Cotton, trading at more than $1 per pound in New York for the first time since 1995, may extend its rally as supplies fail to keep pace with demand, according to trader Gill & Co.
Prices may climb by a further 10 cents to 15 cents in the next 15 days to a month, Chairman and Managing Director Kantilal V. Shah said in a phone interview. Cotton jumped as much as 3.8 percent to $1.0198 today, the highest since June 1995.
“You’ve never seen such a hectic rise,” said Shah, whose Mumbai-based company has been trading cotton for more than a century. “It has broken the rules.”
Cotton has surged 62 percent in the past year on slumping inventories and as excess rain in China and floods in Pakistan damaged crops. The global stockpiles-to-usage ratio is forecast by the U.S. Department of Agriculture to decline to the lowest since 1994.
“Everybody is looking out for cotton because everybody is short,” said Shah, referring to mills that don’t have enough of the raw material. “Supplies all over the world are tight.”
The commodity is the best performer over the past year on the UBS Bloomberg CMCI Index. The most-active contract, for delivery in December, added 3 percent to $1.0118 on ICE Futures U.S. at 2:32 p.m. Mumbai time.
Futures may surge to $1.25 by January as supplies dwindle, O.A. Cleveland, a professor emeritus in agricultural economics at Mississippi State University, said Sept. 14. Prices may reach as much as $1.05 within six weeks, John Flanagan, president of Flanagan Trading Corp., said Sept. 15.
Trade Curbs
Adverse weather in China, the biggest grower and user, and export curbs in India are bolstering prices, Flanagan said.
India, the second-biggest producer and exporter, will limit shipments to 5.5 million bales in the season starting Oct. 1 and will impose “prohibitive” duties on exports above that level, Commerce Secretary Rahul Khullar said earlier this month. A bale weighs 170 kilograms (375 pounds) in India.
Global cotton stockpiles will decline 3.3 percent to 45.4 million bales at the end of the marketing year on July 31, U.S. Department of Agriculture data show. That’s equal to 38 percent of demand, the lowest ratio since 1994. A U.S. bale weighs about 480 pounds (218 kilograms).
Monday, September 20, 2010
James Bond Producers Said to Join Sahara Bid for MGM Studio
The Broccoli family, producers of the James Bond movies and co-owners of the franchise with Metro- Goldwyn-Mayer Inc., are involved in Sahara India Pariwar’s $2 billion bid to buy the debt-laden studio, said a person with knowledge of the offer.
Barbara Broccoli and her stepbrother Michael G. Wilson are part of the Sahara India offer and would receive an undisclosed equity stake in MGM if it succeeds, said the person, who sought anonymity because the discussions are private.
It wasn’t clear whether Broccoli and Wilson would have a management role in the Los Angeles-based studio, the person said. Sahara India, based in Lucknow, offered $2 billion for MGM’s more than $3.7 billion in debt, the Associated Press reported on Sept. 17.
The overture comes as MGM’s creditors are scheduled to vote this week on a pre-packaged bankruptcy plan to restructure the company’s debt by converting it to equity in a merger with Hollywood producer Spyglass Entertainment. Sahara India has interests in finance, infrastructure and housing, media, consumer products, manufacturing and services, according to its website. Its entertainment operations include cable-television channels, film production and cinema chains.
The talks involve Sahara India’s “mutual interest” with MGM, Abhijit Sarkar, head of corporate communications at Sahara India Pariwar, said in an e-mailed statement yesterday. He declined to add to the statement today, saying “it’s too early to comment on the issue.”
Susie Arons, an outside spokeswoman for MGM, declined to comment, as did Stephanie Wenborn, a spokeswoman for the Broccolis’ London-based EON Productions.
Creditor Vote
Under MGM’s pre-packaged bankruptcy plan that creditors will vote on, Spyglass Entertainment co-chairmen Gary Barber and Roger Birnbaum, who produced “The Sixth Sense” and “Seabiscuit”, would operate the studio and swap the rights to their film library for a 5 percent stake in the new company.
On April 19, EON Productions, the James Bond production company controlled by Broccoli and Wilson, said they would suspend development on the next instalment in the 007 series, which was previously scheduled for release in late 2011.
“Due to the continued uncertainty surrounding the future of MGM and the failure to close a sale of the studio, we have suspended development on Bond 23 indefinitely,” EON said then in a statement.
EON has produced 22 Bond films since 1962. Broccoli and Wilson have run the studio since 1995, when they took over from the late Albert “Cubby” Broccoli, who initially controlled the franchise rights. The family owns a 50 percent stake in the franchise, with MGM’s United Artists studios owning the other 50 percent. EON controls the merchandise rights while the studio handles film-related distribution.
Broccoli and Wilson asked Time Warner Inc.’s Warner Bros. film unit to stay involved in the MGM bidding, people with knowledge of the situation said in May. A $1.5 billion bid by Time Warner was rejected as too low, people with knowledge of the matter said in March.
Barbara Broccoli and her stepbrother Michael G. Wilson are part of the Sahara India offer and would receive an undisclosed equity stake in MGM if it succeeds, said the person, who sought anonymity because the discussions are private.
It wasn’t clear whether Broccoli and Wilson would have a management role in the Los Angeles-based studio, the person said. Sahara India, based in Lucknow, offered $2 billion for MGM’s more than $3.7 billion in debt, the Associated Press reported on Sept. 17.
The overture comes as MGM’s creditors are scheduled to vote this week on a pre-packaged bankruptcy plan to restructure the company’s debt by converting it to equity in a merger with Hollywood producer Spyglass Entertainment. Sahara India has interests in finance, infrastructure and housing, media, consumer products, manufacturing and services, according to its website. Its entertainment operations include cable-television channels, film production and cinema chains.
The talks involve Sahara India’s “mutual interest” with MGM, Abhijit Sarkar, head of corporate communications at Sahara India Pariwar, said in an e-mailed statement yesterday. He declined to add to the statement today, saying “it’s too early to comment on the issue.”
Susie Arons, an outside spokeswoman for MGM, declined to comment, as did Stephanie Wenborn, a spokeswoman for the Broccolis’ London-based EON Productions.
Creditor Vote
Under MGM’s pre-packaged bankruptcy plan that creditors will vote on, Spyglass Entertainment co-chairmen Gary Barber and Roger Birnbaum, who produced “The Sixth Sense” and “Seabiscuit”, would operate the studio and swap the rights to their film library for a 5 percent stake in the new company.
On April 19, EON Productions, the James Bond production company controlled by Broccoli and Wilson, said they would suspend development on the next instalment in the 007 series, which was previously scheduled for release in late 2011.
“Due to the continued uncertainty surrounding the future of MGM and the failure to close a sale of the studio, we have suspended development on Bond 23 indefinitely,” EON said then in a statement.
EON has produced 22 Bond films since 1962. Broccoli and Wilson have run the studio since 1995, when they took over from the late Albert “Cubby” Broccoli, who initially controlled the franchise rights. The family owns a 50 percent stake in the franchise, with MGM’s United Artists studios owning the other 50 percent. EON controls the merchandise rights while the studio handles film-related distribution.
Broccoli and Wilson asked Time Warner Inc.’s Warner Bros. film unit to stay involved in the MGM bidding, people with knowledge of the situation said in May. A $1.5 billion bid by Time Warner was rejected as too low, people with knowledge of the matter said in March.
Friday, September 17, 2010
Silver surges by Rs 350 to record high, gold rebounds by Rs 90
NEW DELHI: Maintaining its upward journey, silver surged by Rs 350 to a new peak of Rs 32,800 per kg in the national capital today on hectic buying by stockists, driven by a bullish trend in global markets.
In line with the general firming trend, gold rebounded by Rs 90 to Rs 19,440 per 10 grams on fresh buying by jewellers for the festive and marriage season amid firm global cues.
Silver, which has been on a record-setting spree over the past one week, added Rs 350 to Rs 32,800 per kg on hectic buying by industrial units and coin manufacturers.
The trading sentiment was extremely buoyant after gold surged to a record high in global markets as dollar weakness spurred demand for the precious metal as an investment haven.
In global markets, which normally set the price trend on the domestic front, silver touched a fresh 30-month high of USD 20.95 an ounce, its highest level since May, 2008.
Similarly, gold advanced by 0.4 per cent to a record high of USD 1,280.80 per 10 grams.
Silver ready remained in demand and surged further by Rs 350 to Rs 32,800 per kg, a level never seen before. Silver weekly-based delivery jumped up by Rs 410 to an all-time high of Rs 32,435 per kg. Silver coins also gained Rs 200 to Rs 35,200 for buying and Rs 35,300 for selling of 100 pieces.
Gold of 99.9 and 99.5 per cent purity rebounded by Rs 90 each to Rs 19,440 and Rs 19,340 per 10 grams, respectively. The precious metal had lost Rs 150 in the previous trading session.
However, sovereigns remained flat at Rs 15,200 per piece of eight grams in restricted trade.
In line with the general firming trend, gold rebounded by Rs 90 to Rs 19,440 per 10 grams on fresh buying by jewellers for the festive and marriage season amid firm global cues.
Silver, which has been on a record-setting spree over the past one week, added Rs 350 to Rs 32,800 per kg on hectic buying by industrial units and coin manufacturers.
The trading sentiment was extremely buoyant after gold surged to a record high in global markets as dollar weakness spurred demand for the precious metal as an investment haven.
In global markets, which normally set the price trend on the domestic front, silver touched a fresh 30-month high of USD 20.95 an ounce, its highest level since May, 2008.
Similarly, gold advanced by 0.4 per cent to a record high of USD 1,280.80 per 10 grams.
Silver ready remained in demand and surged further by Rs 350 to Rs 32,800 per kg, a level never seen before. Silver weekly-based delivery jumped up by Rs 410 to an all-time high of Rs 32,435 per kg. Silver coins also gained Rs 200 to Rs 35,200 for buying and Rs 35,300 for selling of 100 pieces.
Gold of 99.9 and 99.5 per cent purity rebounded by Rs 90 each to Rs 19,440 and Rs 19,340 per 10 grams, respectively. The precious metal had lost Rs 150 in the previous trading session.
However, sovereigns remained flat at Rs 15,200 per piece of eight grams in restricted trade.
Thursday, September 16, 2010
Govt raises DA to 45%; to cost exchequer Rs 9,303 cr per annum
New Delhi: Ahead of the festive season, the central government today raised Dearness Allowance by 10 percentage points to 45 per cent of basic pay, benefiting about 88 lakh employees and pensioners.
The decision to provide higher DA to employees will cost the exchequer an additional Rs 9,303.2 crore per annum, an official spokesperson said after a meeting of the Union Cabinet, where it was decided to raise the allowance.
The new DA will be paid to central government employees and pensioners with effect from July 1, 2010, and the burden during the current fiscal has been estimated at Rs 6,202.1 crore.
"Increase in DA is in accordance with the formula based on the recommendations of the Sixth Pay Commission," the spokesperson added.
The existing rate of DA, which is paid as percentage of basic pay to compensate employees for the rising cost of living, is 35 per cent.
Inflation stood at 8.5 per cent in August, while food inflation is hovering above 15 per cent, according to the new WPI indices.
The increase in DA comes ahead of the Dussehra and Diwali festivals in October and November, respectively. The decision will benefit about 50 lakh central government employees and about 38 lakh pensioners.
The decision to provide higher DA to employees will cost the exchequer an additional Rs 9,303.2 crore per annum, an official spokesperson said after a meeting of the Union Cabinet, where it was decided to raise the allowance.
The new DA will be paid to central government employees and pensioners with effect from July 1, 2010, and the burden during the current fiscal has been estimated at Rs 6,202.1 crore.
"Increase in DA is in accordance with the formula based on the recommendations of the Sixth Pay Commission," the spokesperson added.
The existing rate of DA, which is paid as percentage of basic pay to compensate employees for the rising cost of living, is 35 per cent.
Inflation stood at 8.5 per cent in August, while food inflation is hovering above 15 per cent, according to the new WPI indices.
The increase in DA comes ahead of the Dussehra and Diwali festivals in October and November, respectively. The decision will benefit about 50 lakh central government employees and about 38 lakh pensioners.
.DLF May Start Apartment Sales at Its First Mumbai Project Before December
DLF Ltd., India’s biggest developer, may start selling residential apartments at its first project in Mumbai by December, said Saurabh Chawla, executive director for finance.
The New Delhi-based company plans to develop 4 million square feet (371,612 square meters) of homes on former textile mill land in Lower Parel in central Mumbai, and may start offering the apartments this year, Chawla said.
“We are waiting for all our approvals and will launch the project only when we receive all the sanctions,” Chawla said in an interview in New Delhi yesterday. “It should happen sometime by the end of the third quarter” of this financial year ending March 31.
Lower Parel has emerged as an office district after defunct textile mill land was sold for commercial development. High-end residential projects such as Lodha Developers Ltd.’s World One, which claims to be India’s tallest residential tower, are being built in the area.
DLF may earn as much as $2 billion from the project by selling apartments for more than 20,000 rupees ($431) a square foot, CLSA Asia-Pacific Markets estimated in a note to clients dated Aug. 25.
The rush of developers to the area signals there may be an oversupply, analysts Suhas Harinarayanan, Suman Memani and Arun Aggarwal at Religare Capital Markets Ltd., said in a June note.
“Lower Parel is likely to see a supply of over 10 million square feet in the next 3 to 4 years, making it an over-supply zone ” the analysts said.
DLF, whose main developments are in Gurgaon near New Delhi, expects to reduce its net debt levels by 40 billion rupees to 145 billion rupees in the year ending March 31, Chawla said. DLF will earn annuity and rental income of about 18 billion rupees in the period, he said.
The developer also is seeking to sell a stake in the luxury Aman Resorts chain to a strategic partner and expects to complete the transaction this financial year, Chawla said.
The New Delhi-based company plans to develop 4 million square feet (371,612 square meters) of homes on former textile mill land in Lower Parel in central Mumbai, and may start offering the apartments this year, Chawla said.
“We are waiting for all our approvals and will launch the project only when we receive all the sanctions,” Chawla said in an interview in New Delhi yesterday. “It should happen sometime by the end of the third quarter” of this financial year ending March 31.
Lower Parel has emerged as an office district after defunct textile mill land was sold for commercial development. High-end residential projects such as Lodha Developers Ltd.’s World One, which claims to be India’s tallest residential tower, are being built in the area.
DLF may earn as much as $2 billion from the project by selling apartments for more than 20,000 rupees ($431) a square foot, CLSA Asia-Pacific Markets estimated in a note to clients dated Aug. 25.
The rush of developers to the area signals there may be an oversupply, analysts Suhas Harinarayanan, Suman Memani and Arun Aggarwal at Religare Capital Markets Ltd., said in a June note.
“Lower Parel is likely to see a supply of over 10 million square feet in the next 3 to 4 years, making it an over-supply zone ” the analysts said.
DLF, whose main developments are in Gurgaon near New Delhi, expects to reduce its net debt levels by 40 billion rupees to 145 billion rupees in the year ending March 31, Chawla said. DLF will earn annuity and rental income of about 18 billion rupees in the period, he said.
The developer also is seeking to sell a stake in the luxury Aman Resorts chain to a strategic partner and expects to complete the transaction this financial year, Chawla said.
RBI raises policy rates, loans may get costlier
The Reserve Bank of India raised its main lending rate by 0.25 percentage point on Thursday and its borrowing rate by a larger-than-expected 0.50 percentage point, as it continues with the monetary tightening measures to cool inflation.
These hikes would be effective with immediate effect. Bankers said that there is possibility of a hike in lending rates and deposit rates.
An NDTV poll suggested that the RBI could increase repo and reverse repo rates by 25 basis points.
The Reserve Bank of India's repurchase rate (repo), or its overnight lending rate, now stands at 6 per cent, while the reverse repurchase rate, or borrowing rate, is at 5 per cent.
This is the first mid-quarter review of the central bank since it announced in July that the rate-setting meeting would be held at six-week intervals, instead of every quarter. This will help the Reserve Bank of India avoid making surprise moves between meetings.
Recent inflation and indusial growth numbers suggested that the central bank may continue with its monetary tightening measures. The strong economic growth has also given the central bank some headroom for tightening rates.
Despite a slight easing trend in inflation, it still remained at uncomfortable levels. The headline inflation for August remained elevated at 9.5 per cent, according to the old index.
Food prices, the main driver of Indian inflation, have again shown an upward trend after a brief period of moderation in July and first half of August. Food inflation accelerated to above 15 per cent in the first week of September. And food prices are not expected to ease significantly until the summer-sown crops boost supplies.
Industrial output growth for July was at a better-than-expected 13.8 per cent, making a case for further monetary tightening. India's GDP grew by 8.8 per cent in the first quarter, against 6 per cent in the April-June period last fiscal.
Finance Minister Pranab Mukherjee, commenting on the August inflation numbers, said, "There is no room for complacency... we must continue to be vigilant and be prepared with the instruments of fiscal and monetary policy to use them as and when the need arises."
These hikes would be effective with immediate effect. Bankers said that there is possibility of a hike in lending rates and deposit rates.
An NDTV poll suggested that the RBI could increase repo and reverse repo rates by 25 basis points.
The Reserve Bank of India's repurchase rate (repo), or its overnight lending rate, now stands at 6 per cent, while the reverse repurchase rate, or borrowing rate, is at 5 per cent.
This is the first mid-quarter review of the central bank since it announced in July that the rate-setting meeting would be held at six-week intervals, instead of every quarter. This will help the Reserve Bank of India avoid making surprise moves between meetings.
Recent inflation and indusial growth numbers suggested that the central bank may continue with its monetary tightening measures. The strong economic growth has also given the central bank some headroom for tightening rates.
Despite a slight easing trend in inflation, it still remained at uncomfortable levels. The headline inflation for August remained elevated at 9.5 per cent, according to the old index.
Food prices, the main driver of Indian inflation, have again shown an upward trend after a brief period of moderation in July and first half of August. Food inflation accelerated to above 15 per cent in the first week of September. And food prices are not expected to ease significantly until the summer-sown crops boost supplies.
Industrial output growth for July was at a better-than-expected 13.8 per cent, making a case for further monetary tightening. India's GDP grew by 8.8 per cent in the first quarter, against 6 per cent in the April-June period last fiscal.
Finance Minister Pranab Mukherjee, commenting on the August inflation numbers, said, "There is no room for complacency... we must continue to be vigilant and be prepared with the instruments of fiscal and monetary policy to use them as and when the need arises."
Wednesday, September 15, 2010
Exports in Aug up 22.5%; trade gap a concern
Exports grew by an annual 22.5 per cent to $ 16.64 billion in August on improved global demand for Indian merchandise, giving policy makers confidence about achieving the $ 200 billion target for the fiscal.
Imports jumped at a higher pace of 32.2 per cent to $ 29.7 billion in August, leaving a trade deficit of $ 13.06 billion, which is a cause for worry.
"Things are going so far according to our plan and we should be able to reach over exports target of $ 200 billion," Commerce Secretary Rahul Khullar said.
Expressing optimism, exporters body FIEO said that with this growth rate, exports would even surpass the $ 200 billion target and reach $ 210 billion.
Meanwhile, industry reported a 13.8 per cent growth in July, beating by a wide margin the market estimates of a single digit growth.
However, the rate of "heady growth" witnessed in the first quarter of the year has clearly decelerated, Khullar said.
He said while there is a marked improvement in exports during 2010-11 over the previous year "you are well below the $ 17.8 billion which was achieved in August 2008-09".
With imports rising on the back of 8.8 per cent economic growth in the first quarter of the fiscal, ballooning gap between exports and imports (trade deficit) remains the main area of concern for the government.
For the April-August period, the trade deficit aggregated $ 56.62 billion with a monthly average of $
11.2 billion.
The year may end with a trade gap of $ 135 billion. "The gap will be very very large, even compared to $ 118 billion, that we had two years ago."
During April-August this fiscal, exports posted a growth of 28.6 per cent to $ 85.27 billion on a year-on-year basis. Imports during the period grew by 33.1 per cent to $141.89 billion.
The sectors, which registered a healthy rate of exports growth during the first four months of the current financial include cotton yarn and fabric (41 per cent), gems and jewellery (28 per cent), iron ore (84 per cent), chemicals (23 per cent), engineering (40 per cent) and petroleum, oil and lubricants (POL) (50 per cent).
However, segments like readymade garments, handicrafts, handlooms and carpets are still in a bad shape, he said.
During April-August 2010-11, segments that witnessed a good growth rate include POL, which was up 31.7 per cent, fertilisers (79 per cent), vegetable oil (67 per cent), coal (43 per cent), iron and steel (64 per cent), gold (27.7 per cent) and machinery (20 per cent).
Imports jumped at a higher pace of 32.2 per cent to $ 29.7 billion in August, leaving a trade deficit of $ 13.06 billion, which is a cause for worry.
"Things are going so far according to our plan and we should be able to reach over exports target of $ 200 billion," Commerce Secretary Rahul Khullar said.
Expressing optimism, exporters body FIEO said that with this growth rate, exports would even surpass the $ 200 billion target and reach $ 210 billion.
Meanwhile, industry reported a 13.8 per cent growth in July, beating by a wide margin the market estimates of a single digit growth.
However, the rate of "heady growth" witnessed in the first quarter of the year has clearly decelerated, Khullar said.
He said while there is a marked improvement in exports during 2010-11 over the previous year "you are well below the $ 17.8 billion which was achieved in August 2008-09".
With imports rising on the back of 8.8 per cent economic growth in the first quarter of the fiscal, ballooning gap between exports and imports (trade deficit) remains the main area of concern for the government.
For the April-August period, the trade deficit aggregated $ 56.62 billion with a monthly average of $
11.2 billion.
The year may end with a trade gap of $ 135 billion. "The gap will be very very large, even compared to $ 118 billion, that we had two years ago."
During April-August this fiscal, exports posted a growth of 28.6 per cent to $ 85.27 billion on a year-on-year basis. Imports during the period grew by 33.1 per cent to $141.89 billion.
The sectors, which registered a healthy rate of exports growth during the first four months of the current financial include cotton yarn and fabric (41 per cent), gems and jewellery (28 per cent), iron ore (84 per cent), chemicals (23 per cent), engineering (40 per cent) and petroleum, oil and lubricants (POL) (50 per cent).
However, segments like readymade garments, handicrafts, handlooms and carpets are still in a bad shape, he said.
During April-August 2010-11, segments that witnessed a good growth rate include POL, which was up 31.7 per cent, fertilisers (79 per cent), vegetable oil (67 per cent), coal (43 per cent), iron and steel (64 per cent), gold (27.7 per cent) and machinery (20 per cent).
Advance tax numbers indicate good show by finance, auto cos
MUMBAI: Advance tax collections for the second quarter, July-September, 2010-11 indicated on Wednesday that while sectors like banking, finance and auto have done well, cement and pharma were down as compared to last year's numbers.
As for individual corporate, Mukesh Ambani-led Reliance Industries and Larsen & Toubro paid Rs 1,306 crore and Rs 280 crore respectively, higher than Q2 FY10.
RIL had paid Rs 1,157 crore in the year-ago period, indicating that it is steaming ahead. L&T's had paid Rs 210 crore in Q2 FY 10.
Similarly, Kumar Mangalam Birla-owned Hindalco's tax outgo doubled to Rs 140 crore.
However, it was a mixed bag from the Tata Group as Tata Power Rs 60 crore and Tata Motors Rs 95-crore paid less to the exchequer vis-a-vis last year.
Country's financial capital Mumbai, which contributes a major chunk of direct tax collection, clocked over 13 per cent growth, which a top Income Tax official said was below expectations.
"Our expectations were more...some companies in sectors like cement are not showing good numbers," Chief Commissioner of Income Tax Mumbai, P P Srivastava, told PTI here, after the advance tax collections for September quarter ended on Wednesday.
The Mumbai region of Income Tax Department has been assigned a direct tax collection target of Rs 1,50,480-crore for the current financial year, which is 35 per cent of the all India collection target of Rs 4,30,000-crore.
Asked if the target (Mumbai circle) would be met, Srivastava said that "we are hopeful. However, we will have to take extra measures to achieve it."
IT-major Tata Consultancy Services paid Rs 260 crore in advance tax as compared to the previous year's Rs 220 crore, while the payment by Tata Chemicals remained unchanged at Rs 60 crore.
Driven by high growth, advance tax payments in the auto sector were good.
Bajaj Auto paid Rs 243 crore in Q2 FY11, as against last year period's Rs 170 crore, while Mahindra & Mahindra paid Rs 158 crore, up from Rs 112 crore, the source said.
Barring some names, the banking and financial sector witnessed high tax payouts, led by State Bank of India (Rs 1,924 crore), ICICI Bank (Rs 600 crore), HDFC Bank (Rs 600 crore), Central Bank of India (Rs 206 crore), Union Bank of India (Rs 308 crore) and Yes Bank (Rs 105 crore).
Home-loans lender HDFC shelled out Rs 400-crore this quarter, as against Rs 320 crore in the year ago period.
Life Insurance Corporation's payout increased by Rs 128 crore to Rs 1,067-crore, while in the case of General Insurance Corporation, it almost doubled to Rs 92-crore.
The sector which appears to have suffered the most in Q2 FY11 since last year is cement, as payouts by a majority of companies in this segment have fallen sharply.
From last fiscal's Q2 of Rs 150 crore, Ambuja Cement's advance tax payment fell to Rs 90 crore, while UltraTech's payout more than halved to Rs 60 crore.
Cement major Lafarge's advance tax payment declined from Rs 67 crore to Rs 40 crore. In the case of ACC, its advance tax payment plummeted to Rs 60 crore from last fiscal's Q2 of Rs 150 crore.
Consumer electronics major, Videocon, saw its advance tax outgo increase to Rs 35 crore, from last year's Rs 30 crore while state-owned fertiliser company RCF showed a decline to Rs 19 crore from Rs 33 crore in Q2 last fiscal.
Biscuit maker Parle saw its advance tax outgo increase by Rs 3 crore to Rs 12 crore this quarter and Johnson and Johnson paid Rs 22 crore, up from last year's Rs 18 crore.
Two pharma majors -- Lupin and Cipla -- have registered lower payouts at Rs 45 crore and Rs 65 crore respectively as compared to Rs 50 crore and Rs 75 crore, respectively, in the year-ago period.
In the media and entertainment space, Zee Entertainment's payout almost doubled to Rs 60 crore from Rs 32 crore in the year-ago period.
As for individual corporate, Mukesh Ambani-led Reliance Industries and Larsen & Toubro paid Rs 1,306 crore and Rs 280 crore respectively, higher than Q2 FY10.
RIL had paid Rs 1,157 crore in the year-ago period, indicating that it is steaming ahead. L&T's had paid Rs 210 crore in Q2 FY 10.
Similarly, Kumar Mangalam Birla-owned Hindalco's tax outgo doubled to Rs 140 crore.
However, it was a mixed bag from the Tata Group as Tata Power Rs 60 crore and Tata Motors Rs 95-crore paid less to the exchequer vis-a-vis last year.
Country's financial capital Mumbai, which contributes a major chunk of direct tax collection, clocked over 13 per cent growth, which a top Income Tax official said was below expectations.
"Our expectations were more...some companies in sectors like cement are not showing good numbers," Chief Commissioner of Income Tax Mumbai, P P Srivastava, told PTI here, after the advance tax collections for September quarter ended on Wednesday.
The Mumbai region of Income Tax Department has been assigned a direct tax collection target of Rs 1,50,480-crore for the current financial year, which is 35 per cent of the all India collection target of Rs 4,30,000-crore.
Asked if the target (Mumbai circle) would be met, Srivastava said that "we are hopeful. However, we will have to take extra measures to achieve it."
IT-major Tata Consultancy Services paid Rs 260 crore in advance tax as compared to the previous year's Rs 220 crore, while the payment by Tata Chemicals remained unchanged at Rs 60 crore.
Driven by high growth, advance tax payments in the auto sector were good.
Bajaj Auto paid Rs 243 crore in Q2 FY11, as against last year period's Rs 170 crore, while Mahindra & Mahindra paid Rs 158 crore, up from Rs 112 crore, the source said.
Barring some names, the banking and financial sector witnessed high tax payouts, led by State Bank of India (Rs 1,924 crore), ICICI Bank (Rs 600 crore), HDFC Bank (Rs 600 crore), Central Bank of India (Rs 206 crore), Union Bank of India (Rs 308 crore) and Yes Bank (Rs 105 crore).
Home-loans lender HDFC shelled out Rs 400-crore this quarter, as against Rs 320 crore in the year ago period.
Life Insurance Corporation's payout increased by Rs 128 crore to Rs 1,067-crore, while in the case of General Insurance Corporation, it almost doubled to Rs 92-crore.
The sector which appears to have suffered the most in Q2 FY11 since last year is cement, as payouts by a majority of companies in this segment have fallen sharply.
From last fiscal's Q2 of Rs 150 crore, Ambuja Cement's advance tax payment fell to Rs 90 crore, while UltraTech's payout more than halved to Rs 60 crore.
Cement major Lafarge's advance tax payment declined from Rs 67 crore to Rs 40 crore. In the case of ACC, its advance tax payment plummeted to Rs 60 crore from last fiscal's Q2 of Rs 150 crore.
Consumer electronics major, Videocon, saw its advance tax outgo increase to Rs 35 crore, from last year's Rs 30 crore while state-owned fertiliser company RCF showed a decline to Rs 19 crore from Rs 33 crore in Q2 last fiscal.
Biscuit maker Parle saw its advance tax outgo increase by Rs 3 crore to Rs 12 crore this quarter and Johnson and Johnson paid Rs 22 crore, up from last year's Rs 18 crore.
Two pharma majors -- Lupin and Cipla -- have registered lower payouts at Rs 45 crore and Rs 65 crore respectively as compared to Rs 50 crore and Rs 75 crore, respectively, in the year-ago period.
In the media and entertainment space, Zee Entertainment's payout almost doubled to Rs 60 crore from Rs 32 crore in the year-ago period.
RIL regains Rs 1,000-mark; soars 2.25 pc on BSE
MUMBAI: Market leader Reliance Industries today rose over 2 per cent and regained the Rs 1,000-level mark after more than a month, helping the BSE benchmark Sensex extend its winning streak to the seventh day in a row.
Reliance Industries ended the session at Rs 1,010.45, a gain of 2.3 per cent, on the Bombay Stock Exchange. It touched the intra- -day high of Rs 1,016.
The last time it had closed above Rs 1,000-level was on August 6, when it ended at Rs 1,000.30.
With today's jump in its share value, the company's market valuation surged to Rs 3,30,524 crore.
Marketmen said RIL, which enjoys the maximum weight in the Sensex, attracting good buying support also helped the broader market to extend its gains for the seventh day in succession.
They said reports of RIL was seeking a hike in gas price helped the stock rise. They further said today's rise is significant as RIL had not participated in the recent market rally. Yesterday, the company had lost 0.45 per cent.
Reports of company paying higher advance tax for the second quarter, too, fulled the rally.
Other oil and gas counters, however, ended mixed after a volatile session.
Shares of ONGC gained 1.14 per cent to hit its lifetime high at Rs 1,451.90, while HPCL ended 0.58 per cent lower, after hitting a new high of Rs 555.45.
IOC too erased early gains to finish 0.19 per cent down after touching a lifetime high of Rs 448.55.
BPCL settled down by 0.46 per cent, while Essar Oil ended 0.54 per cent higher.
The BSE oil and gas index settled the day with a gain of 193.26 points at 10,655.13.
Carrying forward the gaining momentum, the BSE benchmark Sensex Sensex finished the day higher by 155.15 points at 19,502.11.
Reliance Industries ended the session at Rs 1,010.45, a gain of 2.3 per cent, on the Bombay Stock Exchange. It touched the intra- -day high of Rs 1,016.
The last time it had closed above Rs 1,000-level was on August 6, when it ended at Rs 1,000.30.
With today's jump in its share value, the company's market valuation surged to Rs 3,30,524 crore.
Marketmen said RIL, which enjoys the maximum weight in the Sensex, attracting good buying support also helped the broader market to extend its gains for the seventh day in succession.
They said reports of RIL was seeking a hike in gas price helped the stock rise. They further said today's rise is significant as RIL had not participated in the recent market rally. Yesterday, the company had lost 0.45 per cent.
Reports of company paying higher advance tax for the second quarter, too, fulled the rally.
Other oil and gas counters, however, ended mixed after a volatile session.
Shares of ONGC gained 1.14 per cent to hit its lifetime high at Rs 1,451.90, while HPCL ended 0.58 per cent lower, after hitting a new high of Rs 555.45.
IOC too erased early gains to finish 0.19 per cent down after touching a lifetime high of Rs 448.55.
BPCL settled down by 0.46 per cent, while Essar Oil ended 0.54 per cent higher.
The BSE oil and gas index settled the day with a gain of 193.26 points at 10,655.13.
Carrying forward the gaining momentum, the BSE benchmark Sensex Sensex finished the day higher by 155.15 points at 19,502.11.
Sunday, September 12, 2010
India moves into mobile phone shares trading
Millions of Indian investors will be able to trade shares using their mobile phones after the South Asian nation approved the move and the Bombay Stock Exchange unveiled plans for the service.
Trading on mobile phones is catching on globally, especially in Asia, where mobile phone penetration is growing rapidly.
Interactive Brokers, one of the largest US-based brokers, launched trading on mobile devices in 2002, including in the US and Britain.
But the phenomenon’s arrival in India is a sign that Asia is taking the lead in opening up the capital markets to the masses.
Mobile phone trading has made inroads in Japan and South Korea, where the local stock exchange says it accounts for 3 per cent of trading volume.
Madhu Kannan, chief executive of the Bombay exchange, said on Friday it had received approval from the Securities and Exchange Board of India (Sebi), the market regulator, for internet-based trading via mobile handset.
“We’ll be launching very soon,” he told the Financial Times. “This is something very core to our technology focused strategy. We’re trying to bring more people close to the market.
“It has the ability to significantly advance the concept of financial inclusion and the penetration of capital markets throughout the entire country,” Mr Kannan said.
Vinay Agrawal, executive director at Angel Broking, said that Sebi’s approval of mobile trading would have a significant impact on his business “because mobile penetration around the country is very high.”
India is the world’s fastest growing large mobile market by user numbers and the upcoming introduction of third-generation cellular services could make it easier for investors to access the markets.
The country’s subscriber base was 652.4m users as of the end of July, with 17m users added that month alone, according to the Telecom Regulatory Authority of India.
The National Stock Exchange, India’s biggest exchange, is also expected to receive Sebi’s approval for mobile phone trading and has lined up about 800 brokerage houses to launch its wireless facility.
In South Korea mobile phone share trading is growing as more people use smartphones to trade stocks. But the portion is still small as smartphones were introduced in Korea relatively late with the adoption of the iPhone late last year.
Mobile phone trading amounted to Won5,619bn as of March, according to Korea Exchange. The industry predicts that the current 3 per cent share of all trading done by mobile phone could rise to around 10 per cent in a couple of years.
Most retail, or individual, investors still prefer trading at home on their personal computers.
Gerald Perez, London-based managing director at Interactive Brokers, said his company planned to offer mobile phone trading India shortly. In September last year it launched iPhone and Blackberry apps to allow customers to log into their account and non-customers to view free stock, option, futures and forex quotes around the world. “I think growth is pretty good especially in Asia, everyone has mobile phones and everyone is on the go,” he said.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Trading on mobile phones is catching on globally, especially in Asia, where mobile phone penetration is growing rapidly.
Interactive Brokers, one of the largest US-based brokers, launched trading on mobile devices in 2002, including in the US and Britain.
But the phenomenon’s arrival in India is a sign that Asia is taking the lead in opening up the capital markets to the masses.
Mobile phone trading has made inroads in Japan and South Korea, where the local stock exchange says it accounts for 3 per cent of trading volume.
Madhu Kannan, chief executive of the Bombay exchange, said on Friday it had received approval from the Securities and Exchange Board of India (Sebi), the market regulator, for internet-based trading via mobile handset.
“We’ll be launching very soon,” he told the Financial Times. “This is something very core to our technology focused strategy. We’re trying to bring more people close to the market.
“It has the ability to significantly advance the concept of financial inclusion and the penetration of capital markets throughout the entire country,” Mr Kannan said.
Vinay Agrawal, executive director at Angel Broking, said that Sebi’s approval of mobile trading would have a significant impact on his business “because mobile penetration around the country is very high.”
India is the world’s fastest growing large mobile market by user numbers and the upcoming introduction of third-generation cellular services could make it easier for investors to access the markets.
The country’s subscriber base was 652.4m users as of the end of July, with 17m users added that month alone, according to the Telecom Regulatory Authority of India.
The National Stock Exchange, India’s biggest exchange, is also expected to receive Sebi’s approval for mobile phone trading and has lined up about 800 brokerage houses to launch its wireless facility.
In South Korea mobile phone share trading is growing as more people use smartphones to trade stocks. But the portion is still small as smartphones were introduced in Korea relatively late with the adoption of the iPhone late last year.
Mobile phone trading amounted to Won5,619bn as of March, according to Korea Exchange. The industry predicts that the current 3 per cent share of all trading done by mobile phone could rise to around 10 per cent in a couple of years.
Most retail, or individual, investors still prefer trading at home on their personal computers.
Gerald Perez, London-based managing director at Interactive Brokers, said his company planned to offer mobile phone trading India shortly. In September last year it launched iPhone and Blackberry apps to allow customers to log into their account and non-customers to view free stock, option, futures and forex quotes around the world. “I think growth is pretty good especially in Asia, everyone has mobile phones and everyone is on the go,” he said.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Suzlon turns to emerging markets growth
Suzlon Energy, the world’s third-largest turbine supplier, is embarking on a significant push for new business in emerging markets as it battles a depressed market in the developed world, where it built its reputation.
The group, with headquarters in Pune in India’s Maharashtra state, plans to refocus its business more sharply on the fast-growing emerging markets of its own country, China, South Africa and Brazil, amid a dismal outlook for wind turbines in the US and Europe.
A senior executive said on Monday the lossmaking company might position Repower Systems, Suzlon’s German subsidiary, to supply more developed markets such as the US, Europe and Australia, with an emphasis on offshore wind farms. The parent company would pursue high-growth opportunities in Asia, Africa and Latin America to build its order book quickly.
“We are aiming to break even by the end of the financial year,” said Nicholas Archer, global head of public relations. “If we can get some of the orders in then our fortunes should change pretty quickly.”
The tilt towards emerging markets comes as analysts predict slower than expected growth in wind power, particularly in the US and Europe, over the next two years. The short-term future for solar power, by comparison, is far rosier.
Last week, Barclays Capital, the UK-based investment group, cut its forecast for global wind power demand by 4 per cent for this year.
HSBC is also pessimistic. “Weak electricity demand resulting from energy efficiency measures and recessionary forces have made national wind installation targets easier to achieve ... This is bad news for wind turbine demand,” the bank said in a report.
Of particular concern is the US market, where proposed renewable energy laws have laid the ground for flat wind power growth over the next decade.
Suzlon, which has annual revenues of $5.5bn and commands 10 per cent of the global wind turbine market, plans to integrate Repower by raising its 91 per cent stake in the German engineering company to at least 95 per cent in the coming months.
The integration is expected to give management an opportunity to reinvigorate brands and streamline the corporate structure from almost 60 subsidiaries at present.
The company, headed by Tulsi Tanti, was at the forefront of India’s global acquisition rush in 2006-07. But its highly leveraged expansion at a time of high asset values came under severe strain in the financial crisis and led to a refinancing of $2.5bn debt last year.
Suzlon views Brazil, where a new government may embrace a 20 per cent renewable energy target by 2020, as having strong growth potential.
“We are really quite excited about the Brazilian market,” confirmed Mr Archer.
The group, with headquarters in Pune in India’s Maharashtra state, plans to refocus its business more sharply on the fast-growing emerging markets of its own country, China, South Africa and Brazil, amid a dismal outlook for wind turbines in the US and Europe.
A senior executive said on Monday the lossmaking company might position Repower Systems, Suzlon’s German subsidiary, to supply more developed markets such as the US, Europe and Australia, with an emphasis on offshore wind farms. The parent company would pursue high-growth opportunities in Asia, Africa and Latin America to build its order book quickly.
“We are aiming to break even by the end of the financial year,” said Nicholas Archer, global head of public relations. “If we can get some of the orders in then our fortunes should change pretty quickly.”
The tilt towards emerging markets comes as analysts predict slower than expected growth in wind power, particularly in the US and Europe, over the next two years. The short-term future for solar power, by comparison, is far rosier.
Last week, Barclays Capital, the UK-based investment group, cut its forecast for global wind power demand by 4 per cent for this year.
HSBC is also pessimistic. “Weak electricity demand resulting from energy efficiency measures and recessionary forces have made national wind installation targets easier to achieve ... This is bad news for wind turbine demand,” the bank said in a report.
Of particular concern is the US market, where proposed renewable energy laws have laid the ground for flat wind power growth over the next decade.
Suzlon, which has annual revenues of $5.5bn and commands 10 per cent of the global wind turbine market, plans to integrate Repower by raising its 91 per cent stake in the German engineering company to at least 95 per cent in the coming months.
The integration is expected to give management an opportunity to reinvigorate brands and streamline the corporate structure from almost 60 subsidiaries at present.
The company, headed by Tulsi Tanti, was at the forefront of India’s global acquisition rush in 2006-07. But its highly leveraged expansion at a time of high asset values came under severe strain in the financial crisis and led to a refinancing of $2.5bn debt last year.
Suzlon views Brazil, where a new government may embrace a 20 per cent renewable energy target by 2020, as having strong growth potential.
“We are really quite excited about the Brazilian market,” confirmed Mr Archer.
India growth story poses dilemma for investors
Few of the world’s stock markets have offered a haven from fears of a double-dip recession and Europe’s debt crisis. India, though, is one. Investors have sought sanctuary in its growth prospects and capital inflows have surged. The question now is whether Indian equities are overpriced.
Those who bet on a strong performance from India’s stock market this year have been rewarded. Indian equities have outperformed all their main rivals. The Sensex, India’s benchmark index, which hit a 31-month high on Monday at 18,560.05, has risen 6.27 per cent since January 1. The Shanghai Composite in China, by contrast, has dropped 17.7 per cent and Brazil’s Bovespa index has fallen 4.81 per cent.
Asia’s third-largest economy has offered an attractive combination of economic stability and almost double-digit growth for fund managers anxious about US and European fragility. Net total foreign investments in Indian equities to August 31 were Rs594bn ($12.7bn), up from Rs403bn during the same period in 2009, according to the country’s market regulator.
Foreign investors also bought a net Rs389bn of bonds from the start of the year to July 30, compared with a year earlier when investors sold a net Rs37.2bn in bonds in the same period – a sign that investors’ confidence in the government’s ability to rein in its ballooning public debt has increased. Many analysts expect foreign capital inflows in the equity market to overtake the record Rs17bn in 2007.
KN Sivasubramanian, head of Franklin Templeton’s India Equity portfolio management, says: “India is a largely domestic-driven economy and recent economic and earnings data has been encouraging. Overall, we are seeing both domestic and global investors recognise the [Indian] growth potential.”
Cameron Brandt, senior global markets analyst at EPFR, says: “There was a fair amount of attention being paid to the deterioration of India’s public finances and the risk that, when combined with food and energy-driven inflationary pressures, the central bank would be forced to tighten aggressively. That hasn’t really happened.
“Meanwhile, the nervousness about the strength of the recovery in the US, Europe and Japan has cast a favourable light on the strong domestic component of India’s story.”
But for investors the problem is that a lot of the good news is now in the price. Indian equities trade at more than 17 times forecast earnings for 2010, compared with a five year average of 16.2 times earnings. By comparison, emerging market equities in general trade on an average of 12 times 2010 earnings, while Russia trades at just 6.7 times forecast earnings. That is a hefty premium.
Philip Poole, global head of macro and investment strategy at HSBC global asset management says that, while there is a lot of momentum in the Indian market, he has India as an underweight mostly due to valuations. “Relative to past trading history, the Indian equity market looks fully priced. Within an emerging markets context it looks toppish.”
While India has potential, it also has risks. Indeed, inflation is running at the highest level in any leading emerging market – with nearly 11 per cent forecast for 2010, compared with about 3 per cent for China, 4.9 per cent for Brazil and 7 per cent for Latin America.
Indian economic policymakers have made big strides in recent years in developing consistency. But they have yet to establish the same long-term sustainable growth records as their counterparts in some other emerging markets, notably China and Brazil. “Indian growth is very strong, but that leads to inflation pressures. The authorities will need to act to slow the economy,” says Mr Poole.
“Inflation is a real concern and we expect yields for the [benchmark] 10-year bonds to come under pressure, as the Reserve Bank of India tightens the monetary policy,” says A Prasanna at ICICI Securities.
“India is certainly a longer-term story. Promised reforms and the efforts to boost rural incomes and productivity are not going to happen overnight,” says Mr Brandt. “There are more attractive destinations for ‘hot’ money at the moment.”
Duvvuri Subbarao, the governor of the RBI, told the Financial Times in July that growing risk aversion among foreign investors could have a negative impact on capital flows to India. “Such a slowdown in capital inflows will constrain domestic investment, which is critical to achieving and sustaining high growth rates,” he said.
Nevertheless, the fundamentals behind India’s growth story – abundant liquidity and strong domestic demand – are unlikely to disappear anytime soon, according to Rohit Kapur, at KPMG. “There is a lot of money on the sidelines ready to be invested in India ... people are here to stay and get what they can’t elsewhere: high returns.”
V Jayasankar, executive director at Kotak Investment Banking, says the private equity sector is likely to be a big player driving more money into the markets. “There are various estimates that show that about $25bn to $30bn are waiting to be invested in India by global private equity funds.”
As one veteran investor puts it: “Some bad news would be good news so that we can start getting back into the game.”
Those who bet on a strong performance from India’s stock market this year have been rewarded. Indian equities have outperformed all their main rivals. The Sensex, India’s benchmark index, which hit a 31-month high on Monday at 18,560.05, has risen 6.27 per cent since January 1. The Shanghai Composite in China, by contrast, has dropped 17.7 per cent and Brazil’s Bovespa index has fallen 4.81 per cent.
Asia’s third-largest economy has offered an attractive combination of economic stability and almost double-digit growth for fund managers anxious about US and European fragility. Net total foreign investments in Indian equities to August 31 were Rs594bn ($12.7bn), up from Rs403bn during the same period in 2009, according to the country’s market regulator.
Foreign investors also bought a net Rs389bn of bonds from the start of the year to July 30, compared with a year earlier when investors sold a net Rs37.2bn in bonds in the same period – a sign that investors’ confidence in the government’s ability to rein in its ballooning public debt has increased. Many analysts expect foreign capital inflows in the equity market to overtake the record Rs17bn in 2007.
KN Sivasubramanian, head of Franklin Templeton’s India Equity portfolio management, says: “India is a largely domestic-driven economy and recent economic and earnings data has been encouraging. Overall, we are seeing both domestic and global investors recognise the [Indian] growth potential.”
Cameron Brandt, senior global markets analyst at EPFR, says: “There was a fair amount of attention being paid to the deterioration of India’s public finances and the risk that, when combined with food and energy-driven inflationary pressures, the central bank would be forced to tighten aggressively. That hasn’t really happened.
“Meanwhile, the nervousness about the strength of the recovery in the US, Europe and Japan has cast a favourable light on the strong domestic component of India’s story.”
But for investors the problem is that a lot of the good news is now in the price. Indian equities trade at more than 17 times forecast earnings for 2010, compared with a five year average of 16.2 times earnings. By comparison, emerging market equities in general trade on an average of 12 times 2010 earnings, while Russia trades at just 6.7 times forecast earnings. That is a hefty premium.
Philip Poole, global head of macro and investment strategy at HSBC global asset management says that, while there is a lot of momentum in the Indian market, he has India as an underweight mostly due to valuations. “Relative to past trading history, the Indian equity market looks fully priced. Within an emerging markets context it looks toppish.”
While India has potential, it also has risks. Indeed, inflation is running at the highest level in any leading emerging market – with nearly 11 per cent forecast for 2010, compared with about 3 per cent for China, 4.9 per cent for Brazil and 7 per cent for Latin America.
Indian economic policymakers have made big strides in recent years in developing consistency. But they have yet to establish the same long-term sustainable growth records as their counterparts in some other emerging markets, notably China and Brazil. “Indian growth is very strong, but that leads to inflation pressures. The authorities will need to act to slow the economy,” says Mr Poole.
“Inflation is a real concern and we expect yields for the [benchmark] 10-year bonds to come under pressure, as the Reserve Bank of India tightens the monetary policy,” says A Prasanna at ICICI Securities.
“India is certainly a longer-term story. Promised reforms and the efforts to boost rural incomes and productivity are not going to happen overnight,” says Mr Brandt. “There are more attractive destinations for ‘hot’ money at the moment.”
Duvvuri Subbarao, the governor of the RBI, told the Financial Times in July that growing risk aversion among foreign investors could have a negative impact on capital flows to India. “Such a slowdown in capital inflows will constrain domestic investment, which is critical to achieving and sustaining high growth rates,” he said.
Nevertheless, the fundamentals behind India’s growth story – abundant liquidity and strong domestic demand – are unlikely to disappear anytime soon, according to Rohit Kapur, at KPMG. “There is a lot of money on the sidelines ready to be invested in India ... people are here to stay and get what they can’t elsewhere: high returns.”
V Jayasankar, executive director at Kotak Investment Banking, says the private equity sector is likely to be a big player driving more money into the markets. “There are various estimates that show that about $25bn to $30bn are waiting to be invested in India by global private equity funds.”
As one veteran investor puts it: “Some bad news would be good news so that we can start getting back into the game.”
Saturday, September 11, 2010
Wednesday, September 08, 2010
Basmati rice exports to jump 9%
NEW DELHI: The country’s basmati rice exports are likely to rise nine per cent to 3.5 million tonnes in the 2010—11 season starting October, as crop damage in flood—hit Pakistan may boost demand for Indian aromatic rice, a trade body said on Wednesday.
“India is estimated to export 3.2 million tonnes in current marketing year ending this month and shipments in 2010—11 are expected to rise to 3.5 million tonnes,” All India Rice Exporters Association President, Mr Vijay Sethia, told PTI.
Export of basmati rice would definitely be higher than last year because demand is expected to increase following floods in the neighbouring country, where basmati rice crop has been damaged badly, he said.
Less basmati rice production in the neighbouring country could enhance demand for Indian rice, he added.
Also, domestic supplies are expected to be higher as production of aromatic rice is seen to exceed last year’s output of 4.5 million tonnes on the back of 15—20 per cent jump in the acreage, Mr Sethia noted.
Indian exporters are shipping basmati rice at the minimum export price of USD 900 per tonne. According to estimates, approximately seven lakh hectares of Pakistan’s rice crop is partially or completely submerged under water.
The US Department of Agriculture (USDA) has revised downwards Pakistan’s rice production in 2010—11 to 4.4 million tonnes from its earlier projection of 6.5 million tonnes due to destruction caused by floods.
Similarly, rice exports from neighbouring country is estimated to decline by nearly 40 per cent in 2010—11 to 2.3 million tonnes, it said. - PTI
“India is estimated to export 3.2 million tonnes in current marketing year ending this month and shipments in 2010—11 are expected to rise to 3.5 million tonnes,” All India Rice Exporters Association President, Mr Vijay Sethia, told PTI.
Export of basmati rice would definitely be higher than last year because demand is expected to increase following floods in the neighbouring country, where basmati rice crop has been damaged badly, he said.
Less basmati rice production in the neighbouring country could enhance demand for Indian rice, he added.
Also, domestic supplies are expected to be higher as production of aromatic rice is seen to exceed last year’s output of 4.5 million tonnes on the back of 15—20 per cent jump in the acreage, Mr Sethia noted.
Indian exporters are shipping basmati rice at the minimum export price of USD 900 per tonne. According to estimates, approximately seven lakh hectares of Pakistan’s rice crop is partially or completely submerged under water.
The US Department of Agriculture (USDA) has revised downwards Pakistan’s rice production in 2010—11 to 4.4 million tonnes from its earlier projection of 6.5 million tonnes due to destruction caused by floods.
Similarly, rice exports from neighbouring country is estimated to decline by nearly 40 per cent in 2010—11 to 2.3 million tonnes, it said. - PTI
Monday, September 06, 2010
Sensex rises to 31 month high
The Bombay Stock Exchange benchmark Sensex on Monday jumped by 338 points to close at a 31-month high on heavy buying in metal, refinery and IT stocks backed by a firming global trend.
The 30-share index settled 338.62 points higher at 18,560.05 points, a level never seen after February 2008.
Trading sentiment turned bullish after a stunning growth in the U.S. employment and manufacturing eased concern that the global economy might falter and boosted the outlook for domestic companies, which in turn lift shares of software exporting companies.
The Sensex touched the day’s high of 18,600.30 as market heaviest Reliance Industries, Infosys Technologies and Tata Steel recorded handsome gains.
Reliance Industries shot up by Rs. 27.60 to Rs. 953.20 and second heavy-weight Infosys Technologies by Rs. 59.85 to Rs. 2,831.50. Tata Steel rose by Rs. 35.65 to Rs. 575.60 and ICICI Bank by Rs. 38.05 to Rs. 1,037.70.
All the four stocks carry nearly 32 per cent weightage on the benchmark. In the 30-BSE index components, 26 stocks closed with gains and four ended in the negative zone.
The broad-based National Stock Exchange index Nifty rose by 97.55 points to 5,576.95.
Companies in the U.S. added more jobs than forecast in August and the Institute for Supply Management’s factory index unexpectedly increased, reports showed on Saturday.
The Asian stock market gained followed by a higher closing in the U.S. markets and a firm opening in the European region continued to support the market throughout the session.
The metal sector index gained the most by rising 3.47 per cent to 15,878.80 as Tata Steel, the biggest producer of alloy climbed its highest close since May 13 after product prices have been raised by nearly four per cent.
Hindalco Industries, the biggest aluminum producer that gets most of its sales in North America and Europe, rose by Rs. 8.15 to Rs. 178.55 on report the company plans to spend Rs. 100 billion on projects this year.
The banking sector index added 2.06 per cent to close at 12,728.73 points. The realty sector index rose by 1.98 per cent to 3,557.08 followed by oil and gas index by 1.97 per cent to 10,178.23.
The IT index, which represents software companies, gained 1.88 per cent to 5,563.32. The country’s nearly 40 per cent software business comes from the U.S. and European markets.
With the buying activity spilling over a wide-front, the smallcap index rose by 1.83 per cent to 10,094.52 and midcap index by 1.31 per cent to 7,961.81.
The 30-share index settled 338.62 points higher at 18,560.05 points, a level never seen after February 2008.
Trading sentiment turned bullish after a stunning growth in the U.S. employment and manufacturing eased concern that the global economy might falter and boosted the outlook for domestic companies, which in turn lift shares of software exporting companies.
The Sensex touched the day’s high of 18,600.30 as market heaviest Reliance Industries, Infosys Technologies and Tata Steel recorded handsome gains.
Reliance Industries shot up by Rs. 27.60 to Rs. 953.20 and second heavy-weight Infosys Technologies by Rs. 59.85 to Rs. 2,831.50. Tata Steel rose by Rs. 35.65 to Rs. 575.60 and ICICI Bank by Rs. 38.05 to Rs. 1,037.70.
All the four stocks carry nearly 32 per cent weightage on the benchmark. In the 30-BSE index components, 26 stocks closed with gains and four ended in the negative zone.
The broad-based National Stock Exchange index Nifty rose by 97.55 points to 5,576.95.
Companies in the U.S. added more jobs than forecast in August and the Institute for Supply Management’s factory index unexpectedly increased, reports showed on Saturday.
The Asian stock market gained followed by a higher closing in the U.S. markets and a firm opening in the European region continued to support the market throughout the session.
The metal sector index gained the most by rising 3.47 per cent to 15,878.80 as Tata Steel, the biggest producer of alloy climbed its highest close since May 13 after product prices have been raised by nearly four per cent.
Hindalco Industries, the biggest aluminum producer that gets most of its sales in North America and Europe, rose by Rs. 8.15 to Rs. 178.55 on report the company plans to spend Rs. 100 billion on projects this year.
The banking sector index added 2.06 per cent to close at 12,728.73 points. The realty sector index rose by 1.98 per cent to 3,557.08 followed by oil and gas index by 1.97 per cent to 10,178.23.
The IT index, which represents software companies, gained 1.88 per cent to 5,563.32. The country’s nearly 40 per cent software business comes from the U.S. and European markets.
With the buying activity spilling over a wide-front, the smallcap index rose by 1.83 per cent to 10,094.52 and midcap index by 1.31 per cent to 7,961.81.
Thursday, September 02, 2010
India’s Stocks Rise to Highest in Week; Jaiprakash Advances
Sept. 2 (Bloomberg) -- India’s benchmark stock index climbed to its highest in a week after Finance Minister Pranab Mukherjee said taxes paid by companies increased, fueling speculation earnings may rise.
Jaiprakash Associates Ltd., a construction company that also makes cement, gained the most in more than three months after August sales increased. India’s corporate tax collections grew 21 percent in the April-July period from a year earlier, Mukherjee said yesterday. Sterlite Industries (India) Ltd., the nation’s biggest copper and zinc producer, advanced for a second day as metal prices rose.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 32.44, or 0.2 percent, to 18,238.31. The S&P CNX Nifty Index on the National Stock Exchange rose 0.3 percent to 5,486.15. The BSE 200 Index increased 0.3 percent to 2,342.89.
“All the data points show India’s economy is gaining in strength,” said Vaibhav Sanghavi, a fund manager at Ambit Capital Ltd. in Mumbai who doesn’t disclose the value of the assets he oversees. “On the global side, the latest numbers from the U.S. and China have somewhat reduced the volatility.” Sanghavi said he’s adding shares of retailers, education, media and consumer companies to his holdings, without naming any.
Jaiprakash Sales
Jaiprakash advanced 4.3 percent to 114.65 rupees, its biggest one day gain since May 26, after August sales climbed 51 percent. Bajaj Auto Ltd., second-largest motorcycle maker, climbed 1.2 percent to 2,783.35 rupees after reporting record sales in August.
Apollo Tyres Ltd., the biggest tiremaker by market value, jumped 12 percent to 82.35 rupees, the highest in at least 19 years. The stock was rated “outperform” in new coverage by Govindarajan Chellappa and Rajasa K, analysts at Credit Suisse Group AG, saying the Indian tire industry is “in the midst of a very favorable supply-demand scenario.”
Sterlite added 2.7 percent to 160.65 rupees, extending its 3.6 percent advance yesterday. Copper in London traded near a four-month high, extending yesterday’s advance, after better- than-expected economic data in U.S. and China, the two biggest consumers, boosted the outlook for demand.
Foreign fund inflows to India’s stocks have increased 56 percent this year, making the Sensex the most expensive benchmark index in Asia and among BRIC markets that also include Brazil, Russia and China. The Sensex trades at 17.4 times estimated profit after last year’s biggest rally in 18 years.
Overseas funds bought a net 5.38 billion rupees ($114.4 million) of Indian equities on Aug. 31, raising total investments in the stocks this year to 599.2 billion rupees, according to the nation’s market regulator.
Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.
Jaiprakash Associates Ltd., a construction company that also makes cement, gained the most in more than three months after August sales increased. India’s corporate tax collections grew 21 percent in the April-July period from a year earlier, Mukherjee said yesterday. Sterlite Industries (India) Ltd., the nation’s biggest copper and zinc producer, advanced for a second day as metal prices rose.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, gained 32.44, or 0.2 percent, to 18,238.31. The S&P CNX Nifty Index on the National Stock Exchange rose 0.3 percent to 5,486.15. The BSE 200 Index increased 0.3 percent to 2,342.89.
“All the data points show India’s economy is gaining in strength,” said Vaibhav Sanghavi, a fund manager at Ambit Capital Ltd. in Mumbai who doesn’t disclose the value of the assets he oversees. “On the global side, the latest numbers from the U.S. and China have somewhat reduced the volatility.” Sanghavi said he’s adding shares of retailers, education, media and consumer companies to his holdings, without naming any.
Jaiprakash Sales
Jaiprakash advanced 4.3 percent to 114.65 rupees, its biggest one day gain since May 26, after August sales climbed 51 percent. Bajaj Auto Ltd., second-largest motorcycle maker, climbed 1.2 percent to 2,783.35 rupees after reporting record sales in August.
Apollo Tyres Ltd., the biggest tiremaker by market value, jumped 12 percent to 82.35 rupees, the highest in at least 19 years. The stock was rated “outperform” in new coverage by Govindarajan Chellappa and Rajasa K, analysts at Credit Suisse Group AG, saying the Indian tire industry is “in the midst of a very favorable supply-demand scenario.”
Sterlite added 2.7 percent to 160.65 rupees, extending its 3.6 percent advance yesterday. Copper in London traded near a four-month high, extending yesterday’s advance, after better- than-expected economic data in U.S. and China, the two biggest consumers, boosted the outlook for demand.
Foreign fund inflows to India’s stocks have increased 56 percent this year, making the Sensex the most expensive benchmark index in Asia and among BRIC markets that also include Brazil, Russia and China. The Sensex trades at 17.4 times estimated profit after last year’s biggest rally in 18 years.
Overseas funds bought a net 5.38 billion rupees ($114.4 million) of Indian equities on Aug. 31, raising total investments in the stocks this year to 599.2 billion rupees, according to the nation’s market regulator.
Inflows from overseas reached a record 834.2 billion rupees in 2009, exceeding the high set two years ago in local currency terms, as the biggest advance in 18 years lured foreign funds. They sold a record 529.9 billion rupees of shares in 2008, triggering a record annual decline.
Monday, August 30, 2010
Billionaire Ambani’s Reliance Invests in Luxury Oberoi Hotels
Aug. 30 (Bloomberg) -- Billionaire Mukesh Ambani’s Reliance Industries Ltd. acquired a stake in India’s luxury Oberoi hotel chain, his seventh investment this year as he diversifies from the oil and gas sector that made him Asia’s richest man.
Reliance Industries, operator of the world’s biggest refinery complex, agreed to pay 10.2 billion rupees ($217 million) for a stake in EIH Ltd., which runs the Oberoi and Trident hotels, according to a statement today.
Ambani, 53, has invested more than $1.2 billion buying into a broadband company, cargo carrier and announced plans to build hospitals, universities and set up a sports marketing company. The fastest pace of economic growth in 2 1/2 years is bolstering demand for services, providing alternative sources of revenue as Reliance’s core energy business slows.
“The push is to get into services and diversify their revenue sources from being a pure manufacturing company,” said Jagannadham Thunuguntla, chief strategist at SMC Capitals Ltd. in New Delhi. “Telecom and hospitality are a reflection of India’s growth story.”
Reliance Industries stock has declined 13 percent this year as natural gas production from the nation’s biggest field has been capped for at least two years and earnings from turning crude into fuels at its refining complex has slowed. Ambani faces increased competition from billionaire Anil Agarwal, who this month agreed to buy a controlling stake in India’s largest onland oil field.
‘Excellent Prospects’
“EIH has excellent future prospects,” Reliance said in a statement today. Manoj Warrier, a spokesman for Reliance, declined to comment further.
Reliance Industries shares which have the highest weight in the index, declined 0.2 percent to 947.95 rupees at the end of trading in Mumbai, falling for the sixth straight day. EIH shares gained 11.5 percent to 150.90 rupees, the highest in almost two years.
Reliance is close to signing an agreement with DE Shaw & Co. to start an $800 million infrastructure fund, the Economic Times reported Aug. 26, without saying where it got the information. Chairman Ambani told shareholders June 18 Reliance Foundation will build a university and a hospital in Mumbai.
The company, which also produces chemicals, expects its retail business revenue to grow 10-fold in five years to 450 billion rupees ($9.6 billion). Reliance Retail, with 1,150 stores in 86 cities, had sales of more than 45 billion rupees in the year to March 31, Ambani told shareholders June 18.
“There are opportunities to grow in telecoms and hospitality but I would like to see them fully concentrate on manufacturing,” said Juergen Maier, who helps manage $1.3 billion of emerging market stocks, including Reliance. “Their attempt at service in the retail sector hasn’t been very successful. I’m not very happy that they are diversifying into services.”
Peak Output
Reliance Industries expects to reach peak output at the KG- D6 field in the Bay of Bengal as late as 2012 at least two years behind schedule, two people with knowledge of the plan said July 27. The explorer is currently producing about 60 million cubic meters a day of the clean-burning fuel, 25 percent below its capacity.
The company is also spending almost $3.4 billion to buy shale gas assets in the U.S. from three companies, including Atlas Energy Inc. and Pioneer Natural Resources Co.
Reliance Industries operates 1.24 million barrels a day of crude oil refining capacity in the west Indian state of Gujarat. Global refining margins, or earnings from processing oil into fuels, shrank to $4.22 a barrel in the quarter, compared with $5.49 a barrel in the three months ended June 30, according to data compiled by BP Plc.
Gains from processing oil into fuels may remain stable in the next three quarters, Chief Financial Officer Alok Agarwal said July 27.
Slower refining profit have resulted in Reliance Industries’ net income missing analysts’ estimates in at least three of the last five quarters.
Reliance Industries, operator of the world’s biggest refinery complex, agreed to pay 10.2 billion rupees ($217 million) for a stake in EIH Ltd., which runs the Oberoi and Trident hotels, according to a statement today.
Ambani, 53, has invested more than $1.2 billion buying into a broadband company, cargo carrier and announced plans to build hospitals, universities and set up a sports marketing company. The fastest pace of economic growth in 2 1/2 years is bolstering demand for services, providing alternative sources of revenue as Reliance’s core energy business slows.
“The push is to get into services and diversify their revenue sources from being a pure manufacturing company,” said Jagannadham Thunuguntla, chief strategist at SMC Capitals Ltd. in New Delhi. “Telecom and hospitality are a reflection of India’s growth story.”
Reliance Industries stock has declined 13 percent this year as natural gas production from the nation’s biggest field has been capped for at least two years and earnings from turning crude into fuels at its refining complex has slowed. Ambani faces increased competition from billionaire Anil Agarwal, who this month agreed to buy a controlling stake in India’s largest onland oil field.
‘Excellent Prospects’
“EIH has excellent future prospects,” Reliance said in a statement today. Manoj Warrier, a spokesman for Reliance, declined to comment further.
Reliance Industries shares which have the highest weight in the index, declined 0.2 percent to 947.95 rupees at the end of trading in Mumbai, falling for the sixth straight day. EIH shares gained 11.5 percent to 150.90 rupees, the highest in almost two years.
Reliance is close to signing an agreement with DE Shaw & Co. to start an $800 million infrastructure fund, the Economic Times reported Aug. 26, without saying where it got the information. Chairman Ambani told shareholders June 18 Reliance Foundation will build a university and a hospital in Mumbai.
The company, which also produces chemicals, expects its retail business revenue to grow 10-fold in five years to 450 billion rupees ($9.6 billion). Reliance Retail, with 1,150 stores in 86 cities, had sales of more than 45 billion rupees in the year to March 31, Ambani told shareholders June 18.
“There are opportunities to grow in telecoms and hospitality but I would like to see them fully concentrate on manufacturing,” said Juergen Maier, who helps manage $1.3 billion of emerging market stocks, including Reliance. “Their attempt at service in the retail sector hasn’t been very successful. I’m not very happy that they are diversifying into services.”
Peak Output
Reliance Industries expects to reach peak output at the KG- D6 field in the Bay of Bengal as late as 2012 at least two years behind schedule, two people with knowledge of the plan said July 27. The explorer is currently producing about 60 million cubic meters a day of the clean-burning fuel, 25 percent below its capacity.
The company is also spending almost $3.4 billion to buy shale gas assets in the U.S. from three companies, including Atlas Energy Inc. and Pioneer Natural Resources Co.
Reliance Industries operates 1.24 million barrels a day of crude oil refining capacity in the west Indian state of Gujarat. Global refining margins, or earnings from processing oil into fuels, shrank to $4.22 a barrel in the quarter, compared with $5.49 a barrel in the three months ended June 30, according to data compiled by BP Plc.
Gains from processing oil into fuels may remain stable in the next three quarters, Chief Financial Officer Alok Agarwal said July 27.
Slower refining profit have resulted in Reliance Industries’ net income missing analysts’ estimates in at least three of the last five quarters.
Thursday, August 26, 2010
Jobless Claims in U.S. Decrease More Than Forecast
Aug. 26 (Bloomberg) -- Applications for unemployment benefits in the U.S. fell more than forecast last week, easing concern the labor market was rapidly deteriorating as the economy slows.
Initial jobless claims dropped by 31,000, the first decline in a month, to 473,000 in the week ended Aug. 21, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance decreased, while those getting extended benefits climbed.
The average number of claims over the past month climbed to the highest level since November even as the latest reading provided some relief to the drumbeat of negative economic data in recent weeks. Employers have delayed hiring plans and some have renewed firings as the year-old recovery shows signs of petering out, raising the risk consumer spending will weaken further.
“Even before the recent uptick, the trend had been moderately high and that’s consistent with a lackluster pace of job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “The private sector really hasn’t recovered enough.”
Stock-index futures climbed after the report eased concern job losses were increasing. The contract on the Standard & Poor’s 500 Index rose 0.3 percent to 1,057.7 at 9:14 a.m. in New York. Treasury securities were little changed, erasing earlier gains.
Fewer Than Forecast
The median estimate of 48 economists surveyed by Bloomberg projected claims would drop to 490,000. Forecasts ranged from 475,000 to 510,000. The government revised the prior week’s claims figure up to 504,000, the highest level in nine months, from a previously reported 500,000.
There were no special factors influencing last week’s data, a Labor Department spokesman told reporters as the figures were being released.
The four-week moving average of claims increased to 486,750 from 483,500 the prior week.
The number of people continuing to collect unemployment benefits dropped by 62,000 to 4.46 million in the week ended Aug. 14, from 4.52 million the prior week.
The continuing claims figure does not include those receiving extended benefits under federal programs. The number of Americans who’ve used up traditional benefits and are now collecting emergency and extended payments rose by about 302,000 to 5.84 million in the week ended Aug. 7.
Jobless Rate
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.5 percent in the week ended Aug. 14 from 3.6 percent.
Eleven states and territories reported an increase in claims that same week, while 42 reported a decrease.
While companies have boosted payrolls seven straight months, firings have remained elevated as the economic recovery shows signs of slowing. Private firms added 71,000 jobs in July, fewer than economists had forecast, according to government figures released Aug. 6. Unemployment held at 9.5 percent, near a 26-year high of 10.1 percent.
The government may report tomorrow the economy grew at a 1.4 percent pace in the second quarter, less than the 2.4 percent rate earlier estimated, according to economists surveyed by Bloomberg. That would be the slowest growth since the second quarter of 2009 when the economy was still contracting.
A year after the expansion resumed, companies are still cutting staff.
More Firings
Northrop Grumman Shipbuilding, a unit of Northrop Grumman Corp. this week said it would fire 292 employees at the Gulf Coast shipbuilding facility at Pascagoula, Mississippi, and that it expects to cut another 350 jobs at Pascagoula by the end of the year.
Congress this month passed legislation providing $26 billion in aid to state governments to prevent thousands of layoffs of teachers and other public service employees as declining tax revenue has left state and local governments with budget deficits the National Conference of State Legislatures estimates at $84 billion.
In a sign local governments and employees are cooperating to save jobs, the Los Angeles-based Engineers & Architects Association, which represents one-seventh of the city’s municipal workforce, agreed to terms that call for members to help pay their health insurance costs for the first time, Mayor Antonio Villaraigosa said this week.
Initial jobless claims dropped by 31,000, the first decline in a month, to 473,000 in the week ended Aug. 21, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance decreased, while those getting extended benefits climbed.
The average number of claims over the past month climbed to the highest level since November even as the latest reading provided some relief to the drumbeat of negative economic data in recent weeks. Employers have delayed hiring plans and some have renewed firings as the year-old recovery shows signs of petering out, raising the risk consumer spending will weaken further.
“Even before the recent uptick, the trend had been moderately high and that’s consistent with a lackluster pace of job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “The private sector really hasn’t recovered enough.”
Stock-index futures climbed after the report eased concern job losses were increasing. The contract on the Standard & Poor’s 500 Index rose 0.3 percent to 1,057.7 at 9:14 a.m. in New York. Treasury securities were little changed, erasing earlier gains.
Fewer Than Forecast
The median estimate of 48 economists surveyed by Bloomberg projected claims would drop to 490,000. Forecasts ranged from 475,000 to 510,000. The government revised the prior week’s claims figure up to 504,000, the highest level in nine months, from a previously reported 500,000.
There were no special factors influencing last week’s data, a Labor Department spokesman told reporters as the figures were being released.
The four-week moving average of claims increased to 486,750 from 483,500 the prior week.
The number of people continuing to collect unemployment benefits dropped by 62,000 to 4.46 million in the week ended Aug. 14, from 4.52 million the prior week.
The continuing claims figure does not include those receiving extended benefits under federal programs. The number of Americans who’ve used up traditional benefits and are now collecting emergency and extended payments rose by about 302,000 to 5.84 million in the week ended Aug. 7.
Jobless Rate
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.5 percent in the week ended Aug. 14 from 3.6 percent.
Eleven states and territories reported an increase in claims that same week, while 42 reported a decrease.
While companies have boosted payrolls seven straight months, firings have remained elevated as the economic recovery shows signs of slowing. Private firms added 71,000 jobs in July, fewer than economists had forecast, according to government figures released Aug. 6. Unemployment held at 9.5 percent, near a 26-year high of 10.1 percent.
The government may report tomorrow the economy grew at a 1.4 percent pace in the second quarter, less than the 2.4 percent rate earlier estimated, according to economists surveyed by Bloomberg. That would be the slowest growth since the second quarter of 2009 when the economy was still contracting.
A year after the expansion resumed, companies are still cutting staff.
More Firings
Northrop Grumman Shipbuilding, a unit of Northrop Grumman Corp. this week said it would fire 292 employees at the Gulf Coast shipbuilding facility at Pascagoula, Mississippi, and that it expects to cut another 350 jobs at Pascagoula by the end of the year.
Congress this month passed legislation providing $26 billion in aid to state governments to prevent thousands of layoffs of teachers and other public service employees as declining tax revenue has left state and local governments with budget deficits the National Conference of State Legislatures estimates at $84 billion.
In a sign local governments and employees are cooperating to save jobs, the Los Angeles-based Engineers & Architects Association, which represents one-seventh of the city’s municipal workforce, agreed to terms that call for members to help pay their health insurance costs for the first time, Mayor Antonio Villaraigosa said this week.
Monday, August 23, 2010
Govt extends export sops to struggling sectors
The government continues to extend a helping hand to exporters. Announcing the annual foreign trade policy on Monday, Commerce Minister Anand Sharma said that the recovery in exports has been fragile at best and that it would be prudent to persevere with last year's policy stance.
In keeping with this view, the minister has announced the introduction of a bonus scheme for handicrafts and leather.
Govt extends export sops to struggling sectors
“Abrupt withdrawal can be very hurtful for those sectors that are labour intensive, where the demand has not returned and which continue to do badly. That is why we have retained the support or intensive for such sectors bringing in more the embrace of more incentive schemes which need intervention and support. Along with adding to what was being given earlier in the form of a new scheme where 2% additional bonus has been given to some sectors including handicrafts, handloom, many of the engineering projects as well as the textile and the leather industry.
The minister also announced that the Duty Entitlement Pass Book (DEPB) and Export Promotion for Capital Goods (EPCG) schemes would be extended to March 2012
In keeping with this view, the minister has announced the introduction of a bonus scheme for handicrafts and leather.
Govt extends export sops to struggling sectors
“Abrupt withdrawal can be very hurtful for those sectors that are labour intensive, where the demand has not returned and which continue to do badly. That is why we have retained the support or intensive for such sectors bringing in more the embrace of more incentive schemes which need intervention and support. Along with adding to what was being given earlier in the form of a new scheme where 2% additional bonus has been given to some sectors including handicrafts, handloom, many of the engineering projects as well as the textile and the leather industry.
The minister also announced that the Duty Entitlement Pass Book (DEPB) and Export Promotion for Capital Goods (EPCG) schemes would be extended to March 2012
Indian State-Run Companies Said to Consider Cairn Counter Bid
Aug. 23 (Bloomberg) -- Indian state-run energy companies are considering bidding for a stake in Cairn India Ltd., countering Vedanta Resources Plc’s $9.6 billion offer for the explorer, according to two people familiar with the matter.
India’s oil ministry has instructed Oil & Natural Gas Corp. to study the possibility of making a counter offer, one of the people said. GAIL India Ltd. may join ONGC, another person said.
Vedanta, the mining company controlled by billionaire Anil Agarwal, agreed this month to buy as much as 60 percent of Cairn Energy Plc’s Indian unit to gain access to the country’s biggest onshore oil field. ONGC owns a 30 percent stake in the field and is seeking to increase production as output from 30-year-old fields declines.
The Press Trust of India earlier reported ONGC, India’s largest explorer, Oil India Ltd. and GAIL have arranged $10 billion in funds from international banks to fund a possible bid.
R.S. Sharma, ONGC’s chairman, and Oil Secretary S. Sundareshan, the senior-most bureaucrat in the ministry, declined to comment. Oil India Chairman N.M. Borah and GAIL’s Chairman B.C. Tripathi didn’t answer calls to their mobile phones. Gordon Simpson, a spokesman for Vedanta, declined to comment, while David Nisbet, the head of group corporate affairs for Cairn Energy, didn’t respond to an e-mail sent to him.
India’s oil ministry has instructed Oil & Natural Gas Corp. to study the possibility of making a counter offer, one of the people said. GAIL India Ltd. may join ONGC, another person said.
Vedanta, the mining company controlled by billionaire Anil Agarwal, agreed this month to buy as much as 60 percent of Cairn Energy Plc’s Indian unit to gain access to the country’s biggest onshore oil field. ONGC owns a 30 percent stake in the field and is seeking to increase production as output from 30-year-old fields declines.
The Press Trust of India earlier reported ONGC, India’s largest explorer, Oil India Ltd. and GAIL have arranged $10 billion in funds from international banks to fund a possible bid.
R.S. Sharma, ONGC’s chairman, and Oil Secretary S. Sundareshan, the senior-most bureaucrat in the ministry, declined to comment. Oil India Chairman N.M. Borah and GAIL’s Chairman B.C. Tripathi didn’t answer calls to their mobile phones. Gordon Simpson, a spokesman for Vedanta, declined to comment, while David Nisbet, the head of group corporate affairs for Cairn Energy, didn’t respond to an e-mail sent to him.
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