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Citgroup unveils reconstruction planCitigroup has unveiled a major reconstruction plan. However, it is not the first time this company which dates back to the early 1800s has undone itself and gone through a big transformation.Source: Moneycontrol Top Headlines | 17 Jan 2009 | 5:26 pm Role of old Satyam board members questionable: ExpertsSandeep Parekh, Professor, IIMA, said the role of Satyams board members at the December 16 meet is questionable. \"It looks like a gang of thugs out there. It is looking pretty clear after reading these board minutes that all of these guys were involved. I hope that the new board will take immediate steps to get rid of all of them.\"Source: Moneycontrol Top Headlines | 17 Jan 2009 | 4:09 pm Target Rs 3K cr rev post Westinghouse tieup: LTPower equipment major Larsen Toubro has entered into a partnership with US nuclear power equipment manufacturer, Westinghouse. The partnership with Westinghouse will give LT access to technology necessary to build these light water reactors.Source: Moneycontrol Top Headlines | 17 Jan 2009 | 3:39 pm Who will be Satyam\'s new CFO?As the newly appointed Satyam board begins its hunt for a CFO to steer the company out of the ongoing troubles, CNBCTV18 brings a report on the potential candidates for the post. V Balakrishnan, Alok Mishra and Ravi Ramu feature in the list of potential candidates for the post of Satyam CFO.Source: Moneycontrol Top Headlines | 17 Jan 2009 | 2:23 pm Satyam board meets; CEO, funds top agendaThe Governmentappointed directors of fraudhit Satyam Computer Services began a meeting on Saturday with the focus on how much the company immediately needs to pay salaries and meet other expenditure and on finding a chief executive officer (CEO) to run its daytoday operations.Source: Moneycontrol Top Headlines | 17 Jan 2009 | 1:39 pm Investigators sweat at scale of Satyam fraudA CID lawyer told the court that the fraud is massive and the investigators need access to Ramalinga Raju immediately, and for a reasonable time.Source: Moneycontrol Top Headlines | 17 Jan 2009 | 1:35 pm Maytas valuation not done by us: EYErnst Young has clarified that it was not the advisor to the proposed Satyam transaction as pointed out by the Former Satyams CFO, Srinivas Vadlamani. It very clearly said that it was not engaged by Satyam or any of its arms to conduct Maytas valuation.Source: Moneycontrol Top Headlines | 17 Jan 2009 | 1:05 pm Pakistan must act against terrorists in own interest: PMIndia has given enough proof that terrorists responsible for the Nov 26 attacks on India's commercial capital were from Pakistan and Islamabad bring them to book, Prime Minister Manmohan Singh said Saturday.Source: IndiaeNews.com: Business News | 17 Jan 2009 | 1:00 pm Iran sees oil at around $40 in 2009 - MinisterTEHRAN (Reuters) - Iran's Oil Ministry anticipates a crude oil price of about $40 a barrel in 2009, Oil Minister Gholamhossein Nozari was quoted as saying on Saturday, suggesting Tehran does not expect the market to rebound soon.Source: Reuters: Money News | 17 Jan 2009 | 12:33 pm Wills Lifestyle again partners FDCI for India Fashion WeekEnding weeks of speculation, the Fashion Design Council of India (FDCI) announced Saturday that ITC's Wills Lifestyle brand will continue to sponsor its premier India Fashion Week business-to-business event. Hence, the event will continue to be called the Wills Lifestyle India Fashion Week (WIFW).Source: IndiaeNews.com: Business News | 17 Jan 2009 | 12:30 pm Satyam scam isolated, not a slur on corporate India: Kamal NathThe Rs.70 billion ($1.4 billion) financial scam in Satyam Computer Services is an isolated case and does not tarnish the image of the Indian corporate sector in any way, Commerce Minister Kamal Nath said here Saturday.Source: IndiaeNews.com: Business News | 17 Jan 2009 | 12:30 pm Court sends Rajus, Srinivas to police custody till 22 JanuaryHyderabad: A local court on Saturday sent Satyam’s tainted founder Ramalinga Raju, his brother Rama Raju and the company’s former CFO Vadlamani Srinivas to police custody for four days from Sunday. The 6th additional chief metropolitan magistrate granted their custody to the state CID police, although the prosecution sought seven days detention. The magistrate allowed the investigating agency to interrogate the accused in the presence of their counsel from 0700 hrs till 1700 hrs during their custody period and produce them before the court on 22 January at 1000 hrs. Also Read The Satyam Fiasco (Full Coverage) Defence counsel Bharat Kumar told reporters that a revision petition would be filed in the appropriate court after studying the court’s order on police custody. “We will move the revision application soon after getting the order of the copy on Monday,” he said. The Raju brothers were arrested on 9 January and have been in judicial custody since Saturday last. Srinivas was arrested on 10 January and sent to judicial remand, and all of them were lodged in the Chanchalguda central prison. The police had questioned the Raju brothers on the night of their arrest and sought more time to interrogate them on the Rs7,800 crore financial fraud that Ramalinga Raju had admitted to in Satyam Computer. The CID has already searched Raju’s house and his office in Satyam and recovered at least 44 documents. The court will on Monday hear separate petitions from Raju’s camp seeking bail and special status in jail, and one from SEBI seeking a day’s custody of all three accused. Source: Home - Livemint.com | 17 Jan 2009 | 12:25 pm State-run banks have given USD 676 mn to Maytas: Report!State-run banks have lent 33 billion rupees (USD 676 million) to Maytas Companies, which have interests in property and are controlled by the family of fraud-hit Satyam Computer Services, a newspaper reported on Saturday.Source: Zee News : Business | 17 Jan 2009 | 12:22 pm Russia, EU, Ukraine set for gas talks!Russia and Ukraine were set for a new round of talks Saturday in a bid to resolve their gas dispute that has Europe struggling through winter without crucial gas supplies from the ex-Soviet giants.Source: Zee News : Business | 17 Jan 2009 | 12:22 pm Raju supported by followers despite fall from grace!From his native village Garagaparru in coastal Andhra Pradesh to this IT hub, the disgraced founder and former chairman of Satyam Computer Services B Ramalinga Raju still enjoys a soft corner in the hearts of his followers.Source: Zee News : Business | 17 Jan 2009 | 12:22 pm Obama eyes `urgent` action to fix economy!The US Prez-elect warns of "tough year" ahead unless "dramatic" action is taken on stimulus plan.Source: Zee News : Business | 17 Jan 2009 | 12:22 pm Satyam board meets to discuss new funding plans!The new board of fraud-hit Satyam Computer Services is meeting again on Saturday to look for ways to raise new funds after both the government and the company rejected talks of a state rescue bid.Source: Zee News : Business | 17 Jan 2009 | 12:22 pm MS accused of violating EU rules!EU has said that Microsoft`s practice of selling the IE violates its antitrust rules.Source: Zee News : Business | 17 Jan 2009 | 12:22 pm Govt to pick Satyam chairman - board memberHYDERABAD (Reuters) - The government will pick a chairman for fraud-hit Satyam Computer Services, a member of the company's new six-person government-appointed board said after it met on Saturday.Source: Reuters: Money News | 17 Jan 2009 | 12:21 pm Exclusive: ExSatyam CFO says EY evaluated MaytasSrinivas Vadlamani, the CFO of the erstwhile beleaguered Satyam board, said the evaluation of Maytas was based on Sebi regulations. The valuation for the Maytas deal, he said, was done by Ernst Young, while the title diligence was done by Luthra Luthra.Source: Moneycontrol Top Headlines | 17 Jan 2009 | 12:15 pm Govt to pick Satyam chairman, says board memberHyderabad: The government will pick a chairman for fraud-hit Satyam Computer, a member of the company’s new six-person government-appointed board said after it met on Saturday. Deepak Parekh said that no major decision had been made during the meeting in the company’s headquarters in Hyderabad. “We met the senior management,” he told Reuters. Satyam, India’s No. 4 software services exporter, has been battling for survival since chairman Ramalinga Raju suddenly resigned last week, revealing profits had been falsified for years and that $1 billion of cash on the books did not exist. The company was expected to issue a statement shortly. Source: Home - Livemint.com | 17 Jan 2009 | 12:11 pm India to grow at 7-7.5 percent: Ashok ChawlaThe Indian economy is now projected to grow between 7 and 7.5 percent in the current fiscal, a top official said here Saturday.Source: IndiaeNews.com: Business News | 17 Jan 2009 | 12:00 pm India watching Pakistan probe into Mumbai strikes: PranabIndia will see how long Pakistan takes to complete the investigation into the Mumbai terror strikes, External Affairs Minister Pranab Mukherjee said here Tuesday as he underlined that terrorist strikes were aimed to hurt Indian economy.Source: IndiaeNews.com: Business News | 17 Jan 2009 | 12:00 pm Raju brothers, Vadlamani sent to 4 days police custody - Economic Times
Source: Google News India - Business | 17 Jan 2009 | 11:38 am UK's Brown tells banks to come clean over bad assetsLONDON (Reuters) - Banks must reveal the true scale of their bad assets to help revive frozen global credit markets, British Prime Minister Gordon Brown said on Saturday as officials met bank chiefs to thrash out a new rescue package.Source: Reuters: Money News | 17 Jan 2009 | 11:34 am Satyam's Raju brothers, former CFO in police custody for four daysDisgraced Satyam Computer Services founder B. Ramalinga Raju, his brother B. Rama Raju and the IT major's former chief financial officer Vadlamani Srinivas will be in the custody of the Andhra Pradesh police Jan 18-22, a court here ruled Saturday.Source: IndiaeNews.com: Business News | 17 Jan 2009 | 11:30 am Court sends Raju, Srinivas to police custodyA local court on Saturday, sent Satyam's tainted founder Ramalinga Raju, his brother Rama Raju and the company's former CFO Vadlamani Srinivas to four days police custody.Source: Daily News & Analysis: Money News | 17 Jan 2009 | 11:21 am Satyam an isolated case in Indian corporate world: Pranab - Economic Times
Source: Google News India - Business | 17 Jan 2009 | 11:10 am Satyam fallout: Auditors move from fault finding to fraud finding - Business Standard
Source: Google News India - Business | 17 Jan 2009 | 11:04 am Police get custody of Satyam's Raju brothers, CFOA city court Saturday granted police custody of fraud-hit Satyam's Raju bothers and senior company official Vadlamani Srinivas for four days from Sunday.Source: IndiaeNews.com: Business News | 17 Jan 2009 | 11:00 am Uninterrupted power supply for Commonwealth Games VillageDelhi Chief Minister Sheila Dikshit Saturday laid the foundation stone of a grid sub-station near the Akshardham Temple here that will cater exclusively to the power needs of the 2010 Commonwealth Games Village.Source: IndiaeNews.com: Business News | 17 Jan 2009 | 10:32 am Remittances to Kerala set to fallKerala Finance Minister Thomas Isaac Saturday said the state is soon going to feel the heat of the economic slowdown as remittances from abroad are certain to fall in the coming months.Source: IndiaeNews.com: Business News | 17 Jan 2009 | 10:31 am Mining by NRI-owned British firm triggers protests in OrissaHundreds of tribals armed with bows and arrows Saturday marched in an Orissa district protesting against mining in a hilly area by a British firm owned by an NRI.Source: IndiaeNews.com: Business News | 17 Jan 2009 | 10:31 am Target Rs 3K cr rev post Westinghouse tie-up: L&T - Moneycontrol.com
Source: Google News India - Business | 17 Jan 2009 | 10:25 am Obama admin looks at Govt bank option to buy bad assetsThe incoming administration of US president-elect Barack Obama is considering various options to boost the country's financial system including a government bank to buy toxic assetsSource: Daily News & Analysis: Money News | 17 Jan 2009 | 9:27 am Satyam board’s minutes details Maytas decisionHyderabad: Coinciding with the meeting of the new board of Satyam, the minutes of the 16 December meeting of the now disbanded board on Saturday became public, detailing the unanimous decision to acquire two Maytas firms that proved to be the nemesis of the IT company’s founder Ramalinga Raju. During the course of the meeting last month, Satyam’s then chief financial officer Vadlamani Srinivas informed the board that the valuation of Maytas Properties was done by Ernst & Young, but the global accounting firm disputed the claim. According to the minutes, members noted the imperative of infrastructure foray, particularly based on leveraging on the brand of Satyam to become an eminent player in infrastructure as well. There had been elaborate discussions on the valuation, wherein independent director T R Prasad had advised three distinct methods for evaluation of Maytas Properties while suggesting that in case the final valuation was higher than the aggregate of the three, “full and proper justification should be provided.” When contacted, Prasad said: “I had already made my stand clear and had the deal gone through it would have been subjected to rigorous board scrutiny.” The minutes came to public domain even as the new board of Satyam met for the second time on Saturday to discuss ways to steer clear of the financial mess that Raju had led the company into it. Raju had on 7 January disclosed that he had fudged Satyam’s accounts for years. Source: LatestNews-Home - Livemint.com | 17 Jan 2009 | 9:06 am Govt slow in acting on key reform proposals: TRAIThe outgoing Chairman of Telecom Regulatory Authority of India, Mr Nripendra Misra, on Friday said that some of its key policy recommendations on next generation telecom reforms are still waiting decision from the Government.Source: Moneycontrol Top Headlines | 17 Jan 2009 | 8:48 am 'We were not engaged in Maytas Properties' valuation': E&YThe company was reacting to reports based on the December 16 Satyam board meeting minutes that says Ernst & Young had done the valuation of Maytas.Source: Daily News & Analysis: Money News | 17 Jan 2009 | 8:46 am Satyam board's minutes details Maytas decisionThe minutes of the December 16 meeting of the now disbanded board of Satyam became public, detailing the unanimous decision to acquire two Maytas firms.Source: Daily News & Analysis: Money News | 17 Jan 2009 | 8:46 am Satyam's expanded board meets to discuss fund raisingThe new-look board of Satyam Computer Services began its meeting here to discuss among other things options to raise funds to keep the business alive.Source: Daily News & Analysis: Money News | 17 Jan 2009 | 8:45 am BMW India to launch SUV, sedan model in a monthGerman luxury car maker BMW India will launch its sports utility vehicle X6 and a new model of its seven series sedan in a months time, shrugging off fears of an economic slowdown impacting luxury car sales in a significant way.Source: Moneycontrol Top Headlines | 17 Jan 2009 | 8:34 am Vijay Mallya pitches for infrastructure status to aviation industry - TravelBizMonitor
Source: Google News India - Business | 17 Jan 2009 | 8:19 am Switch hit - Indian Express
Source: Google News India - Business | 17 Jan 2009 | 8:13 am Jet Airways clocks losses of Rs 214 crore in Q3 - Indian Express
Source: Google News India - Business | 17 Jan 2009 | 8:07 am Iran says further OPEC output cut needed - radioTEHRAN (Reuters) - Iran's OPEC governor said the cartel should reduce output further in order to bring balance to the oil market, state radio reported on Saturday.Source: Reuters: Money News | 17 Jan 2009 | 7:17 am Obama kicks off inauguration celebrationsWashington: President-elect Barack Obama kicks off his three-state “Whistle Stop Tour” Saturday mirroring Abraham Lincoln’s historic 1861 journey by train from Philadelphia to Washington. Obama will speak in Philadelphia around 10 a.m. Saturday before he and his family depart on their journey accompanied by a group of “everyday Americans” who have met Obama or Vice President-elect Joe Biden at some point and told them a compelling story. Capacity crowds are expected at inauguration celebration in Washington and the 135-mile (217-kilometer) trip, various stops along the way, is aimed at allowing as many people as possible to participate in the celebrations. On Friday, Obama made a pitch for his massive economic stimulus plan at a Midwestern factory that manufactures wind turbine parts, saying his proposal would help create solid jobs in up-and-coming industries. “Renewable energy isn’t something pie in the sky. It’s not part of a far-off future. It’s happening all across America right now,” Obama told workers on Friday in this Cleveland suburb. “It can create millions of additional jobs and entire new industries if we act right now.” Just days before taking the oath of office as the 44th president, Obama used the factory as a backdrop as he sought to generate support from the public _ constituents of skeptical Republicans and Democrats in Congress _ for his pricey plan to pull the country out of recession. Obama held the campaign-style event a day after the Senate agreed to give him access to the second half of last fall’s $700 billion financial industry bailout and House Democrats unveiled an $825 billion stimulus package. One of the largest bills ever to make its way through Congress, it calls for federal spending of roughly $550 billion and tax cuts of $275 billion over the next two years to revive the sickly economy. It also focuses heavily on energy, education, health care and jobs-producing highway construction. Seeking to counter critics’ claims of excessive spending and too few tax cuts, Obama cast the package as necessary to create long-lasting, well-paying jobs in industries such as alternative energy, and help hard-hit industrial states such as Ohio now and in the future. “It’s not too late to change course _ but only if we take dramatic action as soon as possible,” Obama said. He pledged: “The first job of my administration is to put people back to work and get our economy moving again.” A new Associated Press-GfK poll found that public expectations for Obama’s success after next Tuesday’s inauguration were far higher than for any American president in a generation. It found that 65 percent of those surveyed believe he will be an “above average” president or better, including 28 percent who think he will be “outstanding.” The poll also found broad optimism that Obama could help turn the U.S. economic crisis around. Seventy-one percent said the economy will likely improve during the first year of his presidency. Also Friday, two U.S. officials said Obama was preparing to prohibit the use of waterboarding and harsh interrogation techniques by ordering the CIA to follow military rules for questioning prisoners. The proposal Obama is considering would require all CIA interrogators to follow conduct outlined in the U.S. Army Field Manual, the officials said. The plans would also have the effect of shutting down secret “black site” prisons around the world, they said. The new rules would abandon a part of outgoing President George W. Bush’s counterterrorism policy that has been condemned internationally. Meanwhile, plans were going ahead for an outdoor inauguration despite cold weather forecasts for next week. Temperatures are expected to be in the 30s (about 0 Celsius). Somewhere between 1 million and 2 million people are expected to make their way to Washington for the swearing in ceremony and inaugural parade. Some 240,000 tickets have been issued for the festivities at the Capitol, with 28,000 seats. In his speech in Ohio at a factory of the Cardinal Fastener & Specialty Co., Obama pledged that job creation was a key element of his economic plan. “We’re not looking to create just any kind of jobs here,” Obama added. “We’re looking to create good jobs that pay well and won’t be shipped overseas. Jobs that don’t just put people to work in the short term, but position our economy to be on the cutting edge in the long term.” His audience _ factory workers, invited guests and state officials, including Ohio Gov. Ted Strickland _ gave him warm greetings and polite applause at the relatively low-key appearance. Source: LatestNews-Home - Livemint.com | 17 Jan 2009 | 7:11 am Funding plans seen top priority in Satyam board meetHyderabad: The new board of beleaguered Satyam Computer began its meeting here on Saturday. The government-appointed board will have to address immediate funding needs of the cash-strapped firm as its top priority, after talk of a state rescue bid was rejected both by the government and the company. Satyam, India’s No. 4 software services exporter, has been battling for survival since chairman Ramalinga Raju suddenly resigned last week, revealing profits had been falsified for years and that $1 billion of cash on the books did not exist.  17 January |Mint e-paper But economic affairs secretary Ashok Chawla said on Thursday the government was not looking at any direct support for the company or bailout “at this stage.” Deepak Parekh, a senior banker and Satyam board member, said it had Rs17 billion ($350 million) in receivables and may not need new funding if the money came in on time, adding that the firm would consider bank loans if necessary.  News on your Mobile Log on to m.livemint.com “When your salary bill is about Rs5 billion a month, you certainly need money. Your only asset is your manpower, if you don’t pay them in time, they will leave,” said Rajesh Agarwal, director at CDEquisearch, who felt pledging Satyam’s assets to get bank loans would be a viable option for the short term. “A government bailout would have set a wrong precedence.” The government, which dissolved Satyam’s previous board last week, appointed three new directors on Sunday and another three on Thursday to help steer the company out of crisis. Also Read Brief profiles of the new directors “When you have such eminent people on the board, everybody expects them to take swift action. They can build Satyam from scratch, though it will take time for a full revival,” Agarwal said. The board has tasks to appoint a new CEO and a CFO to bring the company’s operations back to normality and set a date for the company’s third-quarter results. Satyam has hired KPMG and Deloitte as its new auditors and Parekh has said financials would be restated in 8-12 weeks. Also Read Raju’s confession The new board also will have to keep clients from defecting to Satyam’s rivals, fend off a growing number of lawsuits over the scandal and try to rebuild investor trust. Minister Gupta has said the first impression from the new directors about the company was that its operations were sound and that “by and large” major customers were willing to remain with the firm, while Satyam has said its senior management had started meeting clients to reassure them about the developments. Satyam’s shares climbed 27.1% to Rs25.80 on Friday, but the stock is still down more than 85% since the massive fraud was revealed. Satyam’s founder Raju, his brother who was the managing director of the company and the former chief financial officer have been charged and are being held in a jail. Source: LatestNews-Home - Livemint.com | 17 Jan 2009 | 7:02 am RBI increases overseas FX assetsMUMBAI (Reuters) - The Reserve Bank of India (RBI) has increased its holding of foreign exchange assets at end-September even as overall currency reserves declined in the April-September period, it said in a report posted on its website late on Friday.Source: Reuters: Money News | 17 Jan 2009 | 6:33 am Funding, appointment of CEO & CFO top priority: KarnikKiran Karnik, one of the six members of the newly constituted board of Satyam Computers, said they may discuss the issue of funding as well as the appointment of CEO and CFO.Source: Daily News & Analysis: Money News | 17 Jan 2009 | 6:04 am BRICS Securities puts BUY on MarutiWhile domestic sales increased 9% m-o-m to 47,704 vehicles, it dipped 11% y-o-y on 60% y-o-y decline in sales of ”M-800” and weak performance of old models in compact segment, which declined by 7% y-o-y. Midsize segment continued to buck the trend on successful launches of ”SX4” and ”Dzire”. Sales were up 98% y-o-y to 6,524 vehicles. The company, as a part of its global strategy to export ”A-star” under various brand names to European markets and boost its export sales, has dispatched 1,534 cars on a pilot basis to Europe in January 2009. We estimate sales will grow by a marginal 2.6% y-o-y in FY10E. However, EPS growth would be 16% y-o-y in FY10E to Rs50.9, largely led by the margin expansion. At the current price of Rs588, the stock trades at P/E of 11.6x and an EV/EBITDA multiple of 6.2x FY10E earnings, both of which are historical lows. The company’s liquid investment (net of debt) at book stood at Rs137 per share (25% of Market Cap) in FY08. Even if we value core FY10E EPS of Rs43.6 at historical low of 10x and FY10E investments (net of debt) at book (Rs202 per share), the value per share of Maruti stands at Rs618 (upside of 6.5%). In conclusion, we like Maruti and recommend a BUY, as there is adequate margin of safety. Source: LatestNews-Home - Livemint.com | 17 Jan 2009 | 6:01 am Result Review: TCS LimitedTCS recorded a 4.7% q-o-q growth in Top-line in 3QFY2009 primarily driven by the significant Rupee depreciation witnessed over the quarter (positive impact of 3.4% q-o-q). The rupee rate for TCS came in at Rs49.07 per dollar in 3QFY2009 as against Rs44.18 in 2QFY2009, higher by 11.1% q-o-q. Volumes grew by a subdued 2.4% q-o-q, reflecting the increasing pressures of the worsening business environment. Factors that adversely impacted revenue growth during the quarter were a slight dip in pricing (0.1% q-o-q) and a shift in the effort mix to offshore (1.1% q-o-q). Offshore revenues grew, as a percentage of Sales, by 0.8%. However, in US Dollar terms, revenues dipped 5.8% q-o-q largely on account of the adverse cross-currency fluctuations witnessed over the quarter, with the British Pound, Euro, Australian Dollar and Brazilian Real all depreciating against the US dollar. Owing to the margin expansion, the company recorded a 7.2% q-o-q rise in Bottom-line in 3QFY2009. Forex losses at Rs251 crore were almost similar to the previous quarter (Rs260 crore). On a y-o-y basis, bottomline grew by a mere 1.6%. Over FY2008-10E, we expect TCS to record a 15.4% CAGR in topline, while bottomline is expected to clock a mere 6.2% CAGR. At the CMP, the stock is trading at 8.8x FY2010E EPS. While valuations appear reasonable, given the cautious short-term environment for growth and pricing and the below-par 3QFY2009 performance by TCS, we believe the stock is likely to trade lacklustre in the near-term. We have downgraded the target P/E multiple to 10x (13x earlier). We recommend an ACCUMULATE on the stock, with a target price of Rs578. However, near-term stock performance is likely to remain muted. Source: LatestNews-Home - Livemint.com | 17 Jan 2009 | 5:30 am Bajaj Auto profit falls 23%, beats projections - Livemint
Source: Google News India - Business | 17 Jan 2009 | 5:28 am State-run banks have given $676 mln to Maytas - papersMUMBAI (Reuters) - State-run banks have lent 33 billion rupees ($676 million) to Maytas Companies, which have interests in property and are controlled by the family of fraud-hit Satyam Computer Services, the Times of India reported on Saturday.Source: Reuters: Money News | 17 Jan 2009 | 5:23 am Sector Review: Real EstateOur study on the listed companies in real estate sector and data points suggests that the sector has an extremely high exposure to debt; in smaller, mid-rung companies, the debt/market cap is more than 2x. This exposes these companies and their lenders to high risk of default, should they be unable to sell their inventory; this is because, the cost of carry is very high for the real estate companies and their lenders. The recent erosion in the market cap of these companies with the meltdown in the equity markets has further accentuated this risk. Our conversation with real estate/construction and infrastructure companies revealed that their peak borrowing rates had eased by 100bps; moreover, their margins are also likely to squeeze by 150-300bps as sales cycles get elongated and the cost of carry remains high. With new equity financing on hold due to unfavorable capital markets, prevailing high interest rates, and reluctance of banks to lend to real estate sector, the sector is becoming vulnerable to defaults. Source: LatestNews-Home - Livemint.com | 17 Jan 2009 | 5:19 am Satyam's expanded board to meet on SaturdayThe second meeting of the new board is likely to elect a new chairman, who is expected to steer the company out of the mud created largely by Ramalinga Raju.Source: Daily News & Analysis: Money News | 17 Jan 2009 | 5:10 am BRICS Securities puts SELL on Tata MotorsThe newly launched ”Indica Vista” has failed to put brakes on the declining volumes. Sales declined by 29% y-o-y to 6,749 vehicles. However, A3 segment (”Indigo Marina” and ”Indigo CS”) continued to grow and posted 21.3% y-o-y increase to 1,673 vehicles. UV sales continued its negative trajectory, declining by 62% yoy to 1,416 vehicles. Declining IIP has throttled freight demand, which in turn has curtailed MHCV purchases by operators. The downfall in the segment was restricted by LCV which declined 38% y-o-y compared to a decline of 69.5% y-o-y in MHCV sales. We foresee standalone earnings plummeting 63% y-o-y in FY09E (FDEPS Rs10.7) and 13% y-o-y in FY10E (Rs14.3), translating to a P/E of 11.3x FY10E EPS, this on an expected RoE of 5%. Though the stock has corrected 80% from peak, Tata Motors faces multiple challenges, both global and local, and this could be a dampener to valuations for quite some time. We thus recommend a SELL on the counter. Source: LatestNews-Home - Livemint.com | 17 Jan 2009 | 5:08 am BNP Paribas Securities keeps REDUCE on UnitechUnitech will have to repay debt of Rs11 billion over the next two weeks and meet further debt obligations of Rs15 billion over the next three months. Given the weak operational cash flow situation, it will have to resort to asset sales and / or debt restructuring over the near-term. Forced asset sales in the current environment could further erode equity value in our view. The management has indicated that it is in the process of raising Rs8 billion to tide over the near-term liquidity crisis. Failure to do so could lead to forced sale of underlying assets (primarily land). Debt rating Fitch has downgraded Rs59 billion of Unitech’s long-term and short-term debt (approximately 60% of total debt). Long-term debt of Rs44 billion has been downgraded to speculative grade ‘B (ind)’ from investment grade ‘BBB ind’. Short-term debt of Rs15 billion has been downgraded to F4 (ind) from F3 (ind), which, according to Fitch, “indicates a highly uncertain capacity for timely payment of financial commitments relative to other issuers or issues in the country. Capacity or meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment”. Despite easing of borrowing restrictions over the last month, we believe lenders are likely to remain wary of excessive lending due to Unitech’s weak cash flow situation. Outlook The company has launched only about five new projects (6m sqft) this year. Ability to drive volumes in the residential segment in its key National Capital Region (NCR) market in FY10 will be limited due to ‘finished’ inventory build-up. Delays in new launches in Chennai, Cochin and Hyderabad and lower likelihood of launching new commercial / retail projects in FY10 due to a stretched balance sheet impacts our estimates. Leasing progress at UCP suggest a steep 89% decline in demand in first nine months of FY09 indicating a potential vacancy level of 50% when first phase of properties are completed in March 2009. We are lowering our FY10E and FY11E revenue estimates by 28.7% and 31.8%. Our EPS estimates fall more steeply by 40.3% and 41.5% in FY10E and FY11E respectively due to high financial leverage. Our new target price is Rs23 (P/E of 5x on FY11E EPS of Rs4.62. Source: LatestNews-Home - Livemint.com | 17 Jan 2009 | 5:02 am Two U.S. banks fail, first casualties in 2009WASHINGTON (Reuters) - Bank regulators closed two small banks on Friday, the first U.S. banks to fail this year but the latest in an upsurge that began last year as the struggling economy and falling home prices took their toll on financial institutions.Source: Reuters: Money News | 17 Jan 2009 | 4:38 am Reveal truth about MoUs signed, Vaghela tells ModiUnion textile minister Shankersinh Vaghela questioned the legal validity of the MoUs signed by the Gujarat government during the Vibrant Gujarat Investors meet.Source: Daily News & Analysis: Money News | 17 Jan 2009 | 4:04 am DDA scam: Police team in Bulandshahr - Times of India
Source: Google News India - Business | 17 Jan 2009 | 2:59 am Citigroup splits in two, B of A gets gov't aidNEW YORK (Reuters) - Citigroup Inc plans to split into two units and Bank of America Corp took $20 billion in government aid after the two banks suffered huge quarterly losses from the worsening credit crisis.Source: Reuters: Money News | 17 Jan 2009 | 2:37 am L&T signs pact with Westinghouse of USMumbai, Jan. 16 Engineering and construction conglomerate Larsen & Toubro has signed a memorandum of understanding with US-based Westinghouse Electric Company (WEC) to offer pressurised water nuclear reactors with modular constructionSource: Business Line - Home Page | 17 Jan 2009 | 12:00 am Tata Motors to roll out vestibule buses soonMumbai, Jan. 16 Tata Motors is planning to come out with vestibule buses from its joint venture with Marcopolo of Brazil. The company is in talks with Hubner, the German supplier for articulated systems, critical for the manufacture of vestibuleSource: Business Line - Home Page | 17 Jan 2009 | 12:00 am Bajaj Auto net dips to Rs 166 cr in Q3Mumbai, Jan. 16 Two-wheeler major Bajaj Auto has reported a lower net profit of Rs 166 crore for the third quarter of the current fiscal against Rs 214 crore in the corresponding period last year.Source: Business Line - Home Page | 17 Jan 2009 | 12:00 am Govt slow in acting on key reform proposals: TRAINew Delhi, Jan. 16 The outgoing Chairman of Telecom Regulatory Authority of India, Mr Nripendra Misra, on Friday said that some of its key policy recommendations on next generation telecom reforms are still waiting decision from the Government.Source: Business Line - Home Page | 17 Jan 2009 | 12:00 am LIC nominee appointment on Satyam board lifts co’s stockMumbai, Jan. 16 Satyam shares gained close to 40 per cent in intra-day trade on Friday after closing 32 per cent down on Thursday.Source: Business Line - Home Page | 17 Jan 2009 | 12:00 am PSU banks want lowering of risk-weight on small home loansMumbai, Jan. 16 After falling in line with the Government’s diktat to extend home loans of up to Rs 20 lakh at concessional rates of interest, public sector banks now want their pound of flesh.Source: Business Line - Home Page | 17 Jan 2009 | 12:00 am Satyam, an audit process failure: PaiNew Delhi, Jan. 16 The Satyam fiasco should be seen more as an audit process failure and not as an accounting issue, Mr T.V. Mohandas Pai, Member of the Infosys Board and Trustee of the IASC Foundation,Source: Business Line - Home Page | 17 Jan 2009 | 12:00 am Ramalinga Raju’s bail plea hearing put off to Jan 19Hyderabad, Jan 16 Exactly a month after his bid to push through the $1.6-billion acquisition of Maytas twins failed, the former Chairman of Satyam Computers, Mr B. Ramalinga Raju, finds himself in judicial custody and his plea for a bail inSource: Business Line - Home Page | 17 Jan 2009 | 12:00 am Markets this weekDealing yet another body blow to the Satyam-hit Indian IT sector, the World Bank on Monday announced that it had barred Wipro Technologies and Megasoft Ltd since 2007 from receiving direct contracts under its corporate procurementSource: Business Line - Home Page | 17 Jan 2009 | 12:00 am Jet Airways loss doubles on high fuel costs, lower loadsMumbai, Jan. 16 Jet Airways has posted a loss of Rs 214 crore in the third quarter, more than double the net loss of Rs 91 crore recorded in the same period lastSource: Business Line - Home Page | 17 Jan 2009 | 12:00 am Wall St Week Ahead - Obama, earnings to call stocks' tuneNEW YORK (Reuters) - Wall Street will greet a new president next week with high hopes for a fresh start, but a deluge of corporate earnings reports pointing to a deepening recession could spoil the welcome party.Source: Reuters: Money News | 16 Jan 2009 | 10:59 pm Satyam Computers has just 7 days to surviveSatyam Computer Services has just one week to know if it will survive. Even as the centre dithers on a financial package for the beleaguered company.Source: Daily News & Analysis: Money News | 16 Jan 2009 | 10:59 pm More investors seek reversal of Pyramid tradesRetail investor activism is gathering pace in the Pyramid Saimira forged letter case.Source: Daily News & Analysis: Money News | 16 Jan 2009 | 10:27 pm TCS steps up due diligence on contracts - Economic Times
Source: Google News India - Business | 16 Jan 2009 | 9:20 pm RIL gains 6.6%, Sensex pares weekly loss; down to 0.9%Mumbai: Indian stocks rose on Friday, paring the week’s losses, as Reliance Industries Ltd (RIL) gained on expectation the company is close to resolving a dispute over the supply of natural gas to rival Reliance Natural Resources Ltd (RNRL). RIL gained 6.6% to a one-week high of Rs1,217.35. The company owned by Mukesh Ambani will sell gas to a power plant and other projects controlled by his brother Anil, CNBC-TV18 reported, citing a government lawyer. The two split the Reliance group in 2005 after a family feud. Stocks gain because “there is an expectation that Reliance Industries may settle the dispute over natural gas supply”, said R.K. Gupta, who manages the equivalent of about $100 million of stocks at Taurus Mutual Fund in New Delhi. Click here to watch video The Bombay Stock Exchange’s sensitive index, or Sensex, rose 3.1% to 9,323.59 points at close, trimming the week’s loss to 0.9% after a 5.5% drop last week. The S&P CNX Nifty Index on the National Stock Exchange gained 3.4% to 2,828.45. The BSE 200 Index advanced 2.5% to 1,106.64. Nifty futures for January delivery added 3.8% to 2,815.4. RNRL rose 4.1% to Rs53.95. Paresh Chaudhry, spokesman for RIL declined to comment. Venkatesh Somayaji, spokesman for RNRL, wasn’t immediately available for comment. Other companies controlled by Anil Ambani also gained. Reliance Infrastructure Ltd advanced 7.6% to Rs540.95, while Reliance Communications Ltd added 5% to Rs182.70. Indian stocks also gained as the US Senate on Thursday voted to allow the release of $350 billion in financial-rescue funds sought by President-elect Barack Obama. ICICI Bank Ltd rose 3.7% to Rs423.95, while Housing Development Finance Corp. Ltd added 2% to Rs1,565.5. Bank of America Corp., the largest US bank by assets, received a $138 billion emergency lifeline from the government to support its acquisition of Merrill Lynch and Co. and prevent the global financial crisis from deepening. Tata Consultancy Services Ltd, India’s largest software developer, fell 1.5% to Rs503. The company on Thursday reported third-quarter profit growth slowed as clients curbed technology investment. The company also incurred losses because of currency fluctuations. Satyam Computer Services Ltd gained after it said it has pending payments of Rs1,700 crore. The stock rose 21% to Rs24.5, the biggest gain in four days. Source: Home - Livemint.com | 16 Jan 2009 | 7:39 pm Watch where the oil goesIn an oil-driven world, the slick thing is a good proxy for the state of the global economy. It’s an interesting reversal: Instead of oil prices limiting economic growth, it’s the latter that is now determining the flow of oil. In its latest monthly estimate, Paris-based International Energy Agency (IEA) has concluded that world oil consumption will fall for the second consecutive year in 2009, the first time in 26 years since 1982-83. IEA has cut its forecast of oil consumption for the year by one million barrels a day to 85.3 million barrels a day. The agency revised its estimate on the likelihood of the International Monetary Fund and other agencies revising their forecasts of global economic growth. This is a marked change from the pessimistic days of July when oil touched $147 (Rs7,174 today) per barrel and was widely considered the limiting factor to growth in a “post-peak oil” world. Will oil flow the other way? It will, as soon as confidence in future economic prospects is restored. Its limited supply in the world will ensure that. Source: LatestNews-Home - Livemint.com | 16 Jan 2009 | 7:22 pm The week in reviewNew Delhi: The big story this week was Satyam as the new board says the company has Rs1,700 crore as receivables on its books. Company affairs minister Prem Chand Gupta said that most of Satyam’s customers are willing to stay with the company. He also appointed three new directors to the company board, taking its total strength to six.Apex industry association CII’s chief mentor Tarun Das, noted chartered accountant and a past president of the Institute of Chartered Accountants of India (ICAI), T.N. Manoharan and S. Balkrishna Mainak of LIC, a major investor in Satyam, would join Deepak Parekh, Kiran Karnik and C. Achuthan at the board. Click here to watch video In a related development, the ICAI has made a host of recommendations to Sebi and the ministry of company affairs on the role of auditors. ICAI has recommended to Sebi that firms whose partners are found guilty should be debarred from being appointed auditors of listed companies. The earnings season kicks off with Infosys and Tata Consultancy Services (TCS) declaring their third quarter results in the shadow of the Satyam scam. Infosys’s consolidated net profit went up by 14.6% at Rs1,641 crore as against Rs1,432 crore in previous quarter of FY08-09. Net profit included tax writeback of Rs62 crore. The company’s consolidated net sales rose by 6.8% to Rs5,786 crore versus Rs5,418 crore. TCS’s net was up 7.17% at Rs1,352 crore, from Rs1261.5 crore in the previous quarter. Revenue grew 4.65% to Rs7,277 crore, which was below the 5.7% rate expected by market analysts. And in more shocking news for the IT industry, Wipro Technologies on 12 January announced that in June 2007, the World Bank had banned it from contesting for its contracts till 2011 because the company had offered shares to the Bank’s employees during its US IPO in the year 2000. The disclosure follows a similar ban on Satyam that World Bank had announced a few weeks ago. Wipro said that the disclosure follows World Bank’s revised disclosure policies. The company however said that the offer of shares to employees and clients was part of the Securities Exchange Commission-approved directed share program. Truckers called off their strike unconditionally on Monday after the government said that it would set up a committee to look into their demands. The assurance came as a saving grace for the truckers as the government had earlier made it clear that it would not accept any of their demands and instead would come down on the strikers with a heavy hand. “They want to have their leaders released so we said ok, you call off the strike and we’ll press upon the authorities to release them,” says T.R. Balu. The committee to be chaired by Transport Secretary Brahm Dutt will submit a report within eight weeks on the demands raised by the transporters. And inflation rate continues to head southward for the tenth consecutive week and was at 5.24% for the week ended third January. This was below what most analysts expected. Source: Home - Livemint.com | 16 Jan 2009 | 7:14 pm Markets lap up Ambani reunion buzzMumbai: Shares of Mukesh Ambani-controlled Reliance Industries Ltd (RIL) gained on the expectation the company is close to resolving a dispute over the supply of natural gas to Reliance Natural Resources Ltd (RNRL), controlled by his estranged younger brother Anil Ambani. The shares rose 6.6% to a one-week high of Rs1,217.35 each at close on Friday on the National Stock Exchange. They gained because “there is an expectation that Reliance Industries may settle the dispute over natural gas supply”, said R.K. Gupta, a fund manager at Taurus Mutual Fund in New Delhi. Three years after they separated, speculation is rife that the Ambani brothers, Mukesh, 51, and Anil, 49 may be burying the hatchet.  Together we stand? A file picture of Reliance Industries chairman Mukesh Ambani (right) and his younger brother Anil of Reliance-Anil Dhirubhai Ambani Group observing a two-minute silence in memory of their father Dhirubai Ambani at an AGM in Mumbai. Sebastian D'souza / AFP Kamath, the rumour goes, met Anil Ambani separately earlier in the week. Kamath played a significant role in mediating between the brothers before the 2005 split. Both Kamath and Kochhar declined comment. A spokesperson for the Reliance-Anil Dhirubhai Ambani Group said it wasn’t the group’s policy to comment on “market rumours and speculation”. An external spokesperson for RIL said: “We categorically deny any rumours of an out-of- court settlement or negotiation of any nature. Any such rumour or reports are unsubstantiated and completely baseless. It is highly presumptuous to speculate or attribute motives on the nature of meetings of senior management of the company. We appeal to you as a responsible media house to abstain from publishing any hearsay, speculative and planted rumours by vested interests.” This isn’t the first rumour about the brothers getting back together doing the rounds. Another rumour has it that in late December, Anil and Mukesh met at the wedding anniversary celebration of their sister Dipti Salgaocar. And still another has it that Mukesh Ambani has fallen out with his key lieutenants Manoj Modi and Anand Jain, who aligned with him in his fight against Anil Ambani.  The rumours have been strong enough for RIL to issue a clarification on Wednesday dismissing them. So, why does everyone want to believe that the Ambanis are even thinking of getting together? One, it makes great press and is the Bollywoodish brothers-split-brothers-reunite kind of story everyone wants to read in these tough times. Two, it is replete with economic possibilities. After all, if the brothers hadn’t been scrapping, the merger of South Africa’s MTN and Anil Ambani’s Reliance Communications Ltd (RCom) would have likely happened, creating a global telco (one reason the merger fell through was because of legal complications that could have risen from a right of first refusal enjoyed by RIL in case RCom wanted to sell). And RIL would likely have been pumping gas from the KG basin. An oil and gas analyst with a foreign brokerage, who declined to be named, said that the settlement would be a clear “positive” for RIL, which can begin to monetize its gas reserves from the KG basin. And it would benefit the Anil Ambani group as well, either through the supply of gas or cash compensation. And the two groups would stop coming in each other’s way, added the analyst, referring to the aborted RCom–MTN deal. Still, for all the buzz about a possible rapprochement, it can’t be denied that the two groups have done well for themselves since separating. In June 2005, when the split happened, the combined market value of the group’s listed entities was Rs82,827.81 crore. On Friday, the aggregate value of all listed companies controlled by Mukesh Ambani was Rs228,031.14 crore and that of all listed firms controlled by Anil Ambani was Rs94,301.72 crore. Shares of companies belonging to both the groups saw a strong rally on Wednesday after Mumbai-based brokerage firm Avendus Capital Pvt. Ltd put out a report stating that a settlement was in the making. It added that as part of the resolution, Mukesh Ambani would take over RNRL and Anil Ambani would receive cash and control of RIL’s retail arm Reliance Retail Ltd. RIL reacted sharply and on Thursday sent the brokerage a notice asking it to withdraw the report as well as tender a written apology, saying the report was “without any basis” and “completely false”. Bloomberg’s Saikat Chatterjee and Sumit Sharma contributed to this story. Source: LatestNews-Home - Livemint.com | 16 Jan 2009 | 7:14 pm Citi reports $8.3-bn lossStock rises after company announces split.Source: Business Standard | Front Page Headlines | 16 Jan 2009 | 7:08 pm Bollywood tunes into Padma politicsKumar Shanus career in Bollywood spans more than 25 years starting with Yeh Desh in 1984. But recently, when the Hindi playback singer met External Affairs Minister Pranab Mukherjee, he couldnt find an appropriate song from his repertoire to sing for him.Source: Business Standard | Front Page Headlines | 16 Jan 2009 | 7:06 pm Shareholder rebels against Raghav Bahl in film ventureA bitter shareholder battle over poor financial performance has broken out over The Indian Film Company (IFC), acquirers and distributors of such blockbusters as Jab We Met, Welcome, Singh is Kinng and Ghajini.Source: Business Standard | Front Page Headlines | 16 Jan 2009 | 7:05 pm 2-way split at Citi, Q4 loss at $8 bnCitigroup Inc. reported a net loss of $8.29 billion (Rs40,455 crore today) for the fourth quarter (Q4), putting the year’s red ink at $18.72 billion, as the company announced it will reorganize into two business lines focused on banking and other financial services. Citicorp will focus on Citigroup’s banking operations in more than 100 countries, while Citi Holdings will be made up of asset management and consumer finance. The management at Citi Holdings will focus on “tightly managing risks and losses”, the company said on Friday.  More trouble: Citigroup CEO Vikram Pandit. Jin Lee / Bloomberg The reorganization is part of the company’s plan to pull away from the “supermarket” model that has long defined it. The move started earlier this week when Citigroup agreed to combine its Smith Barney brokerage unit with Morgan Stanley’s brokers, creating the world’s largest brokerage firm. Citi said on Friday it planned to make the transition to two companies as quickly as possible. A search is under way for a leader for Citi Holdings. Citi’s shares were recently up 7.6% at $4.12 in pre-market trading. The stock has lost 43% this month alone as fresh concerns emerged about the company’s viability. Citi posted a Q4 net loss of $8.29 billion, or $1.72 a share, compared with a year-ago net loss of $9.83 billion, or $1.99 a share. The latest results, besides the write-downs, included $6.1 billion in net credit losses. Revenue fell 13% to $5.6 billion, hurt by the securities and banking write-downs. “Our results continued to be depressed by an unprecedented dislocation in capital markets and a weak economy,” said chief executive Vikram Pandit. He added the company strengthened its liquidity and reduced risk on its balance sheet during the quarter. Citi’s largest business, consumer banking, posted a wider loss as revenue fell 22% on a decline in investment sales and lower mortgage servicing revenue. Similar declines were seen for the credit card operations and the results also remained deep in the red for the institutional clients group, including Citi’s securities and investment banking operations. The global wealth management business, including Smith Barney and Citi’s private bank, saw its loss balloon as revenue fell 18%. Citi investors had started to believe the worst was over as losses narrowed earlier last year. But the company, seems to have woes that are far from over. It cut about 50,000 jobs, or about 15% of its global workforce, as it looks to cut costs and boost liquidity. Pandit and chairman Win Bischoff are foregoing their annual bonuses, and bonuses for other top executives will be reduced “substantially”, Pandit had said last month. Earlier this month, Citi’s board supported him despite mounting losses. Since being named CEO in December 2007, Pandit hasn’t been able to stop the financial bleeding, despite a $45 billion taxpayer capital infusion in November that made the US government Citigroup’s largest shareholder. wsj@livemint.com Source: Home - Livemint.com | 16 Jan 2009 | 7:01 pm Nayar: not much impact on India opsMumbai: The restructuring of Citi into two separate businesses will not have any major impact on the bank’s 107-year-old operations in India, according to Sanjay Nayar, the outgoing chief executive of Citibank’s South Asia franchise. “It’s too early to comment on the India impact, but my take is the recast is being done primarily keeping in mind the bank’s US and Europe operations,” Nayar told Mint. With at least 8,000 employees and $3.1 billion ( nearly Rs15,130 crore) in capital, Citi in India caters to around 1,500 large companies, 2,500 small and medium enterprises, and seven million customers. Net profit for the Citigroup in India grew to Rs2,596 crore for the period ended 31 March 2008, a 65% jump from Rs1,575 crore in the year-ago period. The group’s balance sheet grew to Rs1.08 trillion during the period, up 28% from Rs84,395 crore in the previous year. In India, the bank offers market, corporate and investment banking services under the Citi brand name and consumer products and services under the Citibank and CitiFinancial banner. It also runs equity brokerage, private banking, wealth management, and private equity (PE) businesses. According to Nayar, most of the businesses will come under the Citicorp. fold while the consumer finance business will be under Citi Holdings. In India, the consumer finance arm of the bank, CitiFinancial, witnessed a significant decline in its profit for the nine months ended 31 December 2007. The decline has been largely due to higher delinquencies in the unsecured personal loan segment. More recent details on its financials are not available in the public domain. In March 2008, Nayar had told Mint that “irrational lending, loose underwriting norms and ample liquidity” in the market led to problems for the consumer finance arm, which has been growing aggressively since 2000 following Citi’s global acquisition of Associates First Capital Corp. in the US. CitiFinancial began its Indian operations in October 1997. It is engaged in retail financing, primarily to finance the mortgage segments and the lower income segment of retail borrowers for personal, consumer durables, and two-wheeler loans. Nayar, in an interview to Mint on 21 November, had said that the consumer finance arm (CitiFinancial), which is in a transition phase, should be fine by June 2009. He had further added, “In the past one year, we have let go of about 400 people, which is reasonable. By the middle of next year, the consumer finance arm will be in order and it will become a multi-product engine serving the middle class of India.’’ “However, I would like to clarify that we will not pull out of any business in India. We are entering 2009 on comfortable liquidity and capital,’’ Nayar had said. Nayar is set to leave the bank to join US-based PE firm Kohlberg Kravis Roberts and Co., as CEO and country head (India) in February. Mark Robinson, a 24-year Citi veteran, is the bank’s next CEO in India. anita.b@livemint.com Source: Home - Livemint.com | 16 Jan 2009 | 7:00 pm Is fibre optics a good place for UK spend?As politicians desperately search for ways to create jobs and stimulate the UK economy, a government-led roll-out of superfast broadband is climbing up the agenda. The prime minister, Gordon Brown, and the opposition Tory party both have hinted at the merits of such a plan. Brown hinted last week that a government-led roll-out of next-generation broadband could form part of his plan to create 100,000 jobs. “When we talk about the roads and the bridges and the railways that were built in previous times—and those were anti-recession measures taken to help people through difficult times—you could (by comparison) talk about the digital infrastructure and that form of communications revolution at a period when we want to stimulate the economy. It’s a very important thing,” Brown told the Observer newspaper. Click here for breakingviews.com  A national fibre roll-out would come at a minimum cost of £6 billion (Rs43,500 crore)—and could stretch to as much as £28 billion depending on the chosen technology, according to the Broadband Stakeholder Group. The bigger the spend, the better the technology and the faster the broadband speed. Few see logic in deploying the costly fibre-to-the-home technology, which would require digging up roads on a huge scale, but the cheaper fibre-to-the-cabinet route won’t create large swathes of fresh employment. Consumer demand for fibre is also as yet unproven. In South Korea, 80% of homes that have access to the superfast fibre network still opt to use the standard 2Mbps service which already covers around half of the UK and is adequate for everyday surfing. But each market is different. The uptake of Virgin Media’s 50Mbps UK cable service, which will be available to 50% of homes within six months, should provide a better indication. What’s more, it’s difficult to see why the government should provide tax breaks or invest in fibre when the industry is already willing and able to spend at its own pace. British Telecommunications Group Plc. has said it will roll out 100Mb fibre to 40% of UK homes by 2012, providing regulation is attractive. Any government intervention at this early stage will simply politicize investment and potentially even stall its deployment, as in Australia, where subsidies are already offered. The case for directing stimulus pounds to superfast broadband is unproven. Other sectors are probably more deserving. Source: Home - Livemint.com | 16 Jan 2009 | 6:15 pm Jet fares better in Q3, sees tiny profit in Q4Mumbai: Lower fuel prices were not enough to prevent higher losses for Jet Airways (India) Ltd in the December quarter. The airline posted a loss of Rs214.18 crore for the three months compared with Rs91.12 crore the previous year. Click here to watch video Fewer passengers boarded planes in the quarter as ticket prices remained high and the economy slowed, despite the fact that the three months to December are traditionally busy ones for airlines because of festivals and holidays. Even though income from operations during the quarter grew by a healthy 24.60% over the previous year, at Rs3,022.83 crore versus Rs2,425.98 crore, other operating expenses climbed faster at 40.13%—from Rs653.11 crore to Rs915.22 crore. These expenses include costs incurred in maintaining wide body planes, engine repairs and landing and navigation charges on the airline’s international operations. Low-fare airline unit JetLite (India) Ltd reduced its net loss to Rs22 crore for the quarter against Rs86 crore for the same period last fiscal. Revenues at the carrier was up 10.3% at Rs474.1 crore for the reporting quarter against Rs429.9 crore for the year ago period.  No profit yet: A CLSA report had indicated that the passenger occupancy factor of Jet—or the number of occupied seats on a plane—was at 60% in December, compared with the 63% needed to make a profit. Ashesh Shah / Mint The December quarter losses of Jet Airways were lower than the Rs384.53 crore loss for the quarter to 30 September on sales of Rs3,121.34 crore. In the September quarter, JetLite reported a Rs86 crore loss. Shares of Jet Airways rose 1.26% on Friday to close at Rs157.05, even as the Bombay Stock Exchange’s benchmark Sensex index expanded 3.1%. “The performance of Jet Airways was slightly better than expectations of the market. The operating margins are positive for the carrier owing to the sharp corrections in the jet fuel prices and (a) better load factor,” an analyst tracking aviation stocks with a Mumbai-based domestic brokerage said. He declined to be identified. “Jet may trim its losses in this fiscal year as it will be having the flexibility of lower jet fuel costs. But it will have to bring back its lost business class travel to keep yields up,” he added. Mahantesh Sabarad, an analyst with Mumbai-based Centrum Broking Pvt. Ltd, said Jet Airways was able to post positive earnings before interest, tax, depreciation and amortization (Ebidta)—an approximate measure of a company’s operating cash flows—because it did not reduce ticket prices when jet fuel prices were consistently falling in the last three months of 2008. The airline reported Ebitda of Rs164.69 crore for the quarter. Fuel prices in Mumbai slipped to Rs33,719.47 a kl in end-December compared with Rs61,834.81 in end-September. “Jet may not able to report the same Ebidta performance in the coming quarter if it is unable to arrest falling domestic traffic besides the fact that there was a sharp reduction in ticket prices from January. But considering the fall in jet fuel prices, Jet can possibly log a small (operating) profit in the next quarter,” Sabarad said. A 5 January report by a local brokerage unit of CLSA Group indicated that the passenger occupancy factor of Jet—or the number of occupied seats on a plane—was at 60% in December, compared with the 63% needed to make a profit. The break-even passenger load factor has moved up to 70% in January after fare cuts by the airline, it added. Shares of the airline have rallied upwards in the last one month primarily on the back of fall in fuel prices (a 7% cut on 31 December was pared by 3.6% increase on 15 January). For the airline to return to profitability, it will be critical that the load factors increase—though this is uncertain given slowing economic growth—even as yields remain under pressure, the report said. During this reporting quarter, Jet Airways has logged a passenger load factor of 62% against the industry average of 60%. “Even in these adverse conditions, Jet Airways could register positive operating profits because of high seat occupancy in international flights, high yields in domestic operations and reduced jet fuel prices,” chief executive Wolfgang Prock-Shuaer told Mint. Source: Home - Livemint.com | 16 Jan 2009 | 6:13 pm Investors dump Hindustan Construction’s sharesThe Hindustan Construction Co. stock was punished on Friday after the company declared a fall in net profit in the December quarter, compared with the year-ago period. Net profit fell to Rs23.2 crore (against Rs25 crore a year ago) but that number was boosted by a big write-back of tax provisions of Rs8.96 crore. At the pre-tax level, profits were down 62.6% compared with the year-ago period. The stock fell 11.5% on Friday.  The firm faces the challenge of funding the orders in its book. That’s reflected in burgeoning interest costs, which went up to Rs57.3 crore in the quarter, up from Rs49.2 crore in the September quarter. Profits before interest, depreciation and tax amounted to just 1.77 times interest outgo during the quarter. Growth in net sales was a disappointment, growing 9.3% year-on-year (y-o-y). Nevertheless, operating profits were actually up 9.6% y-o-y, while operating margins remained at around the same level as in the September quarter. Hindustan Construction has changed its method of accounting for the foreign currency effects on its borrowings from the second quarter and as a consequence, the profit after tax would have been lower by Rs24.5 crore in the December quarter if Accounting Standard 11 had been followed. The firm faces the challenge of funding the orders in its book But a recent note on the construction sector by Reliance Equities points out: “We expect the working capital cycle to deteriorate further from here, which would lead to: declining net margins (as more debt is raised to meet funding needs); a slowdown in execution (as balance sheets are stretched); risk of bad debts/write-offs; and rising negative cash flows.” Seen in that light, there are few short-term positives for the stock. Write to us at marktomarket@livemint.com Source: Home - Livemint.com | 16 Jan 2009 | 6:07 pm Federal Bank’s impressive growth in a jittery quarterLike many other banks, Federal Bank Ltd, too, reined in its advances growth during the turbulent December quarter. Outstanding loans increased marginally during the quarter, from Rs 21,326 crore at the end of September to Rs21,552 crore by the end of December. The bank had indicated to analysts earlier that it would moderate loan growth in the uncertain environment.  Growth was aided by a rise in net interest margins, which went up from 4.1% in the first half of the current fiscal year to 4.41% for the nine months ended December 2008. To be sure, bad loans went up, with the gross non-performing assets (NPAs) percentage going up from 2.6% at the end of September to 2.8% at the end of December. But the bank provided for the extra bad loans, thus reducing net NPAs from 0.4% to 0.33%. The net result has been that earnings per share (EPS) for the December quarter has been Rs11.92, almost the same as the Rs12.02 earned during the year-ago quarter, which means the impact of the rights issue on EPS has been almost recouped in a year. Thanks to the issue, the bank is sitting pretty on a capital adequacy ratio of 19.85%, a comfort in these days when cash is king. The stock rose 9.8% on Friday. At Rs155, the stock trades at 0.62 times its book value as on 31 December 2008, a very attractive valuation. Write to us at marktomarket@livemint.com Source: Home - Livemint.com | 16 Jan 2009 | 6:07 pm
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