, with an emphasis on offshore wind farms. The parent company would pursue high-growth opportunities in Asia, Africa and Latin America to build its order book quickly.

“We are aiming to break even by the end of the financial year,” said Nicholas Archer, global head of public relations. “If we can get some of the orders in then our fortunes should change pretty quickly.”

The tilt towards emerging markets comes as analysts predict slower than expected growth in wind power, particularly in the US and Europe, over the next two years. The short-term future for solar power, by comparison, is far rosier.

Last week, Barclays Capital, the UK-based investment group, cut its forecast for global wind power demand by 4 per cent for this year.

HSBC is also pessimistic. “Weak electricity demand resulting from energy efficiency measures and recessionary forces have made national wind installation targets easier to achieve ... This is bad news for wind turbine demand,” the bank said in a report.

Of particular concern is the US market, where proposed renewable energy laws have laid the ground for flat wind power growth over the next decade.

Suzlon, which has annual revenues of $5.5bn and commands 10 per cent of the global wind turbine market, plans to integrate Repower by raising its 91 per cent stake in the German engineering company to at least 95 per cent in the coming months.

The integration is expected to give management an opportunity to reinvigorate brands and streamline the corporate structure from almost 60 subsidiaries at present.

The company, headed by Tulsi Tanti, was at the forefront of India’s global acquisition rush in 2006-07. But its highly leveraged expansion at a time of high asset values came under severe strain in the financial crisis and led to a refinancing of $2.5bn debt last year.

Suzlon views Brazil, where a new government may embrace a 20 per cent renewable energy target by 2020, as having strong growth potential.

“We are really quite excited about the Brazilian market,” confirmed Mr Archer.

India growth story poses dilemma for investors

2010-09-12T01:20:00.000+05:30

Few of the world’s stock markets have offered a haven from fears of a double-dip recession and Europe’s debt crisis. India, though, is one. Investors have sought sanctuary in its growth prospects and capital inflows have surged. The question now is whether Indian equities are overpriced.

Those who bet on a strong performance from India’s stock market this year have been rewarded. Indian equities have outperformed all their main rivals. The Sensex, India’s benchmark index, which hit a 31-month high on Monday at 18,560.05, has risen 6.27 per cent since January 1. The Shanghai Composite in China, by contrast, has dropped 17.7 per cent and Brazil’s Bovespa index has fallen 4.81 per cent.

Asia’s third-largest economy has offered an attractive combination of economic stability and almost double-digit growth for fund managers anxious about US and European fragility. Net total foreign investments in Indian equities to August 31 were Rs594bn ($12.7bn), up from Rs403bn during the same period in 2009, according to the country’s market regulator.

Foreign investors also bought a net Rs389bn of bonds from the start of the year to July 30, compared with a year earlier when investors sold a net Rs37.2bn in bonds in the same period – a sign that investors’ confidence in the government’s ability to rein in its ballooning public debt has increased. Many analysts expect foreign capital inflows in the equity market to overtake the record Rs17bn in 2007.

KN Sivasubramanian, head of Franklin Templeton’s India Equity portfolio management, says: “India is a largely domestic-driven economy and recent economic and earnings data has been encouraging. Overall, we are seeing both domestic and global investors recognise the [Indian] growth potential.”

Cameron Brandt, senior global markets analyst at EPFR, says: “There was a fair amount of attention being paid to the deterioration of India’s public finances and the risk that, when combined with food and energy-driven inflationary pressures, the central bank would be forced to tighten aggressively. That hasn’t really happened.

“Meanwhile, the nervousness about the strength of the recovery in the US, Europe and Japan has cast a favourable light on the strong domestic component of India’s story.”

But for investors the problem is that a lot of the good news is now in the price. Indian equities trade at more than 17 times forecast earnings for 2010, compared with a five year average of 16.2 times earnings. By comparison, emerging market equities in general trade on an average of 12 times 2010 earnings, while Russia trades at just 6.7 times forecast earnings. That is a hefty premium.

Philip Poole, global head of macro and investment strategy at HSBC global asset management says that, while there is a lot of momentum in the Indian market, he has India as an underweight mostly due to valuations. “Relative to past trading history, the Indian equity market looks fully priced. Within an emerging markets context it looks toppish.”

While India has potential, it also has risks. Indeed, inflation is running at the highest level in any leading emerging market – with nearly 11 per cent forecast for 2010, compared with about 3 per cent for China, 4.9 per cent for Brazil and 7 per cent for Latin America.

Indian economic policymakers have made big strides in recent years in developing consistency. But they have yet to establish the same long-term sustainable growth records as their counterparts in some other emerging markets, notably China and Brazil. “Indian growth is very strong, but that leads to inflation pressures. The authorities will need to act to slow the economy,” says Mr Poole.

“Inflation is a real concern and we expect yields for the [benchmark] 10-year bonds to come under pressure, as the Reserve Bank of India tightens the monetary policy,” says A Prasanna at ICICI Securities.

“India is certainly a longer-term story. Promised reforms and the efforts to boost rural incomes and productivity are not going to happen overnight,” says Mr Brandt. “There are more attractive destinations for ‘hot’ money at the moment.”

Duvvuri Subbarao, the governor of the RBI, told the Financial Times in July that growing risk aversion among foreign investors could have a negative impact on capital flows to India. “Such a slowdown in capital inflows will constrain domestic investment, which is critical to achieving and sustaining high growth rates,” he said.

Nevertheless, the fundamentals behind India’s growth story – abundant liquidity and strong domestic demand – are unlikely to disappear anytime soon, according to Rohit Kapur, at KPMG. “There is a lot of money on the sidelines ready to be invested in India ... people are here to stay and get what they can’t elsewhere: high returns.”

V Jayasankar, executive director at Kotak Investment Banking, says the private equity sector is likely to be a big player driving more money into the markets. “There are various estimates that show that about $25bn to $30bn are waiting to be invested in India by global private equity funds.”

As one veteran investor puts it: “Some bad news would be good news so that we can start getting back into the game.”

हैप्पी गणेश चतुर्थी & यिद मुबारक

2010-09-11T09:54:00.001+05:30

Basmati rice exports to jump 9%

2010-09-08T23:33:00.000+05:30

NEW DELHI: The country’s basmati rice exports are likely to rise nine per cent to 3.5 million tonnes in the 2010—11 season starting October, as crop damage in flood—hit Pakistan may boost demand for Indian aromatic rice, a trade body said on Wednesday.

“India is estimated to export 3.2 million tonnes in current marketing year ending this month and shipments in 2010—11 are expected to rise to 3.5 million tonnes,” All India Rice Exporters Association President, Mr Vijay Sethia, told PTI.

Export of basmati rice would definitely be higher than last year because demand is expected to increase following floods in the neighbouring country, where basmati rice crop has been damaged badly, he said.

Less basmati rice production in the neighbouring country could enhance demand for Indian rice, he added.

Also, domestic supplies are expected to be higher as production of aromatic rice is seen to exceed last year’s output of 4.5 million tonnes on the back of 15—20 per cent jump in the acreage, Mr Sethia noted.

Indian exporters are shipping basmati rice at the minimum export price of USD 900 per tonne. According to estimates, approximately seven lakh hectares of Pakistan’s rice crop is partially or completely submerged under water.

The US Department of Agriculture (USDA) has revised downwards Pakistan’s rice production in 2010—11 to 4.4 million tonnes from its earlier projection of 6.5 million tonnes due to destruction caused by floods.

Similarly, rice exports from neighbouring country is estimated to decline by nearly 40 per cent in 2010—11 to 2.3 million tonnes, it said. - PTI

Sensex rises to 31 month high

2010-09-06T23:17:00.001+05:30

The Bombay Stock Exchange benchmark Sensex on Monday jumped by 338 points to close at a 31-month high on heavy buying in metal, refinery and IT stocks backed by a firming global trend.

The 30-share index settled 338.62 points higher at 18,560.05 points, a level never seen after February 2008.

Trading sentiment turned bullish after a stunning growth in the U.S. employment and manufacturing eased concern that the global economy might falter and boosted the outlook for domestic companies, which in turn lift shares of software exporting companies.

The Sensex touched the day’s high of 18,600.30 as market heaviest Reliance Industries, Infosys Technologies and Tata Steel recorded handsome gains.

Reliance Industries shot up by Rs. 27.60 to Rs. 953.20 and second heavy-weight Infosys Technologies by Rs. 59.85 to Rs. 2,831.50. Tata Steel rose by Rs. 35.65 to Rs. 575.60 and ICICI Bank by Rs. 38.05 to Rs. 1,037.70.

All the four stocks carry nearly 32 per cent weightage on the benchmark. In the 30-BSE index components, 26 stocks closed with gains and four ended in the negative zone.

The broad-based National Stock Exchange index Nifty rose by 97.55 points to 5,576.95.

Companies in the U.S. added more jobs than forecast in August and the Institute for Supply Management’s factory index unexpectedly increased, reports showed on Saturday.

The Asian stock market gained followed by a higher closing in the U.S. markets and a firm opening in the European region continued to support the market throughout the session.

The metal sector index gained the most by rising 3.47 per cent to 15,878.80 as Tata Steel, the biggest producer of alloy climbed its highest close since May 13 after product prices have been raised by nearly four per cent.

Hindalco Industries, the biggest aluminum producer that gets most of its sales in North America and Europe, rose by Rs. 8.15 to Rs. 178.55 on report the company plans to spend Rs. 100 billion on projects this year.

The banking sector index added 2.06 per cent to close at 12,728.73 points. The realty sector index rose by 1.98 per cent to 3,557.08 followed by oil and gas index by 1.97 per cent to 10,178.23.

The IT index, which represents software companies, gained 1.88 per cent to 5,563.32. The country’s nearly 40 per cent software business comes from the U.S. and European markets.

With the buying activity spilling over a wide-front, the smallcap index rose by 1.83 per cent to 10,094.52 and midcap index by 1.31 per cent to 7,961.81.

India’s Stocks Rise to Highest in Week; Jaiprakash Advances

2010-09-02T21:59:00.001+05:30

Sept. 2 (Bloomberg) -- India’s benchmark stock index climbed to its highest in a week after Finance Minister Pranab Mukherjee said taxes paid by companies increased, fueling speculation earnings may rise.

Jaiprakash Associates Ltd., a construction company that also makes cement, gained the most in more than three months after August sales increased. India’s corporate tax collections grew 21 percent in the April-July period from a year earlier, Mukherjee said yesterday. Sterlite Industries (India) Ltd., the nation’s biggest copper and zinc producer, advanced for a second day as metal prices rose.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 32.44, or 0.2 percent, to 18,238.31. The S&P CNX Nifty Index on the National Stock Exchange rose 0.3 percent to 5,486.15. The BSE 200 Index increased 0.3 percent to 2,342.89.

“All the data points show India’s economy is gaining in strength,” said Vaibhav Sanghavi, a fund manager at Ambit Capital Ltd. in Mumbai who doesn’t disclose the value of the assets he oversees. “On the global side, the latest numbers from the U.S. and China have somewhat reduced the volatility.” Sanghavi said he’s adding shares of retailers, education, media and consumer companies to his holdings, without naming any.

Jaiprakash Sales

Jaiprakash advanced 4.3 percent to 114.65 rupees, its biggest one day gain since May 26, after August sales climbed 51 percent. Bajaj Auto Ltd., second-largest motorcycle maker, climbed 1.2 percent to 2,783.35 rupees after reporting record sales in August.

Apollo Tyres Ltd., the biggest tiremaker by market value, jumped 12 percent to 82.35 rupees, the highest in at least 19 years. The stock was rated “outperform” in new coverage by Govindarajan Chellappa and Rajasa K, analysts at Credit Suisse Group AG, saying the Indian tire industry is “in the midst of a very favorable supply-demand scenario.”

Sterlite added 2.7 percent to 160.65 rupees, extending its 3.6 percent advance yesterday. Copper in London traded near a four-month high, extending yesterday’s advance, after better- than-expected economic data in U.S. and China, the two biggest consumers, boosted the outlook for demand.

Foreign fund inflows to India’s stocks have increased 56 percent this year, making the Sensex the most expensive benchmark index in Asia and among BRIC markets that also include Brazil, Russia and China. The Sensex trades at 17.4 times estimated profit after last year’s biggest rally in 18 years.

Overseas funds bought a net 5.38 billion rupees ($114.4 million) of Indian equities on Aug. 31, raising total investments in the stocks this year to 599.2 billion rupees, according to the nation’s market regulator.

Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.

Billionaire Ambani’s Reliance Invests in Luxury Oberoi Hotels

2010-08-30T19:47:00.000+05:30

Aug. 30 (Bloomberg) -- Billionaire Mukesh Ambani’s Reliance Industries Ltd. acquired a stake in India’s luxury Oberoi hotel chain, his seventh investment this year as he diversifies from the oil and gas sector that made him Asia’s richest man.

Reliance Industries, operator of the world’s biggest refinery complex, agreed to pay 10.2 billion rupees ($217 million) for a stake in EIH Ltd., which runs the Oberoi and Trident hotels, according to a statement today.

Ambani, 53, has invested more than $1.2 billion buying into a broadband company, cargo carrier and announced plans to build hospitals, universities and set up a sports marketing company. The fastest pace of economic growth in 2 1/2 years is bolstering demand for services, providing alternative sources of revenue as Reliance’s core energy business slows.

“The push is to get into services and diversify their revenue sources from being a pure manufacturing company,” said Jagannadham Thunuguntla, chief strategist at SMC Capitals Ltd. in New Delhi. “Telecom and hospitality are a reflection of India’s growth story.”

Reliance Industries stock has declined 13 percent this year as natural gas production from the nation’s biggest field has been capped for at least two years and earnings from turning crude into fuels at its refining complex has slowed. Ambani faces increased competition from billionaire Anil Agarwal, who this month agreed to buy a controlling stake in India’s largest onland oil field.

‘Excellent Prospects’

“EIH has excellent future prospects,” Reliance said in a statement today. Manoj Warrier, a spokesman for Reliance, declined to comment further.

Reliance Industries shares which have the highest weight in the index, declined 0.2 percent to 947.95 rupees at the end of trading in Mumbai, falling for the sixth straight day. EIH shares gained 11.5 percent to 150.90 rupees, the highest in almost two years.

Reliance is close to signing an agreement with DE Shaw & Co. to start an $800 million infrastructure fund, the Economic Times reported Aug. 26, without saying where it got the information. Chairman Ambani told shareholders June 18 Reliance Foundation will build a university and a hospital in Mumbai.

The company, which also produces chemicals, expects its retail business revenue to grow 10-fold in five years to 450 billion rupees ($9.6 billion). Reliance Retail, with 1,150 stores in 86 cities, had sales of more than 45 billion rupees in the year to March 31, Ambani told shareholders June 18.

“There are opportunities to grow in telecoms and hospitality but I would like to see them fully concentrate on manufacturing,” said Juergen Maier, who helps manage $1.3 billion of emerging market stocks, including Reliance. “Their attempt at service in the retail sector hasn’t been very successful. I’m not very happy that they are diversifying into services.”

Peak Output

Reliance Industries expects to reach peak output at the KG- D6 field in the Bay of Bengal as late as 2012 at least two years behind schedule, two people with knowledge of the plan said July 27. The explorer is currently producing about 60 million cubic meters a day of the clean-burning fuel, 25 percent below its capacity.

The company is also spending almost $3.4 billion to buy shale gas assets in the U.S. from three companies, including Atlas Energy Inc. and Pioneer Natural Resources Co.

Reliance Industries operates 1.24 million barrels a day of crude oil refining capacity in the west Indian state of Gujarat. Global refining margins, or earnings from processing oil into fuels, shrank to $4.22 a barrel in the quarter, compared with $5.49 a barrel in the three months ended June 30, according to data compiled by BP Plc.

Gains from processing oil into fuels may remain stable in the next three quarters, Chief Financial Officer Alok Agarwal said July 27.

Slower refining profit have resulted in Reliance Industries’ net income missing analysts’ estimates in at least three of the last five quarters.

Jobless Claims in U.S. Decrease More Than Forecast

2010-08-26T19:31:00.001+05:30

Aug. 26 (Bloomberg) -- Applications for unemployment benefits in the U.S. fell more than forecast last week, easing concern the labor market was rapidly deteriorating as the economy slows.

Initial jobless claims dropped by 31,000, the first decline in a month, to 473,000 in the week ended Aug. 21, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance decreased, while those getting extended benefits climbed.

The average number of claims over the past month climbed to the highest level since November even as the latest reading provided some relief to the drumbeat of negative economic data in recent weeks. Employers have delayed hiring plans and some have renewed firings as the year-old recovery shows signs of petering out, raising the risk consumer spending will weaken further.

“Even before the recent uptick, the trend had been moderately high and that’s consistent with a lackluster pace of job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “The private sector really hasn’t recovered enough.”

Stock-index futures climbed after the report eased concern job losses were increasing. The contract on the Standard & Poor’s 500 Index rose 0.3 percent to 1,057.7 at 9:14 a.m. in New York. Treasury securities were little changed, erasing earlier gains.

Fewer Than Forecast

The median estimate of 48 economists surveyed by Bloomberg projected claims would drop to 490,000. Forecasts ranged from 475,000 to 510,000. The government revised the prior week’s claims figure up to 504,000, the highest level in nine months, from a previously reported 500,000.

There were no special factors influencing last week’s data, a Labor Department spokesman told reporters as the figures were being released.

The four-week moving average of claims increased to 486,750 from 483,500 the prior week.

The number of people continuing to collect unemployment benefits dropped by 62,000 to 4.46 million in the week ended Aug. 14, from 4.52 million the prior week.

The continuing claims figure does not include those receiving extended benefits under federal programs. The number of Americans who’ve used up traditional benefits and are now collecting emergency and extended payments rose by about 302,000 to 5.84 million in the week ended Aug. 7.

Jobless Rate

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.5 percent in the week ended Aug. 14 from 3.6 percent.

Eleven states and territories reported an increase in claims that same week, while 42 reported a decrease.

While companies have boosted payrolls seven straight months, firings have remained elevated as the economic recovery shows signs of slowing. Private firms added 71,000 jobs in July, fewer than economists had forecast, according to government figures released Aug. 6. Unemployment held at 9.5 percent, near a 26-year high of 10.1 percent.

The government may report tomorrow the economy grew at a 1.4 percent pace in the second quarter, less than the 2.4 percent rate earlier estimated, according to economists surveyed by Bloomberg. That would be the slowest growth since the second quarter of 2009 when the economy was still contracting.

A year after the expansion resumed, companies are still cutting staff.

More Firings

Northrop Grumman Shipbuilding, a unit of Northrop Grumman Corp. this week said it would fire 292 employees at the Gulf Coast shipbuilding facility at Pascagoula, Mississippi, and that it expects to cut another 350 jobs at Pascagoula by the end of the year.

Congress this month passed legislation providing $26 billion in aid to state governments to prevent thousands of layoffs of teachers and other public service employees as declining tax revenue has left state and local governments with budget deficits the National Conference of State Legislatures estimates at $84 billion.

In a sign local governments and employees are cooperating to save jobs, the Los Angeles-based Engineers & Architects Association, which represents one-seventh of the city’s municipal workforce, agreed to terms that call for members to help pay their health insurance costs for the first time, Mayor Antonio Villaraigosa said this week.

Govt extends export sops to struggling sectors

2010-08-23T19:50:00.000+05:30

The government continues to extend a helping hand to exporters. Announcing the annual foreign trade policy on Monday, Commerce Minister Anand Sharma said that the recovery in exports has been fragile at best and that it would be prudent to persevere with last year's policy stance.

In keeping with this view, the minister has announced the introduction of a bonus scheme for handicrafts and leather.

Govt extends export sops to struggling sectors

“Abrupt withdrawal can be very hurtful for those sectors that are labour intensive, where the demand has not returned and which continue to do badly. That is why we have retained the support or intensive for such sectors bringing in more the embrace of more incentive schemes which need intervention and support. Along with adding to what was being given earlier in the form of a new scheme where 2% additional bonus has been given to some sectors including handicrafts, handloom, many of the engineering projects as well as the textile and the leather industry.

The minister also announced that the Duty Entitlement Pass Book (DEPB) and Export Promotion for Capital Goods (EPCG) schemes would be extended to March 2012

Indian State-Run Companies Said to Consider Cairn Counter Bid

2010-08-23T19:45:00.000+05:30

Aug. 23 (Bloomberg) -- Indian state-run energy companies are considering bidding for a stake in Cairn India Ltd., countering Vedanta Resources Plc’s $9.6 billion offer for the explorer, according to two people familiar with the matter.

India’s oil ministry has instructed Oil & Natural Gas Corp. to study the possibility of making a counter offer, one of the people said. GAIL India Ltd. may join ONGC, another person said.

Vedanta, the mining company controlled by billionaire Anil Agarwal, agreed this month to buy as much as 60 percent of Cairn Energy Plc’s Indian unit to gain access to the country’s biggest onshore oil field. ONGC owns a 30 percent stake in the field and is seeking to increase production as output from 30-year-old fields declines.

The Press Trust of India earlier reported ONGC, India’s largest explorer, Oil India Ltd. and GAIL have arranged $10 billion in funds from international banks to fund a possible bid.

R.S. Sharma, ONGC’s chairman, and Oil Secretary S. Sundareshan, the senior-most bureaucrat in the ministry, declined to comment. Oil India Chairman N.M. Borah and GAIL’s Chairman B.C. Tripathi didn’t answer calls to their mobile phones. Gordon Simpson, a spokesman for Vedanta, declined to comment, while David Nisbet, the head of group corporate affairs for Cairn Energy, didn’t respond to an e-mail sent to him.

Sugar stocks zoom by 6% on hike in ethanol price

2010-08-16T19:38:00.001+05:30

Sugar stocks, led by Bajaj Hindusthan shot up by over 6 per cent on the Bombay Stock Exchange after the government raised the price of ethanol for blending with petrol to Rs. 27 per litre today.

Shares of Bajaj Hindusthan, the country's largest sugar manufacturer, climbed 6.11 per cent to touch a month's high of Rs. 124.90 on the Bombay Stock Exchange in afternoon trade. Later, the scrip was trading at Rs. 121.85, up 3.53 per cent. Simbhaoli Sugars rose 5.40 per cent to a high of Rs. 39.95. Later the scrip was quoting at Rs. 38, up 0.26 per cent on BSE.

Ethanol is used a biofuel additive for petrol and can be made from sugarcane byproduct, molasses.

"The government's decision would help molasses producers get better price for ethanol. This has buoyed the stocks of sugar companies, which were under pressure for quite sometime," SMC Capitals Equity Head Jagannadham Thunuguntla said.

However, Shree Renuka Sugars tanked 0.15 per cent at Rs. 68.55, after hitting its months high at Rs. 71. Following the announcement, stocks of other sugar companies, including Balrampur Chini Mills also rallied (up 0.71 per cent), Dhampur Sugar Mills (3.25 per cent).

The government today approved an interim fixed price of Rs. 27 a litre for ethanol, higher from Rs. 21.5 a litre earlier.

A Group of Ministers (GoM) has recently reaffirmed Rs. 27 per litre price for ethanol to be paid by the oil marketing companies to the sugar mills.

Vedanta Agrees to Buy Stake in Cairn’s Indian Unit

2010-08-16T19:17:00.000+05:30

Aug. 16 (Bloomberg) -- Vedanta Resources Plc, the mining company controlled by billionaire Anil Agarwal, agreed to buy as much as 60 percent of Cairn India Ltd. for $9.6 billion to gain access to India’s biggest onshore oil field.

Vedanta, based in London, will pay a total of about $8.5 billion to $9.6 billion in cash, the company said today in a statement. The price is a 32 percent premium to Cairn India’s average closing price over 90 days. Cairn Energy Plc, Cairn India’s parent, will return a majority of the cash raised to shareholders and invest the rest in exploration.

Vedanta is following the strategy of BHP Billiton Ltd., the world’s largest mining company, by adding oil assets to zinc, copper, iron ore and aluminum businesses. The purchase will give the company access to the Mangala deposit in Rajasthan. Cairn India is 62 percent held by Edinburgh-based Cairn Energy.

“The main issue is, why do a deal, just in terms of there is no previous experience in oil and gas,” Paul Cliff, an analyst at Nomura Holdings Inc. in London, said today by phone. “It will be financed by debt and although it puts some strain on the balance sheet we think it is doable. It’s a concern for investors because Vedanta is a metals and mining house with one of the most aggressive organic growth profiles.”

Credit-Default Swaps

Vedanta will borrow as much as $6.5 billion to fund the acquisition, Deputy Chairman Navin Agarwal said on a conference call today. J.P Morgan Cazenove and Morgan Stanley are acting as joint lead financial advisers along with Standard Chartered Plc, which is also arranging the financing together with Credit Suisse Group AG and Goldman Sachs Group Inc.

Credit-default swaps linked to Vedanta debt rose 116 basis points to 649, according to data provider CMA, the highest since May. Swaps are used to speculate on a company’s ability to repay debt and gain when perceptions of credit quality deteriorate.

Vedanta will buy at least 40 percent and up to 51 percent of Cairn India from London-listed Cairn Energy. The mining company will also make an open offer to Cairn India stockholders for as much as 20 percent of issued shares. The final number of shares sold by Cairn Energy will depend on the results of the open offer, which could take Vedanta’s stake to as high as 60 percent. The process will take about three months to complete, Cairn’s Finance Director Jann Brown said on a call today.

“It’s the right time to realize some of the value we’ve created,” Chief Executive Officer Bill Gammell said on the call. “This isn’t an exit from India for Cairn Energy Plc.”

Sesa Goa

Sesa Goa Ltd., another company controlled by Anil Agarwal, will end up with 20 percent of the explorer in a follow-up deal. The holding will consist of shares bought from Vedanta and through the open offer to shareholders. Sesa Goa will fund most of its purchase with its own cash.

Sesa Goa expects to have 120 billion rupees ($2.6 billion) in cash by the end of March next year, helping to fund the $3 billion purchase, Managing Director Prasun Kumar Mukherjee said by phone today. Sesa Goa had a cash surplus of 80.54 billion rupees as of June 30, according to its quarterly results.

Cairn Energy rose as much as 21.1 pence, or 4.5 percent, to 489.4 pence in London trading, and was at 483.9 pence by 11:39 a.m. local time. The stock has risen 46 percent this year. Sesa Goa fell as much as 9.6 percent in Mumbai trading. Vedanta climbed 5.3 percent to 2,161 pence in London after tumbling 20 percent last week, when the acquisition was reported.

Rich List

Cairn India’s current management will continue running the company after the acquisition, Anil Agarwal said in an interview with Bloomberg UTV today. Cairn India won’t be taken private and Vedanta will provide guidance to the management, he said.

Agarwal, with an estimated fortune of 4.1 billion pounds ($6.4 billion), is ranked 10th on the annual Sunday Times Rich List of the wealthiest people in the U.K., the London-based newspaper said in April. He built his wealth on aluminum, zinc, copper and iron ore after buying Shamsher Sterling Corp. in 1979.

Vedanta was the first Indian company to list its shares on the London Stock Exchange in 2003, according to its website, and employs 30,000 people with operations in India, Australia and Zambia. The company said in 2008 it would spend $20 billion in India over four years on mines and power plants.

The company’s plans to increase Sesa Goa’s production to 50 million metric tons annually from 2014 won’t be affected by the transaction, Navin Agarwal said. Vedanta plans to complete the deal by the first quarter of 2011, he said.

The premium Vedanta is paying for Cairn India reflects the potential of the Rajasthan block, where only one of seven fields has begun production, Vinay Nair, a Mumbai-based analyst at brokerage Khandwala Securities Ltd., said by telephone.

“Even though Vedanta is not a full-fledged oil or exploration company, they’ve shown their management expertise on the mining side,” helping to unlock that value, Nair said.

India's Reliance plans to restart fuel stations

2010-08-11T21:53:00.001+05:30

NEW DELHI Aug 11 (Reuters) - India's Reliance Industries (RELI.BO: Quote) plans to reopen all of its fuel stations in the country and is currently selling petrol and diesel at the same rates as state firms, a company statement said on Wednesday.

Reliance, which operates the world's biggest refining complex at Jamnagar in Gujarat, shut down its petrol pumps in 2008 as crude prices surged towards $150 a barrel.

At the time the Indian government subsidised fuel sales by state firms, knocking private retailers out of the market.

"If the government announces diesel deregulation then diesel, like petrol, will also be available at market rates. Further to this Reliance will resume operations across all pumps, pan India," the Reliance statement said.

Retail sale of petrol and diesel are again viable since the end of June when the government lifted all controls on petrol and raised administered prices of other fuels including diesel.

Reliance owns more than 1,400 fuel stations in India.

The government plans to free diesel prices also, but the deputy chairman of the Planning Commission told Reuters in an interview the government would set diesel rates for the next few months. [ID:nSGE6790K1]

Essar Oil (ESRO.BO: Quote), the only other private refiner in India, and Reliance had together captured about 17 percent of domestic retail market for diesel and accounted for 10 percent of petrol sales by 2005 before they were forced to shut down their pumps.

"Now, with the deregulation of petrol, there is a level playing field and Reliance petrol will now be sold at the same price as that of the other oil companies," the statement said. (Reporting by Nidhi Verma; editing by Surojit Gupta)

Shipping Corp. of India Plans to Sell Up to 20% Stake

2010-08-11T21:50:00.000+05:30

Aug. 11 (Bloomberg) -- Shipping Corp. of India Ltd., the nation’s biggest marine transport company, approved a plan to sell up to a 20 percent stake, Chairman S. Hajara said.

The sale, pending approval from India’s cabinet, will comprise an offer of fresh shares and a stake sale by the government, Hajara said in a telephone interview. The state- owned company plans to invite bids from banks as early as this month to manage the offer, he said today.

India revived its plans to sell Shipping Corp. shares as Asia’s third-biggest economy seeks funds to narrow its budget deficit from a 16-year high. The government aims to raise as much as 400 billion rupees ($8.6 billion) this year by selling stakes in companies including Coal India Ltd. and Steel Authority of India Ltd.

Shipping Corp., which said profit increased 60 percent in the first quarter, seeks to raise funds as the company adds 14 ships in the financial year that started in April. The government, which owns an 80 percent stake in Shipping Corp., had in 2005 planned to sell a 15 percent stake in the company.

Shipping Corp. fell 1.1 percent to 165.55 rupees in Mumbai today. The shares have gained 12 percent this year. The company owns a fleet of 74 vessels of 5.01 million deadweight tons and has 29 vessels on order.

The government said in January it may sell shares in 60 state-run companies to shrink its budget deficit to 5.5 percent of gross domestic product this fiscal year from 6.9 percent last year. Since April, two state-run companies have tapped the markets as part of that initiative.

RBI for capping foreign investment in banks at below 50% Read more: RBI for capping foreign investment in banks at below 50% - India Business - Busin

2010-08-11T21:41:00.002+05:30

MUMBAI: The Reserve Bank on Wednesday proposed bringing down the foreign investment in new private sector banks to below 50% from 74% now, a suggestion that may help some lenders retain their Indian-owned status.

The prescription contained in the discussion paper on norms for entry of new private sector banks comes at a time when two leading private sector lenders -- ICICI Bank and HDFC Bank--have lost the status of Indian-owned banks.

"Since the objective is to create strong domestic banking entities and a diversified banking sector ... aggregate non-resident investment, including FDI, NRI and FII in these banks could be capped at a suitable level below 50% and locked at that level for the initial 10 years," the central bank said.

ICICI Bank and HDFC Bank were categorised as foreign- owned, Indian-controlled lenders, as FDI in them rose over 50 per cent. This happened after norms on calculating FDI changed to include all types of foreign investment including FDI, FII, NRI, ADR, GDR and foreign currency convertible bonds.

The new norms of calculating FDI may have repercussions on their on downstream investment, like in subsidiaries.

The discussion paper said the downstream investment of banks would not be an issue for monitoring indirect foreign investment, if the foreign investment is below 50%.

Experts, however, said it is not clear whether these proposals even if implemented will cover existing banks or not.

"It is not clear. However, it is possible that even the existing banks will have to comply with the new cap over a period of time for a level playing field," said KPMG Financial Services Tax Leader Punit Shah.

Giving rationale for capping foreign investment at 50%, the discussion paper said, "This would enable foreign capital to be used in the promotion of domestic banks ... This would allow for foreign technical collaboration in setting up domestic banks."

RBI released the paper on issuing new banking licenses to foster greater competition and expand the banking system. It listed the pros and cons of various norms such as minimum capital requirements and caps on promoters as well as foreign shareholding.

Meanwhile, RBI is considering applications from 18 foreign entities, including Goldman Sachs, Morgan Stanley, Industrial and Commercial Bank of China (ICBC) and National Australia Bank to start operations in India.

India's Car Sales Hit All-Time High

2010-08-09T20:37:00.000+05:30

NEW DELHI -- Monthly car sales in India hit an all-time high in July, racing ahead of the previous record in March, as new models and rising disposable income encouraged consumers to buy vehicles.

Local sales totaled 158,764 cars in July, up 38% from the 115,084 recorded a year earlier, according to data issued Monday by the Society of Indian Automobile Manufacturers. In March, auto makers had sold 155,600 units in India.
"The growth in the car market is helped by the sustained effort of auto companies to tap the rural market," said Vishnu Mathur, director-general of the society.
Just 12 people on an average among 1,000 Indians own a car or utility vehicle, while the percentage of vehicle owners is much smaller in rural areas. This growth potential amid rising income levels in the second-fastest-growing major economy is encouraging auto makers to launch new models, especially of small cars as most local buyers prefer them because of low price and running cost.
A key reason for higher car sales has been easy availability of loans at low interest rates. However, double-digit inflation has forced India's central bank to raise lending rates by 1.0 percentage point since March, including a quarter-percentage-point hike late July, which could make loans more expensive.
However, Mr. Mathur said the recent round of rate hike has been modest and unlikely to hit sales in the near-term.
Meanwhile, the growth in car sales is likely to overtake the society's projection of 12%-13% in the current fiscal year through March. "We are looking at our growth projections and may revise them upward in the next few months," Mr. Mathur said.
Sales may set new records in October and November, spurred by a number of Hindu and Muslim festivals, considered auspicious to acquire assets.
"New car models will continue to expand the market, with sales likely to be strong in September too" as the festival season starts during the month, said Surjit Arora, an analyst at Mumbai-based brokerage Prabhudas Lilladher Pvt. Ltd.
Local sales at Maruti Suzuki India Ltd. rose 27% to 76,111 cars in July.
The Indian unit of Suzuki Motor Corp. makes eight small-car models, including the Alto, Swift, WagonR, Ritz and Estilo. It launched a variant of the Alto with a 1.0-liter engine last week to retain the company's leadership in the Indian car market as new entrants challenge its dominance.
The local unit of Ford Motor Co. posted a more-than-fourfold rise in its July sales to 8,473 cars from 2,081 a year earlier. The company introduced the Figo, its first small car in India, in March.
Nissan Motor Co. sold 955 cars in the local market, up from just 17 a year earlier. Sales were helped mainly by its new small car, Micra, which was introduced in July.
The Indian unit of Hyundai Motor Co. sold 28,811 cars, up 24% from a year earlier, while sales at Tata Motors Ltd. grew 69% to 24,613 units.
Sales of commercial vehicle and two-wheelers also recorded strong gains during the past month, data from the society showed.
Local truck and bus sales grew 37% to 51,481, helped by strong performances from market leader Tata Motors, second ranked Ashok Leyland Ltd. and Mahindra & Mahindra Ltd.
Truck and bus sales at Tata Motors rose 30% in July to 30,827 vehicles, while those of Ashok Leyland grew 69% to 6,022 vehicles.
In the motorcycle segment, sales rose 30% to 710,621 units as Hero Honda Motors Ltd., Bajaj Auto Ltd. and TVS Motor Co. reported higher sales.
Scooter sales increased 36% to 167,195 units with Honda Motorcycle and Scooter India Pvt. Ltd. and Suzuki Motorcycle India Pvt. Ltd. posting gains.
Overall, vehicle exports in July soared 42% to 198,368 units.

How APJ Abdul Kalam finished mission impossible

2010-08-01T09:20:00.000+05:30

Are leaders born?No. Leadership is all about creativity and learning to grapple with failure and success, as former president APJ Abdul Kalam learnt in the course of becoming a leader of the nation’s scientific community and later of the nation itself.

Kalam headed the Satellite Launch Vehicle mission when it was first attempted in 1979. The mission failed. Kalam did not have any explaining to do as his boss fielded all the questions at the press conference that ensued. But the next mission in 1980 was bang on, and this time Kalam was allowed to announce it to the world.

“A creative leader gives credit to his team when there is success, and when there is failure he absorbs it,” Kalam said, recalling his days in the Indian Space Research Organisation (Isro)while delivering a talk on leadership on the campus of SAP Labs in Whitefield on Friday. The global software applications developer had invited Kalam to speak to its employees and motivate them.
Pointing out the difference between how leadership was perceived a decade back and how it changed later, Kalam said that competitiveness was the key to success and it was important for one to work and succeed with integrity. He said “vision, power of travelling to the unexplored depths, management skills, courage, nobility, transparency in action and to work and succeed with integrity” were a few concrete qualities that make a leader.

Kalam recalled the “best advice” he had received when in Isro.

“One should not let problem be the captain of one’s ship. One should be the captain of the problem and defeat and overcome it.”
Asserting that pressure could sometimes create wonders, he recalled how, as an aeronautical engineering student, he had to design a low-level aircraft under a nine-month project. The design he had developed after labouring for seven months was rejected and he was told that if he failed to come up with a successful design in three days his scholarship would be in soup. Kalam and his five batchmates lost their sleep and food for the next three days and came up with another design that was appreciated and accepted. He said the experience taught him how valuable time was, as he could accomplish in three days something for which nine months had been reserved.

Job worries darken July consumer confidence

2010-07-27T22:38:00.000+05:30

Consumer confidence fell in July on concerns about jobs and business conditions, following a sharp decline in June, the Conference Board reported Tuesday.
July's consumer confidence index fell to 50.4 -- the lowest level since February -- from an upwardly revised 54.3 in June.
"Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves," said Lynn Franco, director of the Conference Board's consumer research center, in a statement.
"Given consumers' heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season."
July's confidence reading should be closer to 90 than 50, given how long the economy has been recovering, Dan Greenhaus, chief economic strategist with Miller Tabak, wrote in a research note.
"While July provides some measure of stability for this index following the exceptionally large drop in June, by any measure, consumer confidence remains extraordinarily depressed in comparison to previous readings," Greenhaus wrote.
Consumers' view of current conditions fell in July, as did their short-term outlook.
The present-situation index fell to 26.1 in July, the lowest level since March, from 26.8 in June. Those saying present business conditions are "bad" rose to 43.6% in July from 41% in June, while those saying jobs are "hard to get" rose to 45.8% from 43.5%.
The expectations index fell to 66.6 in July, hitting the lowest level since February, from 72.7 in June. Those expecting business conditions in six months to be "worse" rose to 15.7% in July from 13.9% in June, while those expecting more jobs fell to 14.3% from 16.2%, and those expected a decrease of income rose to 17.5% from 16.8%.
Buying plans have been affected, according to the Conference Board. Those with plans to buy a home within six months fell to 1.9% in July from 2% in June. However, those with plans to buy an automobile rose to 4.5% from 4.1%, and those planning to buy major appliances rose to 28.5% from 23.7%.
Earlier this month the government reported that nonfarm payrolls fell 125,000 in June, with weak private-sector hiring.

RBI raises rates for fourth time this year

2010-07-27T22:35:00.000+05:30

The Reserve Bank of India on Tuesday raised its key policy rates for the fourth time this year, taking more steps to tame rising prices amid a strong rebound in the economy.

As widely expected, the RBI raised the repo rate by 25 basis points (bps) to 5. 75 per cent in its credit policy review. But the reverse repo rate has been hiked by a slightly higher-than-expected 50 bps to 4.5 per cent. The cash reserve ratio has been kept unchanged at 6 per cent.

One basis point is one-hundredth of a percentage point. The repo rate is the rate at which the RBI infuses cash into the system or banks borrow from the RBI. The reverse repo rate is the rate at which the central bank drains cash from the banking system, or the rate at which banks lend to the RBI.

In an NDTV poll, 12 out of 15 bankers expected a 25 bps hike in repo and reverse repo rates.

Since the RBI did not spring any negative surprise by going for a steep rate hike, Indian markets reacted mildly positively to the rate hike announcement. It was trading flat-to-positive in the early noon trade.

The RBI said that the rate hikes will help to rein in demand pressures and moderate inflation. The central bank also raised its economic growth target for FY11 to 8.5 vs 8 per cent earlier.

Earlier this month on July 2, the RBI in an unscheduled move had raised the key rates by 25 bps to tame inflation, which is still in double-digits, led by high food prices. Inflation for June stood at 10.55 per cent and it is expected to stay in double-digits at least for another couple of months. The July inflation is likely to move further up as the full impact of the oil price hike which was effective from June 25 would be felt during the month.

Despite a sharp rebound in the domestic economy, the RBI has refrained from steep hikes, partly due to an optimistic inflation outlook and fears that a big rise in interest rates will derail the economic recovery process. The tight liquidity in the banking system also had a bearing on its decisions.

Prime Minister Manmohan Singh recently said that expects inflation to ease and reach 6 per cent by December. The government hopes that a normal monsoon will boost supplies of summer-sown crops and help bring down food prices.

"Going by the progress of the monsoon so far, agricultural output is expected to be better than last year. Lead indicators for services activities suggest continuation of the growth momentum," the Reserve Bank said in its Macroeconomic and Monetary Developments: First Quarter Review 2010-11, which was released on Monday.

It cited the prospect of a better Kharif output than last year, buoyancy in the industrial sector, notwithstanding the moderation in May and a significant pick-up in investment demand as major factors giving a positive growth outlook.

POLL - RBI likely to lift rates by 25 bps next week

2010-07-25T22:48:00.001+05:30

REUTERS FORECAST: A majority of economists expect the Reserve Bank of India (RBI) to raise key interest rates by 25 basis points in its quarterly review on July 27 and tighten policy further in coming quarters, a new Reuters poll showed.

While headline inflation has been in double-digits for five months running and economic growth is expected to reach 8.5 percent this year, tight liquidity and continued uncertainty about global recovery are expected to prevent the Reserve Bank of India (RBI) from tightening policy more aggressively.

The RBI has raised rates three times this year by 25 basis points each, most recently in an unexpected move on July 2.

"My sense is unless we see a strong pick up in domestic demand both for credit, investment and for the economic activity in general, we might see a little bit of a softer approach towards policy tightening than initially thought," said Saugata Bhattacharya, an economist with Axis Bank in Mumbai.

Most economists have not changed their expectations from a Reuters poll on July 5 that the RBI would raise the repo rate, at which it lends to banks, by another 50 basis points to 6.0 percent by end of December.

They expect the RBI to raise the reverse repo rate, at which it absorbs excess cash from the banking system, by 50 basis points by end-December.

Tight liquidity since early June has led economists to expect no change in the cash reserve ratio (CRR), the percentage of cash banks must keep in reserve with the RBI by end-December, compared with a 50 basis point rise expected in the July 5 poll.

Of 12 economists in the new survey who were also part of the previous poll, two have lowered their expectations on rate increases for the rest of the year, while three expect the RBI to tighten more aggressively than earlier forecast.

Twelve economists said the RBI's policy tightening in recent quarters was appropriate, while four said the RBI should tighten more aggressively.

Most economists polled expect the repo rate to remain the RBI's operative rate by the end of September, a sign that they expect tight cash conditions to persist. The RBI has allowed cash conditions to remain tight in recent weeks, which helps dampen inflation expectations.

Economists were almost evenly split on whether the repo or reverse repo would be the operative rate by the end of December.

REPO:

Seventeen of 20 economists expect the RBI to raise the repo rate in the July 27 policy review by a quarter-point to 5.75 percent. By the end of December, 10 economists expect a total of 50 basis points in increases in the repo rate and five expect 75 basis points of increase.

By the end of the fiscal year in March, nine economists predict a 75 basis point rise in the repo rate, five expect a 100 basis point increase, two expect 50 basis points and one expects 150 basis points of increase.

REVERSE REPO:

Eighteen of 20 economists expect the RBI to raise the reverse repo rate on July 27, with a median forecast of 4.25 percent, in line with the July 5 poll, from 4 percent. Ten economists expect the rate to be 4.50 percent at the end of December, and five expect the rate to reach 4.75 percent at the end of 2010.

By the end of the fiscal year in March 2011, nine respondents see a 75 basis point increase in the reverse repo rate, and five see a 100 basis point rise.

CASH RESERVE RATIO:

None of the 17 economists foresee a change in the CRR in the July 27 review, in line with the last poll.

The median forecast for the end of December is 6.0 percent, the same level it has held since April 24, compared with 6.5 percent in the July 5 poll. However, none of those who participated in both surveys changed their forecast.

By the end of March, nine economists expects no change in CRR, and three expect a 50 basis point rise.

FACTORS TO WATCH:

-- Wholesale prices in June rose 10.55 percent from a year earlier, marginally below the median forecast for a 10.8 percent rise in a Reuters survey and compared with May's pace of 10.16 percent.

-- The fuel price index rose 14.27 percent in the year to July 3, compared with the previous week's 18.02 percent, while food price index rose an annual 12.81 percent, from 12.63 percent reading in the previous week.

-- Industrial output in May grew at a slower-than-expected 11.5 percent from a year earlier, helped by robust domestic consumer demand, expanding exports, and higher infrastructure spending.

MARKET IMPACT: Traders have discounted a 25 basis point increase in interest rates by the RBI in the July review, but traders said a 50 basis point rise could see the benchmark 10-year bond rise to 7.80 percent, from 7.65 percent now.

A half percentage point increase in policy rates may also push up the one-year overnight indexed swap to 6.20 percent, from 5.86 percent now.

India develops world's cheapest "laptop" at $35

2010-07-25T22:41:00.000+05:30

(Reuters) - India has come up with the world's cheapest "laptop," a touch-screen computing device that costs $35.

India's Human Resource Development Minister Kapil Sibal this week unveiled the low-cost computing device that is designed for students, saying his department had started talks with global manufacturers to start mass production.

"We have reached a (developmental) stage that today, the motherboard, its chip, the processing, connectivity, all of them cumulatively cost around $35, including memory, display, everything," he told a news conference.

He said the touchscreen gadget was packed with Internet browsers, PDF reader and video conferencing facilities but its hardware was created with sufficient flexibility to incorporate new components according to user requirement.

Sibal said the Linux based computing device was expected to be introduced to higher education institutions from 2011 but the aim was to drop the price further to $20 and ultimately to $10.

The device was developed by research teams at India's premier technological institutes, the Indian Institute of Technology and the Indian Institute of Science.

India spends about three percent of its annual budget on school education and has improved its literacy rates to over 64 percent of its 1.2 billion population but studies have shown many students can barely read or write and most state-run schools have inadequate facilities.

JFE plans $1bn Indian steelmaker stake

2010-07-25T22:34:00.000+05:30

JFE Holdings, the Japanese steelmaker, plans to invest about $1bn in India’s JSW Steel for a minority stake, according to two people close to the matter.
The deal is expected to be announced on July 27 when JSW, which has a market value of $4.8bn, reports first-quarter results.
An investment by JFE, the world’s sixth-largest steel producer, is the latest in a string of Japanese companies investing in fast-growing emerging markets to offset anaemic growth at home and an expected slowdown in Europe.
Last week, the Japanese carmakers Toyota and Nissan announced a combined $1.2bn of investments to bolster their presence in Latin America. Earlier this month, Sumitomo, the large trading house, signed a $1.9bn deal in Brazil for a stake in an iron ore mining venture.
The overall value of merger and acquisitions in emerging markets by Japanese companies so far this year has risen to $8.58bn, exceeding 2009’s total of $7.9bn, according to Dealogic.
JFE and JSW had been discussing plans to deepen ties since November, when they agreed to cooperate on boosting steel production to meet India’s voracious demand for the metal, said a person close to the matter.
Japanese carmakers such as Toyota and Nissan have a large manufacturing presence in India, the second-fastest growing auto market after China, and JFE aims to target their increasing demand for steel there.
For JSW, analysts in Mumbai said that JFE’s investment would help the highly indebted Indian steelmaker ease its debt exposure.
It would enable the steelmaker “to create more high-value products that JSW had in the pipeline but couldn’t develop due to its debt constraints,” said Sanjay Jain, a steel analyst at Motial Oswal.
India’s steel market is growing at about 10 per cent annually and per capita steel consumption is about 40kg a year compared with the global average of 150kg a year.

Seven banks fail EU stress tests

2010-07-25T22:14:00.000+05:30

Europe took a further step towards restoring confidence in its banking system on Friday as it published the results of stress tests into the region’s leading financial institutions, showing that only seven of 91 banks failed to meet its capital requirements.
However, investors signalled their distrust of the assumptions underlying the tests and the surprisingly small number of banks to fail the tests.
Five of the seven were cajas, Spanish savings banks, sparking nervousness that the pan-European exercise that Madrid had championed might backfire.
The Bank of Spain on Friday indicated that it had sufficient contingent liquidity measures in place to reassure caja customers and counter any threat of a run on these banks.

The Committee of European Banking Supervisors, which oversaw the tests, identified a capital shortfall of €3.5bn at the seven banks that failed to reach the pass mark of a 6 per cent tier one capital ratio.
The test involved modelling macroeconomic and sovereign debt stresses over 2010 and 2011, applied to end-2009 capital levels.
Germany’s Hypo Real Estate and Greece’s ATEbank were the only non-Spanish institutions to fail.
Among the near-fails, which analysts say could come under pressure to raise capital soon, were Italy’s Monte dei Paschi, on 6.2 per cent, Allied Irish Banks, on 6.5 per cent, and Germany’s Postbank, on 6.6 per cent.
A handful of some of Europe’s most-stretched banks announced a combined €1.3bn of capital raisings on Friday, just hours before regulators divulged the results of the test, although two of them – National Bank of Greece and Slovenia’s NLB – both passed.
The third, Cívica, a caja based in northern Spain that failed the test, secured €450m of convertible bond finance from JC Flowers, the US buy-out firm that has a record of investing in troubled banks.
That marked the first time a caja had sought outside capital, following a liberalisation of the law governing the public sector institutions.
Among the top-rated banks in the tests was Barclays, the UK bank whose baseline tier one ratio of 13 per cent at the end of last year, rises under the stress scenario to 13.7 per cent by end-2011.
The two-month long test exercise has been closely scrutinised by investors, with growing scepticism in the markets that the parameters of the stress scenarios were insufficiently tough.
Germany also upset the pan-European exercise at the last minute by saying its banks would be disclosing the full details of sovereign debt holdings – an adjunct to the stress tests that all banks had been expected to comply with – only on a voluntary basis.
At least six German banks – including Deutsche Bank, Postbank, HRE and DZ Bank – did not publish sovereign holdings on Friday night.
“Arguably the failure here is not the banks concerned but the test itself,” said Richard Cranfield, chairman of the global corporate group at Allen & Overy, the law firm.
“There is little evidence that the tests have been applied consistently and there is a distinct lack of credibility, making this a wasted opportunity.
“One assumes those banks that have failed will be rescued or recapitalised. However, the banks that have scraped through may have more of a challenge on their hands and they may be the ones the market focuses on,” he said.
But European regulators hailed the results of the tests – which they said were three times as tough as last year’s US ones – as proof of the strength of the industry.
“The US did its tests before all its banks had recapitalised,” said Christian Noyer, governor of the Banque de France.
“European banks have now been through recapitalisations, restructurings, cleaning out of their portfolios. We’re arriving after the battle. A few years ago it would have been different,” he said.

EU Bank Stress Tests Fail to Reassure Investors Wary of Capital Criteria

2010-07-25T16:07:00.000+05:30

European regulators found that seven banks need to raise a combined 3.5 billion euros ($4.5 billion) of capital, underwhelming analysts who said the stress tests may not have been strict enough.

“The amount of capital needed is much lower than the market expected,” said Mike Lenhoff, chief strategist at London-based Brewin Dolphin Securities Ltd., which oversees $33 billion. “It seems quite trivial considering the concerns about losses from the sovereign crisis.”

Germany’s Hypo Real Estate Holding AG, Agricultural Bank of Greece SA and five Spanish savings banks didn’t have adequate reserves to maintain a Tier 1 capital ratio of at least 6 percent in the event of a recession and sovereign-debt crisis, lenders and regulators said yesterday. The banks that failed the stress tests are in “close contact” with national authorities over how they will raise capital, said the Committee of European Banking Supervisors, which ran the assessments of 91 lenders.

European governments are using their first coordinated stress tests to reassure investors about the health of financial institutions after the debt crisis pummeled the bonds of Greece, Spain and Portugal. Rising budget deficits in those countries raised concern that they won’t be able to pay their debts.

“This is not reassuring at all,” said Komal Sri-Kumar, who helps manage $118 billion as chief global strategist at TCW Group Inc. in Los Angeles. “These tests were set in such a way that most of them would pass. That doesn’t say to me that the banking system is stable.”

‘Not Very Rigorous’

Before the results were published yesterday, analysts at Goldman Sachs Group Inc. estimated that lenders would need to raise 38 billion euros and Barclays Capital said they would require as much as 85 billion euros. Tests carried out in the U.S. last year found that 10 lenders, including Bank of America Corp. and Citigroup Inc., needed $74.6 billion.

“I don’t think the market is so stupid as to think that they were so wrong,” said Jason Brady, a managing director at Thornburg Investment Management in Santa Fe, New Mexico, which oversees about $57 billion. “The right explanation here is that the testing was not very rigorous.”

European banks have already raised 220 billion euros in the past 18 months, Credit Suisse Group AG analysts said in a report this week. With that amount already raised, it was likely that most European banks would pass the tests, the analysts said.

Trading Books

Analysts and investors said the European tests may not have been strict enough because they ignored the majority of banks’ holdings of sovereign debt. The evaluations took into account potential losses only on government bonds the banks trade, rather than those they are holding until maturity, CEBS said.

Lenders hold about 90 percent of their Greek government bonds in their banking book and 10 percent in their trading book, according to a survey by Morgan Stanley analysts led by Huw van Steenis. They have to write down the value of bonds in their banking book only if there is serious doubt about a state’s ability to repay in full or make interest payments.

“The long-awaited stress tests do not seem to have been that stressful,” Gary Jenkins, an analyst at Evolution Securities Ltd. in London, wrote in a note to clients. “The majority of these bonds are held on the banking books.”

The European Central Bank said banks that failed the stress tests should seek to raise capital from investors before turning to national governments. Spain and Greece both moved to support their lenders that require capital.

Greek Rights Offering

“The ECB welcomes the commitment made by national authorities with regard to back-stop facilities to recapitalize the institutions that may have fallen below the minimum threshold of 6 percent,” the ECB said in a statement.

Agricultural Bank of Greece, the only one of the nation’s lenders to flunk, said it’s preparing a rights offering after posting a shortfall of 242.6 million euros. The government, which owns 77 percent of the bank, said it will take part in the share sale.

Hypo Real Estate, the German commercial-property lender rescued by the government during the financial crisis, had a capital shortfall of about 1.25 billion euros. An “immediate need for capital would arise only if the hypothetical stress scenario actually did materialize,” the Bundesbank and financial regulator BaFin said.

Spanish savings banks CajaSur; a group led by Caixa Catalunya; a group led by Caixa Sabadell; Caja Duero-Caja Espana; and Banca Civica all, posting a combined capital shortfall of 2 billion euros.

Stocks Little Changed

Bank of Spain Governor Miguel Angel Fernandez Ordonez said the central bank will set a deadline for the banks to raise capital privately before turning to public funds. Civica said yesterday it would raise 450 million euros by selling a convertible bond to U.S. leveraged buyout firm J.C. Flowers & Co.

The results of the U.S tests helped the Standard & Poor’s Financials Index jump 36 percent in the following seven months. The 54-member Bloomberg Europe Banks and Financial Services Index rose 0.1 percent yesterday.

“The seven that failed the tests were already banks that had failed or were in the watch list, and that says to me that these tests are not telling us anything we don’t already know,” Sri-Kumar said. “I don’t think the markets will buy it. We’ll have to wait until the Europe markets open on Monday.”

SEBI panel calls for sweeping changes in takeover norms

2010-07-19T22:14:00.000+05:30

A twelve member panel of SEBI headed by C Achuthan and industry veterans like YM Deosthalee and Koushik Chatterjee on Monday submitted a fresh set of recommendations for takeovers including increasing the trigger limit for takeovers.

The panel has recommended sweeping changes to the country's takeover code, including raising the open offer trigger to 25 per cent from 15 per cent to prevent hostile takeovers and the open offer price will based on a 52-week average of the stock price.

NDTV Profit broke the takeover code story on Friday.

The takeover committee has also proposed to make it mandatory for the acquirer to make an offer for up to 100 per cent in the company – a move that will raise the cost for acquisition, but ensure that all shareholders especially retail investors participate in the open offer.

Among other recommendations is a cap of 10-75 per cent for voluntary offers from existing stake holders and to do away with non-compete fee – an attempt to bring more transparency since promoters of a target company will no longer get huge sums of money from the acquirer for not entering the same trade. The timeline of an open offer is also set to reduce to 57 days.

The panel also recommended that the offer price would be based on the volume weighted average of 12 weeks market price of the target company, against 26 weeks now.

Last September, the SEBI formed the Takeover Regulation Advisory Committee to review the takeover rules and make them more relevant. SEBI had last reviewed the code in 2002.

"These regulations will serve the capital markets for the next five to ten years," said CB Bhave, chairman of SEBI.

"An open offer ought to be for all shares of the target company to ensure equality of opportunity and fair treatment of all shareholders, big and small," C Achuthan, chairman of SEBI's Takeover Panel, said.

Most corporates have welcomed the move.

But there are worries too with takeovers getting more expensive. It remains to be seen what impact it will have on the size of takeovers in the country. Also, the cap for voluntary offers has been set at just 10 per cent and will this leave more room for manipulations? But members of the panel say these concerns have been addressed.

The final guidelines however are still a few months away. The recommendations of the takeover panel are open for public feedback till August 31 and only then will market regulator SEBI take a final call. However, looking at the representation that the committee has from SEBI, not much is likely to change.

Read more at: http://beta.profit.ndtv.com/news/show/sebi-panel-calls-for-sweeping-changes-in-takeover-norms-83392?cp

First Browser with an Indian Origin - Epic

2010-07-18T21:42:00.001+05:30

Bangalore based startup Hidden Reflex has announced the launch of its browser "Epic", which aims at making Indians all over the world proud.

Epic, which also happens to be the first entirely Indian made web browser, is based on the Mozilla platform and comes with quite a bunch of India centric features. We did take it for a short spin and we came out quite happy with it. Before we look at the details, let's look at details about Hidden Reflex, the company behind the browser.

The company was founded by the then U.S. based Engineer Alok Bhardwaj in 2007. However, the company is currently based in Bangalore. They initially had a team of three members and have now grown to quite a bunch of people who are working on two separate products. The first one, Epic, has already been launched. The other one is still in the making.Let's get back to the Epic browser now. After you install it, the first thing you notice is the bright colours of the browser. Epic is highly customizable and initially comes with a "Peacock" background that isn't too easy on the eyes. Of course you can change your background with any of the zillion ones provided by the browser or choose one of your own. Even at the launch, there are over 1,500 themes available and compatible with Epic. The browser has a host of applications on its sidebar from where you can launch them. These include Twitter, Facebook, and other similar services. Clicking on any of these icons will launch a widget like window on the side of the browser. The bad thing about this is that you can only open one such widget per window.

Epic also comes with anti-virus protection built-in - a first for any browser. It also supports a long list of Indian languages (currently 12) and an India content sidebar that aggregates news headlines, TV to live cricket commentary and other things that matters to us Indians. It also features a bunch of productivity applications that include a free word processor, video sidebar and my Computer Browser.

The Epic browser is now available for download from here.

Housing, Leading Index in U.S. Probably Slumped in Sign Recovery Slowing

2010-07-18T21:37:00.000+05:30

The housing market took another step back in June as construction and purchases dropped, and a gauge of the outlook for growth signaled the expansion will lose steam, economists said before reports this week.

Builders began work on 580,000 houses last month at an annual rate, down 2.2 percent from May and the slowest pace this year, according to the median estimate of 61 economists surveyed by Bloomberg News before Commerce Department data due July 20. Other reports may show sales of existing homes decreased for a second month and the index of leading indicators declined for the first time in more than a year.

The expiration of a buyer tax credit has caused housing to retreat, showing the industry that precipitated the recession cannot sustain a recovery absent job growth. The financial turmoil caused by the European debt crisis has shaken confidence in the world’s largest economy, raising the risk that spending and employment will cool.

“At a minimum, we’re headed for a soft patch and possibly an extended period of slow growth,” said Julia Coronado, a senior economist at BNP Paribas in New York. “There is a lot of uncertainty about where housing goes from here. Now that we’re in the world ex-tax credits, it’s not clear how deep the pool of demand is for housing.”

Federal Reserve Chairman Ben S. Bernanke will deliver his semiannual report on the economy to members of Congress on July 21. Policy makers last month predicted the expansion will be too slow over the next two years to return to the 5 percent to 5.3 percent jobless rate that they consider full employment, according to minutes of the meeting released last week.

Fewer Permits

Housing’s inability to maintain a rebound is one reason the economic recovery is not gaining speed. Building permits, a sign of future construction, were little changed at a 575,000 annual pace, economists project the Commerce Department’s construction report will also show.

The projected drop in housing starts would follow a 10 percent decrease in May after the deadline to sign purchase agreements, and become eligible to receive a government credit worth as much as $8,000, lapsed on April 30.

Sales of existing homes fell to a 5.1 million annual rate in June from 5.66 million the prior month, economists forecast before a July 22 report from the National Association of Realtors. In April, purchases reached a 5.79 million pace, the highest level since the tax credit was originally due to expire in November.

Tax Credit

Existing sales, which are tallied when a deal closes, may still have been influenced by the government program last month since the closing deadline was June 30 for those meeting the April 30 signing cutoff. The closing deadline was extended this month to Sept. 30 to make sure prospective buyers have enough time to complete transactions.

Homebuilders turned even more pessimistic in July, the National Association of Home Builders/Wells Fargo confidence index on July 19 may show, according to economists surveyed. The index fell to 16 from 17 in June. Readings below 50 mean more respondents said conditions were poor.

Builders compete with inventories of existing homes that are expanding because of mounting foreclosures. Home seizures climbed 38 percent in the second quarter from a year earlier, RealtyTrac Inc. said last week, putting lenders on pace to claim more than 1 million properties this year.

KB Home, the U.S. homebuilder that targets first-time buyers, reported a wider-than-estimated loss and a drop in new orders in its second quarter.

Sales Unpredictable

“A lack of predictability in the overall sales environment will likely impact our full-year deliveries and could potentially extend our outlook for profitability,” KB Home Chief Executive Officer Jeffrey Mezger said June 25 in a conference call.

Home builders have underperformed the broader stock market this year. The Standard & Poor’s Supercomposite Homebuilder Index has fallen about 11 percent so far this year, compared with a 4.5 percent decline for the S&P 500 Index.

Housing indicators haven’t been the only ones showing weakness of late. Manufacturing contracted in June by the most in a year, figures from the Fed showed last week. Other reports showed retail sales fell for a second month and consumer sentiment this month declined to the lowest level in a year.

Firings remain elevated. A Labor Department report on jobless claims on July 22 may show initial claims rose to 445,000 last week from 429,000 the prior week, economists forecast.

The index of leading economic indicators probably fell 0.3 percent in June after rising 0.4 percent in May, according to economists’ estimates before the July 22 release of the Conference Board’s measure of the outlook for the next three to six months.

Analysts have been marking down growth forecasts this month. Economists at JPMorgan Chase & Co. in New York project the economy grew at a 2.1 percent pace from April through June, down from their 3.2 percent estimate in early July. They also reduced the average estimate for the second half of the year by a half percentage point to 2.75 percent.

Earnings Continue to Beat Expectations - Why are Stocks Dropping?

2010-07-18T21:35:00.001+05:30

Of the 28 major reports released yesterday and today there were only two that missed expectations. Almost all the reports beat the average analysts expectations over the last two days. That includes JP Morgan Chase (JPM), Citigroup (C), and Bank of America (BAC), three financial bell-weathers. So if things are so good why are stock prices so bad?

The answer comes down to expectations of the future. Since the end of June traders have been building prices back up on the expectation that the earnings reports this season won't be as bad as many feared a few months ago. However, now that the news is here, they are selling into the data and putting much more emphasis on the bearish future outlooks being released by many management teams. The banking stocks I mentioned above have all released very cautious statements about their future profits. The CEO of Bank of America said today during a call to shareholders that...

"we’re worried about slowing momentum as the year-over-year comparisons get harder as the second half of the year was strong with the consumer. And again, we continue to watch the housing market carefully and it stays in our focus. As we look on the loan demand side, it continues to remain weak. On the commercial side, the commercial customers remain conservative by holding large amounts of cash while waiting signs of sustained demand for their products before they need capital growth. There’s no loan demand because there’s no demand for the products.”

These are not good comments about the future. Wall Street profits tend to drive investor profits in general so an outlook like this by the CEO of one of the largest Wall Street firms will have a strong dampening impact on investors. Considering the early reaction to this earnings season we are targeting support on the major stock indexes again.

FIIs lap up banking, healthcare scrips

2010-07-17T23:17:00.000+05:30

With the economy set to grow at a scorching pace amid prolonged volatility in the market, foreign institutional investors (FIIs) have hiked exposure in banking and healthcare scrips for the quarter ended June 2010.

According to data, on a net basis, they have invested Rs 967 crore in Sensex (^BSESN : 17955.82 +46.36) firms and pulled out about Rs 7,123 crore from non-Sensex companies (largely mid-cap firms). This essentially shows that FIIs have largely been risk-averse in the past quarter.

FIIs have raised their stakes the most in companies such as Phillips Carbon (8.2%), Bank of Rajasthan (6.6%) and Srei Infrastructure Finance (6.23%). They have hiked stakes by more than 4% in GMR Infrastructure and Dhanalaxmi Bank and by more than 3% in Axis Bank, Zensar Technologies, Bajaj (BAJAJAUTO.NS : 2101.05 0) Finserv and South Indian Bank.

In terms of actual investments, FIIs have invested the most in State Bank of India (SBIN.NS : 2449 +9.15) (Rs 2,126 crore). They have also pumped in a sizeable amount in private sector banks like Axis Bank (Rs 1,776 crore), HDFC Bank (Rs 937 crore) and ICICI Bank (ICICIBANK.NS : 902.4 +20.55) (Rs 693 crore). Major Sensex firms in which they have invested substantially include HDFC (Rs 759 crore), Larsen & Toubro (Rs 645 crore) and Hero Honda (Rs 478 crore). Banks, with their larger weight in major indices, have been the clear favourites with FIIs. "The economy is on a firm footing and is set to grow by 8-9%. This will spur credit growth, which in turn will help the banking industry," said Andrew Holland, CEO - Equities, Ambit Capital. The 3G auction, which has eased the fiscal burden on the government, will also help the banking sector, feel experts.

Among Sensex firms, FIIs have invested Rs 5,839 crore in nine companies and pulled out Rs 4,872crore from six others. They have reduced their stakes in heavyweights like Tata Steel (TATASTL.BO : 509.2 -2.1) (4%), Maruti Suzuki (1.03%), Infosys Technologies (INFOSYS.BO : 2778.3 +19.35) (0.52%) and Reliance Industries (RELIANCE.NS : 1062.95 -10.5) (0.39%). The outlook for Tata Steel has been negative because commodity prices have taken a hit in the last quarter due to turmoil in global economy, reckon experts.

Cabinet approves symbol for Indian Rupee

2010-07-17T23:02:00.000+05:30

BANGALORE: Now that the Indian rupee has an identity, the question is: how soon will our computer keyboards start reflecting it? Very quickly, it seems. Vendors say they will roll out the symbol as soon as the Bureau of Indian Standards (BIS) sets the guidelines, since it takes only a minor software change to incorporate it.

Techies say what is required is simple internal coding to assign an additional function to any one of the existing keys that currently holds a single function. The IT industry is awaiting standards from BIS on where and how the new function has to be allocated. "We are fully equipped to integrate the rupee symbol; it requires only a software code change. It would not take more than a production cycle, or about three months, once the standard guidelines for adoption of the same are introduced," said an HCL Infosystems spokesperson.

It would be interesting to see which single-function key (Insert, Page Up, Page Down, Delete or some function key) will bear the rupee symbol. According to S Rajendran, chief marketing officer, Acer India, technically it's an almost inconsequential issue.

Facebook Sees Fourfold Jump in Number of Advertisers Since 2009

2010-06-02T22:52:00.000+05:30

Facebook Inc., owner of the world’s largest social-networking site, said its advertisers have more than quadrupled since the start of 2009 as marketers aim to get their products before a growing global audience.

Facebook, which has been opening offices around the world to serve ad clients, doubled the number of salespeople last year from 2008, according to an e-mailed statement. The company didn’t disclose the number of advertisers or salespeople.

Companies are boosting ad spending after a lull during the recession in a bid to reach consumers who spend long stretches on the Internet. Facebook, which has more than 500 million users, counts Procter & Gamble Co., Toys “R” Us Inc. and Virgin America Inc. among its customers. It’s relying on ads to maintain sales growth and lay the groundwork for a possible initial public offering.

“We’re very well positioned as people come out of this current economic situation,” Mike Murphy, vice president of global sales, said in an interview at Facebook’s headquarters in Palo Alto, California. “What we’ve become is absolutely core to marketing campaigns.”

Facebook sells ads that are placed on the home pages of users, where the latest comments, pictures and links from their friends are posted. The ads also show up next to profile pages, which may include a person’s information such as gender or birth date.

Adidas Marketing

Adidas AG has used Facebook to promote its youth-focused Originals label, said Chris Barbour, who leads global digital marketing for the company’s Sport Style unit. Adidas, the world’s second-largest sporting-goods maker, tries to target users regionally to give the brand a personal touch, he said.

“Wherever our fans are, we’re going to use Facebook to speak to them,” Barbour said. “And we’re going to try to speak to them in a locally relevant way.”

The company ran ads this year to drive more users to its Originals page on Facebook, which features new products and user discussions, he said. Three times as many people signed up to be “fans” of the page during the campaign, compared with the typical rate, he said.

Facebook ran 176 billion display ads in the U.S. in the first quarter, up from 70.7 billion a year earlier, according to research firm ComScore Inc. in Reston, Virginia.

Yahoo, Microsoft

Its growth comes as a threat to rivals Yahoo! Inc. and Microsoft Corp. Facebook has emerged as the largest site for display ads, with a market share of 16 percent, rising from 11 percent in the fourth quarter. That topped Yahoo, which had a 12 percent share, down from 13 percent in the previous period. ComScore doesn’t include the ads that Yahoo places on websites it doesn’t own. Microsoft had 5.5 percent.

Facebook also became the most visited website in March, overtaking longtime leader Google Inc. for the first time, according to Experian Hitwise, a research firm in New York.

Even as companies ramp up spending, privacy challenges threaten to curb advertiser interest if it leads to a slowdown in Facebook’s user growth, said Debra Aho Williamson, an analyst at market-research firm EMarketer Inc. in Seattle.

Facebook faced growing criticism over how it handles privacy after announcing features in April that enabled more sharing with outside sites. Consumer groups filed a complaint with the Federal Trade Commission, and some users dropped the service.

Responding to the criticism, Facebook introduced new privacy settings last week that make it easier for users to protect their information. The company is also making less data publicly available.

‘Pay Attention’

The new settings should “help us scale the service to millions and millions of more people,” Chief Executive Officer Mark Zuckerberg, 26, said last week. The privacy complaints had no meaningful impact on Facebook usage, he said.

Companies should keep a close eye on user growth numbers in coming months, EMarketer’s Williamson said. Users might decide to hide some personal information used by advertisers to target customers, she said.

Facebook had 519.1 million users in April, up from 411 million in September, according to ComScore.

For now, the user growth presents a big enticement for advertisers, Williamson said.

“Any large numbers like that make advertisers say, ‘Wow, I need to pay attention to this.’”

Tata Opens Plant for World’s Cheapest Car on Demand

2010-06-02T22:48:00.000+05:30

June 2 (Bloomberg) -- Tata Motors Ltd., maker of the world’s cheapest car, opened a plant for the $2,500 Nano model that will boost output amid rising demand for automobiles in the south Asian nation.

The factory in Sanand, in the western Indian state of Gujarat, will have initial capacity to build 250,000 Nanos a year, Tata Motors said in an e-mailed statement today. The facility may later be able to produce as many as 350,000 of the cars annually, the company said without elaborating.

Higher production will help Tata clear a backlog of orders for the Nano as it seeks to win customers from Maruti Suzuki India Ltd. and Hyundai Motor Co., the country’s two largest carmakers. Renault SA is also working on an ultra-low cost auto for India, where the government estimates demand for cars may more than double to 3 million annually by 2015, helped by economic expansion and rising incomes.

“More Nanos on the road is crucial to establish the brand as a car for the masses,” said Vaishali Jajoo, a Mumbai-based analyst at Angel Broking Ltd. “Exports of the Nano were always on the cards and this factory will help achieve that as well.”

Tata Motors received 206,703 Nano orders in the initial sales period in April 2009 and chose the first 100,000 customers for the 624-cc model by lottery. That car, with one windshield wiper and no radio or air conditioning at the entry level, sells for 123,360 rupees ($2,615) in New Delhi.

Deliveries of the Nano began in July, and the company sold 33,875 of the cars through April, according to data from the Society of Indian Automobile Manufacturers.

Personal Transport

“Our effort was to give people of India an affordable car,” Ratan Tata said in a speech today. “We are giving people of India a chance for personal transport.” The company canceled a press conference on the Nano because of a cyclonic storm.

Indians may buy as many as 1 million low-cost cars a year by 2016, according to CSM Worldwide Inc. Tata, also owner of the Jaguar Land Rover luxury brands, can account for at least half of that market with its first-mover advantage, according to Puneet Gupta, a New Delhi-based analyst of CSM.

Nissan Motor Co., Renault and Bajaj Auto Ltd. are jointly developing a $3,000 car for showrooms in 2012. The car, one year behind schedule, would be produced at a plant in the western Indian state of Maharashtra with capacity to produce 400,000 vehicles.

A dedicated factory for the Nano was delayed after the automaker halted construction of another plant in Singur, West Bengal state, because of violent protests by farmers demanding the return of land acquired for the site.

Tata abandoned the near-complete facility in October 2008 and began building the Sanand facility on 445 hectares (1,100 acres).

Goldman Says Buy Microsoft Shares After Apple Overtakes Stock

2010-05-27T21:08:00.000+05:30

Microsoft Corp. shares have fallen to attractive levels after a selloff that caused the software maker to lose its status as the world’s biggest technology company by market value, according to Goldman Sachs Group Inc.

Microsoft slumped 18 percent in May through yesterday, when Apple Inc.’s market value exceeded Microsoft’s by $2.94 billion. Technology companies in the Standard & Poor’s 500 Index retreated 11 percent since April 30. Microsoft shares lost 4.1 percent yesterday after Chief Executive Officer Steve Ballmer said that the effects of the European debt crisis will spread outside the region.

“While European contagion is a concern, Ballmer’s comments were not Microsoft specific,” Sarah Friar, an analyst at New York-based Goldman Sachs, wrote in a report to clients dated yesterday. “The shares underperformed large-cap tech despite having relatively lower exposure outside of the U.S. Given significant underperformance and attractive valuation levels, we are buyers of the shares.”

Microsoft had the biggest gain in the Dow Jones Industrial Average, surging 5.3 percent to $26.34 at 10:54 a.m. in New York. It jumped 5.4 percent earlier, the most intraday since Oct. 23.

Nokia C6 Deals Cost Effective Price

2010-05-26T20:59:00.001+05:30

To address the need of the consumers who expect minimal requirement along with simplistic cosmetic work Nokia has come out with their new offering named Nokia C6. Available in two attractive color options comprising black, deep red this smart phone proves to be a users delight as it comes equipped with all the latest features that promise to give best in its class results. Display size being the focal part here this smart phone leaves nor room for complaint as this dual screen phone with its impressive resolution gives out crystal sharp pictures without any distortion. This smart classic phone is ideally targeted at those users who expect minimal requirement without any comprise on standard features like media player, camera, FM radio along with exciting set of games. Audio output of this device sounds simply superb as it powerful speakers give amazing sound clarity that enable its listeners to groove while listening to their favorite music tracks.

Flashing point about this smart phone is its 5 megapixels camera that comes equipped with
4 x Digital Zoom,CMOS Sensor, automatic white balance, full screen viewfinder and capture mode . Due to the presence of these smart tool one can capture and view distortion free images with great clarity. Other camera based utilities that comes equipped with this device include 5 MP, 2592 x 1944 pixels, autofocus, LED flash, Video and screensavers. Further its advanced messaging system like Nokia Xpress Audio Messaging allow the users to send the messages in different modes that include SMS, MMS, EMS. For the entertainment purpose Nokia C6 comes loaded with smart interesting features like audio and video player along with FM radio and FM recording.

People today like to bank on the mobile phone deals that come tagged with several benefits. One such amazing deal that has struck the limelight and is ruling the chart on all the UK based online mobile shops is contract deals on Nokia C6. Once the user avail this kind of wonderful facility he/she gets entitled to receive numerous benefits like free text messages, free talk time. Apart from these assets the users even gets a chance to grab some amazing gifts of his choice that include gaming consoles, LCD TVs or even iPod music player. So this cost effective deal coming with several benefits give its users best value for the money as one can now buy this handset at a cost effective price.

Greece Faces Debt Restructuring or Default, Mundell, Hanke Say

2010-05-26T20:57:00.001+05:30

Nobel Prize winning economist Robert Mundell said debt restructuring may be “inevitable” in parts of the euro area and Steve Hanke, the architect of currency regimes from Argentina to Estonia, warned a Greek default may become unavoidable.

Mundell, who won the economics prize in 1999, predicted debt restructuring for “one or two” euro nations within five years. Hanke of Johns Hopkins University said Greece’s “death spiral” will end in default if debt obligations can’t be renegotiated.

Euro-area ministers agreed on May 2 to provide 110 billion euros ($135 billion) of aid to Greece as the country struggled to control a deficit that reached 13.6 percent of gross domestic product last year, more than four times the European Union limit. When that failed to stop the euro’s slide, the EU and International Monetary Fund offered a financial lifeline of almost $1 trillion to member states.

“Greece’s death spiral will end with debt restructuring or the outright default of its sovereign debt,” Hanke wrote in an article on the website of the Cato Institute in Washington D.C. dated yesterday. “While politicians and bureaucrats from the EU, IMF and Greece tell us that the bailout package will defuse Greece’s time bomb, don’t believe their ‘cheerful Charlie’ chant.”

Not ‘Deconstruction’

Mundell, whose Nobel Prize was for work on exchange rates and capital mobility, said at a conference in Warsaw today that “debt restructuring may be needed for one or two fiscally weak euro members. In five years it may be inevitable, but it doesn’t mean euro deconstruction, it just means debt restructuring.”

Europe needs greater fiscal centralization, including the creation of euro-area Treasury notes and bonds, Mundell said.

“The euro has done marvelously well in its 10 years of existence, but it is operating with one of its two hands tied behind its back,” Mundell said. “There is no area bill like a U.S. Treasury bill. A euro-area bill will greatly improve the ascent of the euro as the reserve currency along the dollar.”

Europe’s currency has dropped 14.2 percent against the dollar this year, the biggest loss among its 16 most-active counterparts, according to data compiled by Bloomberg. It traded at $1.2283 as of 6:20 a.m. in London, after dropping to a four- year low of $1.2144 on May 19.

Exit Possible

Nouriel Roubini, the New York University professor who predicted the global financial crisis, also warned today that financial markets aren’t “credibly” convinced Greece will control its budget deficit.

The euro will weaken further, and some countries may be forced to abandon the common currency, Roubini said at a conference in Bucharest, Romania today.

“I’m not predicting the breakup of euro zone, but the probability is not zero that some of weakest members of euro zone might decide to exit it,” he said.

There are also concerns Spain and Portugal as well as Greece lack the political will to cut spending, Roubini said. Greece pledged to implement austerity measures equal to almost 14 percent of GDP in exchange for the EU rescue funds.

“The markets are not credibly convinced Greece can do the fiscal adjustment it engaged to do,” Roubini said. There are “also questions whether, from a political point of view, there’s going to be support for budget consolidation in these countries -- Greece, Portugal and Spain.”

Double-Dip Risk

Without the option of currency devaluation, Greece needs to push through tax reform to improve its competitiveness, Hanke said. The country ranks 109th in an “ease of doing business” survey of 183 countries, according to the World Bank.

“Without growth, Greece is doomed,” said Hanke, who was an architect of currency policy in Indonesia, Venezuela, Estonia and Kazakhstan among other nations.

There are “serious economic difficulties in the euro zone,” Roubini said today. “There’s even a risk of a double- dip recession.”

The 16-member euro area emerged from its five-quarter recession in the three months through September. A double-dip recession would mean the region’s economy contracting again for at least two consecutive quarters.

The euro region economy will grow 0.9 percent this year after contracting 4.1 percent in 2009, the European Commission estimated May 5. Germany, the bloc’s biggest economy, will expand 1.2 percent in 2010 and 1.6 percent next year. Greece’s economy will contract 3 percent this year and a further 0.5 percent in 2011, the commission estimates.

Greece would benefit from scrapping employer contributions to payroll taxes and imposing a uniform value-added tax rate, Hanke said. Such measures would boost competitiveness “roughly” equivalent to a 40 percent to 45 percent currency devaluation, he said, citing research by Domingo Cavallo, Argentina’s former Economy Minister, and Joaquin Cottani, former Undersecretary of Economic Policy in Argentina.

3G auction returns near Rs 55,000 cr-mark

2010-05-10T22:41:00.001+05:30

NEW DELHI: India Monday concluded 148 rounds of an auction to award spectrum for third generation (3G) telecom services in the country, with the government's provisional revenue from the sale of airwaves nearing the Rs.55,000 crore ($12.2 billion) mark and the nationwide licence price reaching Rs.13,473.55 crore ($3 billion).

The provisional winning price for the pan-India 3G licence was around 285 percent higher than the Rs.3,500 crore reserve price fixed by the government.

At the end of the 26th day of the auction, which began April 9, the government's provisional revenue from the 3G auction stood at Rs.54,378.39 crore, which is well above the amount it had expected.

Earlier, the government had said that it hoped to rake in Rs.55,000 crore ($12.2 billion) from both the 3G auction and the rolling out of broadband wireless Internet services in the country. But with the aggressive bidding in few circles, the government is poised to get more than the estimated amount from the 3G auction alone.

Slots for three-four players are available in each of the 22 circles into which the country has been geographically divided for the 3G services, which will facilitate faster connectivity and enable applications such as Internet TV, video-on-demand, audio-video calls and high-speed data exchange.

Nine telecom companies - Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications - are participating in the online auction.

The government has already given Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) spectrum for 3G services on the condition that they pay the same licence fee as would be levied on private players after the auction.

Along with the fee that will be eventually paid by the two state-run enterprises for the licences, the government will provisionally get at least Rs.54,378.39 crore from the auction.

According to the Department of Telecommunications (DoT), the 3G auction may conclude this week.

Data on the DoT's website showed Mumbai continued to attract the highest bid at Rs.2,433.88 crore. The provisional winning price for Delhi stood at Rs.2,372.97 crore, followed by Karnataka at Rs.1,402.13 crore, Tamil Nadu at Rs.1,287.24 crore and Maharashtra at Rs.1,150.12 crore.

While Bihar, Mumbai, Delhi, Punjab, Orissa and Andhra Pradesh witnessed more players in fray than the number of slots available, Jammu and Kashmir, Haryana, Himachal Pradesh, Madhya Pradesh, West Bengal and Rajasthan could not attract enough bidders.

This 3G auction is a simultaneous auction for the 22 circles over a secure website. At each round, the price is hiked from between 10-1 percent based on demand.

The auction is being held on all days except Sundays and national holidays. The bid data, including the winning companies' names, will be made public after the auction's completion and approval by the government.

The winning firms will have to deposit the money within 10 days after the auction and the successful bidders would be allowed to offer 3G services on a commercial basis from Sep 1.

India mutual fund assets surge 32 pct in April

2010-05-10T22:39:00.001+05:30

MUMBAI: Assets of Indian mutual funds surged 31.7 per cent to Rs 8.1 trillion, helped by large inflows into fixed income funds, data from the Association of Mutual Funds in India showed on Monday.

Income funds, popular among corporates and banks as a venue to park their surplus funds, saw a net inflow of Rs 1.8 trillion. Equity funds saw a net outflow of Rs 12.4 billion, the data showed.

Industry assets had plunged 19.9 per cent to Rs 6.1 trillion in March on outflows from fixed income funds.

EU Crafts $962 Billion Show of Force to Halt Crisis

2010-05-10T22:35:00.000+05:30

May 10 (Bloomberg) -- European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases to stop a sovereign-debt crisis that threatened to shatter confidence in the euro. Stocks surged around the world, the euro strengthened and commodities rallied.

Jolted by last week’s slide in the currency and soaring bond yields in Portugal and Spain, European Union finance chiefs met in a 14-hour session in Brussels overnight. The 16 euro nations agreed in a statement to offer as much as 750 billion euros ($962 billion), including International Monetary Fund backing, to countries facing instability and the European Central Bank said it will buy government and private debt.

The rescue package for Europe’s sovereign debtors comes little more than a year after the waning of the last crisis, caused by the U.S. mortgage-market collapse, which wreaked $1.8 trillion of global credit losses and writedowns. Under U.S. and Asian pressure to stabilize markets, Europe’s governments bet their show of force would prevent a sovereign-debt collapse and muffle speculation the 11-year-old euro might break apart.

“A very thick line has been drawn in the sand,” said Andrew Bosomworth, Munich-based head of portfolio management at Pacific Investment Management Co. and a former ECB official. “This is all in. What more could they have done?”

A 110 billion-euro bailout package for Greece approved last week by the EU and IMF failed to reassure investors, prompting yesterday’s renewed bid to bolster the euro.

How to Pay

“It might temporarily calm nerves but questions will come back later on how they will pay for this package when all of them need fiscal consolidation,” said Venkatraman Anantha- Nageswaran, who helps manage about $140 billion in assets as global chief investment officer at Bank Julius Baer & Co. in Singapore.

The MSCI World Index climbed 2.6 percent to 1,128 at 12:15 p.m. in Brussels. Standard & Poor’s 500 Index futures rallied 4.4 percent. The euro appreciated 2 percent to $1.30. Crude-oil futures gained 3.4 percent.

“The message has gotten through: the euro zone will defend its money,” French Finance Minister Christine Lagarde told reporters in Brussels early today after markets punished inaction last week.

ECB policy makers said they will counter “severe tensions” in “certain” markets by purchasing government and private debt, and the bank restarted a dollar-swap line with the Federal Reserve.

‘Overwhelming Force’

“This truly is overwhelming force, and should be more than sufficient to stabilize markets in the near term, prevent panic and contain the risk of contagion,” Marco Annunziata, chief economist at UniCredit Group in London, said in an e-mailed note. “This is Shock and Awe, Part II and in 3-D.”

Treasuries tumbled on investors’ increased appetite for risk, with yields on benchmark 10-year U.S. notes rising to 3.57 percent from 3.43 percent at last week’s close. German bunds also declined, sending 10-year yields up 18 basis points.

The steps came after failure to contain Greece’s fiscal crisis triggered a 4.1 percent drop in the euro last week, the biggest weekly decline since the aftermath of Lehman Brothers Holdings Inc.’s collapse. European stocks sank the most in 18 months, with the Stoxx Europe 600 Index tumbling 8.8 percent.

The ripple effect in the U.S., including a brief 1,000- point drop in the Dow Jones Industrial Average on May 6, prompted President Barack Obama to call German Chancellor Angela Merkel and French President Nicolas Sarkozy to urge “resolute steps” to prevent the crisis from cascading around the world.

Loan Package

Under the loan package, euro-area governments pledged 440 billion euros in loans or guarantees, with 60 billion euros more in loans from the EU’s budget and as much as 250 billion euros from the International Monetary Fund.

“They will have bought themselves a significant amount of time to do the right thing,” said Barry Eichengreen, an economics professor at the University of California, Berkeley.

In a step that skirts EU rules barring direct central bank lending to governments, the ECB said it will conduct “interventions” to ensure “depth and liquidity” in markets. The purchases will be sterilized, meaning they won’t increase the overall money supply in the financial system.

“This sets a precedent for the rest of the life of the Central Bank and will have likely surprised even the most seasoned observers,” said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc in London. “While the ECB’s intervention might attract bad press regarding its mandate and independence, we believe that this was necessary to short circuit the negative feedback loop which was getting more and more threatening for the global economy. ”

Central Banks Buy

Central banks in Germany, France and Italy all said they began buying government bonds today. None provided further detail.

The ECB also reactivated unlimited fixed-rate offerings of three-month loans, a key tool in the ECB’s efforts to fight the credit crisis.

In Brussels, finance ministers from the 16-nation euro region -- joined by ministers from the 11 EU countries outside the euro -- raced against time to weld the contingency lending arrangements before markets opened in Asia.

Inability to craft a convincing package in time would have left deficit-plagued countries at the mercy of the “wolfpack behavior” of speculators, Finance Minister Anders Borg of Sweden, a non-euro member, said as the meeting began.

Budget Cuts

The new war chest would be used for countries like Portugal or Spain in case their finances buckle. Deficits are set to reach 8.5 percent of gross domestic product in Portugal and 9.8 percent in Spain this year, above the euro region’s 3 percent limit. Both countries pledged “significant” additional budget cuts in 2010 and 2011, which will be outlined in May, an EU statement said.

The extra yield that investors demand to hold Greek, Portuguese and Spanish debt instead of benchmark German bonds fell from euro-era highs. The premium on 10-year government bonds plunged to 343 basis points from as high as 973 basis points for Greece. It fell to 201 basis points from 354 for Portugal and to 94 basis points from 173 for Spain.

Europe’s financial leaders sought to master the euro’s stiffest test since its debut in 1999 without wheelchair-bound Finance Minister Wolfgang Schaeuble of Germany, Europe’s largest economy, who was rushed to a hospital soon after the meeting started due to an adverse reaction to new medication. Interior Minister Thomas de Maiziere got on a last-minute flight to Brussels to take his place.

Merkel’s Meeting

As Merkel’s cabinet held a late-night meeting in Berlin on the euro rescue, her party unexpectedly lost control of Germany’s most populous state in a regional election, potentially costing her a majority in the upper house of the federal parliament.

Goaded by Germany, the ministers made a fresh commitment to closer monitoring of government finances and more rigorous enforcement of the deficit-limitation rules.

The vow to push budget shortfalls below the euro’s 3 percent limit echoes promises that have been regularly broken ever since governments in 1999 set a three-year deadline for achieving balanced budgets. The euro region’s overall deficit is forecast at 6.6 percent of gross domestic product in 2010 and 6.1 percent in 2011.

Britain, the EU’s third-largest economy, won’t contribute to a euro rescue fund, though it backs efforts to restore stability, Chancellor of the Exchequer Alistair Darling said.

“When it comes to supporting the euro, that is for the eurogroup countries,” Darling told Sky News.

Banks face fresh hit from IMF twin tax

2010-04-21T23:27:00.000+05:30

LONDON (Reuters) - To embellish Benjamin Franklin's quote: "In this world, nothing is certain but death and bank taxes."

Sure enough, European and U.S. banks could pay over $35 billion a year under twin taxes proposed by the International Monetary Fund (IMF) to recoup some of the rescue costs of the financial crisis -- and help prevent a repeat.

Support for a global bank levy has built since the United States in January proposed a 0.15 percent charge that could raise $90 billion to $117 billion over a decade.

A tax on banks is seen as inevitable following a wave of government proposals to claw back billions of dollars and euros of taxpayer cash used to bail out the industry. How to structure a levy and smooth it across borders will be a key challenge for world leaders in the next two months.

"We estimate that a U.S.-style tax on the Europeans could raise up to 19 billion euros ($25.5 billion) ... and potentially knock 6-10 percent off normalised profits," Keefe, Bruyette & Woods analyst Andrew Stimpson estimated.

The impact could range from 1 percent of profits to 21 percent, he said, with Dexia worst placed and RBS and Credit Agricole also ranking poorly.

Other banks with big balance sheets would be negatively affected, such as Deutsche Bank and BNP Paribas, while the least impacted should be deposit-rich banks, such as those in Spain and Italy, analysts said.

FAT'S IN THE FIRE?

The IMF suggests a two-pronged approach: a levy on the liabilities of financial firms to cover the cost of any future bailouts and an extra tax on profits and pay.

It is the extra levy -- dubbed a "financial activities tax", or FAT -- that surprised bankers and added heat to a row that has raged since most of the industry rebounded from a two-year financial crisis with bumper profits and bonuses for staff.

"It is potentially more onerous and potentially more wide-ranging but it would be premature to take away a radically negative conclusion," said Ian Gordon, analyst at Exane BNP Paribas in London. "A two-pronged approach wasn't expected, but we don't yet have any better idea on quantum."

The FAT proposal was unwelcome for the sector, and may penalise successful banks rather that risky behaviour, but was not a surprise given lawmakers' mood to curb excessive profits and payouts in the industry, analysts said.

The FAT would be levied on the sum of the profits and remuneration of banks. How countries define each would determine its impact, but a 2-percent FAT in Britain could raise 0.1-0.2 percent of gross domestic product (GDP).

The IMF suggests the first levy -- or financial stability contribution -- could raise 2-4 percent of GDP. A flat initial charge would be refined over time to reflect where risk lay.

A levy similar to a U.S. proposal, with national refinements to adjust for derivatives, capital, deposits and other factors, appears most likely, analysts said. They put the cost for Europe's banks at between 13 billion and 50 billion euros.

"We would not be buying into the sector until it becomes clear where the regulatory goal posts are going to be moved to," noted Bruce Packard, analyst at Seymour Pierce.

The IMF's move helped assuage government fears they risked a "first mover disadvantage" by addressing a tax ahead of peers, said Jan Putnis, a partner at UK law firm Slaughter and May.

But he said there was little in the proposals to discourage banks from taking many of the risks that led to the crisis, and some lawyers warned that as returns are dented, banks may chase riskier opportunities knowing there might be a fund, stuffed with bank taxes, to bail them out.

The IMF said directly supporting banks had cost an average of 2.7 percent of GDP across G20 countries. It was as high as 5.4 percent in Britain, 4.8 percent in Germany and 3.6 percent in the United States.

News that Goldman Sachs has earmarked an average of $166,000 for each employee for the first three months of this year stoked criticism that bankers reap the profits while taxpayers bear the cost of failure.

Britain, which was first to propose a global levy, welcomed the IMF move and is hopeful of clinching agreement. But others, such as Japan and Canada, whose banks avoided problems in the financial crisis, oppose it.

A senior Canadian official doubted there would be wide support across G20 countries as priority should be on toughening capital standards -- which could be at risk of getting crowded out by ideas such as a bank levy.

Iron ore prices reach $190/mt

2010-04-21T07:24:00.001+05:30

Week 16 opened with a bang with the Indian spot prices making a quantum jump of almost USD 10 per tonne since 16th April. The unprecedented escalation seems unstoppable leaving veterans exasperated. It is noteworthy that the gradient has become steeper with each passing days from 1% in mid February to 11% during the course of last one week.

The following factors needs to be mentioned

1. After the banishing import of iron ore below Fe 60% by Chinese traders India could play only second fiddle as the composition of Indian iron ore is skewed towards low grade. As a result, spot prices of high grade iron ore from India have sky rocketed. Although the CNF prices seem to be prevailing at USD 190 per tonne, freakish cases of USD 195 have also been heard on week opening.

2. Prevailing mining mess in India has further fanned the fire with curtailed supply especially on East Coast.

3. The three mining behemoths viz., Vale , Rio Tinto and BHP Billiton have been playing truant to the roost by withholding supplies to leverage negotiating power in contractual discussions creating a situation of "take it or leave it " for Chinese buyers.
4. Against the backdrop of limited ore supply, traders are postponing selling in anticipation of better realization thereby supporting the hike.

However all the fun and frolic is not devoid of an element of scepticism as the tenants of this surge seems artificial rather than market driven.

1. In all likelihood Chinese buyers will bulk under the burgeoning costly ore prices as the finished demand is not increasing proportionately . Domestic prices have already showed signs of waning towards the weekend when the prices of long and flat product dipped slightly.

2. Shanghai equities slumped the most in 6 weeks due to the suspension of lending from banks to third home buyers in some areas.

3. Once the Chinese buyers acquiesce to the demands of the biggies naturally the spot prices will be doused.

The iron ore prices seems all set for a turbulent phase in the coming weeks in view of the above paradoxical reasons however clarity will dawn after the shaping of price trend in the domestic market during the coming week.

Goldman Sachs Says It Didn’t Mislead Investors; Profit Jumps

2010-04-20T23:48:00.000+05:30

Goldman Sachs Group Inc., facing a fraud lawsuit from U.S. regulators, reported net income almost doubled in the first quarter and said it didn’t mislead investors.

“This all seems to be at root about whether someone intentionally misled someone, and that’s not something we would approve of or sanction,” Goldman Sachs Co-General Counsel Greg Palm told analysts on a conference call today. He spoke after the firm said earnings jumped 91 percent to $3.46 billion, or $5.59 a share, surpassing analysts’ estimates.

Goldman Sachs, led by Chief Executive Officer Lloyd Blankfein, finds itself fending off regulatory claims while cementing its position as the most profitable investment bank in Wall Street history. The Securities and Exchange Commission accused the firm of failing to tell investors in a 2007 collateralized debt obligation that hedge fund Paulson & Co., which planned to bet against the CDO, helped select the underlying assets.

Goldman Sachs had “no incentive” for the deal to fail, and lost more than $100 million on the transaction, Palm said. The firm was “somewhat surprised” when the SEC filed its suit on April 16, as “no one had told us in advance,” he said.

Fallout Eyed

Blankfein, 55, didn’t refer specifically to the suit today, saying in a statement, “In light of recent events involving the firm, we appreciate the support of our clients and shareholders, and the dedication and commitment of our people.”

Shareholders said concern about potential fallout from the accusations would supersede the earnings report. The stock, which fell 13 percent on April 16 after the SEC filed its case, fell $1.17 to $162.15 at 9:38 a.m. in New York Stock Exchange composite trading.

Ralph Cole, a senior vice president in research at Ferguson Wellman Inc., is among investors who said they are concerned the case could hurt Goldman Sachs’s reputation and cause clients to switch their business to other firms. Another worry is that the case could lead to additional lawsuits against the bank and add impetus to financial-reform efforts that would erode Goldman Sachs’s earnings potential.

Reputational Risk

“I don’t think the cost of this one suit’s the big deal, not certainly compared to what they make,” said Cole, whose firm manages $2.6 billion including Goldman Sachs stock. “It’s what does this do to their reputation and what does this do to the industry because of the current legislation going through?”

In the U.K., meantime, Britain’s financial regulator said Goldman Sachs’s London units will be formally investigated for fraud. “The Financial Services Authority has decided to commence a formal enforcement investigation into Goldman Sachs International in relation to recent SEC allegations,” the FSA said in an e-mailed statement.

Goldman Sachs said revenue from fixed-income, currencies and commodities trading, which contributed more than half of revenue last year, rose 13 percent in the first quarter to an all-time high of $7.39 billion from $6.56 billion. That beat estimates for $5.95 billion from Howard Chen at Credit Suisse Group AG and $6.09 billion from Roger Freeman at Barclays Capital.

Bank of America Corp. and JPMorgan Chase & Co., the two biggest U.S. banks by assets, both reported record fixed-income revenue last week of $5.52 billion and $5.46 billion respectively.

Investment-Banking Revenue

“We’re looking at a great year for capital markets firms,” Thomas Brown, CEO of Second Curve Capital LLC and founder of bankstocks.com, said yesterday.

Equities-trading revenue rose 18 percent to $2.35 billion from $2 billion a year earlier, Goldman Sachs said. Gains from principal investments, which includes the company’s stakes in Industrial & Commercial Bank of China Ltd. as well as real estate and other companies, were $510 million compared with a net loss of $1.41 billion in the first quarter of 2009.

Investment-banking revenue climbed 44 percent to $1.18 billion from $823 million last year. Within that, fees from financial advice fell 12 percent to $464 million from $527 million and equity-underwriting revenue surged to $371 million from $48 million. Debt underwriting generated $349 million compared with $248 million a year earlier.

Compensation and benefits, the firm’s biggest expense, increased 17 percent to $5.49 billion in the quarter, or 43 percent of the firm’s overall revenue. The cost compared with $4.71 billion in the first quarter of 2009, when the firm set aside 50 percent of revenue.

The bank said the percentage of quarterly revenue put aside for compensation expense was the lowest for any first quarter.

Asian Stocks Rise on Divided Goldman Sachs Vote, Citigroup, Yen

2010-04-20T06:44:00.000+05:30

Asian stocks rose, led by finance companies, as people familiar with the matter said regulators were split on suing Goldman Sachs Group Inc., easing concern over the impact increased scrutiny on banks will have on profits.

Sumitomo Mitsui Financial Group Inc. rose 1.4 percent in Tokyo as Morgan Stanley upgraded the nation’s banks and Citigroup Inc.’s profit beat estimates. National Australia Bank Ltd., the nation’s third-biggest lender, climbed 2.8 percent in Sydney. Honda Motor Co., which gets 44 percent of its sales in North America, gained 1.7 percent in Tokyo after the yen weakened against the dollar.

The MSCI Asia Pacific Index gained 0.6 percent to 126.30 as of 9:44 a.m. in Tokyo. The gauge slumped the most since Feb. 19 yesterday after regulators sued Goldman Sachs for fraud related to collateralized debt obligations. Securities and Exchange Commission officials voted 3-2 to pursue the case, two people familiar with the matter said.

“The divided vote on Goldman suggests excessive regulation that would reduce bank earnings will be avoided,” said Fumiyuki Nakanishi, a senior strategist at SMBC Friend Securities Co. in Tokyo.

Futures on the Standard & Poor’s 500 Index advanced 0.1 percent. The gauge rose 0.5 percent yesterday as the index of U.S. leading indicators rose in March by the most in 10 months.

Sesa Goa Profit Increases on Higher Iron-Ore Demand From China

2010-04-19T22:44:00.000+05:30

April 19 (Bloomberg) -- Sesa Goa Ltd., India’s biggest iron-ore exporter, said fourth-quarter profit more than doubled on higher demand for the steelmaking raw material from China.

Group net income climbed to 12.2 billion rupees ($273 million) in the three months ended March 31 from 5.5 billion rupees a year earlier, the Panaji, Goa-based company said today in an e-mailed statement. Net sales rose to 28.1 billion rupees from 15.8 billion rupees.

Sesa Goa, a unit of Vedanta Resources Plc, exports most of its production to steelmakers in China and Japan. China is the world’s largest buyer of iron ore and last year increased imports by 42 percent to a record 628 million metric tons. Chinese imports of the iron ore by sea could rise 47 percent this year from 2008 levels, Johannesburg-based Kumba Iron Ore Ltd. said on April 15.

Average cash prices of 62 percent iron-content ore delivered to Tianjin port in China jumped 87.5 percent to $131.6 a metric ton in the three months ended March 31, compared with $70.2 a ton a year ago, according to the Steel Index.

Citigroup Net More Than Doubles as Loan Costs Decline

2010-04-19T20:51:00.000+05:30

April 19 (Bloomberg) -- Citigroup Inc. said profit more than doubled as the global economic rebound trimmed costs for bad loans, trading revenue surpassed analysts’ estimates and the value of subprime mortgage bonds increased.

First-quarter net income of $4.43 billion followed a loss of $7.58 billion in the fourth quarter and a profit of $1.59 billion in the first three months of 2009, New York-based Citigroup said today in a statement. Adjusted per-share earnings were 14 cents. Analysts in a Bloomberg survey estimated the company would break even.

Chief Executive Officer Vikram Pandit, who is taking a $1 annual salary until the company turns consistently profitable, said in February that 2010 may show the “earnings potential of the new Citi” after two straight annual losses totaling $29 billion. Profit was the highest since the second quarter of 2007 as bad-loan costs fell 16 percent to $8.37 billion.

“They are now feeling themselves to be sufficiently reserved and they’re beginning to reduce credit expenses,” said Gary Townsend, president of Hill-Townsend Capital LLC, a Chevy Chase, Maryland-based investment firm, in an interview on Bloomberg Television. “That falls directly to the bottom line.”

Citigroup, which climbed 38 percent on the New York Stock Exchange this year before today, advanced 19 cents, or 4.2 percent, to $4.75 in composite trading at 9:46 a.m.

Assets Increase

The bank’s assets increased 8 percent to $2 trillion, after accounting rule makers closed a loophole that had allowed banks to keep credit-card loans and other debt instruments off their balance sheets.

Revenue from continuing operations shrank 5.8 percent to $25.4 billion, while consumer-banking revenue rose 3.1 percent to $8.08 billion, Citigroup said.

Chief Financial Officer John Gerspach said on a conference call with reporters that the company took $800 million of write- ups on subprime mortgage bonds. Writedowns on subprime bonds were among the biggest causes of Citigroup’s losses over the past two years.

“Our performance was aided by stability in the capital markets and improvement in the global business climate,” Pandit said in the statement.

Under bank accounting rules, bad-loan costs include charge- offs during the quarter as well as any increases or decreases of loss reserves for future defaults.

Charge-Offs

Charge-offs in the first quarter climbed to $8.38 billion from $7.28 billion. Overall, the bad-loan costs fell because the bank released $18 million from its reserves, compared with an increase a year earlier of $2.63 billion.

Revenue from trading and investment banking fell 34 percent to $8 billion. Citigroup had $6.59 billion of trading revenue, exceeding Credit Suisse Group AG analyst Moshe Orenbuch’s estimate of $5 billion.

The bank had $1.06 billion of mergers-advisory and underwriting revenue. Orenbuch forecast $1.1 billion.

Citigroup Vice Chairman Edward “Ned” Kelly will become chairman of the investment-banking division, according to an internal memo obtained by Bloomberg News and confirmed by spokeswoman Danielle Romero-Apsilos.

Revenue in Citigroup’s global transaction services division, which manages bank accounts for corporations and acts as securities custodian for fund managers, was $2.44 billion, up from $2.37 billion.

The Citi Holdings division, which includes businesses that Pandit has said he wants to exit, had revenue of $6.55 billion, compared with $4.06 billion a year earlier.

Government’s Stake

Citigroup, which had to get a $45 billion bailout in 2008, repaid $20 billion of the funds in December. The remaining $25 billion was converted by the Treasury Department into 7.7 billion Citigroup shares, which have a market value of about $35 billion.

“All of us at Citi recognize that we would not be where we are without the assistance of American taxpayers,” Pandit said in the statement. He said the company was “gratified” to be able to repay the government “with a substantial return, as well as create a significant increase in the value of their equity in Citi.”

JPMorgan Chase & Co.’s first-quarter profit climbed 55 percent from a year earlier, and Bank of America Corp.’s fell 25 percent. Goldman Sachs Group Inc. reports earnings tomorrow and Morgan Stanley is scheduled for April 21.

C.K. Prahalad, Management Guru, Dies

2010-04-18T22:35:00.000+05:30

Coimbatore Krishnarao Prahalad, one of India's best-known management exports and a distinguished professor at the Ross School of Business at the University of Michigan, died Friday in San Diego after a brief illness. He was 68 years old.

Mr. Prahalad, a world authority on management thinking, was most famous for his unconventional thinking on the "bottom-of-the-pyramid" approach. He followed this up with a book of the same name in 2004. In his book, "The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits," Mr. Prahalad proposes that businesses should start looking at the billions of poor all over the world as value-demanding consumers and not just as those on the fringes of society who can ill afford to buy products. The book went on to become a New York Times bestseller.

Born in Chennai in the Indian state of Tamil Nadu in 1941, Mr. Prahalad was one of nine children of a Sanskrit scholar and judge. He joined Union Carbide in 1960 soon after completing his bachelors in Physics from Loyola College in Madras. He then did his post graduation at the Indian Institute of Management in Ahmedabad, completing his studies there in 1966, and went on to do a PhD on multinational management at the Harvard Business School in 1972.

Mr. Prahlad's theory is believed to have affected many Indian and developing world retail outlets, for instance driving consumer-goods companies like Godrej and Hindustan Lever to come up with small-sized sachets of products like shampoo that could be sold as individual portions.

In 2009, the government of India conferred upon him the Padma Bhushan, one of India's highest civilian awards.

Mr. Prahalad's repertoire includes consulting for some of the world's leading companies, such as AT&T, Citigroup, Kodak, Oracle, Philips and Unilever. Besides "The Fortune at the Bottom of the Pyramid," his other books include "Competing for the Future" with Gary Hamel, "The Future of Competition" with Venkat Ramaswamy and "The New Age of Innovation" with M.S. Krishnan

Goldman Sachs Sued by SEC for Fraud Tied to CDOs

2010-04-16T22:11:00.000+05:30

April 16 (Bloomberg) -- Goldman Sachs Group Inc. was sued by U.S. regulators for fraud tied to collateralized debt obligations that contributed to the worst financial crisis since the Great Depression. The firm’s shares tumbled as much as 16 percent and financial stocks slumped.

Goldman Sachs misstated and omitted key facts about a financial product tied to subprime mortgages as the U.S. housing market was starting to falter, the Securities and Exchange Commission said in a statement today. The SEC also sued Fabrice Tourre, a Goldman Sachs vice president.

“The product was new and complex but the deception and conflicts are old and simple,” SEC Enforcement Director Robert Khuzami said in the statement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”

The SEC alleged that Goldman Sachs, led by Chief Executive Officer Lloyd Blankfein, 55, structured and marketed CDOs that hinged on the performance of subprime mortgage-backed securities. The New York-based firm failed to disclose to investors that hedge fund Paulson & Co. was betting against the CDO, known as Abacus, and influenced the selection of securities for the portfolio, the SEC said. Paulson wasn’t accused of wrongdoing.

Financial Stocks Slump

A gauge of banks and brokerages in the Standard & Poor’s 500 Index sank 3.9 percent for the top loss among 24 groups after the SEC announced its action. Bank of America Corp. and JPMorgan Chase & Co. lost at least 3.5 percent as all 27 companies in the S&P 500 Diversified Financial Index declined.

“This gave the politicians everything they need to push for stronger financial reform and it’s going to further shake investor confidence in Wall Street,” said Matthew McCormick, a banking-industry analyst and portfolio manager at Bahl & Gaynor Inc. in Cincinnati, which oversees $2.8 billion.

Shares of Goldman Sachs fell $23.64, or 13 percent, to $160.63 as of 11:37 a.m. in New York Stock Exchange trading. It was the biggest one-day drop since Jan. 20, 2009.

Goldman Sachs spokesman Lucas Van Praag didn’t return a call and an e-mail seeking comment. A call to Richard Klapper, an attorney for Goldman Sachs at Sullivan & Cromwell LLP, wasn’t returned. Tourre, reached by phone in London today, declined to comment. A call to Pamela Chepiga, a lawyer for Tourre at Allen & Overy LLP, wasn’t returned.

Stefan Prelog, a spokesman for New York-based Paulson & Co., said he couldn’t comment. The company oversees $32 billion.

Financial Shares Tumble After Goldman Sachs Charged With Fraud

2010-04-16T21:08:00.000+05:30

April 16 (Bloomberg) -- Financial shares tumbled after the Securities and Exchange Commission charged Goldman Sachs Group Inc. with fraud related to packaging and selling collateralized debt obligations linked to subprime mortgages.

Goldman Sachs, the most profitable firm in Wall Street history, tumbled 10 percent to $165.02 in New York Stock Exchange composite trading at 11:12 a.m. in New York for the biggest intraday decline in a year.

A gauge of banks and brokerages in the Standard & Poor’s 500 Index sank 4.3 percent for its biggest decline since February 4 and the top loss among 24 groups. Bank of America Corp., Morgan Stanley and JPMorgan Chase & Co. lost at least 4.3 percent as all 27 companies in the S&P 500 Diversified Financial Index declined at least 1.7 percent after the SEC announced its action. Berkshire Hathaway Inc. Class A shares tumbled 5.1 percent.

Goldman Sachs misstated and omitted key facts about a CDO as the U.S. housing market was beginning to falter, the Securities and Exchange Commission said in a statement today. The SEC also sued Fabrice Tourre, a Goldman Sachs vice president.

“I wouldn’t want to own Goldman stock right now,” said Keith Goddard, president of Capital Advisors, which oversees $810 million in Tulsa, Oklahoma. “If this turns out to be remotely true, do you want to be doing business with someone who doesn’t have your best interests in mind? That’s the accusation here.”

Govt imposes duty on cotton exports to check rising prices

2010-04-15T00:13:00.001+05:30

NEW DELHI: The government has imposed a duty of Rs 2,500 per tonne on raw cotton exports in order to moderate prices of the commodity in the domestic market and help the local textiles industry.

The Central Board of Excise and Customs has notified the export duty on the natural fibre, which has seen a sharp rise in prices in the recent few months.

The measure follows the decision by a high-level meeting chaired by Finance Minister Pranab Mukherjee last week.

The export duty has been levied for six months, an official in the textiles ministry said.

The domestic textile industry has been pitching for cotton export restrictions in the wake of steep rise in prices of the natural fibre.

The price of Shankar-6 variety, the premium quality of cotton, has risen to around Rs 28,500 per candy from around Rs 25,000 per candy (356 kg) in November 2009.

India, the world's second largest cotton producer, exported 2.36 million bales (of 170 kg each) of cotton last season (from October 2008 to September 2009).

Besides, the government is taking steps to ensure that there is adequate availability of cotton in the country.

"It was decided that there should be a carry-forward stock of about 50 lakh bales of raw cotton at the beginning of the next cotton season (starting October 2010)," the textiles ministry official said.

Besides, a three per cent duty on export of cotton waste has also been imposed.

Last week, the government also imposed restrictions on export of cotton yarn, making it mandatory for exporters to register their shipments with the textiles commissioner.

As per a notification by the Directorate General of Foreign Trade, export consignments of cotton yarn would now have to be registered with the textiles commissioner before they can leave the country.

One year on, challenges remain at Mahindra Satyam

2010-04-15T00:08:00.000+05:30

A year after taking over the former Satyam Computers, the Mahindra Satyam officials say that a lot has changed for good in the internal systems of Satyam, reports CNBC-TV18's Appaji Reddem.

Exactly a year after taking over Satyam, a visibly confident management of Mahindra Satyam says the fundamentals of the company have been changed to ensure better transparency.

CP Gurnani, CEO, Mahindra Satyam, said, "The fundamental change that happened in the organization was that 14 layers of management were reduced to seven layers. That means between CEO to my youngest engineer trainee, there are seven layers. Fundamentally, the structural changes that have happened around a better transparency, more availability of data, better collaboration between teams and essentially what you see is that customer centricity."

Despite legal issues, the firm also ensures that the much awaited re-statement of Satyam accounts will happen in the coming June as scheduled.

Vineet Nayyar, Chairman, Mahindra Satyam, said, "As the schedule goes, we believe, we will be able to meet the timelines."

The Corporate Affairs Minister Salman Khurshid, who had inaugurated Mahindra Satyam's 26 acre SEZ today, said one needs to take law into account before thinking of meeting timelines, especially with regard to the re-statement of Satyam accounts.

Khurshid stated, "There are technical matters that obviously have to be taken into account. Not everything that we wish and desire is possible immediately because we have to take the law into account. There are many other aspects related to recovery and revival of Mahindra Satyam."

Anand Mahindra tells Mahindra Satyam employees that war is over and it's time to dance. But it's definitely a tough road ahead for Mahindra Satyam as several of documents required to re-state the accounts are still locked up with the Central Bureau of Investigation. And the lawsuits by the US Securities and Exchange Commission are expected to be one of the major troubles for the company.

Government to discuss allowing FDI in retail

2010-04-12T22:57:00.001+05:30

The government of India is planning to allow multi-brand retail to the foreign direct investment (FDI) showing its resolve to open up the sector to international chains.

The department of industrial policy and promotion (DIPP) was written a letter to the finance ministry and is also carrying out discussions with the agriculture ministry about the allowing FDI into the sector.

DIPP is responsible for framing the foreign investment policy for the central government. The department is under the commerce and industry ministry and is proposing to allow 100% FDI in defence production.

"The move to open up retail is part of the government's strategy to plug gaps in the food supply chain and more importantly, help bring down the difference between farm-gate prices and retail prices," said a DIPP official.

Presently, the government allows 51% foreign investment in single-brand retail only and it has been reluctant in opening up the sector to the FDI fearing blackish from the political parties.

The government will put forward the argument that the control of the units will remain in the Indian hands. The official indicated that government will put a cap of 49%.

International chains like US-based Wal-Mart and Germany's Metro AG who have set up shops in the country have been asking the government to open up the sector for FDI.

All-India 3G bid at Rs 4,324 cr; Delhi, Guj see highest prices

2010-04-12T22:54:00.000+05:30

NEW DELHI: The third day of spectrum auction for 3G telephony saw the all-India licence bid touching Rs 4,324 crore at the end of 16 rounds, ensuring that the government would get a minimum of Rs 17,636 crore.

With today's closing, the bid has gone up nearly 24 per cent more than the base price of Rs 3,500 crore and 5.85 per cent higher than Rs 4,085 crore in the last round on Saturday.

The government has set a target of garnering up to Rs 35,000 crore from sale of spectrum for 3G and broadband wireless access (BWA) services.

The Rs 416.43-crore bid for Delhi was the highest among all metros. The bid for Gujarat at Rs 416.42 crore almost matched the one for Delhi, according to details available with the Department of Telecom (DoT).

The bid for Gujarat also saw the highest increase of Rs 20.82 crore from the last round of auction on Saturday.

Andhra Pradesh, Tamil Nadu and Maharashtra saw bids rising to Rs 404.54 crore, while that for Karnataka was Rs 396.58 crore ahead of Mumbai at Rs 392.66 crore.

The bid for Rajasthan was Rs 159.47 crore, UP (E) Rs 157.66 crore, Kolkata, Kerala Rs 150.16 crore each, Madhya Pradesh Rs 149.02 crore, Haryana Rs 140.09 crore and Punjab Rs 123.63 crore.

There were negative demands in nine circles -- West Bengal, HP, Bihar, Orissa, Assam, North East, J&K and Haryana. Excess demands were seen for eight circles with the maximum being for UP (E). These circles did not see any increase in their bid price since Friday.

The government is auctioning three slots of 3G airwaves in 17 telecom service areas. Only two slots are up for sale across the country for broadband airwaves, which will begin after the conclusion of the 3G auctions.

On Friday, the first day of the 3G spectrum sale process, the government had received bids worth a total of Rs 3,919 crore for a pan India licence- this was 12% higher than the base price of Rs 3,500 crore.

Feb industrial output rises at slower-than-expected 15.1%

2010-04-12T22:42:00.002+05:30

The Index of Industrial Production (IIP) for the month of February rose at a slower-than-expected 15.1% as against 16.7% on a month-on-month basis, helped by stimulus measures that boosted domestic demand. The output is expected to ease further following moves to withdraw an economic stimulus, including a interest rate hike in March. A CNBC-TV18 poll indicates a figure of 16.5% for the month.

While the manufacturing sector for grew at 16% in February as compared to 17.9% in January 2010, the mining sector posted a growth at 12.2% versus 14.6% (MoM). The electricity sector too grew at 8.4% in February versus 10.7% in January.

Basic goods for the month grew at 6.7% as compared to 5.6% growth posted in January. The capital goods sector, which showed a growth of 56.2% in January, grew 44.4% in February and the intermediate goods posted 15.6% growth versus 21.3% in January. The consumer goods for the same month grew at 8.9% as against 4.2%.

A pick up in the economy has seen a rise in inflation with the headline number poised to breach 10% in March, above February's 9.89%.

Headline inflation, which was initially driven by high food prices, is now getting a push from other segments. Inflation in manufacturing accelerated to 7.4% in February from 6.5% in January, a sign that inflation is fast becoming a demand-driven problem.

The Reserve Bank of India, citing inflationary pressures and an improving economy, hiked key rates by 25 basis points last month and is expected to raise the rates again by at least the same amount at its policy review on April 20.

Commenting on the figures Atsi Sheth, Chief Economist at Macro-Sutra said, this was still an excellent number. “We stick by our view that the RBI will increase the repo and reverse repo rates by a modest 25 basis points at its policy review on April 20.”

"The number to watch now is inflation, and if it stays in the 10-percent range, especially with non-food inflation not accelerating, this bodes well for our forecast that the RBI's post-April 20 tightening will be measured and moderated," she added.

The numbers are certainly lower than the consensus expectation but some of this was possibly given the core index numbers because there was some slackness on steel, cement and so on, said Abheek Baruah of HDFC Bank. “That has probably got reflected in manufacturing and I think there has been some moderation in both durables and capital goods production, which was again expected because the surge in both December and January have been quite spectacular. So it is just moderation, I wouldn’t be too disappointed but certainly lower than expectations.”

Preferring to use a month-on-month seasonally adjusted numbers rather than year-on-year number, Samiran Chakrabarty, Chief Economist at Standard Chartered Bank says, from that perspective, it’s about 1% MoM drop seasonally adjusted. “However, I am not too surprised because typically we have seen that if in a particular month, the MoM number is very high as happened in January where it was almost a 5% MoM growth, then the next month is somewhat down. So that kind of an adjustment has happen and that’s why this number has come out lower than what the market would have been anticipating. I am not too worried about any reversal of trend in industrial production. I think the momentum is still on.

The yield on the benchmark 10-year bond fell two basis points to 8.03% after the news, but climbed back to 8.04%.

Commenting on the movement, Arun Kaul Executive Director at Central Bank of India, said, “The bond market has seen some worries, the last week auction the yield went up at 7.96 and there on the secondary market the yields have moved upto 8.06% right now. The worry in the market is two-fold; one, inflation has started moving up, we thought inflation was only in primary articles but it looks like non-primary articles it is spilling over too, particularly, the commodity prices are moving up so that is a cause of concern. Particularly oil, oil has moved to USD 86-87 per barrel that is very worrisome. Second, is in terms of the RBI possible action. There is a feeling in the market that the RBI could increase CRR and it could even increase the repo rate to contain inflationary expectations. So that worry is leading to expectation whereby players are not willing to initiate large positions and yields have moved up.”

Finance Minister Pranab Mukherjee has said the government could consider to further roll back stimulus, after hiking factory gate duties in the February budget.

The March purchasing managers' index for India showed the pace of manufacturing activity slowed down, dropping from a 20-month-record in February, as mounting cost pressures took a toll on expansion in output.

India, the world's second fastest growing economy after China, is expected to grow 8.5% in the current fiscal year and 9% in the next.

Greek Stocks, Bonds Rally on $61 Billion EU Aid Plan

2010-04-12T22:30:00.000+05:30

April 12 (Bloomberg) -- Greek stocks and bonds rallied and the euro gained after European governments offered the debt- plagued nation a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates.

Forced into action by a surge in Greek borrowing costs to an 11-year high, euro-region finance ministers said yesterday they would offer as much as 30 billion euros in three-year loans in 2010 at around 5 percent. Its three-year bond yields plunged 90 basis points to 6.18 percent. As much as 15 billion euros would also come from the International Monetary Fund.

“This is a huge amount,” said Stephen Jen, managing director at BlueGold Capital Management LLP in London and a former IMF economist. “This is more than a bazooka. They have gone nuclear on the issue of Greece. In the short run, the market is short Greek assets so we’ll get a rally in those.”

With the euro facing the stiffest test since its debut in 1999, the 16-nation bloc maneuvered around rules barring the bailout of debt-stricken countries, aiming to prevent Greece’s financial plight from spreading and to mute concerns about the currency’s viability. Germany also abandoned an earlier demand that Greece pay market rates.

Bonds Surge

The yield premium investors demand to hold Greek 10-year debt instead of benchmark German bunds dropped 67 basis points to 331 basis points as of 9:58 a.m. in London. Greece’s benchmark ASE Index climbed 4.8 percent, led by National Bank of Greece SA. That would be its biggest one-day gain since Feb. 9.

The yield on Greece’s 2-year note fell 149 basis points to 5.67 percent, the biggest one-day decline since at least 1998 when Bloomberg began collecting the data. Credit-default swaps on Greek sovereign debt tumbled 69 basis points to 357, the largest single-day drop ever, according to CMA DataVision prices.

The euro rose as much as 1.4 percent to $1.3629. The single currency has dropped 4.9 percent against the dollar this year as the discord within Europe over the response to the Greek crisis sapped faith in Europe’s economic management.

Bond investors’ response will determine whether Greece needs to tap the aid, a Greek Finance Ministry official said in Athens yesterday. Finance Minister George Papaconstantinou said the government plans to go ahead with debt sales, including a dollar-denominated bond, without taking up the offer for aid.

Beyond 2010

The package “sends a clear message that nobody can play with our common currency and our common fate,” Greek Prime Minister George Papandreou told reporters in Larnaca, Cyprus.

Yesterday’s teleconference of euro-region officials, which included European Central Bank President Jean-Claude Trichet, left open just how much Greece might need in 2011 and 2012, the final years covered by the package.

“It shows there is money behind this,” Luxembourg Prime Minister Jean-Claude Juncker told reporters in Brussels yesterday after chairing the conference call. “The initiative for activating the mechanism rests with the Greek government.”

Europe’s contribution would represent about two-thirds of any aid, with the IMF chipping in the rest, European Union Economic and Monetary Commissioner Olli Rehn said.

“We cannot speak on behalf of the IMF, but we know that they are ready to cooperate and contribute with a substantial amount,” Rehn said. Greek, EU and IMF officials will meet today to start working on details.

IMF ‘Ready’

The IMF was “ready to join the effort,” Managing Director Dominique Strauss-Kahn said an in e-mailed statement, without giving more details on the IMF contribution.

European rhetorical support in February and March failed to prevent Greek 10-year bond yields from soaring to 7.51 percent on April 8, according to Bloomberg generic prices, amid concern that Papandreou’s government will be swamped by its bills.

The jump in Greek yields to the highest since December 1998 helped overcome resistance to an aid package in Germany, which as Europe’s biggest economy would contribute almost a third of the loans, the largest single share.

Germany “has lost the competition,” said Carsten Brzeski, an economist at ING Group in Brussels who used to work at the European Commission. “All that fuss and talk about not putting taxpayer money at risk has been made obsolete.”

In the compromise hammered out yesterday, the European loans would be tied to Euribor and priced above rates charged by the IMF, a nod to German opposition to subsidizing a country that lived beyond its means. The EU will offer a mix of fixed- rate and floating-rate loans.

Record Deficit

The IMF would charge less than the EU. Both types of funding would be offered at the same time, Rehn said. Transfers to Greece would be made by the ECB.

Greece last week raised its estimate of the 2009 deficit from 12.7 percent of gross domestic product to 12.9 percent, the highest in the euro’s history and more than four times the EU’s 3 percent limit.

While rules dictated by Germany in the 1990s foresee fines for countries that go over the limit, no penalty has ever been imposed. Germany also led the charge to loosen the rules in 2005 after three years of excessive deficits.

While all euro-region governments vowed to contribute, some would need parliamentary approval. Ireland, itself reeling from the financial crisis, would require “national legislation,” Finance Minister Brian Lenihan said in an e-mailed statement.

No Request

The Greek government has yet to request a European lifeline, confident that this year’s planned budget cut of 4 percentage points will stem speculation that it is heading for the euro region’s first-ever default. Fitch Ratings highlighted that risk by shaving Greece’s debt rating to BBB-, one level above junk, on April 9.

A combination of higher taxes, lower spending and salary cuts for public workers has prompted strikes and protests against Papandreou, a socialist elected in October on promises of raising wages.

The EU showed no sign of demanding further Greek austerity measures. Rehn hailed the Greek government for implementing “a very bold and ambitious program.”

Greece needs to raise 11.6 billion euros by the end of May to cover maturing bonds, and another 20 billion euros by the end of the year to pay debt coupons and finance this year’s deficit.

The debt agency plans to offer 1.2 billion euros of six- month and one-year notes tomorrow, in a test of investor confidence.

The amount provided by European governments was larger than expected, said Erik Nielsen, London-based chief European economist at Goldman Sachs Group Inc., though approving money transfers through national parliaments and disbursing the funds on time remains an issue. He expressed concern about Greece’s solvency in the longer term.

“I remain a tad worried about the process of making the money available in time as well as (very) concerned about the issue of longer term sustainability,” Nielsen wrote in a note to investors.

Temasek in Talks to Invest in GMR, Indian Utilities

2010-04-06T19:46:00.000+05:30

April 6 (Bloomberg) -- Temasek Holdings Pte Ltd., the Singapore state investment company, is seeking stakes in Indian power producers including GMR Group as they double capacity to meet demand in the world’s second-fastest growing major economy.

“We are in advanced discussions with GMR,” Wong Kim Yin, managing director for energy investments at Temasek, told reporters at a power conference in Singapore today. “We are trying to get exposure to the domestic India markets.”

Temasek, manager of about S$172 billion ($123 billion) of assets, is betting utilities will ramp up generation in the next seven years to overcome power shortages that India’s government says are constraining economic growth. The 17-member Bombay Stock Exchange Power Index has climbed 62 percent in a year, lagging behind the 70 percent gain in the main Sensitive Index.

“Temasek is probably entering at the right time as the sector and the company have a lot to offer in the short term,” said Abhineet Anand, a Mumbai-based analyst with Antique Stock Broking Ltd. He recommends investors buy shares of GMR Infrastructure Ltd., a unit of GMR Group, with a one-year price target of 82 rupees.

GMR Infrastructure fell 0.2 percent to 63 rupees at 1:22 p.m. in Mumbai trading compared with a 0.1 percent gain in the Sensitive Index. The stock has climbed 24 percent in a year.

A. Subba Rao, chief financial officer of GMR Group, denied on Dec. 15 an Economic Times report that the group was in talks with Temasek and ICICI Bank Ltd. to raise funds to build power plants. He couldn’t be immediately reached at his office today for comment.

Sources of Funding

“Typically we look more at investing in power companies than in power projects,” Wong said, in reply to a question on whether Temasek was investing in new generators in India.

Temasek, which has invested in resources companies and financial institutions including ICICI, India’s second-biggest lender, is in talks with “a number of players,” Wong said.

Finance Minister Pranab Mukherjee said last month that inadequate supply of coal, gas and power is “worrying” as it constrains economic growth. Prime Minister Manmohan Singh called for a partnership between the government and companies to increase power generation.

“In places like India and China, sources of funding remain domestic,” Temasek’s Wong said at the conference. “It is unclear if funding will continue without government stimulus.”

Equity markets offer sources of funding and Singapore is relatively untapped by the power industry, he said.

Indian utilities plan to increase generation capacity to 313,572 megawatts by March 2017 from 156,092 megawatts as of Dec. 31 to curb peak-hour shortages. One megawatt is enough to power about 200 middle-class Indian homes.

Growth in the $1.2 trillion economy may accelerate to as much as 8.75 percent in the year ending March 2011 from an estimated 7.2 percent in the previous financial year, Mukherjee said on April 2.

Apple Sells 300,000 iPads on First Day

2010-04-05T20:33:00.000+05:30

Apple Inc. said it sold more than 300,000 iPads in the U.S., including preorders, on the first day the device was available, hitting all but the highest estimates for the product.

Media attention and early crowds across the country at Apple retail stores had some expecting a bigger figure, with one analyst predicting as many as 700,000 iPad sales the first day. Compared with other Apple product launches, however, analysts said the results were still impressive.

"It looks like initial sales are starting solid," ThinkEquity analyst Vijay Rakesh said.

Apple also said users downloaded more than one million applications and 250,000 e-books from its iBookstore during the first day.

Apple hadn't offered iPad sales forecasts, but over the weekend, swarms of buyers flocked to stores after weeks of publicity about the tablet-style computer. Despite long early lines, crowds thinned throughout the day, and few stores sold out of the device.

With the iPad, Apple is attempting to turn a niche product category—tablet-style computers—into a mainstream device used to watch movies, read books and newspapers, and do some simple computing. Its success will depend on whether less-technology-savvy consumers embrace the device even as Apple fans clamor for it.

Sales estimates varied widely. Piper Jaffray analyst Gene Munster more than doubled his initial first-day sales estimate to between 600,000 and 700,000 units, including preorders, based on longer-than-expected lines at stores and high expectations for online preorders. He had also lifted his 2010 forecast to 5.5 million units from 2.8 million.

Meanwhile, Kaufman Bros. analyst Shaw Wu predicted sales between 250,000 and 300,000 units for the opening weekend.

Preorders made guessing sales based on turnout tricky.

IPads on sale Saturday started at $499. They connect to the Internet using Wi-Fi, with a third-generation wireless iPad available in the next few weeks.

When Apple launched its first iPhone in June 2007, the company sold roughly 270,000 in the first weekend, Mr. Munster estimated. Apple sold one million 3G versions of the iPhone in the first weekend when that device launched in 2008, though the tally included sales abroad.

Overall, analysts expect iPad sales to reach into the millions this year. On Friday, research firm iSuppli Corp. predicted that 7.1 million iPads will sell world-wide this year, with sales nearly tripling to 20.1 million by 2012. But others were less bullish. Forrester Research, for example, predicted first-year sales of three million.

Salary accounts to get up to 25% more interest

2010-04-05T20:27:00.001+05:30

NEW DELHI: Salary account holders could see their interest income rise by up to 25 per cent on the back of a new RBI rule from this month, under which banks will compute 3.5 per cent savings interest on daily basis instead of taking the lowest deposit during a month, Crisil Ratings said today.

Crisil said the new method of interest computation will increase the effective interest rate on savings balances, particularly for salary account holders.

"It is estimated that for a salary account holder with a minimum savings balance between 1-2 times of the monthly salary, the increase in interest income will be between 10 and 25 per cent," it said.

The new computation method has taken effect from April 1, 2010. Earlier, banks gave interest of 3.5 per cent on savings accounts on the basis of the least deposit in an account between the 10th and the last day of each month.

The interest is credited in the account twice a year, in March and September.

As for impact on banks, Crisil said the cost of deposit for them will increase by 10-20 basis points (100 bps = 1 per cent), depending on the share and pattern of the current and savings accounts (CASA).

"This will not materially impact their profitability or lead to any significant change in the share of low-cost deposits, that is CASA in the banking system," it added.

Crisil said, however, that the impact is expected to be higher for banks that have a dominant share of salary accounts with highly fluctuating balances.

At the end of February, all the commercial banks had a total deposit of over Rs 44 lakh crore, including savings, current and fixed deposits. The country's largest lender State Bank of India has over 1.56 crore savings bank account holders.

Crisil said the average CASA levels in the domestic banking system stood at 33 per cent, with savings deposits accounting for 22 per cent as of March 2009.

But it added, "The share of savings deposits is estimated to have increased to 25 per cent as on December 2009, which would translate into an increase of 2-4 per cent in CASA levels by March 31, 2020."

While announcing the annual monetary policy for 2009-10 unveiled last April, the Reserve Bank had said, "payment of interest on savings accounts by scheduled commercial banks would be calculated on a daily product basis with effect from April 1, 2010."

Stocks, Commodities Rise as U.S. Jobs Data Boost Recovery View

2010-04-05T20:23:00.000+05:30

April 5 (Bloomberg) -- U.S. and Asian stocks rose and commodities advanced as growth in American jobs boosted investor optimism that demand in the world’s largest economy is recovering. Treasury yields were at the highest since June.

The Standard & Poor’s 500 Index climbed 0.5 percent to 1,183.75 at 10:04 a.m. in New York, above its highest close since September 2008. The MSCI Asia Pacific Index rose to the highest level in more than 19 months, driven by gains in Japan. Markets in Europe, Australia, Hong Kong, China, Taiwan and New Zealand were shut for holidays. Oil advanced and copper rose to a 20-month high. The dollar fell against 15 of 16 major counterparts and the yield on the benchmark 10-year Treasury note increased 3 basis points to 3.97 percent.

U.S. payrolls gained last month by the most in three years, a “solid report” indicating “the economy is now creating jobs,” Treasury Secretary Timothy F. Geithner said in a Bloomberg Television interview. Industry reports today showed that pending home sales unexpected increased and the Institute for Supply Management’s index of service industries topped economists’ estimates.

“Overall, we are seeing positive signs about the global economy,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co., which manages $111 billion. “While developing nations are leading global growth, they are waiting for the U.S. to rebound. Recent reports are suggesting that the U.S. labor market and consumer spending are improving.”

Exxon Mobil Corp. and Schlumberger Ltd. paced gains in 39 of 40 energy stocks in the S&P 500 as crude oil climbed 1 percent to $85.73 a barrel in New York.

Apple’s iPad

Apple Inc. rose 0.8 percent to $237.80 after saying it sold more than 300,000 iPads on the device’s first day of availability over the weekend.

Canon Inc., which gets 28 percent of its revenue in the Americas, climbed 2.5 percent. Toyota Motor Corp., which derives 31 percent of its revenue in North America, increased 1.1 percent.

Former Federal Reserve chairman Alan Greenspan said yesterday on ABC’s “This Week” that the chances the U.S. economy will retrench after recovering from the worst recession since the 1930s “have fallen very significantly in the last two months.”

“There is increasing growth optimism now given that the job situation in the U.S. is getting a little more relaxed,” said Roger Groebli, Singapore-based head of financial-market analysis at LG Capital Management, part of the group that oversees $84 billion. “Exporters will benefit from that.”

Samsung, Hynix Climb

Samsung Electronics Co. rose 1.5 percent after Maeil Business Newspaper said the company will add a new semiconductor chip line. Asia’s biggest chipmaker also rose after the price of the benchmark DDR2 dynamic random access memory, or DRAM, chip rose on April 2, ending a four-day decline, according to Dramexchange Technology Inc. Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, advanced 3.4 percent.

Malaysia’s ringgit climbed to its strongest level since July 2008 after the government said exports increased 18.4 percent in February from a year earlier.

“The economic recovery theme is attracting foreigners to ringgit assets,” said Tan Voon Ching, a foreign-exchange trader at OSK Investment Bank Bhd. in Kuala Lumpur. “There’s a lot of confidence in the economic outlook for this year.”

Ringgit Gains

The ringgit strengthened 0.6 percent to 3.2301 per dollar. The won added 0.3 percent to 1,123.05 per dollar in Seoul, according to data compiled by Bloomberg. It reached 1,122.15 on April 2, the strongest level since Jan. 19.

Malaysia’s FTSE Bursa Malaysia KLCI Index rose 0.4 percent, advancing for a 10th day, the longest winning streak in 16 years. CIMB Group Holdings Bhd., Malaysia’s second-biggest bank, climbed 1.1 percent to a record. The company said the size of its initial share sale for its dual listing on the Thai exchange has been raised to as much as 50 million shares from 35 million.

Indonesia’s benchmark stock index, Asia’s best-performing major market this year, climbed to a record on expectations the central bank will keep interest rates at a record low tomorrow, helping to boost the economy.

PT Astra International, the nation’s largest auto retailer, surged 4.9 percent. PT Bank Central Asia advanced 5.5 percent, the most in more than two weeks, leading gains among banks. The central bank will keep its key interest rate at 6.5 percent tomorrow after inflation slowed to 3.43 percent in March, according to 16 out of 17 economists in a Bloomberg News survey.

The Jakarta Composite index jumped 2 percent to 2,887.246, above its previous record close of 2,830.26 on Jan. 9, 2008. The measure has climbed 14 percent this year as the central bank raised its economic growth forecast and Standard & Poor’s upgraded the nation’s sovereign debt ratings.

Yen, Pound

The yen snapped four days of losses against the dollar, on speculation Japanese exporters bought the nation’s currency after it touched a seven-month low. The pound gained versus all major counterparts after polls eased concerns that political turmoil will derail the nation’s economic recovery.

The pound rallied after a YouGov Plc poll for the Sunday Times showed that the opposition Conservative Party holds a 10 percent lead over Prime Minister Gordon Brown’s Labour party, before elections that are likely to be held next month. The Conservatives have 39 percent of the vote, while Labour had 29 percent and the Liberal Democrats 20 percent, the survey showed, reducing the likelihood that they will fail to win the parliamentary majority that some think is necessary to tackle the U.K.’s budget deficit, the largest in the Group of 20 nations. The pound strengthened 0.5 percent to $1.5290.

‘Heading Toward Stabilization’

A survey for the Sunday Express newspaper by Canadian pollsters Angus Reid put the Conservatives at 38 percent, 11 points ahead of Labour’s 27 percent, with the Liberal Democrats at 20 percent.

“The polls seem to suggest that the U.K. political situation is gradually heading toward stabilization,” said Toshiya Yamauchi, senior currency analyst in Tokyo at online currency trading company Ueda Harlow Ltd. “Signs of political stabilization, combined by waning expectations for additional quantitative monetary measures amid the plethora of positive data, will support the currency.”

Crude oil for May delivery rose to a 17-month high.

Oil prices have established a floor of $75 a barrel and there is no need for OPEC to increase production, Venezuelan Oil Minister Rafael Ramirez said April 2. The Organization of Petroleum Exporting Countries pumps about 40 percent of the world’s oil and slashed output in January 2009 to prevent a glut. The group left its production targets unchanged when ministers met in Vienna on March 17.

Venezuela, the group’s sixth-largest producer, is seeking a price band between $80 and $100 a barrel, Ramirez told reporters in Caracas on April 2.

Copper for May delivery advanced as much as 1.2 percent to $3.6265 a pound in New York, the highest level since Aug. 1, 2008.