Global markets may be the breadwinners for Indian technology majors, but the domestic market is fast becoming the next hot destination for global firms, particularly smaller, niche market players. While the western economies are still waiting for ‘green shoots’ of recovery, a slew of niche technology vendors, who were focusing on the US and Europe for so long, are finding greener pastures in emerging markets such as India.
“The global tech giants are already present in India in a big way. But what we are observing now is the gradual entry of small- and medium-sized tech companies with niche product offerings,” says Diptarup Chakraborti, principal research analyst of Gartner, the world’s largest IT research and advisory firm. It’s the slowdown in key western markets that’s leading these firms to emerging markets, he adds.
Some of the companies that have set up shops in India in the past six quarters include business intelligence provider MicroStrategy, anti-virus vendor AVG Technologies, investment analytics provider MSCI Barra, document manager ReadSoft, insurance software company IDIT Technologies, banking solutions firm Trasset and financial technology outfit SmartStream.
While the downturn in western markets triggered this trend, these firms were lured by India’s resilience to the global crisis, its strong local industrial base and the government’s big-ticket spends on technology infrastructure.
“Corporate India consists of 5,000 large enterprises, 27,000 small and medium outfits (SMEs) and more than seven lakh home-office set-ups. This sums up into a huge opportunity for tech providers,” says Mohammad Saif, global consulting firm Frost & Sullivan deputy director of ICT practices for South Asia and the Middle-East.
Most new entrants into India are niche technology players, points out Milan Sheth, business advisory services partner of professional advisory firm Ernst & Young. “These companies are targeting two major areas, including government and public sector segment and specialised analytics and modelling,” he adds.
Some of the new entrants that ET spoke to cited maturity in domestic IT market as an important reason to target India. “Since Indian companies are increasingly competing in the world market, they find a need to adhere to global best practices in their respective fields. Hence, we feel that the time is right for us to bring our global customer insights to the Indian market,” says Shankar Ganapathy, world-wide V-P of MicroStrategy, a $360-million US provider of business intelligence solutions that announced the launch of its India operations a few weeks ago.
Also, according to SunGard managing director Atul Sareen, various regulatory changes in India are creating new opportunities for technology providers to bring in best-in-industry solutions. For instance, the Reserve Bank of India’s decision to allow retail investors to invest in global markets requires technologies to connect broker terminals to international exchanges and also necessitates use of advanced risk-mitigating solutions, says Mr Sareen, who looks after sales of financial solutions for SunGard, a $5.6-billion US vendor of software solutions.
SunGard, which has been operating off-shore development centres in India since 1993, recently set up sales office in India to cater to local customers. The company will initially target financial solutions for segments including banking, insurance, front and back-office trading, and energy trading. At the end of 2008, the company had 2,000 employees in India or 10% of its global headcount of 20,000. It expects a 50% rise in its Indian headcount by the end of 2009.
AVG Technologies, which has 80 million users of its anti-virus solutions across the world, launched direct channel presence in India two months ago. “So far, our India presence was through Internet downloads of our free software. However, looking at fast-growing Internet connectivity in India, we have established channel sales in the country,” said Peter Baxter, vice-president, business development.
AVG, a privately-held company, commands 14% share of anti-virus solutions in the US and 11% in Europe. As part of its India venture, it has tied up with 12 large format retail outlets, including Croma, a part of Tata Sons, international retail chain Staples, and K Raheja promoted HyperCITY.
Foreign firms that set up shops in India early have already started reaping the benefits. Buongiorno, the world’s largest listed mobile value-added services (MVAS) provider that launched its India operations three years ago, is expecting a three-fold growth this year. “Though our operations in India are smaller compared to our global revenue (e316 million in 2008), we are growing rapidly here,” says Kuni Yoshi Furihata, co-CEO and chief financial officer of the Italian firm. The company, which earns close to 10% of its global revenue from India, has been providing VAS services to top domestic telecom operators, including Bharti Airtel.
According to Nasscom estimates, the domestic IT services market has grown two folds to $8.3 billion in the three years ended March 2009. Over half of this revenue came from IT spends by small- and medium-sized companies.
In contrast, global IT spends are in decline as clients are either delaying investment decisions or cutting discretionary IT spends. According to Gartner’s latest estimates, the world-wide IT spending is slated to drop by 6% to $3.2 trillion in 2009 from $3.4 in the previous year.
“While the global economic downturn shows signs of easing, this year IT budgets are still being cut and consumers will need a lot more persuading before they can feel confident enough to loosen their purse strings,” said Richard Gordon, research vice-president and head of global forecasting at Gartner, in a statement issued last month.
Also, as reported by ET in its March 21 edition, the government has lined up an investment of over $6 billion for mission critical projects, a chunk of which will be spent on technology infrastructure. While the global tech vendors are vying for a share in the booming Indian IT market, it will be interesting to see how their Indian counterparts react to this ‘firang’ onslaught.
Tuesday, August 11, 2009
Monday, August 10, 2009
Morgan Stanley wealth unit sees India clients tripling
MUMBAI (Reuters) - Morgan Stanley expects to more than triple its clients at its India wealth management unit over the next four years as the U.S. money manager ramps up operation to tap the country's growing rich.
Himanshu Bhagat and Amitava Neogi, both executive directors at the Indian private banking unit, said a stock market surge and rising optimism about a global recovery have helped attract nearly 300 clients since launch last September.
"We target to get around 1,000 client families over the next 3-4 years," Bhagat told Reuters in an interview.
India is fast emerging as a magnet for global wealth managers because of its growing economy and rising income of a middle class that is larger than the population of the United States.
Canara Robeco Asset Management estimates India's middle class at more than 400 million people.
Consultant Celent forecasts Indian wealth industry to manage about $1 trillion worth of assets by 2012, an opportunity that has attracted the likes of Barclays, Societe Generale and Credit Suisse.
Morgan Stanley's private banking unit has 100 staff in India, including 36 relationship managers across four large cities such as Mumbai and New Delhi. It hopes to hire more than 50 people in the next three years.
"We are continuously hiring," Bhagat said.
The firm is also advising clients to buy foreign equities to diversify globally, a trend yet to pick up in India even though local regulations allow each individual to invest up to $200,000 overseas every year.
"There are emerging frontier markets like Vietnam, Sri Lanka which they should be looking at. There are also distressed opportunities in Europe and the U.S. We are advising our clients to evaluate this option," Bhagat said.
Morgan Stanley hopes to offer onshore wealth management services in Vietnam and China to boost Asia presence.
India's main stock index has surged almost 90 percent from its 2009 trough hit in early March, powered by nearly $9 billion of foreign fund inflows.
"We are overweight on Indian equity in our model portfolios and urge our clients to buy on the dips," Neogi said.
Better quarterly earnings have improved the case for India investment, he said, adding the market was nearly at 2003 levels after. Foreign funds that had whittled down their India holding to meet redemption pressures were now keen to build up exposure.
Bhagat said Indian clients were now more willing to take risk after a revival in markets.
The industry had suffered a blow last year as the number of rich in India fell by nearly a third to 84,000, the fastest drop in the world after Hong Kong, after a record 52 percent fall in local shares hurt the net worth of individuals.
Himanshu Bhagat and Amitava Neogi, both executive directors at the Indian private banking unit, said a stock market surge and rising optimism about a global recovery have helped attract nearly 300 clients since launch last September.
"We target to get around 1,000 client families over the next 3-4 years," Bhagat told Reuters in an interview.
India is fast emerging as a magnet for global wealth managers because of its growing economy and rising income of a middle class that is larger than the population of the United States.
Canara Robeco Asset Management estimates India's middle class at more than 400 million people.
Consultant Celent forecasts Indian wealth industry to manage about $1 trillion worth of assets by 2012, an opportunity that has attracted the likes of Barclays, Societe Generale and Credit Suisse.
Morgan Stanley's private banking unit has 100 staff in India, including 36 relationship managers across four large cities such as Mumbai and New Delhi. It hopes to hire more than 50 people in the next three years.
"We are continuously hiring," Bhagat said.
The firm is also advising clients to buy foreign equities to diversify globally, a trend yet to pick up in India even though local regulations allow each individual to invest up to $200,000 overseas every year.
"There are emerging frontier markets like Vietnam, Sri Lanka which they should be looking at. There are also distressed opportunities in Europe and the U.S. We are advising our clients to evaluate this option," Bhagat said.
Morgan Stanley hopes to offer onshore wealth management services in Vietnam and China to boost Asia presence.
India's main stock index has surged almost 90 percent from its 2009 trough hit in early March, powered by nearly $9 billion of foreign fund inflows.
"We are overweight on Indian equity in our model portfolios and urge our clients to buy on the dips," Neogi said.
Better quarterly earnings have improved the case for India investment, he said, adding the market was nearly at 2003 levels after. Foreign funds that had whittled down their India holding to meet redemption pressures were now keen to build up exposure.
Bhagat said Indian clients were now more willing to take risk after a revival in markets.
The industry had suffered a blow last year as the number of rich in India fell by nearly a third to 84,000, the fastest drop in the world after Hong Kong, after a record 52 percent fall in local shares hurt the net worth of individuals.
AI, Kingfisher & Jet may go no-frills on most domestic routes
NEW DELHI: Amidst growing concern over the financial health of airlines, the top three carriers of the country—Air India, Kingfisher Airlines and Jet Airways—are planning to convert most of their domestic flights into no-frills services. This would result in more attractive fares for consumers, but may further pull down the yield of airlines.
Since the three airlines together control over 60% of the domestic market, the proposed move would significantly curtail full-service operations in the country while the market share of no-frills services would expand in a big way.
The move, which would cheer consumers, comes at a time when airlines are finding it difficult to improve the yield. According to an industry estimate, average passenger tariff has halved to Rs 3,000 in the last five years. The cost of operation of airlines has, however, gone up during this period resulting in a shortfall in revenue.
While Jet Airways has said it will increase the number of flights on its JetKonnect network to 160 by October out of its total 290 flights on domestic routes, Kingfisher has already shifted 70% its 365 domestic flights a day to the no-frills brand.
The country’s largest carrier by fleet size, Air India, has said it will gradually shift 75% of its domestic flights to its low-cost entity Air India Express. The increased supply of seats in the market may force airlines to sell tickets below cost.
“Service criteria between full-service carriers and low-cost airlines is shrinking. Full-service airlines, which have shifted capacity on low-fare brands, are doing away with business class, thus increasing seats. By doing this, airlines are putting pressure on the low-frills market. This will eventually hurt everybody,” Amadeus India managing director Ankur Bhatia said.
Domestic carriers are together estimated to have lost Rs 10,000 crore in 2008-09 mainly on account of high fuel price in the first half of the fiscal and excess capacity.
“There is still 20% additional capacity in the market. The industry needs to discipline itself and cut back capacity. We have been loudly telling people that we are cutting capacity. In the past one year, we have reduced 20% of our capacity,” said a Jet Airways official who did not wish to be identified said.
Excess capacity and intense competition force carriers to sell tickets below cost in order to fill seats. This reduces the yield per seat of the airline. For example, Air India’s yield in terms of returns per kilometre (RPKM) in 2007-08 decreased to Rs 3.13/RPKM from Rs 3.25/RPKM in 2006-07, notwithstanding an improvement in load factor.
In 2008-09, the airline’s yield stood at Rs 4.6/RPKM and Rs 2.99/RPKM for its narrow and wide-body aircraft, respectively.
In the last one year, air travellers have shifted to low-cost airlines with corporate houses trimming their travel budget. This has helped no-frills airlines SpiceJet and JetLite come out of the red and report profit.
SpiceJet reported a net profit of Rs 26.34 crore in the first quarter ended June 31 as against a net loss Rs 129.22 crore in the same quarter of 2008. JetLite (formerly Air Sahara) also posted a marginal profit of Rs 2.2 crore in the first quarter of the current fiscal.
Since the three airlines together control over 60% of the domestic market, the proposed move would significantly curtail full-service operations in the country while the market share of no-frills services would expand in a big way.
The move, which would cheer consumers, comes at a time when airlines are finding it difficult to improve the yield. According to an industry estimate, average passenger tariff has halved to Rs 3,000 in the last five years. The cost of operation of airlines has, however, gone up during this period resulting in a shortfall in revenue.
While Jet Airways has said it will increase the number of flights on its JetKonnect network to 160 by October out of its total 290 flights on domestic routes, Kingfisher has already shifted 70% its 365 domestic flights a day to the no-frills brand.
The country’s largest carrier by fleet size, Air India, has said it will gradually shift 75% of its domestic flights to its low-cost entity Air India Express. The increased supply of seats in the market may force airlines to sell tickets below cost.
“Service criteria between full-service carriers and low-cost airlines is shrinking. Full-service airlines, which have shifted capacity on low-fare brands, are doing away with business class, thus increasing seats. By doing this, airlines are putting pressure on the low-frills market. This will eventually hurt everybody,” Amadeus India managing director Ankur Bhatia said.
Domestic carriers are together estimated to have lost Rs 10,000 crore in 2008-09 mainly on account of high fuel price in the first half of the fiscal and excess capacity.
“There is still 20% additional capacity in the market. The industry needs to discipline itself and cut back capacity. We have been loudly telling people that we are cutting capacity. In the past one year, we have reduced 20% of our capacity,” said a Jet Airways official who did not wish to be identified said.
Excess capacity and intense competition force carriers to sell tickets below cost in order to fill seats. This reduces the yield per seat of the airline. For example, Air India’s yield in terms of returns per kilometre (RPKM) in 2007-08 decreased to Rs 3.13/RPKM from Rs 3.25/RPKM in 2006-07, notwithstanding an improvement in load factor.
In 2008-09, the airline’s yield stood at Rs 4.6/RPKM and Rs 2.99/RPKM for its narrow and wide-body aircraft, respectively.
In the last one year, air travellers have shifted to low-cost airlines with corporate houses trimming their travel budget. This has helped no-frills airlines SpiceJet and JetLite come out of the red and report profit.
SpiceJet reported a net profit of Rs 26.34 crore in the first quarter ended June 31 as against a net loss Rs 129.22 crore in the same quarter of 2008. JetLite (formerly Air Sahara) also posted a marginal profit of Rs 2.2 crore in the first quarter of the current fiscal.
Asian Stocks Advance on U.S. Jobs, Japanese Machinery Orders
Aug. 10 (Bloomberg) -- Asian stocks rose, led by automakers and consumer companies, after the U.S. jobless rate dropped and Japanese machinery orders increased, boosting confidence that the world’s two largest economies are emerging from recessions.
Japan’s Toyota Motor Corp., which gets 31 percent of its revenue from North America, gained 2 percent as the dollar strengthened against the yen after the U.S. jobs report. Bridgestone Corp., the world’s largest tiremaker, rose 6.5 percent in Tokyo after forecasting a profit. Hallenstein Glasson Holdings Ltd., a New Zealand clothing retailer, jumped 3.9 percent in Wellington after the country’s house prices rose.
The MSCI Asia Pacific Index climbed 1.4 percent to 112.28 as of 11:35 a.m. in Tokyo, following a 1 percent drop last week. The gauge has climbed 59 percent from a more than five-year low on March 9 amid speculation the global economy is recovering from the credit crisis.
“There’s a sense that the region is growing more quickly than other parts of the world,” said Mark Konyn, chief executive officer of RCM Asia Pacific Ltd. in Hong Kong, which holds $11 billion. “Valuations are not stretched, but the market’s moved a hell of a long way since the bottom. The question is whether or not we’ll see that follow through in economic improvement and I think you see it in the jobs numbers in the U.S.”
Japan’s Nikkei 225 Stock Average rose 1.3 percent to 10,545.90 as strategists at Nomura Holdings Inc. predicted the gauge may climb as high as 11,500 by the end of October. Mitsubishi Rayon Co., which makes fabrics and chemicals, surged 25 percent after the Nikkei newspaper reported the company may be bought by rival Mitsubishi Chemical Holdings Corp.
Beating Estimates
Hong Kong’s Hang Seng Index climbed 2.6 percent. Australia’s S&P/ASX 200 Index advanced 1 percent, led by real- estate trust Goodman Group, which surged 14 percent after a share sale eased concerns about the company’s debt levels.
Futures on the Standard & Poor’s 500 Index added 0.1 percent. The gauge climbed 1.3 percent on Aug. 7 after a Labor Department report showed the joblessness rate dropped to 9.4 percent last month from June, the first decline since April 2008. Economists had estimated the rate would rise to 9.6 percent.
Japanese machinery orders, an indicator of capital investment in the next three to six months, climbed 9.7 percent from May, the Cabinet Office said today in Tokyo. The median estimate of 22 economists surveyed by Bloomberg was for a 2.6 percent increase.
Toyota gained 2 percent to 4,170 yen. Sony Corp., which gets about a quarter of its sales from the U.S., climbed 3.3 percent to 2,785 yen. Komatsu Ltd., the world’s second-biggest maker of construction equipment, rose 3 percent to 1,634 yen.
Higher Forecast
Bridgestone jumped 5.7 percent to 1,787 yen after forecasting full-year net income of 6 billion yen ($62 million), compared with an earlier break-even prediction.
A weaker yen also boosted the outlook for Japanese export earnings. The Japanese currency depreciated to as much as 97.78 from about 95.43 at the 3 p.m. close of Tokyo stock trading on Aug. 7.
“The improvement in the U.S. job market will increase demand for risk assets globally, including stocks,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. in Tokyo. “Exporters will get an extra boost in that the yen is sufficiently weak to help raise their profits.”
Companies’ efforts to cut costs boosted investor confidence in the outlook for earnings, Nomura strategists wrote in a Japanese-language report. The analysts said the Nikkei 225 may rise as high as 11,500 by the end of October, lifting a previous estimate that ranged between 10,500 and 11,000.
Takeover Speculation
Hallenstein Glasson gained 3.9 percent to NZ$2.90. New Zealand house prices rose for the third month in July, advancing 0.7 percent from the previous month, according to Quotable Value New Zealand Ltd., the government valuation agency.
Mitsubishi Rayon surged 25 percent to 340 yen after the Nikkei reported Mitsubishi Chemical may pay as much as 200 billion yen to buy the company. Mitsubishi Rayon said it had no statement to make.
Mitsubishi Chemical wasn’t the source of the information, spokesman Yoshinori Nagayama said. The company’s shares added 5.4 percent to 446 yen.
Goodman surged 14 percent to 50.5 Australian cents. Institutional investors bought A$923 million ($773 million) shares for 40 cents each, the Sydney-based company said in a statement today, while retail investors are expected to buy A$355 million in shares.
“Some traders were wanting this capital raising to take place,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “It’s being taken positively because it will result in a stronger balance sheet, better liquidity and an impressive gearing.”
Japan’s Toyota Motor Corp., which gets 31 percent of its revenue from North America, gained 2 percent as the dollar strengthened against the yen after the U.S. jobs report. Bridgestone Corp., the world’s largest tiremaker, rose 6.5 percent in Tokyo after forecasting a profit. Hallenstein Glasson Holdings Ltd., a New Zealand clothing retailer, jumped 3.9 percent in Wellington after the country’s house prices rose.
The MSCI Asia Pacific Index climbed 1.4 percent to 112.28 as of 11:35 a.m. in Tokyo, following a 1 percent drop last week. The gauge has climbed 59 percent from a more than five-year low on March 9 amid speculation the global economy is recovering from the credit crisis.
“There’s a sense that the region is growing more quickly than other parts of the world,” said Mark Konyn, chief executive officer of RCM Asia Pacific Ltd. in Hong Kong, which holds $11 billion. “Valuations are not stretched, but the market’s moved a hell of a long way since the bottom. The question is whether or not we’ll see that follow through in economic improvement and I think you see it in the jobs numbers in the U.S.”
Japan’s Nikkei 225 Stock Average rose 1.3 percent to 10,545.90 as strategists at Nomura Holdings Inc. predicted the gauge may climb as high as 11,500 by the end of October. Mitsubishi Rayon Co., which makes fabrics and chemicals, surged 25 percent after the Nikkei newspaper reported the company may be bought by rival Mitsubishi Chemical Holdings Corp.
Beating Estimates
Hong Kong’s Hang Seng Index climbed 2.6 percent. Australia’s S&P/ASX 200 Index advanced 1 percent, led by real- estate trust Goodman Group, which surged 14 percent after a share sale eased concerns about the company’s debt levels.
Futures on the Standard & Poor’s 500 Index added 0.1 percent. The gauge climbed 1.3 percent on Aug. 7 after a Labor Department report showed the joblessness rate dropped to 9.4 percent last month from June, the first decline since April 2008. Economists had estimated the rate would rise to 9.6 percent.
Japanese machinery orders, an indicator of capital investment in the next three to six months, climbed 9.7 percent from May, the Cabinet Office said today in Tokyo. The median estimate of 22 economists surveyed by Bloomberg was for a 2.6 percent increase.
Toyota gained 2 percent to 4,170 yen. Sony Corp., which gets about a quarter of its sales from the U.S., climbed 3.3 percent to 2,785 yen. Komatsu Ltd., the world’s second-biggest maker of construction equipment, rose 3 percent to 1,634 yen.
Higher Forecast
Bridgestone jumped 5.7 percent to 1,787 yen after forecasting full-year net income of 6 billion yen ($62 million), compared with an earlier break-even prediction.
A weaker yen also boosted the outlook for Japanese export earnings. The Japanese currency depreciated to as much as 97.78 from about 95.43 at the 3 p.m. close of Tokyo stock trading on Aug. 7.
“The improvement in the U.S. job market will increase demand for risk assets globally, including stocks,” said Tomochika Kitaoka, a senior strategist at Mizuho Securities Co. in Tokyo. “Exporters will get an extra boost in that the yen is sufficiently weak to help raise their profits.”
Companies’ efforts to cut costs boosted investor confidence in the outlook for earnings, Nomura strategists wrote in a Japanese-language report. The analysts said the Nikkei 225 may rise as high as 11,500 by the end of October, lifting a previous estimate that ranged between 10,500 and 11,000.
Takeover Speculation
Hallenstein Glasson gained 3.9 percent to NZ$2.90. New Zealand house prices rose for the third month in July, advancing 0.7 percent from the previous month, according to Quotable Value New Zealand Ltd., the government valuation agency.
Mitsubishi Rayon surged 25 percent to 340 yen after the Nikkei reported Mitsubishi Chemical may pay as much as 200 billion yen to buy the company. Mitsubishi Rayon said it had no statement to make.
Mitsubishi Chemical wasn’t the source of the information, spokesman Yoshinori Nagayama said. The company’s shares added 5.4 percent to 446 yen.
Goodman surged 14 percent to 50.5 Australian cents. Institutional investors bought A$923 million ($773 million) shares for 40 cents each, the Sydney-based company said in a statement today, while retail investors are expected to buy A$355 million in shares.
“Some traders were wanting this capital raising to take place,” said Chris Weston, an institutional dealer at IG Markets in Melbourne. “It’s being taken positively because it will result in a stronger balance sheet, better liquidity and an impressive gearing.”
Sunday, August 09, 2009
IMF Agrees to Boost Pakistan’s Loan to $11.3 Billion
Aug. 8 (Bloomberg) -- The International Monetary Fund agreed to increase a loan to Pakistan by $3.2 billion to buttress an economy and budget hurt by a war against Taliban insurgents and a global recession.
The expanded financing brings the total loan outstanding from the IMF to $11.3 billion, or about 6.3 percent of Pakistan’s gross domestic product, the Washington-based lender said in the statement. The entire standby arrangement also was extended by about two months until the end of 2010.
“Pakistan’s economy has continued to stabilize,” IMF Deputy Managing Director Murilo Portugal said in an e-mailed statement. “Reforms in the financial sector and the foreign exchange market have been progressing, and steps have been taken to strengthen the social safety net.”
The country turned to the IMF for a $7.6 billion credit line last year after its current-account deficit widened to a record and its foreign reserves shrank 75 percent in a year to $3.45 billion. Pakistan agreed on July 16 to cut power subsidies almost 50 percent this year to meet a condition set by the IMF for the November bailout.
The additional aid is needed to shore up the government’s finances as it fights the Taliban at an annual cost of $8.5 billion. IMF executive directors agreed to let the government use a portion of the increased loan to finance priority spending, including expenditures to help displaced people until donor pledges are received, they said.
Taliban Campaign
Pakistan’s army last month said it killed more than 1,600 Taliban militants in a 10-week offensive to regain control of the northwestern Swat district after the group seized territory in violation of an accord with the government that allowed Islamic law to be introduced in the region.
The IMF board also authorized an immediate disbursement of $1.2 billion after a second review of the original loan, while granting Pakistan several waivers for not meeting criteria including a fiscal deficit target.
“Fiscal discipline is a key issue,” Adnan Mazarei, the IMF’s mission chief for Pakistan, said on a conference call yesterday. The introduction of a value-added tax “will hopefully raise revenue and broaden the tax base.”
The IMF said the authorities’ monetary policy should “remain vigilant about preventing a resurgence of inflation.”
Pakistan’s economy has ground almost to a halt as the global recession erodes exports and deters investment. The $146 billion economy may expand as little as 0.8 percent in the year to June 2010, according to HSBC Holdings Plc, the weakest pace since 1952.
Pakistan stocks rose yesterday on reports top Taliban guerrilla commander Baitullah Mehsud, who ordered suicide bombings nationwide and had a $5 million bounty on his head, may have been killed in a U.S. missile strike.
The Obama administration hasn’t yet verified the reports, White House Press Secretary Robert Gibbs said.
The expanded financing brings the total loan outstanding from the IMF to $11.3 billion, or about 6.3 percent of Pakistan’s gross domestic product, the Washington-based lender said in the statement. The entire standby arrangement also was extended by about two months until the end of 2010.
“Pakistan’s economy has continued to stabilize,” IMF Deputy Managing Director Murilo Portugal said in an e-mailed statement. “Reforms in the financial sector and the foreign exchange market have been progressing, and steps have been taken to strengthen the social safety net.”
The country turned to the IMF for a $7.6 billion credit line last year after its current-account deficit widened to a record and its foreign reserves shrank 75 percent in a year to $3.45 billion. Pakistan agreed on July 16 to cut power subsidies almost 50 percent this year to meet a condition set by the IMF for the November bailout.
The additional aid is needed to shore up the government’s finances as it fights the Taliban at an annual cost of $8.5 billion. IMF executive directors agreed to let the government use a portion of the increased loan to finance priority spending, including expenditures to help displaced people until donor pledges are received, they said.
Taliban Campaign
Pakistan’s army last month said it killed more than 1,600 Taliban militants in a 10-week offensive to regain control of the northwestern Swat district after the group seized territory in violation of an accord with the government that allowed Islamic law to be introduced in the region.
The IMF board also authorized an immediate disbursement of $1.2 billion after a second review of the original loan, while granting Pakistan several waivers for not meeting criteria including a fiscal deficit target.
“Fiscal discipline is a key issue,” Adnan Mazarei, the IMF’s mission chief for Pakistan, said on a conference call yesterday. The introduction of a value-added tax “will hopefully raise revenue and broaden the tax base.”
The IMF said the authorities’ monetary policy should “remain vigilant about preventing a resurgence of inflation.”
Pakistan’s economy has ground almost to a halt as the global recession erodes exports and deters investment. The $146 billion economy may expand as little as 0.8 percent in the year to June 2010, according to HSBC Holdings Plc, the weakest pace since 1952.
Pakistan stocks rose yesterday on reports top Taliban guerrilla commander Baitullah Mehsud, who ordered suicide bombings nationwide and had a $5 million bounty on his head, may have been killed in a U.S. missile strike.
The Obama administration hasn’t yet verified the reports, White House Press Secretary Robert Gibbs said.
NHPC Gets $3.7 Billion of Bids in Initial Share Offer
Aug. 7 (Bloomberg) -- NHPC Ltd., India’s biggest hydroelectric power generator, received more than 178.2 billion rupees ($3.7 billion) of bids, 3.5 times the stock on offer on the first day of its initial share sale.
The utility, which is offering 1.68 billion shares including 559.1 million government shares, got bids for 5.94 billion shares when bidding closed for the day at 5 p.m. in Mumbai, according to the National Stock Exchange Web site.
Power producers are accelerating share-sale plans as equities rebound from a 2008 slump and are set for their best year in six. Adani Power Ltd., controlled by Indian billionaire Gautam Adani, raised 30.2 billion rupees after getting $11.5 billion in bids in a sale ended July 31.
Utilities, including Indiabulls Power Ltd., may sell shares to raise as much as 100 billion rupees in the next three months, according to Angel Broking Ltd. analyst Girish Solanki.
NHPC, based in Faridabad near New Delhi, plans to raise as much as 40 billion rupees, while the federal government expects 20 billion rupees in the initial public offering, Chairman S.K. Garg said July 28. The offer would be India’s biggest since Reliance Power Ltd.’s record share sale in January 2008.
NHPC is offering shares at 30 rupees to 36 rupees apiece and will use part of the funds to build seven hydroelectric projects with a combined capacity of 3,240 megawatts, according to the share sale documents. The issue closes Aug. 12.
The IPO is being managed by SBI Capital Markets Ltd., Kotak Mahindra Capital Co. Ltd. and Enam Securities Pvt.
The utility, which is offering 1.68 billion shares including 559.1 million government shares, got bids for 5.94 billion shares when bidding closed for the day at 5 p.m. in Mumbai, according to the National Stock Exchange Web site.
Power producers are accelerating share-sale plans as equities rebound from a 2008 slump and are set for their best year in six. Adani Power Ltd., controlled by Indian billionaire Gautam Adani, raised 30.2 billion rupees after getting $11.5 billion in bids in a sale ended July 31.
Utilities, including Indiabulls Power Ltd., may sell shares to raise as much as 100 billion rupees in the next three months, according to Angel Broking Ltd. analyst Girish Solanki.
NHPC, based in Faridabad near New Delhi, plans to raise as much as 40 billion rupees, while the federal government expects 20 billion rupees in the initial public offering, Chairman S.K. Garg said July 28. The offer would be India’s biggest since Reliance Power Ltd.’s record share sale in January 2008.
NHPC is offering shares at 30 rupees to 36 rupees apiece and will use part of the funds to build seven hydroelectric projects with a combined capacity of 3,240 megawatts, according to the share sale documents. The issue closes Aug. 12.
The IPO is being managed by SBI Capital Markets Ltd., Kotak Mahindra Capital Co. Ltd. and Enam Securities Pvt.
Friday, August 07, 2009
Record number of insolvencies
A record number of people have been declared insolvent as the credit crisis marks its second anniversary, new figures showed on Friday.
A total of 33,073 people were declared insolvent during the three months to the end of June, 27.4 per cent more than during the same period a year earlier, according to the Insolvency Service.
It means numbers are now at their highest level since records began in 1960 and experts forecast there is worse to come as unemployment rises and people are unable to pay their bills.
At the same time, the number of companies that collapsed rose by 39.1 per cent year-on-year to 5,055 in the three months to the end of June.
Alan Tomlinson, of insolvency practitioners Tomlinsons, described the combination of rising unemployment and unmanageable debt as “the perfect storm”.
“Many of the people we’re seeing are in serious, serious difficulty,” he said.
“The sharp rise in the number of individual insolvencies is a reflection of the ongoing fallout from irresponsible borrowing in the good years and people living beyond, in many cases way beyond, their means.”
The individual insolvencies consisted of 18,870 bankruptcies – which were up 15.3 per cent on the same period a year ago and 12,225 of its less stringent form, Individual Voluntary Arrangements (IVAs) – which were up 27.4 per cent on the same period in 2008.
An IVA is an arrangement that is entered into with those owed money, while a bankruptcy involves a formal court order where assets are sold to pay creditors.
An alternative to bankruptcy – a debt relief order – was introduced in April, but various restrictions limit those who can apply, such as not owning your own home and having debts of less than £15,000.
Anthony Cork, of accountants Wilkins Kennedy, said: “Pressure from the Government has meant that a lot of banks have been holding off on foreclosing on individuals and restructuring businesses that they have lent to. However, this political pressure is on the wane and intervention led by lenders is expected to accelerate in the autumn.”
A total of 33,073 people were declared insolvent during the three months to the end of June, 27.4 per cent more than during the same period a year earlier, according to the Insolvency Service.
It means numbers are now at their highest level since records began in 1960 and experts forecast there is worse to come as unemployment rises and people are unable to pay their bills.
At the same time, the number of companies that collapsed rose by 39.1 per cent year-on-year to 5,055 in the three months to the end of June.
Alan Tomlinson, of insolvency practitioners Tomlinsons, described the combination of rising unemployment and unmanageable debt as “the perfect storm”.
“Many of the people we’re seeing are in serious, serious difficulty,” he said.
“The sharp rise in the number of individual insolvencies is a reflection of the ongoing fallout from irresponsible borrowing in the good years and people living beyond, in many cases way beyond, their means.”
The individual insolvencies consisted of 18,870 bankruptcies – which were up 15.3 per cent on the same period a year ago and 12,225 of its less stringent form, Individual Voluntary Arrangements (IVAs) – which were up 27.4 per cent on the same period in 2008.
An IVA is an arrangement that is entered into with those owed money, while a bankruptcy involves a formal court order where assets are sold to pay creditors.
An alternative to bankruptcy – a debt relief order – was introduced in April, but various restrictions limit those who can apply, such as not owning your own home and having debts of less than £15,000.
Anthony Cork, of accountants Wilkins Kennedy, said: “Pressure from the Government has meant that a lot of banks have been holding off on foreclosing on individuals and restructuring businesses that they have lent to. However, this political pressure is on the wane and intervention led by lenders is expected to accelerate in the autumn.”
Fannie Mae seeks more state aid after massive loss
Fannie Mae, the troubled state-backed mortgage firm, a massive $14.8bn (£8.8bn) loss in the second quarter, and asked the US Treasury for another $10.7bn in aid.
Fannie Mae and its fellow state-backed lender Freddie Mac have already received hundreds of billions of dollars as part of a virtual government takeover aimed at avoiding their collapse in the wake of the subprime mortgage crisis.
"Second-quarter results were driven primarily by $18.8bn of credit-related expenses, reflecting the ongoing impact of adverse conditions in the housing market, as well as the economic recession and rising unemployment. Credit-related expenses were partially offset by fair value gains," the company said.
"The company also reported a substantial decrease in impairment losses on investment securities, which was due in part to the adoption of new accounting guidance."
The latest decrease for Fannie Mae came on the heels of a $23.2bn loss in the first quarter.
"Taking into account unrealized gains on available-for-sale securities during the second quarter and an adjustment to our deferred tax assets due to the new accounting guidance, the loss resulted in a net worth deficit of $10.6bn as of June 30, 2009," the company said in a statement.
As a result, it said the head of its conservator, the FederaL Housing Finance Agency, submitted a $10.7bn request from the Treasury "in order to eliminate our net worth deficit" on or before September 30.
The Washington Post reported Wednesday that the US government could split Fannie Mae and Freddie Mac and place the firms' toxic assets in a federal corporation.
Such a deal could allow the financial giants, long lynchpins of the US housing market, to move forward unconstrained by troubled assets - easing still constricted credit markets with the hope of driving consumer spending, the report said. Together, the two firms back 40 percent of all US home loans.
White House spokesman Robert Gibbs insisted that the report was "light years ahead of any decision-making process here".
"There's no meeting that's scheduled," he said. "And safe to say that many senior administration economic officials learned of this proposal sometime this morning at the foot of their driveway."
Staff "are aware of the problem and working on it as a part of financial regulatory reform," Mr Gibbs added.
However, he cautioned, assuming "that either this is at a point of even a decision by senior economic officials, let alone anybody that occupies the Oval Office, is way, way, way ahead of itself".
Fannie Mae and its fellow state-backed lender Freddie Mac have already received hundreds of billions of dollars as part of a virtual government takeover aimed at avoiding their collapse in the wake of the subprime mortgage crisis.
"Second-quarter results were driven primarily by $18.8bn of credit-related expenses, reflecting the ongoing impact of adverse conditions in the housing market, as well as the economic recession and rising unemployment. Credit-related expenses were partially offset by fair value gains," the company said.
"The company also reported a substantial decrease in impairment losses on investment securities, which was due in part to the adoption of new accounting guidance."
The latest decrease for Fannie Mae came on the heels of a $23.2bn loss in the first quarter.
"Taking into account unrealized gains on available-for-sale securities during the second quarter and an adjustment to our deferred tax assets due to the new accounting guidance, the loss resulted in a net worth deficit of $10.6bn as of June 30, 2009," the company said in a statement.
As a result, it said the head of its conservator, the FederaL Housing Finance Agency, submitted a $10.7bn request from the Treasury "in order to eliminate our net worth deficit" on or before September 30.
The Washington Post reported Wednesday that the US government could split Fannie Mae and Freddie Mac and place the firms' toxic assets in a federal corporation.
Such a deal could allow the financial giants, long lynchpins of the US housing market, to move forward unconstrained by troubled assets - easing still constricted credit markets with the hope of driving consumer spending, the report said. Together, the two firms back 40 percent of all US home loans.
White House spokesman Robert Gibbs insisted that the report was "light years ahead of any decision-making process here".
"There's no meeting that's scheduled," he said. "And safe to say that many senior administration economic officials learned of this proposal sometime this morning at the foot of their driveway."
Staff "are aware of the problem and working on it as a part of financial regulatory reform," Mr Gibbs added.
However, he cautioned, assuming "that either this is at a point of even a decision by senior economic officials, let alone anybody that occupies the Oval Office, is way, way, way ahead of itself".
Asian Stocks May Add 23%, India Raised, JPMorgan Says
Aug. 7 (Bloomberg) -- Asian stocks may climb a further 23 percent to 450 by the end of the year amid signs of a stronger- than-expected economic recovery, JPMorgan Chase & Co. said.
JPMorgan also raised India’s equity market to “overweight” from “neutral” amid political stability and stepped-up economic reforms, analysts led by Adrian Mowat said in an Aug. 6 report. Investors should own more shares than indicated by benchmark indexes in Taiwan, South Korea, Indonesia and Thailand, with exporters among the best bets, they added.
The MSCI AC Asia-Pacific excluding Japan Index slipped 1.3 percent to 360.79 as of 3:27 p.m. in Singapore, trimming its gains this year to 46 percent. JPMorgan’s forecast represents an 82 percent advance in the measure for the full year, which would be its best annual gain on record.
“Economic activity in a number of countries is close to or at its peak,” the analysts wrote. “Real GDP for Asia ex-Japan, Indonesia, China, Australia and India is forecast to be higher in the second quarter of 2009 than any of the previous quarters. However, their markets are more than 20 percent below their peaks.”
Mowat, the brokerage’s chief Asian and emerging-market strategist, had predicted in June that the MSCI regional index would climb to 400 this year.
Aberdeen Asset Management Plc is more cautious, saying that global stocks are now fully priced following gains this year. Chinese shares have already entered a bubble, Hugh Young, who helps oversee the equivalent of $220 billion as Aberdeen’s Asian managing director, said in an interview yesterday.
India’s Growth
Indian stocks may benefit as low interest rates and inflation spur economic growth, JPMorgan said. The Reserve Bank of India last week left borrowing costs unchanged at record lows, after slashing interest rates six times since October.
Inflation has slowed from a 16-year high of 12.91 percent in August last year as oil prices fell. India’s benchmark wholesale-price index fell for an eighth week, declining 1.58 percent in the week to July 25 from a year earlier, the government said yesterday.
The benchmark Bombay Stock Exchange Sensitive Index fell as much as 1.7 percent today. It has climbed 58 percent this year, the eighth-best gain among 89 indexes tracked by Bloomberg globally.
“India is a current account deficit economy and needs to import capital to keep growing quickly,” the analysts wrote. “The credit crunch in our view is over. Low external interest rates combined with low levels for the Indian rupee should accelerate capital inflows and growth.”
The brokerage added Tata Motors Ltd., the Indian truckmaker that owns Jaguar Land Rover, and Infrastructure Development Finance Co., a financier of roads, ports and utilities, to its list of recommended stocks in India.
Acer Inc., the world’s third-largest maker of personal computers, and Korean Air Lines Co. were also among companies that JPMorgan added to its recommended portfolio, the report said.
JPMorgan also raised India’s equity market to “overweight” from “neutral” amid political stability and stepped-up economic reforms, analysts led by Adrian Mowat said in an Aug. 6 report. Investors should own more shares than indicated by benchmark indexes in Taiwan, South Korea, Indonesia and Thailand, with exporters among the best bets, they added.
The MSCI AC Asia-Pacific excluding Japan Index slipped 1.3 percent to 360.79 as of 3:27 p.m. in Singapore, trimming its gains this year to 46 percent. JPMorgan’s forecast represents an 82 percent advance in the measure for the full year, which would be its best annual gain on record.
“Economic activity in a number of countries is close to or at its peak,” the analysts wrote. “Real GDP for Asia ex-Japan, Indonesia, China, Australia and India is forecast to be higher in the second quarter of 2009 than any of the previous quarters. However, their markets are more than 20 percent below their peaks.”
Mowat, the brokerage’s chief Asian and emerging-market strategist, had predicted in June that the MSCI regional index would climb to 400 this year.
Aberdeen Asset Management Plc is more cautious, saying that global stocks are now fully priced following gains this year. Chinese shares have already entered a bubble, Hugh Young, who helps oversee the equivalent of $220 billion as Aberdeen’s Asian managing director, said in an interview yesterday.
India’s Growth
Indian stocks may benefit as low interest rates and inflation spur economic growth, JPMorgan said. The Reserve Bank of India last week left borrowing costs unchanged at record lows, after slashing interest rates six times since October.
Inflation has slowed from a 16-year high of 12.91 percent in August last year as oil prices fell. India’s benchmark wholesale-price index fell for an eighth week, declining 1.58 percent in the week to July 25 from a year earlier, the government said yesterday.
The benchmark Bombay Stock Exchange Sensitive Index fell as much as 1.7 percent today. It has climbed 58 percent this year, the eighth-best gain among 89 indexes tracked by Bloomberg globally.
“India is a current account deficit economy and needs to import capital to keep growing quickly,” the analysts wrote. “The credit crunch in our view is over. Low external interest rates combined with low levels for the Indian rupee should accelerate capital inflows and growth.”
The brokerage added Tata Motors Ltd., the Indian truckmaker that owns Jaguar Land Rover, and Infrastructure Development Finance Co., a financier of roads, ports and utilities, to its list of recommended stocks in India.
Acer Inc., the world’s third-largest maker of personal computers, and Korean Air Lines Co. were also among companies that JPMorgan added to its recommended portfolio, the report said.
CFA Program Details
CFA Program Overview
The CFA Program, administered by CFA Institute, sets the global standard for investment industry knowledge and ethical behavior. CFA Institute determines the curriculum, administers the exam, and awards the charter. Known as the "gold standard" amongst financial industry professionals, the CFA charter is recognized as a significant benchmark within the financial community.
The CFA Program consists of a series of three examinations (Levels 1, 2, and 3) that must be taken in succession, and are offered only once annually in June, with the exception of Level 1 candidates who also have the option of sitting for the exam in December.
A minimum of 250 hours of preparation per CFA exam level is recommended, although some candidates will need more time (or less) depending on their individual backgrounds and experience. There is no limit to the number of times you can take each exam, and you can take as much time as you need to complete the program.
The CFA curriculum is dynamic and changes annually to meet the nature and complexity of the global investment profession.
The CFA Candidate Body of Knowledge™
The Learning Outcomes Statements and core concepts in the CFA Program are built on the Candidate Body of Knowledge™ (CBOK), a practice-based curriculum that is determined by thousands of CFA charterholders from around the world.
Level 1 candidates will concentrate on the tools and concepts related to investment valuation, portfolio management, as well as an overview of how these processes fit within the guidelines of the CFA Institute Code of Ethics and Standards of Professional Conduct.
Level 2 candidates are expected to demonstrate a greater depth of understanding of the tools and techniques that were introduced in the Level 1 curriculum, in addition to applications in asset valuation within the context of the Code of Ethics and Standards of Professional Conduct.
Level 3 candidates are required to demonstrate a higher level of understanding of the materials tested at Levels 1 and 2, as well as display effective knowledge of the entire portfolio management process.
CFA Exam Formats
Level 1
The Level 1 examination is comprised of 240 multiple-choice questions that are equally weighted but divided into two sessions, morning and afternoon (120 multiple-choice questions per session).
Level 2
The Level 2 examination consists of a total of 120 items that are divided into 20 equally weighted item sets (10 item sets per session). Each item set contains a vignette (with an average length of 1.5 pages) as well as six multiple-choice questions.
Level 3
The Level 3 examination contains 12 to 15 essay questions in addition to 10 item sets. Essay questions may have multiple parts, and item sets include six multiple-choice questions.
Candidate Eligibility Requirements
To be eligible to enter the CFA Program, you must:
Hold a U.S. bachelor's (or equivalent) degree, be in the final year of your bachelor's degree program, or have four years of qualified, professional work experience or a combination of work and college experience that totals at least four years
Meet the professional conduct admission criteria (during the application process, you will be asked to sign statements of Professional Conduct and Candidate Responsibility)
Be prepared to take the exams in English
Enroll and Register in the CFA Program
To enter into the CFA Program, candidates must pay a one-time registration fee in addition to the required enrollment fees for each Level. CFA Institute reference material and a partial mock exam are both included with candidate registration and enrollment.
To obtain a printed version of the CFA Program enrollment and registration forms in the mail, call CFA Institute's Information Central Department at: (800) 247-8132 or (434) 951-5499 or email info@cfainstitute.org.
CFA Exam Fees
CFA Exam fees range from $600 to $1,395 depending on your CFA Exam Level and also when you register.
The CFA Program, administered by CFA Institute, sets the global standard for investment industry knowledge and ethical behavior. CFA Institute determines the curriculum, administers the exam, and awards the charter. Known as the "gold standard" amongst financial industry professionals, the CFA charter is recognized as a significant benchmark within the financial community.
The CFA Program consists of a series of three examinations (Levels 1, 2, and 3) that must be taken in succession, and are offered only once annually in June, with the exception of Level 1 candidates who also have the option of sitting for the exam in December.
A minimum of 250 hours of preparation per CFA exam level is recommended, although some candidates will need more time (or less) depending on their individual backgrounds and experience. There is no limit to the number of times you can take each exam, and you can take as much time as you need to complete the program.
The CFA curriculum is dynamic and changes annually to meet the nature and complexity of the global investment profession.
The CFA Candidate Body of Knowledge™
The Learning Outcomes Statements and core concepts in the CFA Program are built on the Candidate Body of Knowledge™ (CBOK), a practice-based curriculum that is determined by thousands of CFA charterholders from around the world.
Level 1 candidates will concentrate on the tools and concepts related to investment valuation, portfolio management, as well as an overview of how these processes fit within the guidelines of the CFA Institute Code of Ethics and Standards of Professional Conduct.
Level 2 candidates are expected to demonstrate a greater depth of understanding of the tools and techniques that were introduced in the Level 1 curriculum, in addition to applications in asset valuation within the context of the Code of Ethics and Standards of Professional Conduct.
Level 3 candidates are required to demonstrate a higher level of understanding of the materials tested at Levels 1 and 2, as well as display effective knowledge of the entire portfolio management process.
CFA Exam Formats
Level 1
The Level 1 examination is comprised of 240 multiple-choice questions that are equally weighted but divided into two sessions, morning and afternoon (120 multiple-choice questions per session).
Level 2
The Level 2 examination consists of a total of 120 items that are divided into 20 equally weighted item sets (10 item sets per session). Each item set contains a vignette (with an average length of 1.5 pages) as well as six multiple-choice questions.
Level 3
The Level 3 examination contains 12 to 15 essay questions in addition to 10 item sets. Essay questions may have multiple parts, and item sets include six multiple-choice questions.
Candidate Eligibility Requirements
To be eligible to enter the CFA Program, you must:
Hold a U.S. bachelor's (or equivalent) degree, be in the final year of your bachelor's degree program, or have four years of qualified, professional work experience or a combination of work and college experience that totals at least four years
Meet the professional conduct admission criteria (during the application process, you will be asked to sign statements of Professional Conduct and Candidate Responsibility)
Be prepared to take the exams in English
Enroll and Register in the CFA Program
To enter into the CFA Program, candidates must pay a one-time registration fee in addition to the required enrollment fees for each Level. CFA Institute reference material and a partial mock exam are both included with candidate registration and enrollment.
To obtain a printed version of the CFA Program enrollment and registration forms in the mail, call CFA Institute's Information Central Department at: (800) 247-8132 or (434) 951-5499 or email info@cfainstitute.org.
CFA Exam Fees
CFA Exam fees range from $600 to $1,395 depending on your CFA Exam Level and also when you register.
Monsoon Rain Deficit Widens in India, Hurting Sugar Cane, Rice
Aug. 6 (Bloomberg) -- India’s monsoon, the main source of irrigation for the nation’s 235 million farmers, was less than average for a second week, threatening harvests of crops such as sugar cane and rice.
The country received 23.5 millimeters of rain, 64 percent below the average 65.9 millimeters in the week ended Aug. 5, the India Meteorological Department said on its Web site. Falls were deficient or scanty in 27 of 36 weather divisions. The deficit in June 1-Aug. 5 period widened to 25 percent from 19 percent a week earlier, the office said.
A normal monsoon is key to Prime Minister Manmohan Singh’s efforts to push economic expansion back to a 9 percent pace and cool prices of essential commodities such as sugar and lentils. Dry weather in July last year hurt sugar cane output this year, turning India into a net importer for the first time since 2006.
“Insufficient rain has hurt cane crop in Uttar Pradesh,” Farm Minister Sharad Pawar told the parliament today. “We need to keep a close eye on the monsoon situation.”
Raw Sugar reached a 28-year high in New York today on speculation a deficient monsoon rainfall in India will limit cane yields and prolong a global deficit. Futures for October delivery rose 2 percent to 19.76 cents a pound at 8:44 a.m. on ICE Futures U.S. in New York. Earlier, the price reached 19.83 cents, the highest for a most-active contract since April 1981.
White sugar traded in London reached the highest since 1983 and prices in Vashi, India’s biggest wholesale market reached a record today.
Uttar Pradesh, India’s second-biggest sugar producer, has declared drought in 47 districts. Maharashtra state, the biggest producer, cut its output forecast for next year to 4.6 million tons from 5 million predicted in June.
Switching Acreage
Output may drop 43 percent to 15 million tons in the season to Sept. 30 from 26.4 million tons a year earlier after farmers switched to more profitable crops such as wheat, Pawar said.
“The overall price situation including pulses and sugar is very serious,” Pawar said. “We have taken several steps to control open market prices by making imports free.”
India has contracted to buy 2.9 million tons of raw sugar, of which 1.84 million tons has arrived into the country or is in transit, Pawar said. Purchases in the year starting Oct. 1 may soar to 8 million tons, Arhant Jain, the executive president of finance at Dhampur Sugar Mills Ltd., India’s No.4 producer, said yesterday. The projection is double the import volume estimated by the country’s biggest producers.
Monsoon in the June-September season will be 93 percent of the long-period average of 89 centimeters (35 inches), with a margin of error of 4 percent, the government forecast June 24, scaling down an April forecast for normal monsoon.
“If the rains in August and September turn out to be normal, then price situation may improve,” Pawar said.
The country received 23.5 millimeters of rain, 64 percent below the average 65.9 millimeters in the week ended Aug. 5, the India Meteorological Department said on its Web site. Falls were deficient or scanty in 27 of 36 weather divisions. The deficit in June 1-Aug. 5 period widened to 25 percent from 19 percent a week earlier, the office said.
A normal monsoon is key to Prime Minister Manmohan Singh’s efforts to push economic expansion back to a 9 percent pace and cool prices of essential commodities such as sugar and lentils. Dry weather in July last year hurt sugar cane output this year, turning India into a net importer for the first time since 2006.
“Insufficient rain has hurt cane crop in Uttar Pradesh,” Farm Minister Sharad Pawar told the parliament today. “We need to keep a close eye on the monsoon situation.”
Raw Sugar reached a 28-year high in New York today on speculation a deficient monsoon rainfall in India will limit cane yields and prolong a global deficit. Futures for October delivery rose 2 percent to 19.76 cents a pound at 8:44 a.m. on ICE Futures U.S. in New York. Earlier, the price reached 19.83 cents, the highest for a most-active contract since April 1981.
White sugar traded in London reached the highest since 1983 and prices in Vashi, India’s biggest wholesale market reached a record today.
Uttar Pradesh, India’s second-biggest sugar producer, has declared drought in 47 districts. Maharashtra state, the biggest producer, cut its output forecast for next year to 4.6 million tons from 5 million predicted in June.
Switching Acreage
Output may drop 43 percent to 15 million tons in the season to Sept. 30 from 26.4 million tons a year earlier after farmers switched to more profitable crops such as wheat, Pawar said.
“The overall price situation including pulses and sugar is very serious,” Pawar said. “We have taken several steps to control open market prices by making imports free.”
India has contracted to buy 2.9 million tons of raw sugar, of which 1.84 million tons has arrived into the country or is in transit, Pawar said. Purchases in the year starting Oct. 1 may soar to 8 million tons, Arhant Jain, the executive president of finance at Dhampur Sugar Mills Ltd., India’s No.4 producer, said yesterday. The projection is double the import volume estimated by the country’s biggest producers.
Monsoon in the June-September season will be 93 percent of the long-period average of 89 centimeters (35 inches), with a margin of error of 4 percent, the government forecast June 24, scaling down an April forecast for normal monsoon.
“If the rains in August and September turn out to be normal, then price situation may improve,” Pawar said.
Thursday, August 06, 2009
India’s Growth May Suffer From Weak Monsoon, UBS Says
Aug. 6 (Bloomberg) -- India’s economic growth may slow by as much as 2 percentage points in the year to March 2010 if monsoon rains remain deficient and hurt farm production, according to UBS AG.
“If rainfall fails to improve more significantly we fear a supply shock and a drop in agricultural output,” Philip Wyatt, a senior economist at UBS in Hong Kong, said in a report today. “This would mean real gross domestic product growth could be 1 to 2 percent lower than our current expectation of 7 percent.”
India relies on monsoon rains to produce food for its 1.2 billion people, as more than half of the nation’s arable land isn’t irrigated. Lower farm output may cut incomes among the 742 million people who live in the countryside and erode their purchasing power, weakening an economy already forecast by the central bank to expand at the slowest pace in seven years.
Rainfall of 5 percent below average would see farm output “stay static” and may knock less than 0.5 percentage points off India’s growth rate, Wyatt wrote. A rain deficiency of closer to 10 percent would reduce gross domestic product growth by 1 percentage point and a 20 percent shortfall may chop off 2 percentage points, according to the UBS report.
India’s monsoon, the main source of irrigation for the nation’s 235 million farmers, is 25 percent below average so far this season, NDTV Profit reported today, citing A.B. Mazumdar, the deputy director general of the weather bureau.
‘Don’t Look Good’
Insufficient rain has caused acreage of all major crops to lag behind year-ago levels, denting prospects for bigger harvests of rice, oilseeds and sugar cane. India, the world’s second-biggest rice producer, planted monsoon paddy crops in 28 percent less area this year because of scant rain in the main growing regions, according to Farm Minister Sharad Pawar.
“The omens don’t look good,” Wyatt said. The bank will review the possibility of any downgrade in its 7 percent growth projection for India after viewing rainfall data for mid-August, he said.
The $1.2 trillion economy grew 6.7 percent in the year to March 31, 2010. That compares with an average growth rate of about 8.8 percent in the previous five years.
“If rainfall fails to improve more significantly we fear a supply shock and a drop in agricultural output,” Philip Wyatt, a senior economist at UBS in Hong Kong, said in a report today. “This would mean real gross domestic product growth could be 1 to 2 percent lower than our current expectation of 7 percent.”
India relies on monsoon rains to produce food for its 1.2 billion people, as more than half of the nation’s arable land isn’t irrigated. Lower farm output may cut incomes among the 742 million people who live in the countryside and erode their purchasing power, weakening an economy already forecast by the central bank to expand at the slowest pace in seven years.
Rainfall of 5 percent below average would see farm output “stay static” and may knock less than 0.5 percentage points off India’s growth rate, Wyatt wrote. A rain deficiency of closer to 10 percent would reduce gross domestic product growth by 1 percentage point and a 20 percent shortfall may chop off 2 percentage points, according to the UBS report.
India’s monsoon, the main source of irrigation for the nation’s 235 million farmers, is 25 percent below average so far this season, NDTV Profit reported today, citing A.B. Mazumdar, the deputy director general of the weather bureau.
‘Don’t Look Good’
Insufficient rain has caused acreage of all major crops to lag behind year-ago levels, denting prospects for bigger harvests of rice, oilseeds and sugar cane. India, the world’s second-biggest rice producer, planted monsoon paddy crops in 28 percent less area this year because of scant rain in the main growing regions, according to Farm Minister Sharad Pawar.
“The omens don’t look good,” Wyatt said. The bank will review the possibility of any downgrade in its 7 percent growth projection for India after viewing rainfall data for mid-August, he said.
The $1.2 trillion economy grew 6.7 percent in the year to March 31, 2010. That compares with an average growth rate of about 8.8 percent in the previous five years.
China '09 GDP growth seen at 8 pct - govt think-tank
SHANGHAI (Reuters) - China's gross domestic product is expected to grow about 8 percent this year as the economy recovers, an influential government think-tank said in a report released on Thursday.
China's annual GDP growth rate had slowed to 6.1 percent in the first quarter of this year but picked up to 7.9 percent in the second quarter, ending seven consecutive quarters of deceleration, as government support measures helped an economic recovery take hold.
The State Information Centre said in a report carried in the official Shanghai Securities News that investment remained the driver of the rebound in the world's third-largest economy, although a slide in exports was abating as the environment for overseas demand became less severe and government measures such as export tax rebates took effect. China's exports are expected to fall 17.5 percent this year, it said, although imports were forecast to decline at a more modest 16 percent rate, and the trade surplus was likely to shrink to $220 billion.
The report added that China's consumer prices should begin rising again before the end of the year, due in part to higher prices for oil and other resources, although surplus production capacity would restrain price increases.
It forecast the consumer price index would show a 0.5 percent decline year-on-year for 2009.
China's annual GDP growth rate had slowed to 6.1 percent in the first quarter of this year but picked up to 7.9 percent in the second quarter, ending seven consecutive quarters of deceleration, as government support measures helped an economic recovery take hold.
The State Information Centre said in a report carried in the official Shanghai Securities News that investment remained the driver of the rebound in the world's third-largest economy, although a slide in exports was abating as the environment for overseas demand became less severe and government measures such as export tax rebates took effect. China's exports are expected to fall 17.5 percent this year, it said, although imports were forecast to decline at a more modest 16 percent rate, and the trade surplus was likely to shrink to $220 billion.
The report added that China's consumer prices should begin rising again before the end of the year, due in part to higher prices for oil and other resources, although surplus production capacity would restrain price increases.
It forecast the consumer price index would show a 0.5 percent decline year-on-year for 2009.
Wednesday, August 05, 2009
Global economy at risk from oil price rise
The world economy cannot sustain any further rise in the oil price, the International Energy Agency’s chief economist warned as oil prices rose toward a record high for the year.
Fatih Birol told the Financial Times that prices higher than about $70 could dampen a world economic recovery.
“If we go one step further, if we see prices go much higher than that, we may see it slow down and strangle economic recovery,” he said of oil prices on Friday, when the European benchmark was around $70.
European oil on Monday reached a high for the year of $73.75, spurred by manufacturing data from China and construction data from the US.
Fears have been raised over recent months that the inflationary effect of higher energy prices could impact the monetary measures taken by western governments to get their economies out of recession.
Nicolas Sarkozy, French president, and Gordon Brown, UK prime minister, called for better scrutiny of energy markets at the G8 meeting last month in Italy, and the US commodities regulator began hearings last week that are likely to result in more limits on oil futures trade. UK regulators are also considering whether energy futures markets are adequately controlled.
However, Mr Birol said that efforts to curb oil speculation were “a good step”, but were not going to significantly reduce prices.
Mr Birol said poorer countries such as those in sub-Saharan Africa would be particularly hurt by higher energy prices. “They will go through a . . . vicious circle of debt as they did a few years ago in order to finance their oil imports,” he said.
The real problem, he said, was declining investment in oil production, which if anything had worsened in recent months.
“If there is a continuation of declining investment in the upstream sector, in a few years’ time we may have major difficulties.”
He said Chinese demand would be an important determinant of oil prices, and the worldwide supply and demand balance could become very tight if other countries began to grow in 2011 or 2012.
World crude oil prices reached up to $147 in July 2008, but crashed to below $40 by the end of the year.
Francisco Blanch, commodity strategist at Bank of America, said the tolerable range of oil prices appeared to be somewhere between $70 and $80, with $80 being the upper limit of the band for developed economies. At $90-$100 a barrel he said even China could be affected.
He said that lower prices of oil and other commodities late last year was probably more beneficial to the global economy than any government stimulus effort. “This whole recovery is based on more liquidity being added to the system, when in fact the problem is we didn’t have enough oil,” he said.
Fatih Birol told the Financial Times that prices higher than about $70 could dampen a world economic recovery.
“If we go one step further, if we see prices go much higher than that, we may see it slow down and strangle economic recovery,” he said of oil prices on Friday, when the European benchmark was around $70.
European oil on Monday reached a high for the year of $73.75, spurred by manufacturing data from China and construction data from the US.
Fears have been raised over recent months that the inflationary effect of higher energy prices could impact the monetary measures taken by western governments to get their economies out of recession.
Nicolas Sarkozy, French president, and Gordon Brown, UK prime minister, called for better scrutiny of energy markets at the G8 meeting last month in Italy, and the US commodities regulator began hearings last week that are likely to result in more limits on oil futures trade. UK regulators are also considering whether energy futures markets are adequately controlled.
However, Mr Birol said that efforts to curb oil speculation were “a good step”, but were not going to significantly reduce prices.
Mr Birol said poorer countries such as those in sub-Saharan Africa would be particularly hurt by higher energy prices. “They will go through a . . . vicious circle of debt as they did a few years ago in order to finance their oil imports,” he said.
The real problem, he said, was declining investment in oil production, which if anything had worsened in recent months.
“If there is a continuation of declining investment in the upstream sector, in a few years’ time we may have major difficulties.”
He said Chinese demand would be an important determinant of oil prices, and the worldwide supply and demand balance could become very tight if other countries began to grow in 2011 or 2012.
World crude oil prices reached up to $147 in July 2008, but crashed to below $40 by the end of the year.
Francisco Blanch, commodity strategist at Bank of America, said the tolerable range of oil prices appeared to be somewhere between $70 and $80, with $80 being the upper limit of the band for developed economies. At $90-$100 a barrel he said even China could be affected.
He said that lower prices of oil and other commodities late last year was probably more beneficial to the global economy than any government stimulus effort. “This whole recovery is based on more liquidity being added to the system, when in fact the problem is we didn’t have enough oil,” he said.
Raksha Bandhan
Raksha Bandhan (the bond of protection in Hindi and Panjabi) is a Hindu festival, which celebrates the relationship between brothers and sisters. It is celebrated on the full moon of the month of Shraavana (Shravan Poornima).[1][2][3][4]
The festival is marked by the tying of a rakhi, or holy thread by the sister on the wrist of her brother. The elder brother in return offers a gift to his sister and vows to look after her same while an elder sister returns offers to her younger brother. The brother and sister traditionally feed each other sweets. It is not necessary that the rakhi can be given only to a brother by birth; any male can be "adopted" as a brother by tying a rakhi on the person, that is "blood brothers and sisters", whether they are cousins or a good friend. Indian history is replete with women asking for protection, through rakhi, from men who were neither their brothers, nor Hindus themselves. In 16th century, Rani Karnavati of Chittor sent a rakhi to the Mughal Emperor Humayun when she was threatened by Bahadur Shah of Gujarat. Humayun abandoned an ongoing military campaign to ride to her rescue.
The rakhi may also be tied on other special occasions to show solidarity and kinship (not necessarily only among brothers and sisters), as was done during the Indian independence movement.
Origins
The origin of the festival is mostly attributed to one of the following mythological incidents:
1. Indra's fight with Vritra - Indra, the king of devtas (gods), had lost his kingdom to the asura (demon) Vritra. At the behest of his Guru Brihaspati, Indra's wife Shachi tied a thread around her husband's wrist to ensure his victory in the upcoming duel.
2. Draupadi and Krishna during the Rajsuya yagya - After Shishupal's death, Krishna was left with a bleeding finger. Draupadi, the wife of the Pandavas, had torn a strip of silk off her sari and tied it around Krishna's wrist to stop the flow of blood. Touched by her concern, Krishna had declared himself bound to her by her love. He further promised to repay the debt many fold. Many years later when Draupudi was about to be shamed by being disrobed in front of the whole court by her evil brother-in-law Duryodhana, she called on Krishna to help her, and he did by divinely elongating her sari so it could not be removed.
Other significant myth's, revolving this sacred festivial, have been passed down for generations in families across India.
History
There are many references to the significance of the Rakhi festival in Vaishnava Theology. Many of these significant historical facts are still not known or recorded.
Vritra-Indra
The origin of this festival is usually traced back to the historical incidents of Indra's fight with Vritra-Indra that resulted in Indra's loss. Then, his wife had tied a thread around his wrist and empowered it with divine powers to make sure Indra emerged victorious in the duel that followed.
Krishna and Draupadi
Another incident is the one from the epic Mahabharat that concerns Krishna and Draupadi, the wife of the Pandavas. She had torn a strip of silk off her sari and tied it around Krishna's wrist to stop the flow of blood Krishna was so touched by her action that he found himself bound to her by love. He promised to repay the debt and then spent the next 25 years doing just that. Draupadi in spite of being married to 5 great warriors and being a daughter of a powerful monarch only trusted and depended wholly on Krishna.
Krishna repaid the debt of love during "Vastra haran"(removing of clothes forcefully) of Draupadi. Draupadi's "Vastra Haran" was done in the assembly of King Dritrashtra, when Yudishter,her husband lost her in gamble,at that time Krishna indefinitely extended her saree, so it could not be removed, to save her pride.This is how He paid his debt towards rakhi tied to him by Draupadi.
King Bali and Goddess Laxmi
According to another legend the Demon King Bali was a great devotee of Lord Vishnu. Lord Vishnu had taken up the task to guard his kingdom leaving his own abode in Vaikunth. Goddess Lakshmi wished to be with her lord back in her abode. She went to Bali disguised as a Brahmin woman to seek refuge till her husband came back.
During the Shravan Purnima celebrations, Lakshmi tied the sacred thread to the King. Upon being asked she revealed who she was and why she was there. The king was touched by her goodwill for his family and her purpose and requested the Lord to accompany her. He sacrificed all he had for the Lord and his devoted wife.
Thus the festival is also called Baleva that is Bali Raja's devotion to the Lord. It is said that since then it has been a tradition to invite sisters in Shravan Purnima for the thread tying ceremony or the Raksha Bandhan.
Yama and the Yamuna
According to another legend, Raksha Bandhan was a ritual followed by Lord Yama (the Lord of Death) and his sister Yamuna. Yamuna tied rakhi to Yama and bestowed immortality. Yama was so moved by the serenity of the occasion that he declared that whoever gets a rakhi tied from his sister and promised her protection will become immortal.
Raksha Bandhan celebrations in India
While Raksha Bandhan is celebrated all over the country, different parts of the country mark the day in different ways. These celebrations happen to fall on the same day, and may not have anything to do with Raksha Bandhan itself or Rakhi.
Tying of rakhi
Perhaps the single most important way of celebrating Raksha Bandhan is by tying the rakhi. A sister ties a rakhi to the wrist of her brother. The tying of a rakhi signifies her asking of her brother for his protection and love for the sister and repay her with a small gift. The brother in turn, accepts the rakhi, confirms his love and affection for his sister. It is a family event where all members of family, dressed in finery, gather and celebrate. The tying of rakhi is followed by a family feast.
On this day the sisters also tie a 'loomba' to the bangle of their brother's wife. A loomba is a loop of string with a charm or some other item attached to the loop of string. This charm or item then dangles from the bangle. The sisters then receive money from their sister's in law.
Rakhi Purnima
Rakhi is celebrated as Rakhi Purnima in North India as well as in parts of Northwest India. The word "Purnima" means a full moon night.it is also called as rakshabhandan.
Nariyal Purnima
In western India and parts of Maharashtra, Gujarat, and Goa this day is celebrated as Nariyal Purnima. On this day an offering of a coconut (nariyal) is made to the sea, as a mark of respect to Lord Varuna, the God of the Sea. Nariyal Purnima marks the beginning of the fishing season and the fishermen, who depend on the sea for a living, make an offering to Lord Varuna so that they can reap bountiful fish from the sea.
Kajari Purnima
In central parts of India such as Madhya Pradesh, Chattisgarh, Jharkand and Bihar this day is celebrated as Kajari Purnima. It is an important day for the farmers and women blessed with a son. On the ninth day after Shravana Amavasya, the preparations of the Kajari festival start. This ninth day is called Kajari Navami and varied rituals are performed by women who have sons until Kajri Purnima or the full moon day.
Pavitropana
In parts of Gujarat, this day is celebrated as Pavitropana. On this day people perform the grand pooja or the worship of Lord Shiva. It is the culmination of the prayers done through out the year.
The festival is marked by the tying of a rakhi, or holy thread by the sister on the wrist of her brother. The elder brother in return offers a gift to his sister and vows to look after her same while an elder sister returns offers to her younger brother. The brother and sister traditionally feed each other sweets. It is not necessary that the rakhi can be given only to a brother by birth; any male can be "adopted" as a brother by tying a rakhi on the person, that is "blood brothers and sisters", whether they are cousins or a good friend. Indian history is replete with women asking for protection, through rakhi, from men who were neither their brothers, nor Hindus themselves. In 16th century, Rani Karnavati of Chittor sent a rakhi to the Mughal Emperor Humayun when she was threatened by Bahadur Shah of Gujarat. Humayun abandoned an ongoing military campaign to ride to her rescue.
The rakhi may also be tied on other special occasions to show solidarity and kinship (not necessarily only among brothers and sisters), as was done during the Indian independence movement.
Origins
The origin of the festival is mostly attributed to one of the following mythological incidents:
1. Indra's fight with Vritra - Indra, the king of devtas (gods), had lost his kingdom to the asura (demon) Vritra. At the behest of his Guru Brihaspati, Indra's wife Shachi tied a thread around her husband's wrist to ensure his victory in the upcoming duel.
2. Draupadi and Krishna during the Rajsuya yagya - After Shishupal's death, Krishna was left with a bleeding finger. Draupadi, the wife of the Pandavas, had torn a strip of silk off her sari and tied it around Krishna's wrist to stop the flow of blood. Touched by her concern, Krishna had declared himself bound to her by her love. He further promised to repay the debt many fold. Many years later when Draupudi was about to be shamed by being disrobed in front of the whole court by her evil brother-in-law Duryodhana, she called on Krishna to help her, and he did by divinely elongating her sari so it could not be removed.
Other significant myth's, revolving this sacred festivial, have been passed down for generations in families across India.
History
There are many references to the significance of the Rakhi festival in Vaishnava Theology. Many of these significant historical facts are still not known or recorded.
Vritra-Indra
The origin of this festival is usually traced back to the historical incidents of Indra's fight with Vritra-Indra that resulted in Indra's loss. Then, his wife had tied a thread around his wrist and empowered it with divine powers to make sure Indra emerged victorious in the duel that followed.
Krishna and Draupadi
Another incident is the one from the epic Mahabharat that concerns Krishna and Draupadi, the wife of the Pandavas. She had torn a strip of silk off her sari and tied it around Krishna's wrist to stop the flow of blood Krishna was so touched by her action that he found himself bound to her by love. He promised to repay the debt and then spent the next 25 years doing just that. Draupadi in spite of being married to 5 great warriors and being a daughter of a powerful monarch only trusted and depended wholly on Krishna.
Krishna repaid the debt of love during "Vastra haran"(removing of clothes forcefully) of Draupadi. Draupadi's "Vastra Haran" was done in the assembly of King Dritrashtra, when Yudishter,her husband lost her in gamble,at that time Krishna indefinitely extended her saree, so it could not be removed, to save her pride.This is how He paid his debt towards rakhi tied to him by Draupadi.
King Bali and Goddess Laxmi
According to another legend the Demon King Bali was a great devotee of Lord Vishnu. Lord Vishnu had taken up the task to guard his kingdom leaving his own abode in Vaikunth. Goddess Lakshmi wished to be with her lord back in her abode. She went to Bali disguised as a Brahmin woman to seek refuge till her husband came back.
During the Shravan Purnima celebrations, Lakshmi tied the sacred thread to the King. Upon being asked she revealed who she was and why she was there. The king was touched by her goodwill for his family and her purpose and requested the Lord to accompany her. He sacrificed all he had for the Lord and his devoted wife.
Thus the festival is also called Baleva that is Bali Raja's devotion to the Lord. It is said that since then it has been a tradition to invite sisters in Shravan Purnima for the thread tying ceremony or the Raksha Bandhan.
Yama and the Yamuna
According to another legend, Raksha Bandhan was a ritual followed by Lord Yama (the Lord of Death) and his sister Yamuna. Yamuna tied rakhi to Yama and bestowed immortality. Yama was so moved by the serenity of the occasion that he declared that whoever gets a rakhi tied from his sister and promised her protection will become immortal.
Raksha Bandhan celebrations in India
While Raksha Bandhan is celebrated all over the country, different parts of the country mark the day in different ways. These celebrations happen to fall on the same day, and may not have anything to do with Raksha Bandhan itself or Rakhi.
Tying of rakhi
Perhaps the single most important way of celebrating Raksha Bandhan is by tying the rakhi. A sister ties a rakhi to the wrist of her brother. The tying of a rakhi signifies her asking of her brother for his protection and love for the sister and repay her with a small gift. The brother in turn, accepts the rakhi, confirms his love and affection for his sister. It is a family event where all members of family, dressed in finery, gather and celebrate. The tying of rakhi is followed by a family feast.
On this day the sisters also tie a 'loomba' to the bangle of their brother's wife. A loomba is a loop of string with a charm or some other item attached to the loop of string. This charm or item then dangles from the bangle. The sisters then receive money from their sister's in law.
Rakhi Purnima
Rakhi is celebrated as Rakhi Purnima in North India as well as in parts of Northwest India. The word "Purnima" means a full moon night.it is also called as rakshabhandan.
Nariyal Purnima
In western India and parts of Maharashtra, Gujarat, and Goa this day is celebrated as Nariyal Purnima. On this day an offering of a coconut (nariyal) is made to the sea, as a mark of respect to Lord Varuna, the God of the Sea. Nariyal Purnima marks the beginning of the fishing season and the fishermen, who depend on the sea for a living, make an offering to Lord Varuna so that they can reap bountiful fish from the sea.
Kajari Purnima
In central parts of India such as Madhya Pradesh, Chattisgarh, Jharkand and Bihar this day is celebrated as Kajari Purnima. It is an important day for the farmers and women blessed with a son. On the ninth day after Shravana Amavasya, the preparations of the Kajari festival start. This ninth day is called Kajari Navami and varied rituals are performed by women who have sons until Kajri Purnima or the full moon day.
Pavitropana
In parts of Gujarat, this day is celebrated as Pavitropana. On this day people perform the grand pooja or the worship of Lord Shiva. It is the culmination of the prayers done through out the year.
Tuesday, August 04, 2009
UK manufacturing grows for first time in 16 months
Britain's manufacturing sector grew for the first time in 16 months in July, according to a survey from the Chartered Institute of Purchasing & Supply (CIPS).
The CIPS manufacturing purchasing managers' index rose to 50.8 last month from an upwardly revised 47.4 in June, the first time the number has been above the 50 level that divides contraction from growth since March last year.
July's figure was well above expectations of a rise to 47.7 and marks a sharp rebound from the record low of 34.9 set in November.
After the data, sterling rose 1.25 cents to a nine-month high against the dollar of $1.8639 and a one-month high of 84.77p against the euro. September gilt futures also extended losses to their day's low.
David Noble, CIPS chief executive, said: "The manufacturing sector has clearly pulled out of the nosedive it was in earlier this year and is no longer plummeting."
He said customers slashed inventories so severely in the downturn that they were now in need of new stock in order to meet improved sales. New orders jumped to 55.9 from June's 49.8, its highest level since November 2007 and the first time orders have risen since March last year.
Although the CIPS survey adds to evidence that Britain's economy is over the worst of the recession, Mr Noble warned it was still early days and smaller firms continued to bear the brunt of the recession.
The research also found manufacturing employment declined for the fifteenth month running in July, although the rate of decline was the slowest since June last year.
Howard Archer, an economist at IHS Global Insight, said the competitive pound was helping the sector by making UK manufacturers stronger in their domestic markets as well as by helping exporters.
However, he sounded a note of caution, particularly as the CBI industrial trends survey for July showed a marked relapse in orders: "Manufacturers still face serious obstacles and the suspicion remains that sustainable growth in the sector could yet prove elusive for some time to come.
"While leaner stocks and a more competitive pound have improved their position, manufacturers are still battling against muted domestic demand, difficult conditions in overseas markets and intensified competition."
Economists said the discrepancy with official data meant that the PMI data needed to be treated with care.
"We need to be cautious about reading too much into the PMIs of course because we have seen a fairly marked pick-up in the PMIs over recent months and yet the Q2 GDP out-turn was quite a bit weaker than expected," said Adam Chester, economist at HBOS, told Reuters.
Companies reported restarting production they had stalled during the depths of the recession earlier in the year, with large firms expanding output faster than smaller ones.
The CIPS manufacturing purchasing managers' index rose to 50.8 last month from an upwardly revised 47.4 in June, the first time the number has been above the 50 level that divides contraction from growth since March last year.
July's figure was well above expectations of a rise to 47.7 and marks a sharp rebound from the record low of 34.9 set in November.
After the data, sterling rose 1.25 cents to a nine-month high against the dollar of $1.8639 and a one-month high of 84.77p against the euro. September gilt futures also extended losses to their day's low.
David Noble, CIPS chief executive, said: "The manufacturing sector has clearly pulled out of the nosedive it was in earlier this year and is no longer plummeting."
He said customers slashed inventories so severely in the downturn that they were now in need of new stock in order to meet improved sales. New orders jumped to 55.9 from June's 49.8, its highest level since November 2007 and the first time orders have risen since March last year.
Although the CIPS survey adds to evidence that Britain's economy is over the worst of the recession, Mr Noble warned it was still early days and smaller firms continued to bear the brunt of the recession.
The research also found manufacturing employment declined for the fifteenth month running in July, although the rate of decline was the slowest since June last year.
Howard Archer, an economist at IHS Global Insight, said the competitive pound was helping the sector by making UK manufacturers stronger in their domestic markets as well as by helping exporters.
However, he sounded a note of caution, particularly as the CBI industrial trends survey for July showed a marked relapse in orders: "Manufacturers still face serious obstacles and the suspicion remains that sustainable growth in the sector could yet prove elusive for some time to come.
"While leaner stocks and a more competitive pound have improved their position, manufacturers are still battling against muted domestic demand, difficult conditions in overseas markets and intensified competition."
Economists said the discrepancy with official data meant that the PMI data needed to be treated with care.
"We need to be cautious about reading too much into the PMIs of course because we have seen a fairly marked pick-up in the PMIs over recent months and yet the Q2 GDP out-turn was quite a bit weaker than expected," said Adam Chester, economist at HBOS, told Reuters.
Companies reported restarting production they had stalled during the depths of the recession earlier in the year, with large firms expanding output faster than smaller ones.
RIM launches BlackBerry at Rs 15,990
NEW DELHI: Canada-based Research In Motion today launched a BlackBerry mobile phone priced at Rs 15,990 in India targetting young professionals
and students.
The handset, BlackBerry Curve 8520, would be available across India on Airtel service from August 7.
Research In Motion Vice President (India) Frenny Bawa said, "The new BlackBerry Curve 8520 will help appeal to a much wider audience of customers in India."
Airtel Chief Marketing Officer, Mobile Services, Raghunath Mandava said, "We believe that the BlackBerry Curve 8520 will appeal to young professionals, students and a broad spectrum of customers who want the mobile for messaging, social networking, email, music and entertainment."
and students.
The handset, BlackBerry Curve 8520, would be available across India on Airtel service from August 7.
Research In Motion Vice President (India) Frenny Bawa said, "The new BlackBerry Curve 8520 will help appeal to a much wider audience of customers in India."
Airtel Chief Marketing Officer, Mobile Services, Raghunath Mandava said, "We believe that the BlackBerry Curve 8520 will appeal to young professionals, students and a broad spectrum of customers who want the mobile for messaging, social networking, email, music and entertainment."
Wednesday, July 01, 2009
Indian disinvestment to take off with government backing
Central government disinvestment is likely to kick-start as the Indian government is under pressure to improve its fiscal deficit, a host of consultants and a state-owned company official told mergermarket. ”Market-driven divestments will also give impetus to the capital markets through IPO and rights offerings, which are likely to see government support by way of underwriting commitment,” the company official and one foreign banker said.
Pending issuances include those by state owned enterprises like National Hydroelectric Power Corporation (NHPC) and OIL India, a Mumbai-based lawyer said.
State-owned engineering conglomerate, HMT and NHPC could be divestment candidates, said a private equity source. An earlier report filed in September 2008 by this newswire said that HMT could consider a strategic stake sale.
A decisive victory to the Congress Party-led coalition in the general elections saw the Indian market upbeat on Monday. Trading activity on Indian bourses came to a halt as major stock indices shot to a 15% circuit limit within minutes of market opening. It was suspended for the rest of the day as it hit the 20% mark. A survey of consultants, bankers and lawyers indicated anticipation of economic reforms by the new government. This includes the divestment of stakes in some state-owned companies held up due to resistance from communists and socialist parties backing the outgoing government.
Strategic stake sales in state-owned companies are not likely to take effect quickly, said a Mumbai-based banker. The banker pointed out that listed companies like Hindustan Petroleum and Bharat Petroleum could go to the market. “There are quite a few oil marketing companies in the fold,” he added.
However, a Delhi-based lawyer felt that it would not be easy for the government to sell stakes in oil marketing companies given that oil prices have been volatile over the past few years. The government may choose to strengthen the finances of some of these companies before going to the market, he added.
A report by French securities firm CLSA identified that the Government of India’s holding in listed state-owned companies alone is worth USD 176bn. A reduction in shareholding to hypothetically 51% across all the state-owned entities could bring in USD 62bn at current market prices, the report stated. ”We believe the government will, however, test the waters with small stake sales. A 10% stake sale in the ten large public state undertakings (PSU) that are likely disinvestment candidates can bring in USD 17bn,” the firm estimated in its report over the weekend.
CLSA’s list of likely disinvestment targets include listed companies like National Thermal Power Corporation, National Mineral Development Corporation, BHEL, SAIL, Power Grid, GAIL, as well as unlisted companies like Coal India, Balco and Oil India.
Telecom companies like BSNL and MTNL could see some stake sale from the government, said a Delhi-based banker. BSNL is the largest state-owned telco and entirely owned by the government. The company had put off IPO plans in October 2008 due to poor market conditions, according to earlier press reports. The banker felt that the appetite may just be present now in this sector.
The Delhi-based lawyer felt that the government may auction 3G spectrums to private telcos and raise quick resources prior to looking at divesting stakes in BSNL and MTNL. The lawyer felt that the government will then look at divesting stakes when the state-owned companies get enough traction in terms of revenue and profitability in the 3G space.
There could also be some minority divestments in companies like Bharat Electronics and Bharat Heavy Electricals by way of strategic tie ups, a Mumbai-based lawyer said, identifying Larsen & Tourbo as a likely partner.
M&A to kick off with greater fund inflows and consolidation
A lot of domestic M&A activity will pick up, said Shailesh Haribhakti, managing director & CEO at Haribhakti Associates, a consultancy firm. He identified M&A play in textiles, gems & jewellery, auto components and entertainment. It would be more aggregation rather than a predatory approach encouraged by private equity investors and bankers looking to contain non performing assets, Haribhakti added.
There is a lot of interest from foreign players entering the market, said the sector banker, identifying interest in real estate and infrastructure.
Two other bankers and a lawyer added that India would also see greater foreign direct investment inflow in the insurance, retail, and capital goods sectors. The only way India would be able to beat countries like China would be through increase in FDI inflows, the lawyer said.
Banking reforms: Cap for individual foreign investors unlikely to be increased
There is a lot of expectation of reforms to accelerate in the banking sector with government shareholding in state-owned banks expected to fall from the current minimum of 51% to 30%. Further, the Indian government had initially spoken of permitting foreign investment in banks beyond the current 5% individual limit.
However, considering the global pressures faced by most leading financial institutions overseas, which are currently economically supported by their respective governments, it is unlikely there would be much FDI coming into the Indian banking sector, said a ratings analyst looking at banks in India.
The ratings analyst was skeptical as to how depositors would react should the government bring down its stake in state-owned banks like Bank of Baroda to 30%. ”In December 2008 we saw a flight of capital from private sector banks to state-owned banks. Hence, decreasing government holding to 30% first needs higher depositor insurance to instill confidence among depositors,” he explained.
At the same time, delays in the opening up of the banking sector could negatively impact private-owned banks like Development Credit Bank, said the analyst. DCB said that it was open to a stake sale to a foreign bank, as earlier reported by this newswire.
Insurance reforms: Do global majors have funds to acquire higher stakes?
The passage of the Insurance Amendment Bill currently in Parliament, will enhance the foreign direct investment limits in insurance companies to 49%. This will open up a new source of capital for the fast growing insurance sector, said Paresh Parasnis, principal officer and executive director, HDFC Standard Life.
Two bankers estimated that state-owned insurance companies like Life Insurance Corporation of India (LIC), and New India Assurance Company could see the government bringing down its shareholding from the current 100%. ”The question is - who would be in a position to take up the stake sale? - and hence it is likely that LIC’s divestment would be by way of the capital market,” said a second banker.
While the market and many insurance companies are upbeat that foreign shareholdings will rise from the current 26% cap, bankers are skeptical over actual deal flows given that some of the global insurance majors such as New York-listed AIG and Fortis are currently facing economic pressures in their home markets.
Aviation reforms: Global airline majors indicate preference for franchise
While strategic stake sales in the aviation sector are expected to change the fortunes for companies like Kingfisher Airlines, Jet Airways and SpiceJet, one banker said that even if this were to be permitted, global airline companies are facing their own domestic pressures, and hence there would only be a handful of companies open to the idea of a potential stake acquisition in the domestic airline industry. Further, they would want to ensure control looking at the way many Indian airline companies are operating, he added.
Aviation reforms may not be top priority for the new UPA government, said a second banker. Even though the same government has come into power following the election results, it was not the wish of the entire earlier government to open up the sector, he said, adding that it was Praful Patel, the aviation minister, who had pushed for the reforms. ”Even if the newly elected Congress government does open up the skies, global airline companies have indicated preference for the franchise model and are not exactly falling over each other to pick up stakes,” the banker said.
A Jet Airways source said that currently it would not wish to pass any comments as the situation is hypothetical. The company had, in an earlier report filed by this newswire, said that it is not currently interested in a strategic stake sale given present valuations.
Pending issuances include those by state owned enterprises like National Hydroelectric Power Corporation (NHPC) and OIL India, a Mumbai-based lawyer said.
State-owned engineering conglomerate, HMT and NHPC could be divestment candidates, said a private equity source. An earlier report filed in September 2008 by this newswire said that HMT could consider a strategic stake sale.
A decisive victory to the Congress Party-led coalition in the general elections saw the Indian market upbeat on Monday. Trading activity on Indian bourses came to a halt as major stock indices shot to a 15% circuit limit within minutes of market opening. It was suspended for the rest of the day as it hit the 20% mark. A survey of consultants, bankers and lawyers indicated anticipation of economic reforms by the new government. This includes the divestment of stakes in some state-owned companies held up due to resistance from communists and socialist parties backing the outgoing government.
Strategic stake sales in state-owned companies are not likely to take effect quickly, said a Mumbai-based banker. The banker pointed out that listed companies like Hindustan Petroleum and Bharat Petroleum could go to the market. “There are quite a few oil marketing companies in the fold,” he added.
However, a Delhi-based lawyer felt that it would not be easy for the government to sell stakes in oil marketing companies given that oil prices have been volatile over the past few years. The government may choose to strengthen the finances of some of these companies before going to the market, he added.
A report by French securities firm CLSA identified that the Government of India’s holding in listed state-owned companies alone is worth USD 176bn. A reduction in shareholding to hypothetically 51% across all the state-owned entities could bring in USD 62bn at current market prices, the report stated. ”We believe the government will, however, test the waters with small stake sales. A 10% stake sale in the ten large public state undertakings (PSU) that are likely disinvestment candidates can bring in USD 17bn,” the firm estimated in its report over the weekend.
CLSA’s list of likely disinvestment targets include listed companies like National Thermal Power Corporation, National Mineral Development Corporation, BHEL, SAIL, Power Grid, GAIL, as well as unlisted companies like Coal India, Balco and Oil India.
Telecom companies like BSNL and MTNL could see some stake sale from the government, said a Delhi-based banker. BSNL is the largest state-owned telco and entirely owned by the government. The company had put off IPO plans in October 2008 due to poor market conditions, according to earlier press reports. The banker felt that the appetite may just be present now in this sector.
The Delhi-based lawyer felt that the government may auction 3G spectrums to private telcos and raise quick resources prior to looking at divesting stakes in BSNL and MTNL. The lawyer felt that the government will then look at divesting stakes when the state-owned companies get enough traction in terms of revenue and profitability in the 3G space.
There could also be some minority divestments in companies like Bharat Electronics and Bharat Heavy Electricals by way of strategic tie ups, a Mumbai-based lawyer said, identifying Larsen & Tourbo as a likely partner.
M&A to kick off with greater fund inflows and consolidation
A lot of domestic M&A activity will pick up, said Shailesh Haribhakti, managing director & CEO at Haribhakti Associates, a consultancy firm. He identified M&A play in textiles, gems & jewellery, auto components and entertainment. It would be more aggregation rather than a predatory approach encouraged by private equity investors and bankers looking to contain non performing assets, Haribhakti added.
There is a lot of interest from foreign players entering the market, said the sector banker, identifying interest in real estate and infrastructure.
Two other bankers and a lawyer added that India would also see greater foreign direct investment inflow in the insurance, retail, and capital goods sectors. The only way India would be able to beat countries like China would be through increase in FDI inflows, the lawyer said.
Banking reforms: Cap for individual foreign investors unlikely to be increased
There is a lot of expectation of reforms to accelerate in the banking sector with government shareholding in state-owned banks expected to fall from the current minimum of 51% to 30%. Further, the Indian government had initially spoken of permitting foreign investment in banks beyond the current 5% individual limit.
However, considering the global pressures faced by most leading financial institutions overseas, which are currently economically supported by their respective governments, it is unlikely there would be much FDI coming into the Indian banking sector, said a ratings analyst looking at banks in India.
The ratings analyst was skeptical as to how depositors would react should the government bring down its stake in state-owned banks like Bank of Baroda to 30%. ”In December 2008 we saw a flight of capital from private sector banks to state-owned banks. Hence, decreasing government holding to 30% first needs higher depositor insurance to instill confidence among depositors,” he explained.
At the same time, delays in the opening up of the banking sector could negatively impact private-owned banks like Development Credit Bank, said the analyst. DCB said that it was open to a stake sale to a foreign bank, as earlier reported by this newswire.
Insurance reforms: Do global majors have funds to acquire higher stakes?
The passage of the Insurance Amendment Bill currently in Parliament, will enhance the foreign direct investment limits in insurance companies to 49%. This will open up a new source of capital for the fast growing insurance sector, said Paresh Parasnis, principal officer and executive director, HDFC Standard Life.
Two bankers estimated that state-owned insurance companies like Life Insurance Corporation of India (LIC), and New India Assurance Company could see the government bringing down its shareholding from the current 100%. ”The question is - who would be in a position to take up the stake sale? - and hence it is likely that LIC’s divestment would be by way of the capital market,” said a second banker.
While the market and many insurance companies are upbeat that foreign shareholdings will rise from the current 26% cap, bankers are skeptical over actual deal flows given that some of the global insurance majors such as New York-listed AIG and Fortis are currently facing economic pressures in their home markets.
Aviation reforms: Global airline majors indicate preference for franchise
While strategic stake sales in the aviation sector are expected to change the fortunes for companies like Kingfisher Airlines, Jet Airways and SpiceJet, one banker said that even if this were to be permitted, global airline companies are facing their own domestic pressures, and hence there would only be a handful of companies open to the idea of a potential stake acquisition in the domestic airline industry. Further, they would want to ensure control looking at the way many Indian airline companies are operating, he added.
Aviation reforms may not be top priority for the new UPA government, said a second banker. Even though the same government has come into power following the election results, it was not the wish of the entire earlier government to open up the sector, he said, adding that it was Praful Patel, the aviation minister, who had pushed for the reforms. ”Even if the newly elected Congress government does open up the skies, global airline companies have indicated preference for the franchise model and are not exactly falling over each other to pick up stakes,” the banker said.
A Jet Airways source said that currently it would not wish to pass any comments as the situation is hypothetical. The company had, in an earlier report filed by this newswire, said that it is not currently interested in a strategic stake sale given present valuations.
Monday, June 08, 2009
BRIC economies poised for growth; China to outperform peers
New Delhi (PTI): The BRIC (Brazil, Russia, India and China) economies will continue to grow significantly even as economic giants across the world are getting affected by the recessionary fears, says a report.
"The growing economic importance of India, Brazil and Russia will have important consequences," Deutsche Bank Research said in a report, adding that "economically, financially and politically, China overshadows and will continue to overshadow the other BRICs."
Regarding India, the report said, the country would have to overcome domestic opposition to growth-enhancing and growth-sustaining economic reforms to carry forward its growth momentum.
Besides, "it is not clear yet that the leap-frogging 'services revolution' will turn out to be an economically and politically viable development model," the report added.
Besides, other BRIC economies like Brazil and Russia are also facing challenges because of which China would continue to outperform its peers over the next couple of decades.
"Investment ratios in Brazil remain very low. Russia is overly dependent on hydrocarbons and is facing very adverse demographic developments," the report said.
China's economy is larger than that of the three other BRIC economies (Brazil, Russia and India) combined. Besides, China's exports and its official forex reserve holdings are more than twice as large as those of the other BRICs combined.
"China's relative and absolute economic importance will continue to rise for the foreseeable future. In terms of economic growth, China has been outperforming the other BRICs by a wide margin over the past thirty years," the report said.
High savings rate, low level of urbanisation, low per capita income and a successful export-oriented strategy underpinned by strong investment in infrastructure and education would sustain China’s economic performance so much so that China would soon become the world’s largest economy by 2025-30.
"With every year that goes by, China's economic, political and financial weight will increase – and incentives to make its voice heard in global economic and financial affairs will become concomitantly and inexorably stronger.
Recent official Chinese comments on US financial policy and the reserve status of the dollar already point to greater assertiveness than in the past," the report added.
However, China is likely to face challenges like gradually deteriorating demographics and environmental sustainability up to potential international trade frictions, the report said.
"The growing economic importance of India, Brazil and Russia will have important consequences," Deutsche Bank Research said in a report, adding that "economically, financially and politically, China overshadows and will continue to overshadow the other BRICs."
Regarding India, the report said, the country would have to overcome domestic opposition to growth-enhancing and growth-sustaining economic reforms to carry forward its growth momentum.
Besides, "it is not clear yet that the leap-frogging 'services revolution' will turn out to be an economically and politically viable development model," the report added.
Besides, other BRIC economies like Brazil and Russia are also facing challenges because of which China would continue to outperform its peers over the next couple of decades.
"Investment ratios in Brazil remain very low. Russia is overly dependent on hydrocarbons and is facing very adverse demographic developments," the report said.
China's economy is larger than that of the three other BRIC economies (Brazil, Russia and India) combined. Besides, China's exports and its official forex reserve holdings are more than twice as large as those of the other BRICs combined.
"China's relative and absolute economic importance will continue to rise for the foreseeable future. In terms of economic growth, China has been outperforming the other BRICs by a wide margin over the past thirty years," the report said.
High savings rate, low level of urbanisation, low per capita income and a successful export-oriented strategy underpinned by strong investment in infrastructure and education would sustain China’s economic performance so much so that China would soon become the world’s largest economy by 2025-30.
"With every year that goes by, China's economic, political and financial weight will increase – and incentives to make its voice heard in global economic and financial affairs will become concomitantly and inexorably stronger.
Recent official Chinese comments on US financial policy and the reserve status of the dollar already point to greater assertiveness than in the past," the report added.
However, China is likely to face challenges like gradually deteriorating demographics and environmental sustainability up to potential international trade frictions, the report said.
Friday, May 01, 2009
Chrysler files for bankruptcy; signs Fiat deal
DETROIT/WASHINGTON (Reuters) - Chrysler LLC -- battered for the past two years by disappearing global auto sales and the credit crisis -- filed for bankruptcy on Thursday and announced an industry-changing deal with Fiat after talks to restructure its debt broke down.
Despite weeks of intense negotiations, Chrysler failed to gain the full support from its lenders to avoid the first-ever bankruptcy filing by a major U.S. automaker.
The move was hailed by President Barack Obama as a critical step in saving 30,000 jobs at Chrysler, majority-owned by Cerberus Capital Group, and hundreds of thousands more jobs at affiliated suppliers and dealers.
At the same time, Chrysler as expected entered into an alliance with Italian automaker Fiat SpA where it sold a stake starting at 20 percent and in which Fiat can become the majority owner once the government loans are repaid.
The Chapter 11 filing, in U.S. Bankruptcy Court in Manhattan, sent shock waves through the entire industry -- including Chrysler's rivals and suppliers.
As part of the filing, the U.S. government will provide up to $3.5 billion in debtor-in-possession (DIP) financing and up to $4.5 billion in exit financing. Obama said he hopes the entire process will take only 30 to 60 days.
Some of Chrysler's 3,600 U.S. dealers are expected to close, and Chrysler Financial will stop providing loans for new cars and trucks. Instead, GM's financing arm, GMAC, will provide loans to Chrysler dealers.
Despite weeks of intense negotiations, Chrysler failed to gain the full support from its lenders to avoid the first-ever bankruptcy filing by a major U.S. automaker.
The move was hailed by President Barack Obama as a critical step in saving 30,000 jobs at Chrysler, majority-owned by Cerberus Capital Group, and hundreds of thousands more jobs at affiliated suppliers and dealers.
At the same time, Chrysler as expected entered into an alliance with Italian automaker Fiat SpA where it sold a stake starting at 20 percent and in which Fiat can become the majority owner once the government loans are repaid.
The Chapter 11 filing, in U.S. Bankruptcy Court in Manhattan, sent shock waves through the entire industry -- including Chrysler's rivals and suppliers.
As part of the filing, the U.S. government will provide up to $3.5 billion in debtor-in-possession (DIP) financing and up to $4.5 billion in exit financing. Obama said he hopes the entire process will take only 30 to 60 days.
Some of Chrysler's 3,600 U.S. dealers are expected to close, and Chrysler Financial will stop providing loans for new cars and trucks. Instead, GM's financing arm, GMAC, will provide loans to Chrysler dealers.
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