NEW DELHI: The third day of spectrum auction for 3G telephony saw the all-India licence bid touching Rs 4,324 crore at the end of 16 rounds, ensuring that the government would get a minimum of Rs 17,636 crore.
With today's closing, the bid has gone up nearly 24 per cent more than the base price of Rs 3,500 crore and 5.85 per cent higher than Rs 4,085 crore in the last round on Saturday.
The government has set a target of garnering up to Rs 35,000 crore from sale of spectrum for 3G and broadband wireless access (BWA) services.
The Rs 416.43-crore bid for Delhi was the highest among all metros. The bid for Gujarat at Rs 416.42 crore almost matched the one for Delhi, according to details available with the Department of Telecom (DoT).
The bid for Gujarat also saw the highest increase of Rs 20.82 crore from the last round of auction on Saturday.
Andhra Pradesh, Tamil Nadu and Maharashtra saw bids rising to Rs 404.54 crore, while that for Karnataka was Rs 396.58 crore ahead of Mumbai at Rs 392.66 crore.
The bid for Rajasthan was Rs 159.47 crore, UP (E) Rs 157.66 crore, Kolkata, Kerala Rs 150.16 crore each, Madhya Pradesh Rs 149.02 crore, Haryana Rs 140.09 crore and Punjab Rs 123.63 crore.
There were negative demands in nine circles -- West Bengal, HP, Bihar, Orissa, Assam, North East, J&K and Haryana. Excess demands were seen for eight circles with the maximum being for UP (E). These circles did not see any increase in their bid price since Friday.
The government is auctioning three slots of 3G airwaves in 17 telecom service areas. Only two slots are up for sale across the country for broadband airwaves, which will begin after the conclusion of the 3G auctions.
On Friday, the first day of the 3G spectrum sale process, the government had received bids worth a total of Rs 3,919 crore for a pan India licence- this was 12% higher than the base price of Rs 3,500 crore.
Monday, April 12, 2010
Feb industrial output rises at slower-than-expected 15.1%
The Index of Industrial Production (IIP) for the month of February rose at a slower-than-expected 15.1% as against 16.7% on a month-on-month basis, helped by stimulus measures that boosted domestic demand. The output is expected to ease further following moves to withdraw an economic stimulus, including a interest rate hike in March. A CNBC-TV18 poll indicates a figure of 16.5% for the month.
While the manufacturing sector for grew at 16% in February as compared to 17.9% in January 2010, the mining sector posted a growth at 12.2% versus 14.6% (MoM). The electricity sector too grew at 8.4% in February versus 10.7% in January.
Basic goods for the month grew at 6.7% as compared to 5.6% growth posted in January. The capital goods sector, which showed a growth of 56.2% in January, grew 44.4% in February and the intermediate goods posted 15.6% growth versus 21.3% in January. The consumer goods for the same month grew at 8.9% as against 4.2%.
A pick up in the economy has seen a rise in inflation with the headline number poised to breach 10% in March, above February's 9.89%.
Headline inflation, which was initially driven by high food prices, is now getting a push from other segments. Inflation in manufacturing accelerated to 7.4% in February from 6.5% in January, a sign that inflation is fast becoming a demand-driven problem.
The Reserve Bank of India, citing inflationary pressures and an improving economy, hiked key rates by 25 basis points last month and is expected to raise the rates again by at least the same amount at its policy review on April 20.
Commenting on the figures Atsi Sheth, Chief Economist at Macro-Sutra said, this was still an excellent number. “We stick by our view that the RBI will increase the repo and reverse repo rates by a modest 25 basis points at its policy review on April 20.”
"The number to watch now is inflation, and if it stays in the 10-percent range, especially with non-food inflation not accelerating, this bodes well for our forecast that the RBI's post-April 20 tightening will be measured and moderated," she added.
The numbers are certainly lower than the consensus expectation but some of this was possibly given the core index numbers because there was some slackness on steel, cement and so on, said Abheek Baruah of HDFC Bank. “That has probably got reflected in manufacturing and I think there has been some moderation in both durables and capital goods production, which was again expected because the surge in both December and January have been quite spectacular. So it is just moderation, I wouldn’t be too disappointed but certainly lower than expectations.”
Preferring to use a month-on-month seasonally adjusted numbers rather than year-on-year number, Samiran Chakrabarty, Chief Economist at Standard Chartered Bank says, from that perspective, it’s about 1% MoM drop seasonally adjusted. “However, I am not too surprised because typically we have seen that if in a particular month, the MoM number is very high as happened in January where it was almost a 5% MoM growth, then the next month is somewhat down. So that kind of an adjustment has happen and that’s why this number has come out lower than what the market would have been anticipating. I am not too worried about any reversal of trend in industrial production. I think the momentum is still on.
The yield on the benchmark 10-year bond fell two basis points to 8.03% after the news, but climbed back to 8.04%.
Commenting on the movement, Arun Kaul Executive Director at Central Bank of India, said, “The bond market has seen some worries, the last week auction the yield went up at 7.96 and there on the secondary market the yields have moved upto 8.06% right now. The worry in the market is two-fold; one, inflation has started moving up, we thought inflation was only in primary articles but it looks like non-primary articles it is spilling over too, particularly, the commodity prices are moving up so that is a cause of concern. Particularly oil, oil has moved to USD 86-87 per barrel that is very worrisome. Second, is in terms of the RBI possible action. There is a feeling in the market that the RBI could increase CRR and it could even increase the repo rate to contain inflationary expectations. So that worry is leading to expectation whereby players are not willing to initiate large positions and yields have moved up.”
Finance Minister Pranab Mukherjee has said the government could consider to further roll back stimulus, after hiking factory gate duties in the February budget.
The March purchasing managers' index for India showed the pace of manufacturing activity slowed down, dropping from a 20-month-record in February, as mounting cost pressures took a toll on expansion in output.
India, the world's second fastest growing economy after China, is expected to grow 8.5% in the current fiscal year and 9% in the next.
While the manufacturing sector for grew at 16% in February as compared to 17.9% in January 2010, the mining sector posted a growth at 12.2% versus 14.6% (MoM). The electricity sector too grew at 8.4% in February versus 10.7% in January.
Basic goods for the month grew at 6.7% as compared to 5.6% growth posted in January. The capital goods sector, which showed a growth of 56.2% in January, grew 44.4% in February and the intermediate goods posted 15.6% growth versus 21.3% in January. The consumer goods for the same month grew at 8.9% as against 4.2%.
A pick up in the economy has seen a rise in inflation with the headline number poised to breach 10% in March, above February's 9.89%.
Headline inflation, which was initially driven by high food prices, is now getting a push from other segments. Inflation in manufacturing accelerated to 7.4% in February from 6.5% in January, a sign that inflation is fast becoming a demand-driven problem.
The Reserve Bank of India, citing inflationary pressures and an improving economy, hiked key rates by 25 basis points last month and is expected to raise the rates again by at least the same amount at its policy review on April 20.
Commenting on the figures Atsi Sheth, Chief Economist at Macro-Sutra said, this was still an excellent number. “We stick by our view that the RBI will increase the repo and reverse repo rates by a modest 25 basis points at its policy review on April 20.”
"The number to watch now is inflation, and if it stays in the 10-percent range, especially with non-food inflation not accelerating, this bodes well for our forecast that the RBI's post-April 20 tightening will be measured and moderated," she added.
The numbers are certainly lower than the consensus expectation but some of this was possibly given the core index numbers because there was some slackness on steel, cement and so on, said Abheek Baruah of HDFC Bank. “That has probably got reflected in manufacturing and I think there has been some moderation in both durables and capital goods production, which was again expected because the surge in both December and January have been quite spectacular. So it is just moderation, I wouldn’t be too disappointed but certainly lower than expectations.”
Preferring to use a month-on-month seasonally adjusted numbers rather than year-on-year number, Samiran Chakrabarty, Chief Economist at Standard Chartered Bank says, from that perspective, it’s about 1% MoM drop seasonally adjusted. “However, I am not too surprised because typically we have seen that if in a particular month, the MoM number is very high as happened in January where it was almost a 5% MoM growth, then the next month is somewhat down. So that kind of an adjustment has happen and that’s why this number has come out lower than what the market would have been anticipating. I am not too worried about any reversal of trend in industrial production. I think the momentum is still on.
The yield on the benchmark 10-year bond fell two basis points to 8.03% after the news, but climbed back to 8.04%.
Commenting on the movement, Arun Kaul Executive Director at Central Bank of India, said, “The bond market has seen some worries, the last week auction the yield went up at 7.96 and there on the secondary market the yields have moved upto 8.06% right now. The worry in the market is two-fold; one, inflation has started moving up, we thought inflation was only in primary articles but it looks like non-primary articles it is spilling over too, particularly, the commodity prices are moving up so that is a cause of concern. Particularly oil, oil has moved to USD 86-87 per barrel that is very worrisome. Second, is in terms of the RBI possible action. There is a feeling in the market that the RBI could increase CRR and it could even increase the repo rate to contain inflationary expectations. So that worry is leading to expectation whereby players are not willing to initiate large positions and yields have moved up.”
Finance Minister Pranab Mukherjee has said the government could consider to further roll back stimulus, after hiking factory gate duties in the February budget.
The March purchasing managers' index for India showed the pace of manufacturing activity slowed down, dropping from a 20-month-record in February, as mounting cost pressures took a toll on expansion in output.
India, the world's second fastest growing economy after China, is expected to grow 8.5% in the current fiscal year and 9% in the next.
Greek Stocks, Bonds Rally on $61 Billion EU Aid Plan
April 12 (Bloomberg) -- Greek stocks and bonds rallied and the euro gained after European governments offered the debt- plagued nation a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates.
Forced into action by a surge in Greek borrowing costs to an 11-year high, euro-region finance ministers said yesterday they would offer as much as 30 billion euros in three-year loans in 2010 at around 5 percent. Its three-year bond yields plunged 90 basis points to 6.18 percent. As much as 15 billion euros would also come from the International Monetary Fund.
“This is a huge amount,” said Stephen Jen, managing director at BlueGold Capital Management LLP in London and a former IMF economist. “This is more than a bazooka. They have gone nuclear on the issue of Greece. In the short run, the market is short Greek assets so we’ll get a rally in those.”
With the euro facing the stiffest test since its debut in 1999, the 16-nation bloc maneuvered around rules barring the bailout of debt-stricken countries, aiming to prevent Greece’s financial plight from spreading and to mute concerns about the currency’s viability. Germany also abandoned an earlier demand that Greece pay market rates.
Bonds Surge
The yield premium investors demand to hold Greek 10-year debt instead of benchmark German bunds dropped 67 basis points to 331 basis points as of 9:58 a.m. in London. Greece’s benchmark ASE Index climbed 4.8 percent, led by National Bank of Greece SA. That would be its biggest one-day gain since Feb. 9.
The yield on Greece’s 2-year note fell 149 basis points to 5.67 percent, the biggest one-day decline since at least 1998 when Bloomberg began collecting the data. Credit-default swaps on Greek sovereign debt tumbled 69 basis points to 357, the largest single-day drop ever, according to CMA DataVision prices.
The euro rose as much as 1.4 percent to $1.3629. The single currency has dropped 4.9 percent against the dollar this year as the discord within Europe over the response to the Greek crisis sapped faith in Europe’s economic management.
Bond investors’ response will determine whether Greece needs to tap the aid, a Greek Finance Ministry official said in Athens yesterday. Finance Minister George Papaconstantinou said the government plans to go ahead with debt sales, including a dollar-denominated bond, without taking up the offer for aid.
Beyond 2010
The package “sends a clear message that nobody can play with our common currency and our common fate,” Greek Prime Minister George Papandreou told reporters in Larnaca, Cyprus.
Yesterday’s teleconference of euro-region officials, which included European Central Bank President Jean-Claude Trichet, left open just how much Greece might need in 2011 and 2012, the final years covered by the package.
“It shows there is money behind this,” Luxembourg Prime Minister Jean-Claude Juncker told reporters in Brussels yesterday after chairing the conference call. “The initiative for activating the mechanism rests with the Greek government.”
Europe’s contribution would represent about two-thirds of any aid, with the IMF chipping in the rest, European Union Economic and Monetary Commissioner Olli Rehn said.
“We cannot speak on behalf of the IMF, but we know that they are ready to cooperate and contribute with a substantial amount,” Rehn said. Greek, EU and IMF officials will meet today to start working on details.
IMF ‘Ready’
The IMF was “ready to join the effort,” Managing Director Dominique Strauss-Kahn said an in e-mailed statement, without giving more details on the IMF contribution.
European rhetorical support in February and March failed to prevent Greek 10-year bond yields from soaring to 7.51 percent on April 8, according to Bloomberg generic prices, amid concern that Papandreou’s government will be swamped by its bills.
The jump in Greek yields to the highest since December 1998 helped overcome resistance to an aid package in Germany, which as Europe’s biggest economy would contribute almost a third of the loans, the largest single share.
Germany “has lost the competition,” said Carsten Brzeski, an economist at ING Group in Brussels who used to work at the European Commission. “All that fuss and talk about not putting taxpayer money at risk has been made obsolete.”
In the compromise hammered out yesterday, the European loans would be tied to Euribor and priced above rates charged by the IMF, a nod to German opposition to subsidizing a country that lived beyond its means. The EU will offer a mix of fixed- rate and floating-rate loans.
Record Deficit
The IMF would charge less than the EU. Both types of funding would be offered at the same time, Rehn said. Transfers to Greece would be made by the ECB.
Greece last week raised its estimate of the 2009 deficit from 12.7 percent of gross domestic product to 12.9 percent, the highest in the euro’s history and more than four times the EU’s 3 percent limit.
While rules dictated by Germany in the 1990s foresee fines for countries that go over the limit, no penalty has ever been imposed. Germany also led the charge to loosen the rules in 2005 after three years of excessive deficits.
While all euro-region governments vowed to contribute, some would need parliamentary approval. Ireland, itself reeling from the financial crisis, would require “national legislation,” Finance Minister Brian Lenihan said in an e-mailed statement.
No Request
The Greek government has yet to request a European lifeline, confident that this year’s planned budget cut of 4 percentage points will stem speculation that it is heading for the euro region’s first-ever default. Fitch Ratings highlighted that risk by shaving Greece’s debt rating to BBB-, one level above junk, on April 9.
A combination of higher taxes, lower spending and salary cuts for public workers has prompted strikes and protests against Papandreou, a socialist elected in October on promises of raising wages.
The EU showed no sign of demanding further Greek austerity measures. Rehn hailed the Greek government for implementing “a very bold and ambitious program.”
Greece needs to raise 11.6 billion euros by the end of May to cover maturing bonds, and another 20 billion euros by the end of the year to pay debt coupons and finance this year’s deficit.
The debt agency plans to offer 1.2 billion euros of six- month and one-year notes tomorrow, in a test of investor confidence.
The amount provided by European governments was larger than expected, said Erik Nielsen, London-based chief European economist at Goldman Sachs Group Inc., though approving money transfers through national parliaments and disbursing the funds on time remains an issue. He expressed concern about Greece’s solvency in the longer term.
“I remain a tad worried about the process of making the money available in time as well as (very) concerned about the issue of longer term sustainability,” Nielsen wrote in a note to investors.
Forced into action by a surge in Greek borrowing costs to an 11-year high, euro-region finance ministers said yesterday they would offer as much as 30 billion euros in three-year loans in 2010 at around 5 percent. Its three-year bond yields plunged 90 basis points to 6.18 percent. As much as 15 billion euros would also come from the International Monetary Fund.
“This is a huge amount,” said Stephen Jen, managing director at BlueGold Capital Management LLP in London and a former IMF economist. “This is more than a bazooka. They have gone nuclear on the issue of Greece. In the short run, the market is short Greek assets so we’ll get a rally in those.”
With the euro facing the stiffest test since its debut in 1999, the 16-nation bloc maneuvered around rules barring the bailout of debt-stricken countries, aiming to prevent Greece’s financial plight from spreading and to mute concerns about the currency’s viability. Germany also abandoned an earlier demand that Greece pay market rates.
Bonds Surge
The yield premium investors demand to hold Greek 10-year debt instead of benchmark German bunds dropped 67 basis points to 331 basis points as of 9:58 a.m. in London. Greece’s benchmark ASE Index climbed 4.8 percent, led by National Bank of Greece SA. That would be its biggest one-day gain since Feb. 9.
The yield on Greece’s 2-year note fell 149 basis points to 5.67 percent, the biggest one-day decline since at least 1998 when Bloomberg began collecting the data. Credit-default swaps on Greek sovereign debt tumbled 69 basis points to 357, the largest single-day drop ever, according to CMA DataVision prices.
The euro rose as much as 1.4 percent to $1.3629. The single currency has dropped 4.9 percent against the dollar this year as the discord within Europe over the response to the Greek crisis sapped faith in Europe’s economic management.
Bond investors’ response will determine whether Greece needs to tap the aid, a Greek Finance Ministry official said in Athens yesterday. Finance Minister George Papaconstantinou said the government plans to go ahead with debt sales, including a dollar-denominated bond, without taking up the offer for aid.
Beyond 2010
The package “sends a clear message that nobody can play with our common currency and our common fate,” Greek Prime Minister George Papandreou told reporters in Larnaca, Cyprus.
Yesterday’s teleconference of euro-region officials, which included European Central Bank President Jean-Claude Trichet, left open just how much Greece might need in 2011 and 2012, the final years covered by the package.
“It shows there is money behind this,” Luxembourg Prime Minister Jean-Claude Juncker told reporters in Brussels yesterday after chairing the conference call. “The initiative for activating the mechanism rests with the Greek government.”
Europe’s contribution would represent about two-thirds of any aid, with the IMF chipping in the rest, European Union Economic and Monetary Commissioner Olli Rehn said.
“We cannot speak on behalf of the IMF, but we know that they are ready to cooperate and contribute with a substantial amount,” Rehn said. Greek, EU and IMF officials will meet today to start working on details.
IMF ‘Ready’
The IMF was “ready to join the effort,” Managing Director Dominique Strauss-Kahn said an in e-mailed statement, without giving more details on the IMF contribution.
European rhetorical support in February and March failed to prevent Greek 10-year bond yields from soaring to 7.51 percent on April 8, according to Bloomberg generic prices, amid concern that Papandreou’s government will be swamped by its bills.
The jump in Greek yields to the highest since December 1998 helped overcome resistance to an aid package in Germany, which as Europe’s biggest economy would contribute almost a third of the loans, the largest single share.
Germany “has lost the competition,” said Carsten Brzeski, an economist at ING Group in Brussels who used to work at the European Commission. “All that fuss and talk about not putting taxpayer money at risk has been made obsolete.”
In the compromise hammered out yesterday, the European loans would be tied to Euribor and priced above rates charged by the IMF, a nod to German opposition to subsidizing a country that lived beyond its means. The EU will offer a mix of fixed- rate and floating-rate loans.
Record Deficit
The IMF would charge less than the EU. Both types of funding would be offered at the same time, Rehn said. Transfers to Greece would be made by the ECB.
Greece last week raised its estimate of the 2009 deficit from 12.7 percent of gross domestic product to 12.9 percent, the highest in the euro’s history and more than four times the EU’s 3 percent limit.
While rules dictated by Germany in the 1990s foresee fines for countries that go over the limit, no penalty has ever been imposed. Germany also led the charge to loosen the rules in 2005 after three years of excessive deficits.
While all euro-region governments vowed to contribute, some would need parliamentary approval. Ireland, itself reeling from the financial crisis, would require “national legislation,” Finance Minister Brian Lenihan said in an e-mailed statement.
No Request
The Greek government has yet to request a European lifeline, confident that this year’s planned budget cut of 4 percentage points will stem speculation that it is heading for the euro region’s first-ever default. Fitch Ratings highlighted that risk by shaving Greece’s debt rating to BBB-, one level above junk, on April 9.
A combination of higher taxes, lower spending and salary cuts for public workers has prompted strikes and protests against Papandreou, a socialist elected in October on promises of raising wages.
The EU showed no sign of demanding further Greek austerity measures. Rehn hailed the Greek government for implementing “a very bold and ambitious program.”
Greece needs to raise 11.6 billion euros by the end of May to cover maturing bonds, and another 20 billion euros by the end of the year to pay debt coupons and finance this year’s deficit.
The debt agency plans to offer 1.2 billion euros of six- month and one-year notes tomorrow, in a test of investor confidence.
The amount provided by European governments was larger than expected, said Erik Nielsen, London-based chief European economist at Goldman Sachs Group Inc., though approving money transfers through national parliaments and disbursing the funds on time remains an issue. He expressed concern about Greece’s solvency in the longer term.
“I remain a tad worried about the process of making the money available in time as well as (very) concerned about the issue of longer term sustainability,” Nielsen wrote in a note to investors.
Tuesday, April 06, 2010
Temasek in Talks to Invest in GMR, Indian Utilities
April 6 (Bloomberg) -- Temasek Holdings Pte Ltd., the Singapore state investment company, is seeking stakes in Indian power producers including GMR Group as they double capacity to meet demand in the world’s second-fastest growing major economy.
“We are in advanced discussions with GMR,” Wong Kim Yin, managing director for energy investments at Temasek, told reporters at a power conference in Singapore today. “We are trying to get exposure to the domestic India markets.”
Temasek, manager of about S$172 billion ($123 billion) of assets, is betting utilities will ramp up generation in the next seven years to overcome power shortages that India’s government says are constraining economic growth. The 17-member Bombay Stock Exchange Power Index has climbed 62 percent in a year, lagging behind the 70 percent gain in the main Sensitive Index.
“Temasek is probably entering at the right time as the sector and the company have a lot to offer in the short term,” said Abhineet Anand, a Mumbai-based analyst with Antique Stock Broking Ltd. He recommends investors buy shares of GMR Infrastructure Ltd., a unit of GMR Group, with a one-year price target of 82 rupees.
GMR Infrastructure fell 0.2 percent to 63 rupees at 1:22 p.m. in Mumbai trading compared with a 0.1 percent gain in the Sensitive Index. The stock has climbed 24 percent in a year.
A. Subba Rao, chief financial officer of GMR Group, denied on Dec. 15 an Economic Times report that the group was in talks with Temasek and ICICI Bank Ltd. to raise funds to build power plants. He couldn’t be immediately reached at his office today for comment.
Sources of Funding
“Typically we look more at investing in power companies than in power projects,” Wong said, in reply to a question on whether Temasek was investing in new generators in India.
Temasek, which has invested in resources companies and financial institutions including ICICI, India’s second-biggest lender, is in talks with “a number of players,” Wong said.
Finance Minister Pranab Mukherjee said last month that inadequate supply of coal, gas and power is “worrying” as it constrains economic growth. Prime Minister Manmohan Singh called for a partnership between the government and companies to increase power generation.
“In places like India and China, sources of funding remain domestic,” Temasek’s Wong said at the conference. “It is unclear if funding will continue without government stimulus.”
Equity markets offer sources of funding and Singapore is relatively untapped by the power industry, he said.
Indian utilities plan to increase generation capacity to 313,572 megawatts by March 2017 from 156,092 megawatts as of Dec. 31 to curb peak-hour shortages. One megawatt is enough to power about 200 middle-class Indian homes.
Growth in the $1.2 trillion economy may accelerate to as much as 8.75 percent in the year ending March 2011 from an estimated 7.2 percent in the previous financial year, Mukherjee said on April 2.
“We are in advanced discussions with GMR,” Wong Kim Yin, managing director for energy investments at Temasek, told reporters at a power conference in Singapore today. “We are trying to get exposure to the domestic India markets.”
Temasek, manager of about S$172 billion ($123 billion) of assets, is betting utilities will ramp up generation in the next seven years to overcome power shortages that India’s government says are constraining economic growth. The 17-member Bombay Stock Exchange Power Index has climbed 62 percent in a year, lagging behind the 70 percent gain in the main Sensitive Index.
“Temasek is probably entering at the right time as the sector and the company have a lot to offer in the short term,” said Abhineet Anand, a Mumbai-based analyst with Antique Stock Broking Ltd. He recommends investors buy shares of GMR Infrastructure Ltd., a unit of GMR Group, with a one-year price target of 82 rupees.
GMR Infrastructure fell 0.2 percent to 63 rupees at 1:22 p.m. in Mumbai trading compared with a 0.1 percent gain in the Sensitive Index. The stock has climbed 24 percent in a year.
A. Subba Rao, chief financial officer of GMR Group, denied on Dec. 15 an Economic Times report that the group was in talks with Temasek and ICICI Bank Ltd. to raise funds to build power plants. He couldn’t be immediately reached at his office today for comment.
Sources of Funding
“Typically we look more at investing in power companies than in power projects,” Wong said, in reply to a question on whether Temasek was investing in new generators in India.
Temasek, which has invested in resources companies and financial institutions including ICICI, India’s second-biggest lender, is in talks with “a number of players,” Wong said.
Finance Minister Pranab Mukherjee said last month that inadequate supply of coal, gas and power is “worrying” as it constrains economic growth. Prime Minister Manmohan Singh called for a partnership between the government and companies to increase power generation.
“In places like India and China, sources of funding remain domestic,” Temasek’s Wong said at the conference. “It is unclear if funding will continue without government stimulus.”
Equity markets offer sources of funding and Singapore is relatively untapped by the power industry, he said.
Indian utilities plan to increase generation capacity to 313,572 megawatts by March 2017 from 156,092 megawatts as of Dec. 31 to curb peak-hour shortages. One megawatt is enough to power about 200 middle-class Indian homes.
Growth in the $1.2 trillion economy may accelerate to as much as 8.75 percent in the year ending March 2011 from an estimated 7.2 percent in the previous financial year, Mukherjee said on April 2.
Monday, April 05, 2010
Apple Sells 300,000 iPads on First Day
Apple Inc. said it sold more than 300,000 iPads in the U.S., including preorders, on the first day the device was available, hitting all but the highest estimates for the product.
Media attention and early crowds across the country at Apple retail stores had some expecting a bigger figure, with one analyst predicting as many as 700,000 iPad sales the first day. Compared with other Apple product launches, however, analysts said the results were still impressive.
"It looks like initial sales are starting solid," ThinkEquity analyst Vijay Rakesh said.
Apple also said users downloaded more than one million applications and 250,000 e-books from its iBookstore during the first day.
Apple hadn't offered iPad sales forecasts, but over the weekend, swarms of buyers flocked to stores after weeks of publicity about the tablet-style computer. Despite long early lines, crowds thinned throughout the day, and few stores sold out of the device.
With the iPad, Apple is attempting to turn a niche product category—tablet-style computers—into a mainstream device used to watch movies, read books and newspapers, and do some simple computing. Its success will depend on whether less-technology-savvy consumers embrace the device even as Apple fans clamor for it.
Sales estimates varied widely. Piper Jaffray analyst Gene Munster more than doubled his initial first-day sales estimate to between 600,000 and 700,000 units, including preorders, based on longer-than-expected lines at stores and high expectations for online preorders. He had also lifted his 2010 forecast to 5.5 million units from 2.8 million.
Meanwhile, Kaufman Bros. analyst Shaw Wu predicted sales between 250,000 and 300,000 units for the opening weekend.
Preorders made guessing sales based on turnout tricky.
IPads on sale Saturday started at $499. They connect to the Internet using Wi-Fi, with a third-generation wireless iPad available in the next few weeks.
When Apple launched its first iPhone in June 2007, the company sold roughly 270,000 in the first weekend, Mr. Munster estimated. Apple sold one million 3G versions of the iPhone in the first weekend when that device launched in 2008, though the tally included sales abroad.
Overall, analysts expect iPad sales to reach into the millions this year. On Friday, research firm iSuppli Corp. predicted that 7.1 million iPads will sell world-wide this year, with sales nearly tripling to 20.1 million by 2012. But others were less bullish. Forrester Research, for example, predicted first-year sales of three million.
Media attention and early crowds across the country at Apple retail stores had some expecting a bigger figure, with one analyst predicting as many as 700,000 iPad sales the first day. Compared with other Apple product launches, however, analysts said the results were still impressive.
"It looks like initial sales are starting solid," ThinkEquity analyst Vijay Rakesh said.
Apple also said users downloaded more than one million applications and 250,000 e-books from its iBookstore during the first day.
Apple hadn't offered iPad sales forecasts, but over the weekend, swarms of buyers flocked to stores after weeks of publicity about the tablet-style computer. Despite long early lines, crowds thinned throughout the day, and few stores sold out of the device.
With the iPad, Apple is attempting to turn a niche product category—tablet-style computers—into a mainstream device used to watch movies, read books and newspapers, and do some simple computing. Its success will depend on whether less-technology-savvy consumers embrace the device even as Apple fans clamor for it.
Sales estimates varied widely. Piper Jaffray analyst Gene Munster more than doubled his initial first-day sales estimate to between 600,000 and 700,000 units, including preorders, based on longer-than-expected lines at stores and high expectations for online preorders. He had also lifted his 2010 forecast to 5.5 million units from 2.8 million.
Meanwhile, Kaufman Bros. analyst Shaw Wu predicted sales between 250,000 and 300,000 units for the opening weekend.
Preorders made guessing sales based on turnout tricky.
IPads on sale Saturday started at $499. They connect to the Internet using Wi-Fi, with a third-generation wireless iPad available in the next few weeks.
When Apple launched its first iPhone in June 2007, the company sold roughly 270,000 in the first weekend, Mr. Munster estimated. Apple sold one million 3G versions of the iPhone in the first weekend when that device launched in 2008, though the tally included sales abroad.
Overall, analysts expect iPad sales to reach into the millions this year. On Friday, research firm iSuppli Corp. predicted that 7.1 million iPads will sell world-wide this year, with sales nearly tripling to 20.1 million by 2012. But others were less bullish. Forrester Research, for example, predicted first-year sales of three million.
Salary accounts to get up to 25% more interest
NEW DELHI: Salary account holders could see their interest income rise by up to 25 per cent on the back of a new RBI rule from this month, under which banks will compute 3.5 per cent savings interest on daily basis instead of taking the lowest deposit during a month, Crisil Ratings said today.
Crisil said the new method of interest computation will increase the effective interest rate on savings balances, particularly for salary account holders.
"It is estimated that for a salary account holder with a minimum savings balance between 1-2 times of the monthly salary, the increase in interest income will be between 10 and 25 per cent," it said.
The new computation method has taken effect from April 1, 2010. Earlier, banks gave interest of 3.5 per cent on savings accounts on the basis of the least deposit in an account between the 10th and the last day of each month.
The interest is credited in the account twice a year, in March and September.
As for impact on banks, Crisil said the cost of deposit for them will increase by 10-20 basis points (100 bps = 1 per cent), depending on the share and pattern of the current and savings accounts (CASA).
"This will not materially impact their profitability or lead to any significant change in the share of low-cost deposits, that is CASA in the banking system," it added.
Crisil said, however, that the impact is expected to be higher for banks that have a dominant share of salary accounts with highly fluctuating balances.
At the end of February, all the commercial banks had a total deposit of over Rs 44 lakh crore, including savings, current and fixed deposits. The country's largest lender State Bank of India has over 1.56 crore savings bank account holders.
Crisil said the average CASA levels in the domestic banking system stood at 33 per cent, with savings deposits accounting for 22 per cent as of March 2009.
But it added, "The share of savings deposits is estimated to have increased to 25 per cent as on December 2009, which would translate into an increase of 2-4 per cent in CASA levels by March 31, 2020."
While announcing the annual monetary policy for 2009-10 unveiled last April, the Reserve Bank had said, "payment of interest on savings accounts by scheduled commercial banks would be calculated on a daily product basis with effect from April 1, 2010."
Crisil said the new method of interest computation will increase the effective interest rate on savings balances, particularly for salary account holders.
"It is estimated that for a salary account holder with a minimum savings balance between 1-2 times of the monthly salary, the increase in interest income will be between 10 and 25 per cent," it said.
The new computation method has taken effect from April 1, 2010. Earlier, banks gave interest of 3.5 per cent on savings accounts on the basis of the least deposit in an account between the 10th and the last day of each month.
The interest is credited in the account twice a year, in March and September.
As for impact on banks, Crisil said the cost of deposit for them will increase by 10-20 basis points (100 bps = 1 per cent), depending on the share and pattern of the current and savings accounts (CASA).
"This will not materially impact their profitability or lead to any significant change in the share of low-cost deposits, that is CASA in the banking system," it added.
Crisil said, however, that the impact is expected to be higher for banks that have a dominant share of salary accounts with highly fluctuating balances.
At the end of February, all the commercial banks had a total deposit of over Rs 44 lakh crore, including savings, current and fixed deposits. The country's largest lender State Bank of India has over 1.56 crore savings bank account holders.
Crisil said the average CASA levels in the domestic banking system stood at 33 per cent, with savings deposits accounting for 22 per cent as of March 2009.
But it added, "The share of savings deposits is estimated to have increased to 25 per cent as on December 2009, which would translate into an increase of 2-4 per cent in CASA levels by March 31, 2020."
While announcing the annual monetary policy for 2009-10 unveiled last April, the Reserve Bank had said, "payment of interest on savings accounts by scheduled commercial banks would be calculated on a daily product basis with effect from April 1, 2010."
Stocks, Commodities Rise as U.S. Jobs Data Boost Recovery View
April 5 (Bloomberg) -- U.S. and Asian stocks rose and commodities advanced as growth in American jobs boosted investor optimism that demand in the world’s largest economy is recovering. Treasury yields were at the highest since June.
The Standard & Poor’s 500 Index climbed 0.5 percent to 1,183.75 at 10:04 a.m. in New York, above its highest close since September 2008. The MSCI Asia Pacific Index rose to the highest level in more than 19 months, driven by gains in Japan. Markets in Europe, Australia, Hong Kong, China, Taiwan and New Zealand were shut for holidays. Oil advanced and copper rose to a 20-month high. The dollar fell against 15 of 16 major counterparts and the yield on the benchmark 10-year Treasury note increased 3 basis points to 3.97 percent.
U.S. payrolls gained last month by the most in three years, a “solid report” indicating “the economy is now creating jobs,” Treasury Secretary Timothy F. Geithner said in a Bloomberg Television interview. Industry reports today showed that pending home sales unexpected increased and the Institute for Supply Management’s index of service industries topped economists’ estimates.
“Overall, we are seeing positive signs about the global economy,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co., which manages $111 billion. “While developing nations are leading global growth, they are waiting for the U.S. to rebound. Recent reports are suggesting that the U.S. labor market and consumer spending are improving.”
Exxon Mobil Corp. and Schlumberger Ltd. paced gains in 39 of 40 energy stocks in the S&P 500 as crude oil climbed 1 percent to $85.73 a barrel in New York.
Apple’s iPad
Apple Inc. rose 0.8 percent to $237.80 after saying it sold more than 300,000 iPads on the device’s first day of availability over the weekend.
Canon Inc., which gets 28 percent of its revenue in the Americas, climbed 2.5 percent. Toyota Motor Corp., which derives 31 percent of its revenue in North America, increased 1.1 percent.
Former Federal Reserve chairman Alan Greenspan said yesterday on ABC’s “This Week” that the chances the U.S. economy will retrench after recovering from the worst recession since the 1930s “have fallen very significantly in the last two months.”
“There is increasing growth optimism now given that the job situation in the U.S. is getting a little more relaxed,” said Roger Groebli, Singapore-based head of financial-market analysis at LG Capital Management, part of the group that oversees $84 billion. “Exporters will benefit from that.”
Samsung, Hynix Climb
Samsung Electronics Co. rose 1.5 percent after Maeil Business Newspaper said the company will add a new semiconductor chip line. Asia’s biggest chipmaker also rose after the price of the benchmark DDR2 dynamic random access memory, or DRAM, chip rose on April 2, ending a four-day decline, according to Dramexchange Technology Inc. Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, advanced 3.4 percent.
Malaysia’s ringgit climbed to its strongest level since July 2008 after the government said exports increased 18.4 percent in February from a year earlier.
“The economic recovery theme is attracting foreigners to ringgit assets,” said Tan Voon Ching, a foreign-exchange trader at OSK Investment Bank Bhd. in Kuala Lumpur. “There’s a lot of confidence in the economic outlook for this year.”
Ringgit Gains
The ringgit strengthened 0.6 percent to 3.2301 per dollar. The won added 0.3 percent to 1,123.05 per dollar in Seoul, according to data compiled by Bloomberg. It reached 1,122.15 on April 2, the strongest level since Jan. 19.
Malaysia’s FTSE Bursa Malaysia KLCI Index rose 0.4 percent, advancing for a 10th day, the longest winning streak in 16 years. CIMB Group Holdings Bhd., Malaysia’s second-biggest bank, climbed 1.1 percent to a record. The company said the size of its initial share sale for its dual listing on the Thai exchange has been raised to as much as 50 million shares from 35 million.
Indonesia’s benchmark stock index, Asia’s best-performing major market this year, climbed to a record on expectations the central bank will keep interest rates at a record low tomorrow, helping to boost the economy.
PT Astra International, the nation’s largest auto retailer, surged 4.9 percent. PT Bank Central Asia advanced 5.5 percent, the most in more than two weeks, leading gains among banks. The central bank will keep its key interest rate at 6.5 percent tomorrow after inflation slowed to 3.43 percent in March, according to 16 out of 17 economists in a Bloomberg News survey.
The Jakarta Composite index jumped 2 percent to 2,887.246, above its previous record close of 2,830.26 on Jan. 9, 2008. The measure has climbed 14 percent this year as the central bank raised its economic growth forecast and Standard & Poor’s upgraded the nation’s sovereign debt ratings.
Yen, Pound
The yen snapped four days of losses against the dollar, on speculation Japanese exporters bought the nation’s currency after it touched a seven-month low. The pound gained versus all major counterparts after polls eased concerns that political turmoil will derail the nation’s economic recovery.
The pound rallied after a YouGov Plc poll for the Sunday Times showed that the opposition Conservative Party holds a 10 percent lead over Prime Minister Gordon Brown’s Labour party, before elections that are likely to be held next month. The Conservatives have 39 percent of the vote, while Labour had 29 percent and the Liberal Democrats 20 percent, the survey showed, reducing the likelihood that they will fail to win the parliamentary majority that some think is necessary to tackle the U.K.’s budget deficit, the largest in the Group of 20 nations. The pound strengthened 0.5 percent to $1.5290.
‘Heading Toward Stabilization’
A survey for the Sunday Express newspaper by Canadian pollsters Angus Reid put the Conservatives at 38 percent, 11 points ahead of Labour’s 27 percent, with the Liberal Democrats at 20 percent.
“The polls seem to suggest that the U.K. political situation is gradually heading toward stabilization,” said Toshiya Yamauchi, senior currency analyst in Tokyo at online currency trading company Ueda Harlow Ltd. “Signs of political stabilization, combined by waning expectations for additional quantitative monetary measures amid the plethora of positive data, will support the currency.”
Crude oil for May delivery rose to a 17-month high.
Oil prices have established a floor of $75 a barrel and there is no need for OPEC to increase production, Venezuelan Oil Minister Rafael Ramirez said April 2. The Organization of Petroleum Exporting Countries pumps about 40 percent of the world’s oil and slashed output in January 2009 to prevent a glut. The group left its production targets unchanged when ministers met in Vienna on March 17.
Venezuela, the group’s sixth-largest producer, is seeking a price band between $80 and $100 a barrel, Ramirez told reporters in Caracas on April 2.
Copper for May delivery advanced as much as 1.2 percent to $3.6265 a pound in New York, the highest level since Aug. 1, 2008.
The Standard & Poor’s 500 Index climbed 0.5 percent to 1,183.75 at 10:04 a.m. in New York, above its highest close since September 2008. The MSCI Asia Pacific Index rose to the highest level in more than 19 months, driven by gains in Japan. Markets in Europe, Australia, Hong Kong, China, Taiwan and New Zealand were shut for holidays. Oil advanced and copper rose to a 20-month high. The dollar fell against 15 of 16 major counterparts and the yield on the benchmark 10-year Treasury note increased 3 basis points to 3.97 percent.
U.S. payrolls gained last month by the most in three years, a “solid report” indicating “the economy is now creating jobs,” Treasury Secretary Timothy F. Geithner said in a Bloomberg Television interview. Industry reports today showed that pending home sales unexpected increased and the Institute for Supply Management’s index of service industries topped economists’ estimates.
“Overall, we are seeing positive signs about the global economy,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co., which manages $111 billion. “While developing nations are leading global growth, they are waiting for the U.S. to rebound. Recent reports are suggesting that the U.S. labor market and consumer spending are improving.”
Exxon Mobil Corp. and Schlumberger Ltd. paced gains in 39 of 40 energy stocks in the S&P 500 as crude oil climbed 1 percent to $85.73 a barrel in New York.
Apple’s iPad
Apple Inc. rose 0.8 percent to $237.80 after saying it sold more than 300,000 iPads on the device’s first day of availability over the weekend.
Canon Inc., which gets 28 percent of its revenue in the Americas, climbed 2.5 percent. Toyota Motor Corp., which derives 31 percent of its revenue in North America, increased 1.1 percent.
Former Federal Reserve chairman Alan Greenspan said yesterday on ABC’s “This Week” that the chances the U.S. economy will retrench after recovering from the worst recession since the 1930s “have fallen very significantly in the last two months.”
“There is increasing growth optimism now given that the job situation in the U.S. is getting a little more relaxed,” said Roger Groebli, Singapore-based head of financial-market analysis at LG Capital Management, part of the group that oversees $84 billion. “Exporters will benefit from that.”
Samsung, Hynix Climb
Samsung Electronics Co. rose 1.5 percent after Maeil Business Newspaper said the company will add a new semiconductor chip line. Asia’s biggest chipmaker also rose after the price of the benchmark DDR2 dynamic random access memory, or DRAM, chip rose on April 2, ending a four-day decline, according to Dramexchange Technology Inc. Hynix Semiconductor Inc., the world’s second-largest computer-memory chipmaker, advanced 3.4 percent.
Malaysia’s ringgit climbed to its strongest level since July 2008 after the government said exports increased 18.4 percent in February from a year earlier.
“The economic recovery theme is attracting foreigners to ringgit assets,” said Tan Voon Ching, a foreign-exchange trader at OSK Investment Bank Bhd. in Kuala Lumpur. “There’s a lot of confidence in the economic outlook for this year.”
Ringgit Gains
The ringgit strengthened 0.6 percent to 3.2301 per dollar. The won added 0.3 percent to 1,123.05 per dollar in Seoul, according to data compiled by Bloomberg. It reached 1,122.15 on April 2, the strongest level since Jan. 19.
Malaysia’s FTSE Bursa Malaysia KLCI Index rose 0.4 percent, advancing for a 10th day, the longest winning streak in 16 years. CIMB Group Holdings Bhd., Malaysia’s second-biggest bank, climbed 1.1 percent to a record. The company said the size of its initial share sale for its dual listing on the Thai exchange has been raised to as much as 50 million shares from 35 million.
Indonesia’s benchmark stock index, Asia’s best-performing major market this year, climbed to a record on expectations the central bank will keep interest rates at a record low tomorrow, helping to boost the economy.
PT Astra International, the nation’s largest auto retailer, surged 4.9 percent. PT Bank Central Asia advanced 5.5 percent, the most in more than two weeks, leading gains among banks. The central bank will keep its key interest rate at 6.5 percent tomorrow after inflation slowed to 3.43 percent in March, according to 16 out of 17 economists in a Bloomberg News survey.
The Jakarta Composite index jumped 2 percent to 2,887.246, above its previous record close of 2,830.26 on Jan. 9, 2008. The measure has climbed 14 percent this year as the central bank raised its economic growth forecast and Standard & Poor’s upgraded the nation’s sovereign debt ratings.
Yen, Pound
The yen snapped four days of losses against the dollar, on speculation Japanese exporters bought the nation’s currency after it touched a seven-month low. The pound gained versus all major counterparts after polls eased concerns that political turmoil will derail the nation’s economic recovery.
The pound rallied after a YouGov Plc poll for the Sunday Times showed that the opposition Conservative Party holds a 10 percent lead over Prime Minister Gordon Brown’s Labour party, before elections that are likely to be held next month. The Conservatives have 39 percent of the vote, while Labour had 29 percent and the Liberal Democrats 20 percent, the survey showed, reducing the likelihood that they will fail to win the parliamentary majority that some think is necessary to tackle the U.K.’s budget deficit, the largest in the Group of 20 nations. The pound strengthened 0.5 percent to $1.5290.
‘Heading Toward Stabilization’
A survey for the Sunday Express newspaper by Canadian pollsters Angus Reid put the Conservatives at 38 percent, 11 points ahead of Labour’s 27 percent, with the Liberal Democrats at 20 percent.
“The polls seem to suggest that the U.K. political situation is gradually heading toward stabilization,” said Toshiya Yamauchi, senior currency analyst in Tokyo at online currency trading company Ueda Harlow Ltd. “Signs of political stabilization, combined by waning expectations for additional quantitative monetary measures amid the plethora of positive data, will support the currency.”
Crude oil for May delivery rose to a 17-month high.
Oil prices have established a floor of $75 a barrel and there is no need for OPEC to increase production, Venezuelan Oil Minister Rafael Ramirez said April 2. The Organization of Petroleum Exporting Countries pumps about 40 percent of the world’s oil and slashed output in January 2009 to prevent a glut. The group left its production targets unchanged when ministers met in Vienna on March 17.
Venezuela, the group’s sixth-largest producer, is seeking a price band between $80 and $100 a barrel, Ramirez told reporters in Caracas on April 2.
Copper for May delivery advanced as much as 1.2 percent to $3.6265 a pound in New York, the highest level since Aug. 1, 2008.
Tuesday, March 30, 2010
Singapore's DBS to sell stake in India fund unit
MUMBAI (Reuters) - Singapore's DBS on Tuesday said, it would sell stake in its Indian mutual fund unit to Chennai-based Murugappa Group for 91 rupees a share.
DBS Cholamandalam Asset Management is run by Cholamandalam DBS Finance, a joint venture between DBS, Southeast Asia's biggest bank, and India's Murugappa Group.
DBS Cholamandalam Asset Management is run by Cholamandalam DBS Finance, a joint venture between DBS, Southeast Asia's biggest bank, and India's Murugappa Group.
StanChart files prospectus for India listing
HONG KONG/MUMBAI (Reuters) - Standard Chartered has filed a draft prospectus to raise up to $750 million through an issue of Indian Depositary Receipts, the first such offering in Asia's third-largest economy.
StanChart, which is expanding its presence across Asia, is also listed in Hong Kong. The bank, which gets 20.5 percent of the group's profit from India, said earlier this month it planned to raise $500 million to $750 million through the issue during the second quarter of this year.
The amount it raises will depend on market conditions and investor demand, the bank said on Tuesday.
Profits in India topped $1 billion in 2009, the second country to do so after Hong Kong.
The bank said it had hired UBS AG, Goldman Sachs, JM Financial Consultants, DSP Merrill Lynch, Kotak Mahindra Capital and SBI Capital Markets to manage the offering.
StanChart appointed its STCI Capital Markets unit as a co-book running lead manager.
StanChart, which is expanding its presence across Asia, is also listed in Hong Kong. The bank, which gets 20.5 percent of the group's profit from India, said earlier this month it planned to raise $500 million to $750 million through the issue during the second quarter of this year.
The amount it raises will depend on market conditions and investor demand, the bank said on Tuesday.
Profits in India topped $1 billion in 2009, the second country to do so after Hong Kong.
The bank said it had hired UBS AG, Goldman Sachs, JM Financial Consultants, DSP Merrill Lynch, Kotak Mahindra Capital and SBI Capital Markets to manage the offering.
StanChart appointed its STCI Capital Markets unit as a co-book running lead manager.
Monday, March 29, 2010
The new way to make money from Hollywood
The new Hollywood Stock Exchange, where moviegoers can make (and lose) money from placing bets on a film's potential success
I made nearly $100 this week betting that The Girl with the Dragon Tattoo will take rather more than $5m at the US box office over the next few weeks. And I'm doing pretty well from my punt that Chloe, an erotic thriller starring Julianne Moore, will bomb when it opens across America this weekend. But no one seems to agree with me that Ca$h, a psychological thriller about a couple facing foreclosure on their Chicago home, starring Sean Bean, could be a surprise hit.
Welcome to the new Hollywood Stock Exchange, where moviegoers can make (and lose) money from placing bets on a film's potential success. And this isn't some two-bit internet betting outfit. Behind the launch is Cantor Fitzgerald, one of New York's biggest financial brokerages.
But I'm not about to become a day-trading movie mogul. For now, it's play money; a shadow portfolio of punts that won't make or lose any real cash. The exchange goes live next month, after winning approval from the U.S. Commodity Futures Trading Commission. It will be called DBOR (Domestic Box Office Receipts) Movie Futures, and it is trying to lure speculators with the tag line “trade what you know”.
The launch is aimed squarely at the U.S. public and movie industry, but Richard Jaycobs, President of Cantor Exchange, says he is examining ways in which U.K. investors can participate. Details of the new exchange won't emerge until closer to the launch but for now, movie fans can try their luck on the hsx.com website — it stands for Hollywood Stock Exchange — which is run by Cantor Fitzgerald and gives a flavour of what futures trading will be like when applied to the film industry.
Punters choose from a huge list of “movie stocks”, priced on the exchange according to market expectations of their box office success. Each $1 of the stock's price represents an expected $1m in box office receipts. For example, units in Hot Tub Time Machine, a sci-fi comedy opening this weekend in the U.S., were trading midweek at around $72; in other words, the market expects it to gross around $72m. If you buy it at $72 and it grosses more than that, you're in the money. If it takes less, you're out of pocket.
Think a film is over-hyped and will flop? The exchange lets speculators “short” or sell a movie. For example, Chloe was trading at $10.83 when I decided to short it last week. I admit I'm no movie buff: all I did was look up The Guardian's review (“a by-the-numbers drama, with no believable tension'') and hey, this isn't real money (yet). Maybe quite a few people in the U.S. have also read Peter Bradshaw's review because Chloe dropped to $9.66 on the exchange this week. This means that on paper, I've made some 10 per cent.
The final reckoning comes with the formal box office returns. These are based on total U.S. takings over four weeks for wide release films and 12 weeks for limited releases, after which they are delisted from the exchange. As Chloe is wide release, my punt is that it will make less than $10.83m over four weeks. Does this sound a bit too easy? Well, it turns out most users of hsx.com expected Avatar to flop, yet it went on to take $730m in the U.S. alone. If punters had put real money behind their bets, they could have been nursing huge losses, as shorting can magnify the downside.
Critics might be wondering at this point why Cantor is doing this. Is there really that much to be made from gullible punters who think they can outsmart Hollywood producers? In truth, the exchange has been designed for big studios to hedge their risks, in much the same way that farmers can take out forward contracts on everything from pork bellies to orange juice. And it comes at a time when, in spite of the success of Avatar, film producers are wary of falling DVD sales (down 12 per cent in the U.S. last year) and illegal downloads. “With the launch of the DBOR Movie Futures contract trading, movie distributors, exhibitors, producers, and investment entities will have an unprecedented public market to create liquidity and hedge their daily business. The Cantor Exchange will provide a new component to the film finance formula to combat the uncertainties of the home video market and growing 3D marketplace,” says Andrew Wing, Chief Executive of Cantor Entertainment.
But the new exchange is not without its critics. Writing in the Washington Post, Steven Pearlstein said: “If nothing else, the movie exchange is an obvious invitation to trading with insider information, allowing those who are actually producing a movie to bet on its outcome against outsiders who have never read the script, reviewed the dailies or seen the marketing budget.”
Cantor won't even have the market to itself. Veriana, a U.S. private investment group, is launching The Trend Exchange next month, although with a high minimum investment (contracts are expected to be priced from $100,000) it is aimed at institutions. Founder and Chief Executive Robert Swagger says: “By offering speculators and hedgers a market-based solution to transfer the considerable financial risks associated with major movie productions, The Trend Exchange will perform the same public service that futures exchanges have been providing to commercial users for nearly 200 years.”
It is backed by Ralph Winter, producer of the X-Men and Fantastic Four series of films.
I made nearly $100 this week betting that The Girl with the Dragon Tattoo will take rather more than $5m at the US box office over the next few weeks. And I'm doing pretty well from my punt that Chloe, an erotic thriller starring Julianne Moore, will bomb when it opens across America this weekend. But no one seems to agree with me that Ca$h, a psychological thriller about a couple facing foreclosure on their Chicago home, starring Sean Bean, could be a surprise hit.
Welcome to the new Hollywood Stock Exchange, where moviegoers can make (and lose) money from placing bets on a film's potential success. And this isn't some two-bit internet betting outfit. Behind the launch is Cantor Fitzgerald, one of New York's biggest financial brokerages.
But I'm not about to become a day-trading movie mogul. For now, it's play money; a shadow portfolio of punts that won't make or lose any real cash. The exchange goes live next month, after winning approval from the U.S. Commodity Futures Trading Commission. It will be called DBOR (Domestic Box Office Receipts) Movie Futures, and it is trying to lure speculators with the tag line “trade what you know”.
The launch is aimed squarely at the U.S. public and movie industry, but Richard Jaycobs, President of Cantor Exchange, says he is examining ways in which U.K. investors can participate. Details of the new exchange won't emerge until closer to the launch but for now, movie fans can try their luck on the hsx.com website — it stands for Hollywood Stock Exchange — which is run by Cantor Fitzgerald and gives a flavour of what futures trading will be like when applied to the film industry.
Punters choose from a huge list of “movie stocks”, priced on the exchange according to market expectations of their box office success. Each $1 of the stock's price represents an expected $1m in box office receipts. For example, units in Hot Tub Time Machine, a sci-fi comedy opening this weekend in the U.S., were trading midweek at around $72; in other words, the market expects it to gross around $72m. If you buy it at $72 and it grosses more than that, you're in the money. If it takes less, you're out of pocket.
Think a film is over-hyped and will flop? The exchange lets speculators “short” or sell a movie. For example, Chloe was trading at $10.83 when I decided to short it last week. I admit I'm no movie buff: all I did was look up The Guardian's review (“a by-the-numbers drama, with no believable tension'') and hey, this isn't real money (yet). Maybe quite a few people in the U.S. have also read Peter Bradshaw's review because Chloe dropped to $9.66 on the exchange this week. This means that on paper, I've made some 10 per cent.
The final reckoning comes with the formal box office returns. These are based on total U.S. takings over four weeks for wide release films and 12 weeks for limited releases, after which they are delisted from the exchange. As Chloe is wide release, my punt is that it will make less than $10.83m over four weeks. Does this sound a bit too easy? Well, it turns out most users of hsx.com expected Avatar to flop, yet it went on to take $730m in the U.S. alone. If punters had put real money behind their bets, they could have been nursing huge losses, as shorting can magnify the downside.
Critics might be wondering at this point why Cantor is doing this. Is there really that much to be made from gullible punters who think they can outsmart Hollywood producers? In truth, the exchange has been designed for big studios to hedge their risks, in much the same way that farmers can take out forward contracts on everything from pork bellies to orange juice. And it comes at a time when, in spite of the success of Avatar, film producers are wary of falling DVD sales (down 12 per cent in the U.S. last year) and illegal downloads. “With the launch of the DBOR Movie Futures contract trading, movie distributors, exhibitors, producers, and investment entities will have an unprecedented public market to create liquidity and hedge their daily business. The Cantor Exchange will provide a new component to the film finance formula to combat the uncertainties of the home video market and growing 3D marketplace,” says Andrew Wing, Chief Executive of Cantor Entertainment.
But the new exchange is not without its critics. Writing in the Washington Post, Steven Pearlstein said: “If nothing else, the movie exchange is an obvious invitation to trading with insider information, allowing those who are actually producing a movie to bet on its outcome against outsiders who have never read the script, reviewed the dailies or seen the marketing budget.”
Cantor won't even have the market to itself. Veriana, a U.S. private investment group, is launching The Trend Exchange next month, although with a high minimum investment (contracts are expected to be priced from $100,000) it is aimed at institutions. Founder and Chief Executive Robert Swagger says: “By offering speculators and hedgers a market-based solution to transfer the considerable financial risks associated with major movie productions, The Trend Exchange will perform the same public service that futures exchanges have been providing to commercial users for nearly 200 years.”
It is backed by Ralph Winter, producer of the X-Men and Fantastic Four series of films.
Sunday, March 28, 2010
Investing in India
India is the 12th largest economy in the world and has the second largest population at 1.13B. India’s GDP grew 9.1% in 2007 and grew about 8% each of the previous three years. However, while India’s economy is booming, its lack of natural resources, compared to emerging markets like Brazil and Russia, and lack of infrastructure investment present real obstacles to the country's further growth. The Indian government also expects that about $500B in infrastructure investment will be needed to support the ongoing growth of the country. The economy ran into difficulties in 2008 as inflation rose to 11.4%, the highest since 1995, due largely to record prices in oil and other major commodities. The stock market fell 40% in the first half of 2008 and foreign investors withdrew $5.5B from the market after having put $19B into the market in 2007. India also has a fiscal deficit amounting to 6% of GDP, higher than any other major emerging market.
Major Indian Companies
Energy
• Reliance Industries Limited (RELIANCE.EQ-IN) is the largest company in India.
• Oil and Natural Gas Corporation (ONGC.EQ-IN) is a major oil and gas producer.
• Indian Oil Corporation Limited (IOC.EQ-IN) is an oil producer.
• NTPC Limited (NTPC-BY) is a major utilities company.
Banking
• ICICI Bank (ICICIBANK-BY) - ICICI Bank is the largest credit card provider in India.
• HDFC Bank (HDFCBANK.EQ-IN)
• State Bank of India (SBI-BY) is the largest bank in India.
Telecommunications
• Bharti Airtel (BHARTIARTL-BY) is a major telecom services provider.
• Reliance Communications (RCOMSL-BY) is a major telecom services provider.
Industrial
• Steel Authority of India Limited (SAIL-BY) is the largest steel producer in India.
• Tata Steel Limited (TATASTL-BY) is the second largest steel producer.
• Hindustan Zinc Limited (HINDZINC-BY) is a mining company that produces zinc and lead.
• Bharat Heavy Electricals Limited (BHEL-BY) is an industrial manufacturing and engineering company.
Retail
• Pantaloon Retail Limited (PANTALOONR.EQ-IN) is India's largest retailer.
• Shoppers Stop Limited (SHOPERSTOP-BY) is an Indian department store.
Services
• Infosys Technologies (INFY) is the largest IT outsourcing company in India.
• Wipro (WIT) is a major IT outsourcing company.
• Satyam Computer Services (SAY) is a major IT outsourcing company.
• Tata Consultancy Services (TCS-BY)
• Catvision Products Ltd (CATVISIO) is a niche security technology company in India.
Automotive
• Tata Motors (TTM) is the largest automobile manufacturer in India.
• Maruti Suzuki India (MARUTI-BY) is a major automobile manufacturer, especially for small cars.
• Mahindra_&_Mahindra_Ltd_(MNM-BY) is the top tractor maker and also is one of the car-makers.
Foreign Companies Invested in India
• Nokia's second largest market behind China is India. Nokia's Asia-Pacific segment made up 22% of sales in 2007, predominantly coming from China and India. India was Nokia's third largest market in 2006, but passed the US in 2007 putting it in the second place spot.
• Hyundai is the second largest car manufacturer in India and had a 17% share in the automobile market in 2007.
• IBM is the largest multinational company in India and received about $1B in sales from India in 2007.
Trends and Forces
India Pays High Price to Fuel Rapidly Growing Economy
India's GDP grew 9.1% in 2007 and over 8% per year the three years before that, but India does not have the natural resources to cover the majority of the fuel demanded by this growth. India must import 75% of its oil and in 2007/2008 oil prices hit record highs. India paid $68B in oil imports in 2007-2008, a 40% increase from the previous year. In an effort to reduce the pain of high oil prices, India is turning to one of its few major resources: coal. Coal makes up about 55% of India's energy needs, with about 83% of coal coming from the state-run oil company, Coal India Limited. However, domestic coal production is still not sufficient as Coal India's chairman said that he expects coal imports to rise 10% in 2008. Coal India is also investing in operations in Africa, Indonesia, Canada, and Australia to help meet the demand. While India must import a lot of its energy, the domestic energy companies, like Reliance Industries and Indian Oil Corporation, are still in high demand and growing rapidly.
A Booming Retail Market
The retail market has grown 1,440% between 1991 and 2007 and is the 5th largest retail market in the world at $330B in 2007. India has 12M retail outlets, but the market is by no means dominated by organized retail chains. Only 4% of India’s retail market is made up by organized retailers, and, as a result, foreign companies have started to invest in the growing Indian market. McKinsey Global reported that the middle class in India could grow from 50M to 300M and that the average Indian income will grow 300% by 2025. However, already India is the 3rd largest country in the world by purchasing power and has the second largest population in the world – 1.1B people.
Expanding the Infrastructure
The Indian government expects that about $500B in infrastructure investment will be needed to support the ongoing growth of the country. In 2007 only 20% of India’s roads were considered to be in good condition and it takes an average of 3 to 5 days for a port to turnaround a ship (compared to 4 to 6 hours in Hong Kong and Singapore). On top of that, India has not expanded its air infrastructure since 2002, but over that same time the number of air passengers has increased 25%. India's GDP is growing at an average annual rate of 7%, but without an equally impressive investment in India's infrastructure, the growth can not be sustained. Tata Steel and the Steel Authority of India are the two largest steel companies in India.
Growth of Internet and Technology Usage
About 40% of the 1.1B person population is 18 or younger, and this is the generation leading the adoption of the internet and consumer technology products. Between 2000 and 2007, the number of Indian people using the internet grew 700%. The internet population grew to 60M which represents a 5.2% penetration. This, however, is very low compared to penetration in the US, Japan, and South Korea which are all around 68% penetration. Of those 60M users, only about 3M have access to broadband. At the same time, India is the fastest growing mobile phone market in the world. Gartner predicts that India's market will be $37B by 2012 (a compounded annual growth rate of 12%). In 2007, mobile phone penetration was 19.8%, but Gartner expects that to increase to 60.7% by 2012. India has primarily a rural population and a low average income so mobile phone manufacturers are focusing on handsets below $25. Market prices for notebooks tend to be lowered in the Indian market as well in order for companies to gain market share, but the introduction of "netbooks" or mobile internet devices, could provide a cheaper alternative to notebooks for consumers in India.
$31B in Software Exports
Software exports have grown from 500M in 1994 to 31B in March 2007, making up about 22% of India's exports. India is the largest exporter of software beating out both China and Russia. IT business process outsourcing grew 33% in 2007 and Nasscom expects the IT industry in India will grow to $75B by 2010. India’s largest IT outsourcing companies like Infosys and Wipro have also started to set up branches in other possible outsourcing hot spots like China, Latin America, and Morocco.
India's Demographics
For the most part, India remains a rural population. About 77% of the country lives outside the cities and about 60% of the workforce is in agriculture. The average Indian salary has grown 15.2%, the most of any country in the world in 2007, but, at the same time, 30% of the population is in poverty and only about 61% are literate. The educational system has been neglected for many years and while there are finally efforts to revamp India's education, it will take time for measures to take effect. Only 10% of Indian children go to college and, as a result, India is suffering from a shortage of skilled labor.
Major Indian Companies
Energy
• Reliance Industries Limited (RELIANCE.EQ-IN) is the largest company in India.
• Oil and Natural Gas Corporation (ONGC.EQ-IN) is a major oil and gas producer.
• Indian Oil Corporation Limited (IOC.EQ-IN) is an oil producer.
• NTPC Limited (NTPC-BY) is a major utilities company.
Banking
• ICICI Bank (ICICIBANK-BY) - ICICI Bank is the largest credit card provider in India.
• HDFC Bank (HDFCBANK.EQ-IN)
• State Bank of India (SBI-BY) is the largest bank in India.
Telecommunications
• Bharti Airtel (BHARTIARTL-BY) is a major telecom services provider.
• Reliance Communications (RCOMSL-BY) is a major telecom services provider.
Industrial
• Steel Authority of India Limited (SAIL-BY) is the largest steel producer in India.
• Tata Steel Limited (TATASTL-BY) is the second largest steel producer.
• Hindustan Zinc Limited (HINDZINC-BY) is a mining company that produces zinc and lead.
• Bharat Heavy Electricals Limited (BHEL-BY) is an industrial manufacturing and engineering company.
Retail
• Pantaloon Retail Limited (PANTALOONR.EQ-IN) is India's largest retailer.
• Shoppers Stop Limited (SHOPERSTOP-BY) is an Indian department store.
Services
• Infosys Technologies (INFY) is the largest IT outsourcing company in India.
• Wipro (WIT) is a major IT outsourcing company.
• Satyam Computer Services (SAY) is a major IT outsourcing company.
• Tata Consultancy Services (TCS-BY)
• Catvision Products Ltd (CATVISIO) is a niche security technology company in India.
Automotive
• Tata Motors (TTM) is the largest automobile manufacturer in India.
• Maruti Suzuki India (MARUTI-BY) is a major automobile manufacturer, especially for small cars.
• Mahindra_&_Mahindra_Ltd_(MNM-BY) is the top tractor maker and also is one of the car-makers.
Foreign Companies Invested in India
• Nokia's second largest market behind China is India. Nokia's Asia-Pacific segment made up 22% of sales in 2007, predominantly coming from China and India. India was Nokia's third largest market in 2006, but passed the US in 2007 putting it in the second place spot.
• Hyundai is the second largest car manufacturer in India and had a 17% share in the automobile market in 2007.
• IBM is the largest multinational company in India and received about $1B in sales from India in 2007.
Trends and Forces
India Pays High Price to Fuel Rapidly Growing Economy
India's GDP grew 9.1% in 2007 and over 8% per year the three years before that, but India does not have the natural resources to cover the majority of the fuel demanded by this growth. India must import 75% of its oil and in 2007/2008 oil prices hit record highs. India paid $68B in oil imports in 2007-2008, a 40% increase from the previous year. In an effort to reduce the pain of high oil prices, India is turning to one of its few major resources: coal. Coal makes up about 55% of India's energy needs, with about 83% of coal coming from the state-run oil company, Coal India Limited. However, domestic coal production is still not sufficient as Coal India's chairman said that he expects coal imports to rise 10% in 2008. Coal India is also investing in operations in Africa, Indonesia, Canada, and Australia to help meet the demand. While India must import a lot of its energy, the domestic energy companies, like Reliance Industries and Indian Oil Corporation, are still in high demand and growing rapidly.
A Booming Retail Market
The retail market has grown 1,440% between 1991 and 2007 and is the 5th largest retail market in the world at $330B in 2007. India has 12M retail outlets, but the market is by no means dominated by organized retail chains. Only 4% of India’s retail market is made up by organized retailers, and, as a result, foreign companies have started to invest in the growing Indian market. McKinsey Global reported that the middle class in India could grow from 50M to 300M and that the average Indian income will grow 300% by 2025. However, already India is the 3rd largest country in the world by purchasing power and has the second largest population in the world – 1.1B people.
Expanding the Infrastructure
The Indian government expects that about $500B in infrastructure investment will be needed to support the ongoing growth of the country. In 2007 only 20% of India’s roads were considered to be in good condition and it takes an average of 3 to 5 days for a port to turnaround a ship (compared to 4 to 6 hours in Hong Kong and Singapore). On top of that, India has not expanded its air infrastructure since 2002, but over that same time the number of air passengers has increased 25%. India's GDP is growing at an average annual rate of 7%, but without an equally impressive investment in India's infrastructure, the growth can not be sustained. Tata Steel and the Steel Authority of India are the two largest steel companies in India.
Growth of Internet and Technology Usage
About 40% of the 1.1B person population is 18 or younger, and this is the generation leading the adoption of the internet and consumer technology products. Between 2000 and 2007, the number of Indian people using the internet grew 700%. The internet population grew to 60M which represents a 5.2% penetration. This, however, is very low compared to penetration in the US, Japan, and South Korea which are all around 68% penetration. Of those 60M users, only about 3M have access to broadband. At the same time, India is the fastest growing mobile phone market in the world. Gartner predicts that India's market will be $37B by 2012 (a compounded annual growth rate of 12%). In 2007, mobile phone penetration was 19.8%, but Gartner expects that to increase to 60.7% by 2012. India has primarily a rural population and a low average income so mobile phone manufacturers are focusing on handsets below $25. Market prices for notebooks tend to be lowered in the Indian market as well in order for companies to gain market share, but the introduction of "netbooks" or mobile internet devices, could provide a cheaper alternative to notebooks for consumers in India.
$31B in Software Exports
Software exports have grown from 500M in 1994 to 31B in March 2007, making up about 22% of India's exports. India is the largest exporter of software beating out both China and Russia. IT business process outsourcing grew 33% in 2007 and Nasscom expects the IT industry in India will grow to $75B by 2010. India’s largest IT outsourcing companies like Infosys and Wipro have also started to set up branches in other possible outsourcing hot spots like China, Latin America, and Morocco.
India's Demographics
For the most part, India remains a rural population. About 77% of the country lives outside the cities and about 60% of the workforce is in agriculture. The average Indian salary has grown 15.2%, the most of any country in the world in 2007, but, at the same time, 30% of the population is in poverty and only about 61% are literate. The educational system has been neglected for many years and while there are finally efforts to revamp India's education, it will take time for measures to take effect. Only 10% of Indian children go to college and, as a result, India is suffering from a shortage of skilled labor.
Tuesday, March 23, 2010
Obama welcomes healthcare vote
US President Barack Obama has said the approval by Congress of his landmark healthcare bill was a victory for the American people and common sense.
Here is the full text of Mr Obama's remarks, delivered at the White House.
Good evening, everybody. Tonight, after nearly 100 years of talk and frustration, after decades of trying, and a year of sustained effort and debate, the United States Congress finally declared that America's workers and America's families and America's small businesses deserve the security of knowing that here, in this country, neither illness nor accident should endanger the dreams they've worked a lifetime to achieve.
Tonight, at a time when the pundits said it was no longer possible, we rose above the weight of our politics. We pushed back on the undue influence of special interests. We didn't give in to mistrust or to cynicism or to fear.
I know this wasn't an easy vote for a lot of people. But it was the right vote
Instead, we proved that we are still a people capable of doing big things and tackling our biggest challenges. We proved that this government - a government of the people and by the people - still works for the people.
I want to thank every member of Congress who stood up tonight with courage and conviction to make healthcare reform a reality. And I know this wasn't an easy vote for a lot of people. But it was the right vote.
I want to thank Speaker Nancy Pelosi for her extraordinary leadership, and Majority Leader Steny Hoyer and Majority Whip Jim Clyburn for their commitment to getting the job done.
I want to thank my outstanding Vice President, Joe Biden, and my wonderful Secretary of Health and Human Services, Kathleen Sebelius, for their fantastic work on this issue.
I want to thank the many staffers in Congress, and my own incredible staff in the White House, who have worked tirelessly over the past year with Americans of all walks of life to forge a reform package finally worthy of the people we were sent here to serve.
'Prayers answered'
Today's vote answers the dreams of so many who have fought for this reform.
To every unsung American who took the time to sit down and write a letter or type out an e-mail hoping your voice would be heard - it has been heard tonight.
Today's vote answers the prayers of every American who has hoped deeply for something to be done about a healthcare system that works for insurance companies, but not for ordinary people
To the untold numbers who knocked on doors and made phone calls, who organised and mobilized out of a firm conviction that change in this country comes not from the top down, but from the bottom up - let me reaffirm that conviction: this moment is possible because of you.
Most importantly, today's vote answers the prayers of every American who has hoped deeply for something to be done about a healthcare system that works for insurance companies, but not for ordinary people.
For most Americans, this debate has never been about abstractions, the fight between right and left, Republican and Democrat - it's always been about something far more personal.
It's about every American who knows the shock of opening an envelope to see that their premiums just shot up again when times are already tough enough.
It's about every parent who knows the desperation of trying to cover a child with a chronic illness only to be told "no" again and again and again.
It's about every small business owner forced to choose between insuring employees and staying open for business. They are why we committed ourselves to this cause.
Tonight's vote is not a victory for any one party - it's a victory for them. It's a victory for the American people. And it's a victory for common sense.
'Major reform'
Now, it probably goes without saying that tonight's vote will give rise to a frenzy of instant analysis. There will be tallies of Washington winners and losers, predictions about what it means for Democrats and Republicans, for my poll numbers, for my administration.
This legislation will not fix everything that ails our healthcare system. But it moves us decisively in the right direction. This is what change looks like
But long after the debate fades away and the prognostication fades away and the dust settles, what will remain standing is not the government-run system some feared, or the status quo that serves the interests of the insurance industry, but a healthcare system that incorporates ideas from both parties - a system that works better for the American people.
If you have health insurance, this reform just gave you more control by reining in the worst excesses and abuses of the insurance industry with some of the toughest consumer protections this country has ever known - so that you are actually getting what you pay for.
If you don't have insurance, this reform gives you a chance to be a part of a big purchasing pool that will give you choice and competition and cheaper prices for insurance.
And it includes the largest healthcare tax cut for working families and small businesses in history - so that if you lose your job and you change jobs, start that new business, you'll finally be able to purchase quality, affordable care and the security and peace of mind that comes with it.
This reform is the right thing to do for our seniors. It makes Medicare stronger and more solvent, extending its life by almost a decade.
And it's the right thing to do for our future. It will reduce our deficit by more than $100bn over the next decade, and more than $1 trillion in the decade after that.
So this isn't radical reform. But it is major reform. This legislation will not fix everything that ails our healthcare system. But it moves us decisively in the right direction. This is what change looks like.
'Call of history'
Now as momentous as this day is, it's not the end of this journey.
On Tuesday, the Senate will take up revisions to this legislation that the House has embraced, and these are revisions that have strengthened this law and removed provisions that had no place in it.
When faced with crisis, we did not shrink from our challenge - we overcame it. We did not avoid our responsibility - we embraced it. We did not fear our future - we shaped it
Some have predicted another siege of parliamentary manoeuvring in order to delay adoption of these improvements. I hope that's not the case.
It's time to bring this debate to a close and begin the hard work of implementing this reform properly on behalf of the American people. This year, and in years to come, we have a solemn responsibility to do it right.
Nor does this day represent the end of the work that faces our country.
The work of revitalising our economy goes on. The work of promoting private sector job creation goes on. The work of putting American families' dreams back within reach goes on. And we march on, with renewed confidence, energized by this victory on their behalf.
In the end, what this day represents is another stone firmly laid in the foundation of the American Dream. Tonight, we answered the call of history as so many generations of Americans have before us.
When faced with crisis, we did not shrink from our challenge - we overcame it. We did not avoid our responsibility - we embraced it. We did not fear our future - we shaped it.
Here is the full text of Mr Obama's remarks, delivered at the White House.
Good evening, everybody. Tonight, after nearly 100 years of talk and frustration, after decades of trying, and a year of sustained effort and debate, the United States Congress finally declared that America's workers and America's families and America's small businesses deserve the security of knowing that here, in this country, neither illness nor accident should endanger the dreams they've worked a lifetime to achieve.
Tonight, at a time when the pundits said it was no longer possible, we rose above the weight of our politics. We pushed back on the undue influence of special interests. We didn't give in to mistrust or to cynicism or to fear.
I know this wasn't an easy vote for a lot of people. But it was the right vote
Instead, we proved that we are still a people capable of doing big things and tackling our biggest challenges. We proved that this government - a government of the people and by the people - still works for the people.
I want to thank every member of Congress who stood up tonight with courage and conviction to make healthcare reform a reality. And I know this wasn't an easy vote for a lot of people. But it was the right vote.
I want to thank Speaker Nancy Pelosi for her extraordinary leadership, and Majority Leader Steny Hoyer and Majority Whip Jim Clyburn for their commitment to getting the job done.
I want to thank my outstanding Vice President, Joe Biden, and my wonderful Secretary of Health and Human Services, Kathleen Sebelius, for their fantastic work on this issue.
I want to thank the many staffers in Congress, and my own incredible staff in the White House, who have worked tirelessly over the past year with Americans of all walks of life to forge a reform package finally worthy of the people we were sent here to serve.
'Prayers answered'
Today's vote answers the dreams of so many who have fought for this reform.
To every unsung American who took the time to sit down and write a letter or type out an e-mail hoping your voice would be heard - it has been heard tonight.
Today's vote answers the prayers of every American who has hoped deeply for something to be done about a healthcare system that works for insurance companies, but not for ordinary people
To the untold numbers who knocked on doors and made phone calls, who organised and mobilized out of a firm conviction that change in this country comes not from the top down, but from the bottom up - let me reaffirm that conviction: this moment is possible because of you.
Most importantly, today's vote answers the prayers of every American who has hoped deeply for something to be done about a healthcare system that works for insurance companies, but not for ordinary people.
For most Americans, this debate has never been about abstractions, the fight between right and left, Republican and Democrat - it's always been about something far more personal.
It's about every American who knows the shock of opening an envelope to see that their premiums just shot up again when times are already tough enough.
It's about every parent who knows the desperation of trying to cover a child with a chronic illness only to be told "no" again and again and again.
It's about every small business owner forced to choose between insuring employees and staying open for business. They are why we committed ourselves to this cause.
Tonight's vote is not a victory for any one party - it's a victory for them. It's a victory for the American people. And it's a victory for common sense.
'Major reform'
Now, it probably goes without saying that tonight's vote will give rise to a frenzy of instant analysis. There will be tallies of Washington winners and losers, predictions about what it means for Democrats and Republicans, for my poll numbers, for my administration.
This legislation will not fix everything that ails our healthcare system. But it moves us decisively in the right direction. This is what change looks like
But long after the debate fades away and the prognostication fades away and the dust settles, what will remain standing is not the government-run system some feared, or the status quo that serves the interests of the insurance industry, but a healthcare system that incorporates ideas from both parties - a system that works better for the American people.
If you have health insurance, this reform just gave you more control by reining in the worst excesses and abuses of the insurance industry with some of the toughest consumer protections this country has ever known - so that you are actually getting what you pay for.
If you don't have insurance, this reform gives you a chance to be a part of a big purchasing pool that will give you choice and competition and cheaper prices for insurance.
And it includes the largest healthcare tax cut for working families and small businesses in history - so that if you lose your job and you change jobs, start that new business, you'll finally be able to purchase quality, affordable care and the security and peace of mind that comes with it.
This reform is the right thing to do for our seniors. It makes Medicare stronger and more solvent, extending its life by almost a decade.
And it's the right thing to do for our future. It will reduce our deficit by more than $100bn over the next decade, and more than $1 trillion in the decade after that.
So this isn't radical reform. But it is major reform. This legislation will not fix everything that ails our healthcare system. But it moves us decisively in the right direction. This is what change looks like.
'Call of history'
Now as momentous as this day is, it's not the end of this journey.
On Tuesday, the Senate will take up revisions to this legislation that the House has embraced, and these are revisions that have strengthened this law and removed provisions that had no place in it.
When faced with crisis, we did not shrink from our challenge - we overcame it. We did not avoid our responsibility - we embraced it. We did not fear our future - we shaped it
Some have predicted another siege of parliamentary manoeuvring in order to delay adoption of these improvements. I hope that's not the case.
It's time to bring this debate to a close and begin the hard work of implementing this reform properly on behalf of the American people. This year, and in years to come, we have a solemn responsibility to do it right.
Nor does this day represent the end of the work that faces our country.
The work of revitalising our economy goes on. The work of promoting private sector job creation goes on. The work of putting American families' dreams back within reach goes on. And we march on, with renewed confidence, energized by this victory on their behalf.
In the end, what this day represents is another stone firmly laid in the foundation of the American Dream. Tonight, we answered the call of history as so many generations of Americans have before us.
When faced with crisis, we did not shrink from our challenge - we overcame it. We did not avoid our responsibility - we embraced it. We did not fear our future - we shaped it.
Greek economy 'to worsen' in 2010 says central bank
Greece's economy is in a "vicious circle" and will contract more severely than the government says, according to the country's central bank.
The Bank of Greece (BoG) said economic output in 2010 will fall by 2%, worse than the government's prediction of between 1.2% and 1.7%.
BoG says the recession will be worse due to planned public spending cuts.
The report comes ahead of a European Union summit which may discuss Greece's economic crisis.
BoG said that it approves of Athens' strategy to bring down the country's budget deficit, but that the impact will be worse than first thought.
"The Greek economy has fallen into a vicious circle with only one way out: the drastic reduction of the deficit and debt," the Bank's annual monetary policy report says.
The report warned that the eurozone's economic recovery remains fragile, having relied to a large extent on fiscal stimulus, which must gradually be reversed as it is leading to large budget deficits.
The report said: "The economic policy that has been announced is the start of this effort.
"Its efficient implementation will lead to a virtuous circle that will bring the Greek economy back on a sustainable growth orbit."
European aid
Greece's budget deficit last year was 12.9% of GDP, more than four times the limit under eurozone rules.
There have been conflicting reports about whether eurozone countries will discuss Greece's plight at a summit on Thursday.
Germany has irritated some of its European partners with its opposition to a financial aid to help Greece overcome its debt crisis, believing that Athens itself can solve the problem.
German Chancellor Angela Merkel told Greek Prime Minister George Papandreou on Sunday that the European Union was ready to "do what is necessary to preserve the stability of the eurozone".
Yet, in a radio interview, she said she opposed any move by EU leaders to take a firm decision on the Greek question at Thursday's summit, as Greece does not need money at the moment.
Financial markets have intensified pressure on Greece, which must refinance more than 50bn euros (£44.8bn) in debt this year, including more than 20bn euros by the end of May.
Athens must now pay roughly twice the interest that Germany does to borrow money, and has asked the EU to either guarantee loans or lend money outright if Greece cannot raise the funds it needs at reasonable rates.
The Bank of Greece (BoG) said economic output in 2010 will fall by 2%, worse than the government's prediction of between 1.2% and 1.7%.
BoG says the recession will be worse due to planned public spending cuts.
The report comes ahead of a European Union summit which may discuss Greece's economic crisis.
BoG said that it approves of Athens' strategy to bring down the country's budget deficit, but that the impact will be worse than first thought.
"The Greek economy has fallen into a vicious circle with only one way out: the drastic reduction of the deficit and debt," the Bank's annual monetary policy report says.
The report warned that the eurozone's economic recovery remains fragile, having relied to a large extent on fiscal stimulus, which must gradually be reversed as it is leading to large budget deficits.
The report said: "The economic policy that has been announced is the start of this effort.
"Its efficient implementation will lead to a virtuous circle that will bring the Greek economy back on a sustainable growth orbit."
European aid
Greece's budget deficit last year was 12.9% of GDP, more than four times the limit under eurozone rules.
There have been conflicting reports about whether eurozone countries will discuss Greece's plight at a summit on Thursday.
Germany has irritated some of its European partners with its opposition to a financial aid to help Greece overcome its debt crisis, believing that Athens itself can solve the problem.
German Chancellor Angela Merkel told Greek Prime Minister George Papandreou on Sunday that the European Union was ready to "do what is necessary to preserve the stability of the eurozone".
Yet, in a radio interview, she said she opposed any move by EU leaders to take a firm decision on the Greek question at Thursday's summit, as Greece does not need money at the moment.
Financial markets have intensified pressure on Greece, which must refinance more than 50bn euros (£44.8bn) in debt this year, including more than 20bn euros by the end of May.
Athens must now pay roughly twice the interest that Germany does to borrow money, and has asked the EU to either guarantee loans or lend money outright if Greece cannot raise the funds it needs at reasonable rates.
Budget 2010: The economic challenge in graphics
Chancellor Alistair Darling has warned repeatedly that Wednesday's Budget - the last before the general election - will be unlikely to hold much cheer.
There would be "no giveaway", he told the BBC, saying that the Budget would reflect "the times in which we live".
It is an acknowledgement of the huge economic challenges that still face the country, and the restrictions those put on the chancellor's Budget plans.
The first challenge is to sustain the fragile economic recovery , which saw the UK emerge from recession with a growth rate of 0.3% in the last three months of 2009.
Economists are divided over the strength of the recovery, and the risk of the economy falling back into recession.
The state of the economy has a direct impact on unemployment , which has risen to its highest level since the early '90s as struggling companies lay off staff.
Measures to keep people in their jobs have been repeatedly cited as a priority for the government.
But, like other stimulus measures, it is limited in what it can do because of the dire state of the UK's public finances .
The UK's budget deficit - the gap between the amount it spends and the amount it earns through taxes - is forecast to rise to up to £178bn this year.
That will push up the total amount of government debt to £850bn.
In order to start paying back that debt, the deficit will need to be closed in the coming years, and that means either increasing taxes or making cuts to public spending , or both.
Alistair Darling has defended his plan to cut the deficit by half over four years, arguing that faster cuts risk harming the recovery.
His plans for the budget deficit and expectations for the economy as a whole will be closely watched by investors in the UK economy, and the financial markets they invest in.
There would be "no giveaway", he told the BBC, saying that the Budget would reflect "the times in which we live".
It is an acknowledgement of the huge economic challenges that still face the country, and the restrictions those put on the chancellor's Budget plans.
The first challenge is to sustain the fragile economic recovery , which saw the UK emerge from recession with a growth rate of 0.3% in the last three months of 2009.
Economists are divided over the strength of the recovery, and the risk of the economy falling back into recession.
The state of the economy has a direct impact on unemployment , which has risen to its highest level since the early '90s as struggling companies lay off staff.
Measures to keep people in their jobs have been repeatedly cited as a priority for the government.
But, like other stimulus measures, it is limited in what it can do because of the dire state of the UK's public finances .
The UK's budget deficit - the gap between the amount it spends and the amount it earns through taxes - is forecast to rise to up to £178bn this year.
That will push up the total amount of government debt to £850bn.
In order to start paying back that debt, the deficit will need to be closed in the coming years, and that means either increasing taxes or making cuts to public spending , or both.
Alistair Darling has defended his plan to cut the deficit by half over four years, arguing that faster cuts risk harming the recovery.
His plans for the budget deficit and expectations for the economy as a whole will be closely watched by investors in the UK economy, and the financial markets they invest in.
Budget 2010: Top ten Budget tax changes since 1997
1, Dividend tax credits
In his first Budget in 1997, Gordon Brown announced the abolition of payable dividend tax credits for pension funds and other companies. This is often referred to as having had one of the most significant impacts on pension fund returns.
2, Stamp duty
1997 was also the year in which a graduated stamp duty was announced. Since then the threshold has increased from £60,000 to £125,000 (with a temporary increase to £175,000) and the rate for properties over £500,000 has doubled from 2pc to 4pc.
3, Tax credits
Gordon Brown would probably argue that tax credits are the most significant tax development. When he introduced the working families tax credit in the 1998 Budget, Gordon Brown said it would “..abolish the grotesque distortion where some low paid employees have had to pay back more than a pound for every extra pound they earn”.
4, Capital gains tax
Also in 1998, the Chancellor abolished the system of indexation for capital gains tax and introduced taper relief which provided an effective rate of 10pc on disposal of business assets and was looked upon as being a real boost for entrepreneurial businesses. In the 2007 Pre-Budget Report (PBR) nearly ten years later, taper relief was abolished and a flat rate of 18pc was introduced.
5, Benefits in kind
In the 1999 Budget the Chancellor extended employer national insurance contributions to all benefits in kind provided to employees whereas it had previously only applied to company cars and fuel. This imposed a considerable financial burden on some employers.
6, Environmental taxation
Over the course of the 1999 and 2000 Budgets climate change levy and aggregates levy were introduced to cut emissions and reduce pollution. Since then, along with landfill tax, these measures have been the cornerstone of the Government’s environmental policies.
7, Research and development relief
In the 2000 Budget small and medium-sized companies were given relief for expenditure on qualifying research and development and this was extended to large companies in the 2002 Budget to boost innovation and research in Britain.
8, Corporation tax rates
Of course Budgets are most famous for changing tax rates and Gordon Brown kicked this off by cutting the corporation tax rate from 33pc to 31pc in the 1997 Budget. It is now 28pc. A 10pc starting rate was announced in 1999, was reduced to 0pc in 2002 and was eventually abolished in 2005.
9, Income tax rates
In the 1999 Budget, the basic rate of income tax was cut from 23pc to 22pc, the 20pc rate was abolished and 10pc starting rate was announced. In the 2008 PBR, the basic rate was cut to 20pc and the starting rate was abolished for non-savings income. The most controversial change came in the 2008 PBR with the announcement of a 45pc rate (later amended to 50pc in the 2009 Budget) for high earners.
10, Holding companies
Over the course of a number of Budgets, a variety of measures have been introduced to create a regime to encourage holding companies to come to the UK. Such measures include double tax relief reform, the substantial shareholdings exemption, the dividend exemption and the new patent box rules
In his first Budget in 1997, Gordon Brown announced the abolition of payable dividend tax credits for pension funds and other companies. This is often referred to as having had one of the most significant impacts on pension fund returns.
2, Stamp duty
1997 was also the year in which a graduated stamp duty was announced. Since then the threshold has increased from £60,000 to £125,000 (with a temporary increase to £175,000) and the rate for properties over £500,000 has doubled from 2pc to 4pc.
3, Tax credits
Gordon Brown would probably argue that tax credits are the most significant tax development. When he introduced the working families tax credit in the 1998 Budget, Gordon Brown said it would “..abolish the grotesque distortion where some low paid employees have had to pay back more than a pound for every extra pound they earn”.
4, Capital gains tax
Also in 1998, the Chancellor abolished the system of indexation for capital gains tax and introduced taper relief which provided an effective rate of 10pc on disposal of business assets and was looked upon as being a real boost for entrepreneurial businesses. In the 2007 Pre-Budget Report (PBR) nearly ten years later, taper relief was abolished and a flat rate of 18pc was introduced.
5, Benefits in kind
In the 1999 Budget the Chancellor extended employer national insurance contributions to all benefits in kind provided to employees whereas it had previously only applied to company cars and fuel. This imposed a considerable financial burden on some employers.
6, Environmental taxation
Over the course of the 1999 and 2000 Budgets climate change levy and aggregates levy were introduced to cut emissions and reduce pollution. Since then, along with landfill tax, these measures have been the cornerstone of the Government’s environmental policies.
7, Research and development relief
In the 2000 Budget small and medium-sized companies were given relief for expenditure on qualifying research and development and this was extended to large companies in the 2002 Budget to boost innovation and research in Britain.
8, Corporation tax rates
Of course Budgets are most famous for changing tax rates and Gordon Brown kicked this off by cutting the corporation tax rate from 33pc to 31pc in the 1997 Budget. It is now 28pc. A 10pc starting rate was announced in 1999, was reduced to 0pc in 2002 and was eventually abolished in 2005.
9, Income tax rates
In the 1999 Budget, the basic rate of income tax was cut from 23pc to 22pc, the 20pc rate was abolished and 10pc starting rate was announced. In the 2008 PBR, the basic rate was cut to 20pc and the starting rate was abolished for non-savings income. The most controversial change came in the 2008 PBR with the announcement of a 45pc rate (later amended to 50pc in the 2009 Budget) for high earners.
10, Holding companies
Over the course of a number of Budgets, a variety of measures have been introduced to create a regime to encourage holding companies to come to the UK. Such measures include double tax relief reform, the substantial shareholdings exemption, the dividend exemption and the new patent box rules
Monday, March 22, 2010
Subbarao Begins India Battle to Contain Accelerating Inflation
March 22 (Bloomberg) -- India central bank Governor Duvvuri Subbarao may add to his first interest rate increase since the end of the global recession after falling in danger of being judged too slow to contain accelerating consumer prices.
The next move may come as soon as next month, according to Morgan Stanley and IHS Global Insight. The Reserve Bank of India boosted the benchmark reverse repurchase rate to 3.5 percent from a record-low 3.25 percent and the repurchase rate to 5 percent from 4.75 percent on March 19, saying curbing inflation has become “imperative.”
The announcement followed Nomura Holdings Inc. saying the RBI was “behind the curve” after inflation hit a 16-month high and exceeded the rate in all other Group of Twenty economies. Indian stocks may tumble today as investors anticipate higher borrowing costs, with the benchmark Sensitive Index at risk of a 200-point drop, according CNI Research (India) Ltd. in Mumbai.
“The strength of India’s domestic demand will keep inflation fairly high,” Jyoti Narasimhan, research director for India at IHS Global in Lexington, Massachusetts, said in an interview. “This is definitely the first of many rate increases to come. We could see another hike in April. Twenty five basis points is not a heroic move.”
The quarter-point rise was a down payment on 3 percentage points of increases that the central bank will need to enact this year to stem inflation, according to Goldman Sachs Group Inc.
Global Trend
India followed Australia and Malaysia in lifting borrowing costs this month, while Norway and Israel did so at the end of last year, as the global economy recovered from the worst recession since World War II.
Inflation has returned to Asia as the region leads the global economic recovery. India’s wholesale-price inflation rate touched 9.89 percent in February, exceeding the central bank’s 8.5 percent forecast by March-end.
Factory output in Malaysia rose 12.7 percent in January. Consumer prices in China rose to a 16-month high of 2.7 percent in February from a year earlier as industrial production grew 20.7 percent in the first two months of 2010, the most in more than five years.
Still lagging behind India are central banks in the Group of Seven economies with the Federal Reserve and European Central Bank among those waiting for evidence of a more concrete recovery before they reverse record low borrowing costs. Canada may be the first G-7 central bank to shift after data showed its core inflation rate unexpectedly accelerated last month.
Before Meeting
Subbarao moved a month before the bank’s scheduled April 20 monetary policy meeting after India’s industrial output gained 16.7 percent in January from a year earlier, following a 17.6 percent increase in December that was the biggest jump since at least 1994, according to Bloomberg data.
“Given the lags in monetary policy, it is better to respond in a timely manner, even if it is outside the scheduled policy reviews, than take stronger measures at a later stage when inflationary expectations have accentuated,” the central bank said in its March 19 statement.
The bank will “maintain this tightening path,” Morgan Stanley economist Chetan Ahya said in a note on March 19. He expects Subbarao to increase rates by another 25 basis points on April 20. The rates may go up by one percentage point in 2010, including last week’s raise, he said.
‘Growing Discomfort’
The rate increase will end a rally in the government bond market and the benchmark 10-year note yield may rise to around 8 percent this week, said Indranil Pan, chief economist at Kotak Mahindra Bank Ltd. in Mumbai.
India’s 10-year notes completed their best week since September on March 19, and stocks had their biggest weekly gain in nine months, after Standard & Poor’s upgraded the nation’s debt-rating outlook to stable from negative on optimism for economic growth and government plans to narrow the budget gap.
Yields declined 18 basis points to 7.83 percent in Mumbai last week, while the Sensitive index rose 2.4 percent to 17,578.23 during the period.
The central bank said economic “recovery is increasingly taking hold” and pointed to the latest industrial production data as evidence of a “revival of private demand.”
India’s passenger-car sales gained to a record in February amid rising incomes in the world’s second-most populous nation. The demand is encouraging Ford Motor Co. and Volkswagen AG to build plants and unveil new models in the South Asian nation.
India’s $1.2 trillion economy, Asia’s biggest after Japan and China, may expand 8.2 percent in the next fiscal year, compared with 7.2 percent in the year to March 31, the finance ministry said in February.
Inflation is politically sensitive in a country such as India, where the World Bank estimates almost three-quarters of the nation’s 1.2 billion people live on less than $2 a day.
Opposition parties led by the Bharatiya Janata Party repeatedly stalled proceedings in parliament this month, accusing Prime Minister Manmohan Singh’s government of being anti-poor and failing to curb prices.
The next move may come as soon as next month, according to Morgan Stanley and IHS Global Insight. The Reserve Bank of India boosted the benchmark reverse repurchase rate to 3.5 percent from a record-low 3.25 percent and the repurchase rate to 5 percent from 4.75 percent on March 19, saying curbing inflation has become “imperative.”
The announcement followed Nomura Holdings Inc. saying the RBI was “behind the curve” after inflation hit a 16-month high and exceeded the rate in all other Group of Twenty economies. Indian stocks may tumble today as investors anticipate higher borrowing costs, with the benchmark Sensitive Index at risk of a 200-point drop, according CNI Research (India) Ltd. in Mumbai.
“The strength of India’s domestic demand will keep inflation fairly high,” Jyoti Narasimhan, research director for India at IHS Global in Lexington, Massachusetts, said in an interview. “This is definitely the first of many rate increases to come. We could see another hike in April. Twenty five basis points is not a heroic move.”
The quarter-point rise was a down payment on 3 percentage points of increases that the central bank will need to enact this year to stem inflation, according to Goldman Sachs Group Inc.
Global Trend
India followed Australia and Malaysia in lifting borrowing costs this month, while Norway and Israel did so at the end of last year, as the global economy recovered from the worst recession since World War II.
Inflation has returned to Asia as the region leads the global economic recovery. India’s wholesale-price inflation rate touched 9.89 percent in February, exceeding the central bank’s 8.5 percent forecast by March-end.
Factory output in Malaysia rose 12.7 percent in January. Consumer prices in China rose to a 16-month high of 2.7 percent in February from a year earlier as industrial production grew 20.7 percent in the first two months of 2010, the most in more than five years.
Still lagging behind India are central banks in the Group of Seven economies with the Federal Reserve and European Central Bank among those waiting for evidence of a more concrete recovery before they reverse record low borrowing costs. Canada may be the first G-7 central bank to shift after data showed its core inflation rate unexpectedly accelerated last month.
Before Meeting
Subbarao moved a month before the bank’s scheduled April 20 monetary policy meeting after India’s industrial output gained 16.7 percent in January from a year earlier, following a 17.6 percent increase in December that was the biggest jump since at least 1994, according to Bloomberg data.
“Given the lags in monetary policy, it is better to respond in a timely manner, even if it is outside the scheduled policy reviews, than take stronger measures at a later stage when inflationary expectations have accentuated,” the central bank said in its March 19 statement.
The bank will “maintain this tightening path,” Morgan Stanley economist Chetan Ahya said in a note on March 19. He expects Subbarao to increase rates by another 25 basis points on April 20. The rates may go up by one percentage point in 2010, including last week’s raise, he said.
‘Growing Discomfort’
The rate increase will end a rally in the government bond market and the benchmark 10-year note yield may rise to around 8 percent this week, said Indranil Pan, chief economist at Kotak Mahindra Bank Ltd. in Mumbai.
India’s 10-year notes completed their best week since September on March 19, and stocks had their biggest weekly gain in nine months, after Standard & Poor’s upgraded the nation’s debt-rating outlook to stable from negative on optimism for economic growth and government plans to narrow the budget gap.
Yields declined 18 basis points to 7.83 percent in Mumbai last week, while the Sensitive index rose 2.4 percent to 17,578.23 during the period.
The central bank said economic “recovery is increasingly taking hold” and pointed to the latest industrial production data as evidence of a “revival of private demand.”
India’s passenger-car sales gained to a record in February amid rising incomes in the world’s second-most populous nation. The demand is encouraging Ford Motor Co. and Volkswagen AG to build plants and unveil new models in the South Asian nation.
India’s $1.2 trillion economy, Asia’s biggest after Japan and China, may expand 8.2 percent in the next fiscal year, compared with 7.2 percent in the year to March 31, the finance ministry said in February.
Inflation is politically sensitive in a country such as India, where the World Bank estimates almost three-quarters of the nation’s 1.2 billion people live on less than $2 a day.
Opposition parties led by the Bharatiya Janata Party repeatedly stalled proceedings in parliament this month, accusing Prime Minister Manmohan Singh’s government of being anti-poor and failing to curb prices.
Friday, March 19, 2010
Facebook beats Google as most-visited site in US
Facebook has become the most-visited site in the US after beating former title holder Google.
The popular social networking page toppled the search giant after accounting for 7.07 per cent of all US web traffic compared to Google’s 7.03 per cent, web analysts Hitwise revealed.
“It’s definitely a big moment for Facebook, even though they beat by a small margin,” News.com.au quoted Hitwise’s Matt Tatham as telling CNN.
He added, “People want information from friends they trust, versus the anonymity of a search engine.” The research did not include other Google services such as Gmail and YouTube.
The popular social networking page toppled the search giant after accounting for 7.07 per cent of all US web traffic compared to Google’s 7.03 per cent, web analysts Hitwise revealed.
“It’s definitely a big moment for Facebook, even though they beat by a small margin,” News.com.au quoted Hitwise’s Matt Tatham as telling CNN.
He added, “People want information from friends they trust, versus the anonymity of a search engine.” The research did not include other Google services such as Gmail and YouTube.
Microsoft to launch Office 2010 by June
Global software giant Microsoft Corp. will launch the latest version of its popular application suite MS Office 2010 for Indian users in June, a top official said here Thursday.
“The Office 2010 will be available for both businesses and consumers in June,” Microsoft Corp.’s India Chairman Ravi Venkatesan told reporters here on the sidelines of an seminar on social inclusion here.
The latest version features office web applications which will include online versions of MS Word, Excel, Power Point and OneNot. It will allow sharing and collaboration of documents and files.
Microsoft had already released the beta version, a soft launch, of MS Office 2010 and related web applications in November 2009.
Early this month, the company also unveiled in India its latest offering in the area of cloud computing called Windows Azure that will help companies share software and storage facilities and bring down their total IT spend by as much as 50 per cent.
In cloud computing, companies share computer resources, such as servers, software and data storage, through the internet, instead of setting up such infrastructure at their own end.
World Bank provides $1.05 bn to improve education in India
The World Bank has approved two projects worth $ 1.05 billion (over Rs 4,800 crore) for India, aimed at expanding the reach of primary schools and the quality of engineering education in the country.
“The World Bank today approved two education projects worth USD 1.05 billion for India, designed to boost the number of children enrolling in and completing elementary school, and to improve quality of engineering education across the country,” it said in a statement.
It further said India has made significant progress in meeting its education goals, especially at the primary level.
Through its 86th constitutional amendment in 2002, India mandated elementary education as a fundamental right of every child.
The same year, the government also launched the Sarva Shiksha Abhiyan (SSA), a nationwide program to take quality elementary education to all children.
The Bank has supported the SSA with total grants of USD 1.1 billion since 2003, it added.
“SSA -- now the largest ongoing Education for All (EFA) program in the world -- has been remarkably successful, particularly in achieving greater access to elementary education,” said Roberto Zagha, World Bank Country Director for India.
Between 2003 and 2009, the number of children reportedly enrolled in elementary education in India increased by 57 million to 192 million.
Billionaires in ‘Cricket-Mad’ India Seek Market-Beating Teams
March 19 (Bloomberg) -- Cricket has proven a better investment than the stock market for India’s billionaires, prompting tycoons to line up this weekend to buy new franchises.
The Indian Premier League, playing a three-hour version of the traditional five-day game, has set a March 21 deadline for prospective owners to bid for its ninth and 10th teams. The $225 million minimum is more than double the highest bid submitted for an original team.
The eight teams’ owners include Mukesh Ambani, the world’s fourth-richest man and chairman of Reliance Industries Ltd.; billionaire Vijay Mallya, chairman of UB Group; Rupert Murdoch’s son, Lachlan; and movie megastar Shah Rukh Khan. The league’s appreciation outpaced last year’s 81 percent gain in India’s benchmark Sensitive Index, the most in 18 years.
“The speed with which the IPL has been able to generate value in a very short span of time is astonishing,” said Unni Krishnan, managing director of Brand Finance in India. “I would bet that there is no comparable brand in the world.”
Growth was fueled by a $1.8 billion TV contract with a Sony Corp. unit and a deal with Google Inc. to show matches on YouTube. Now IPL founder and chairman Lalit Modi, 46, wants to bring the fast-paced version of the game, called Twenty20, to the U.S. Modi met USA Cricket Association Chief Executive Officer Donald Lockerbie in Dubai last month to discuss holding IPL matches on American fields, or pitches, by 2011.
Brand Value Doubled
The IPL has more than doubled its brand value to $4.13 billion now from $2.01 billion in 2009, according to Brand Finance Plc.
“The IPL is a powerful new product in the sports industry and we will work hard to see USA Cricket and the IPL succeed together and energize the growth of cricket in our country,” Lockerbie said after the initial meeting.
The two organizations will meet again in May.
The bidders this weekend will include billionaire Venugopal Dhoot, chairman of Videocon Industries Ltd., which makes mobile phones and other consumer durables.
“It’s a good business proposal and I was also the captain of a college team and know how to handle the cricketers,” he said yesterday.
$1 Billion Net Worth
This will be the second attempt at an auction, initially scheduled for March 7. Bidders originally were required to have a net worth of at least $1 billion and to pay an advance bank guarantee of $100 million if they won. Modi dropped those requirements after several companies complained, he said on Twitter. He didn’t identify them.
Bids submitted before the auction’s original date included Dhoot; Gautam Adani, whose Adani Group owns ports and power plants; and Jaiprakash Gaur’s construction company Jaiprakash Associates Ltd., the Hindu Business Line reported.
Jaiprakash Associates spokeswoman Sunita Joshi and Adani Enterprises Ltd. spokesman Devendra Amin didn’t respond to calls seeking comment.
The IPL is fortified by the world’s second-fastest growing major economy, where gross domestic product may expand 8.2 percent in the fiscal year starting April 1, the Finance Ministry said Feb. 25. That’s up from an estimated 7.2 percent this year.
TV Revenue
It is modeled after major American sports leagues, where teams maintain membership regardless of performance -- unlike soccer’s English Premier League -- and share TV revenue, said Stefan Szymanski, a professor at Cass Business School in London. The IPL’s growth has come even as the league played last season in South Africa because of security concerns after the November 2008 terrorist attack in Mumbai.
“The IPL is structured in a way that should work economically for the owners,” Szymanski said. “The incentive structure of football encourages teams to invest beyond their means.”
The first IPL champion, the Rajasthan Royals, cost $67 million in 2008. Last year, actress Shilpa Shetty and her husband bought an 11.7 percent stake that valued the club at $140 million.
“This is probably the highest appreciation for any franchise in the history of modern-day sports,” Modi said.
Brand Finance, of London, increased the IPL’s valuation after Multi Screen Media Pvt., a unit of Tokyo-based Sony Corp., signed a nine-year broadcast deal before the 2009 season for a total of 82 billion rupees.
Fashion Show
The IPL generated $200 million in revenue in its inaugural year from streams including ticket sales, uniform advertisements and merchandising. Modi sold title sponsorships, named an official drinks maker and organized a fashion show.
The league’s YouTube page generated about 10 million views since its third season started March 12, according to the Web site. Advertisers include HSBC Holdings Plc, Hewlett-Packard Co., Coca-Cola Co. and Samsung Electronics Co. Ltd.
Teams use that money to pay some of cricket’s highest salaries. In a January auction, Ambani bid $2.5 million for Trinidadian Kieron Pollard, the NDTV 24X7 channel reported.
Former England national team captains Kevin Pietersen and Andrew Flintoff were acquired for $1.55 million each last year.
Ownership is more than about money, Szymanski and owners said. It brings increased brand awareness and membership in a display of the nation’s No. 1 sport.
“Everybody knew that India was cricket-mad and there was a potential for a commercial cricket competition in India,” Szymanski said. “The question was: Could you pull it off? Lalit Modi proved that you could.”
The Indian Premier League, playing a three-hour version of the traditional five-day game, has set a March 21 deadline for prospective owners to bid for its ninth and 10th teams. The $225 million minimum is more than double the highest bid submitted for an original team.
The eight teams’ owners include Mukesh Ambani, the world’s fourth-richest man and chairman of Reliance Industries Ltd.; billionaire Vijay Mallya, chairman of UB Group; Rupert Murdoch’s son, Lachlan; and movie megastar Shah Rukh Khan. The league’s appreciation outpaced last year’s 81 percent gain in India’s benchmark Sensitive Index, the most in 18 years.
“The speed with which the IPL has been able to generate value in a very short span of time is astonishing,” said Unni Krishnan, managing director of Brand Finance in India. “I would bet that there is no comparable brand in the world.”
Growth was fueled by a $1.8 billion TV contract with a Sony Corp. unit and a deal with Google Inc. to show matches on YouTube. Now IPL founder and chairman Lalit Modi, 46, wants to bring the fast-paced version of the game, called Twenty20, to the U.S. Modi met USA Cricket Association Chief Executive Officer Donald Lockerbie in Dubai last month to discuss holding IPL matches on American fields, or pitches, by 2011.
Brand Value Doubled
The IPL has more than doubled its brand value to $4.13 billion now from $2.01 billion in 2009, according to Brand Finance Plc.
“The IPL is a powerful new product in the sports industry and we will work hard to see USA Cricket and the IPL succeed together and energize the growth of cricket in our country,” Lockerbie said after the initial meeting.
The two organizations will meet again in May.
The bidders this weekend will include billionaire Venugopal Dhoot, chairman of Videocon Industries Ltd., which makes mobile phones and other consumer durables.
“It’s a good business proposal and I was also the captain of a college team and know how to handle the cricketers,” he said yesterday.
$1 Billion Net Worth
This will be the second attempt at an auction, initially scheduled for March 7. Bidders originally were required to have a net worth of at least $1 billion and to pay an advance bank guarantee of $100 million if they won. Modi dropped those requirements after several companies complained, he said on Twitter. He didn’t identify them.
Bids submitted before the auction’s original date included Dhoot; Gautam Adani, whose Adani Group owns ports and power plants; and Jaiprakash Gaur’s construction company Jaiprakash Associates Ltd., the Hindu Business Line reported.
Jaiprakash Associates spokeswoman Sunita Joshi and Adani Enterprises Ltd. spokesman Devendra Amin didn’t respond to calls seeking comment.
The IPL is fortified by the world’s second-fastest growing major economy, where gross domestic product may expand 8.2 percent in the fiscal year starting April 1, the Finance Ministry said Feb. 25. That’s up from an estimated 7.2 percent this year.
TV Revenue
It is modeled after major American sports leagues, where teams maintain membership regardless of performance -- unlike soccer’s English Premier League -- and share TV revenue, said Stefan Szymanski, a professor at Cass Business School in London. The IPL’s growth has come even as the league played last season in South Africa because of security concerns after the November 2008 terrorist attack in Mumbai.
“The IPL is structured in a way that should work economically for the owners,” Szymanski said. “The incentive structure of football encourages teams to invest beyond their means.”
The first IPL champion, the Rajasthan Royals, cost $67 million in 2008. Last year, actress Shilpa Shetty and her husband bought an 11.7 percent stake that valued the club at $140 million.
“This is probably the highest appreciation for any franchise in the history of modern-day sports,” Modi said.
Brand Finance, of London, increased the IPL’s valuation after Multi Screen Media Pvt., a unit of Tokyo-based Sony Corp., signed a nine-year broadcast deal before the 2009 season for a total of 82 billion rupees.
Fashion Show
The IPL generated $200 million in revenue in its inaugural year from streams including ticket sales, uniform advertisements and merchandising. Modi sold title sponsorships, named an official drinks maker and organized a fashion show.
The league’s YouTube page generated about 10 million views since its third season started March 12, according to the Web site. Advertisers include HSBC Holdings Plc, Hewlett-Packard Co., Coca-Cola Co. and Samsung Electronics Co. Ltd.
Teams use that money to pay some of cricket’s highest salaries. In a January auction, Ambani bid $2.5 million for Trinidadian Kieron Pollard, the NDTV 24X7 channel reported.
Former England national team captains Kevin Pietersen and Andrew Flintoff were acquired for $1.55 million each last year.
Ownership is more than about money, Szymanski and owners said. It brings increased brand awareness and membership in a display of the nation’s No. 1 sport.
“Everybody knew that India was cricket-mad and there was a potential for a commercial cricket competition in India,” Szymanski said. “The question was: Could you pull it off? Lalit Modi proved that you could.”
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