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Google India reaches out Tier II populationGoogle India which is very optimistic on the Indian growth story wants to get more Indians on to the world wide web. CNBCTV18s Divya Rajagopal and Avni Raja take a ride on Google\'s internet bus.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 2:24 pm Global crisis to hit China more than IndiaAsian Development Bank said that the impact of global financial meltdown will be much more on China than India.Source: Daily News & Analysis: Money News | 7 Feb 2009 | 2:10 pm Lufthansa sacks 17, closes four city offices in IndiaLufthansa sacked 17 employees and announced closure of its offices in four cities as part of restructuring of its sales network in India.Source: Daily News & Analysis: Money News | 7 Feb 2009 | 2:08 pm Amid falling prices, Indan metal sector may bleedThe Indian metal sector may be heading towards a meltdown of sorts. A report by CLSA says projects worth over Rs 2.2 lakh crore are at a risk of getting delayed.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 2:00 pm Sebi satisfied with Raju\'s probe, has enough evidenceEven as the Securities Exchange Board of India (Sebi) investigation team maintains a stoic silence on the interrogation of the Raju brothers, CNBCTV18 learns Sebi is satisfied with its probe and may have found enough evidence to prove market manipulation. CNBCTV18s Priyanshu Sikka reports.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 1:43 pm Hit by slowdown, developers put SEZs on holdSlowdown woes are hitting special economic zones (SEZs), which were much in vogue until a year or two ago. Many SEZ projects across the country are being put on the backburner.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 1:23 pm Iraq oil minister sees OPEC cuts in MarchBAGHDAD (Reuters) - OPEC is likely to decide to cut oil production targets when it meets in March, which should help prices gradually rise back above a fair price of $70 a barrel, Iraqi Oil Minister Hussain al-Shahristani said on Saturday.Source: Reuters: Money News | 7 Feb 2009 | 1:04 pm Judicial remand of Raju, four others extended till Feb 21 - Times of India
Source: Google News India - Business | 7 Feb 2009 | 12:49 pm Judicial remand of Raju, 4 others extended till 21 FebHyderabad: A local court on Saturday extended the judicial remand of Satyam Computer’s former chairman B Ramalinga Raju and four other accused till 21 February. The 6th additional chief metropolitan magistrate extended judicial remand of all the five accused in Rs7,800-crore Satyam fraud case. The other accused, whose judicial remand was extended on Saturday, are Satyam’s former managing director and Raju’s brother Rama Raju, former CFO Vadlamani Srinivas, Price Waterhouse’s sacked employees S Gopalakrishnan and Talluri Srinivas. Also Read The Satyam Fiasco (Full Coverage) It was the fourth extension of the judicial remand of Raju brothers and Vadlamani Srinivas since their arrest last month. Meanwhile, a second bail petition for S Gopalakrishnan and Talluri Srinivas was filed on Saturday. Earlier, on 3 February, the court had rejected the bail application of the duo. Source: Home - Livemint.com | 7 Feb 2009 | 12:42 pm Fraud-hit Satyam's new CEO says firm can do 'the impossible' - Economic Times
Source: Google News India - Business | 7 Feb 2009 | 12:27 pm Only Satyam board has legal immunity, not CEO: ManoharanTN Manoharan, a board member of the Satyam board said that only funcionaries appointed by the government would enjoy legal immunity under the Company Law Board.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 12:24 pm ILFS asks govt to supercede Maytas Infra boardAfter the Satyam scam, Ramalinga Raju\'s family seems to be all set to lose control over their beleaguered firm Maytas Infrastructure as well. Sources say IlFs, IFCI and Sicom have written a letter to the Ministry of Corporate Affairs (MCA) asking it to supercede the existing Maytas board. Vishwanath Pilla and Sandeep Srikanth report.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 12:13 pm ONGC discovers new oil wells in GujaratThe state-run oil producer Oil and Natural Gas Corp (ONGC) has discovered two new oil wells in Patan district in Gujarat, which have estimated oil reserves of over one million tonnes, an official said here Saturday.Source: IndiaeNews.com: Business News | 7 Feb 2009 | 12:01 pm Cabinet secretary reviews response systems at airportsDays after security agencies were thrown into a tizzy at the capital's Indira Gandhi International Airport following the disruptive behaviour of an air passenger, the response mechanism of various organisations involved in aviation security was reviewed Saturday at a meeting called by Cabinet Secretary K.M. Chandrashekhar.Source: IndiaeNews.com: Business News | 7 Feb 2009 | 12:01 pm PSBs increase auto financing: Loan rates fall, sales riseAuto sales in January saw a pickup and industry experts say there are signs of financiers getting back into the market. Interest rates, which had shot up to as high as 24% for two wheelers, have begun to ease. CNBCTV18s Swati Khandelwal gives in the details on the auto finance market.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 11:50 am Obama: quick action needed to stop economic tailspinWASHINGTON (Reuters) - With a successful U.S. Senate vote on his economic stimulus bill in sight, President Barack Obama warned on Saturday that quick action was needed to avoid economic catastrophe and blamed Republican policies for pushing the country into crisis.Source: Reuters: Money News | 7 Feb 2009 | 11:40 am Italy`s recession may stretch into 2010: IMF!The International Monetary Fund said that the possibility of Italy`s economic recession stretching into 2010 "cannot be ruled out" amid the global slump and financial crisis.Source: Zee News : Business | 7 Feb 2009 | 11:39 am US Senators agree on $780 bn Bill!US Senators on Friday night agreed on an USD 780 billion economic stimulus measure.Source: Zee News : Business | 7 Feb 2009 | 11:39 am Raju, brother, CFO in protective custody: DamodaranThe scam-hit Satyam Computer founder B Ramalinga Raju, brother Rama Raju and ex-CFO Srinivas are in "protective custody", former SEBI chief M Damodaran said.Source: Daily News & Analysis: Money News | 7 Feb 2009 | 11:24 am BJP revives Ram temple plan ahead of pollsNagpur: Raking up the Ayodhya issue ahead of the Lok Sabha elections, Bharatiya Janata Party (BJP) chief Rajnath Singh on Saturday declared that nobody could shake the party’s faith in Lord Ram, for whom a magnificent temple will be built at Ayodhya. Leaders of the BJP are meeting in Nagpur in a last major gathering before taking on the Congress party-led alliance in elections to be held in April and May. “We will build the Ram temple in Ayodhya, and we are waiting for the right opportunity,” the party president told about 8,000 BJP members on Saturday. “No one can alter our resolve.”  BJP chief Rajnath Singh addresses party leaders at national executive meet in Nagpur on Saturday. PTI photo The BJP had kept its pet issues like Ayodhya, Article 370 in Jammu and Kashmir and Uniform Civil Code on a backburner when it came to power in 1998 and tied up a coalition. He lamented that during the last five years the Congress-led coalition at the Centre had failed to spare “even five minutes” for initiating dialogue to resolve the Ram Janambhoomi issue. Experts said that move did not go well with its hardline supporters, and the party was now trying to woo them back before the biggest electoral exercise in the world gets underway. “They are probably beginning to believe that the temple issue can win them votes,” Kuldip Nayar, a political analyst, said. “The shift to the Ram temple issue can hurt the BJP badly.” Others said reviving the temple issue will not go down well with its allies. “The Ram temple was no longer a major election issue, but it seems the party is reviving it before elections,” Anil K. Verma, a political commentator, told Reuters. ”It could be self-defeating.” Some analysts say a BJP victory could swing India to a stronger pro-market agenda after several years of reform stagnation that have investors worried about India’s capacity to sustain growth. India is suffering an economic downturn and food prices have risen sharply, hurting millions of people. Source: Home - Livemint.com | 7 Feb 2009 | 11:12 am Kerala NRI association demands government help for jobless diasporaThe Pravasi Malayalee Welfare Association Saturday urged both the state and central governments to come to the aid of the large number of NRIs who are returning to Kerala after losing their jobs due to the global economic recession.Source: IndiaeNews.com: Business News | 7 Feb 2009 | 11:01 am Govt to come out with stimulus package for media industryTaking note of the difficulties faced by the media industry due to the financial crisis, the government said it will shortly announce a stimulus package for the sector.Source: Daily News & Analysis: Money News | 7 Feb 2009 | 10:36 am Recession blues fail to tinge players’ price tagsMumbai: The prices paid for cricketers who will join the Indian Premier League (IPL) in its second season clearly show no signs of the recession blues tormenting the rest of the economy. Also See High Five (Graphic) The Rajasthan Royals’ victory seems to have played on the minds of the bidders this time around Satish Deodhar of the Indian Institute of Management, Ahmedabad (IIM-A) and his student Siddhartha Rastogi estimate that only around half of the amounts paid to Mahendra Singh Dhoni ($1.5 million, or Rs7.3 crore today ) and Sachin Tendulkar ($1.12 million) is for their abilities on the field. The rest is a premium paid for their iconic popularity in the region they represent in IPL. There is a similar stiff premium for the likes of Sourav Ganguly, Yuvraj Singh and Rahul Dravid. Alas, it was the non-glamorous and icon-less Rajasthan Royals who walked away with the inaugural championship. Also See Who Paid What for Whom (Graphic) And what about 2009? Have the lessons been learnt? There were no Indian icons on offer on Friday; so many of the qualitative parameters that drove up prices last year were absent. But the Rajasthan Royals’ victory seems to have played on the minds of the bidders this time around. Mint tried to gauge whether the lessons of the first IPL season have been learnt. It seems so. Also Read What slowdown? It’s a high sixer for IPL What we did is this: compared the price paid for a player with his Reliance Mobile ICC one-day international ranking. Each player gets three rankings—as a batsman, bowler and an all-rounder. We chose the ranking where he scores the highest. And we have only considered the 12 players who have such rankings. For example, former England captain Kevin Pietersen, who will join Bangalore Royal Challengers for $1.55 million, is ranked at 51 as an all-rounder, eight as a batsman and 151 as a bowler. We chose his batting ranking, since that is his strong point. There is a close link between performance and payment. Of the four top earners for whom rankings are available, three are in the Top 10 in their respective categories. Mumbai Indians have taken a risk with South African batsman Jean-Paul Duminy, who is 29 in the international batting rankings, but was paid $950,000, the third highest. On the other hand, the Mumbai team will get New Zealand bowler Kyle Mills (five in the bowling rankings) for a mere $150,000. The IIM-A researchers used heavy-duty econometrics to come to their conclusion. Our analysis is by no stretch of imagination that scientific. But it does seem that the Rajasthan Royals’ victory in 2008 has ensured that IPL franchisees want players who perform rather than just heart-throbs. Graphics by Sandeep Bhatnagar / Mint Source: Home - Livemint.com | 7 Feb 2009 | 10:04 am Wipro’s hiring strategy indicates weak outlookSoftware services firm Wipro Ltd’s revenue growth of 3.5% in constant currency terms for the December quarter is considerably higher than the 1% growth reported by rivals Tata Consultancy Services Ltd (TCS) and Infosys Technologies Ltd. What’s more, the company has said average billing rates were 1.2% higher on a constant currency, compared with the September quarter. While TCS said average billing rates were flat at second quarter levels, Infosys reported a 1.8% decline in average pricing. Also See Losing out (Graphic) In recent times, it has been rare for Wipro to outperform its peers on these parameters. Yet, its investors have little reason to rejoice. Its guidance for the March quarter implies close to a 7% decline in the core business, compared with the December quarter. Wipro’s hiring strategy bears out its weak outlook on volumes. Its headcount in the IT services business was reduced by about 1,100 compared with the September quarter. Though volumes have grown year-on-year (y-o-y), the number of employees is stagnant at year-ago levels. TCS and Infosys continue to hire freshers from campuses and train them, so that they have trained manpower to meet demand when there’s a turnaround. Wipro’s hiring strategy seems to reflect there is no sign of a turnaround in the near future. The positive side is that employee utilization has improved y-o-y. Besides, pricing is higher and Wipro has also had the benefit of rupee depreciation. Still, its profit margin has fallen by about 20 basis points on a y-o-y basis after adjusting for a one-time provision for bad and doubtful debts. With pricing now expected to decline and volume growth set to disappear, margins could well take more beating. One basis point is one-hundredth of a percentage point. Wipro has also been aggressive in hedging its foreign currency exposure. Although the rupee is at 48 to a dollar, it may realize a rate of about 42-45 for a number of its contracts. This could be one of the reasons margins were under pressure last quarter. The worry is that the problem will repeat in the coming quarters. It’s for these reasons that Wipro’s stock fell 3.7% after its results were announced. Graphics by Sandeep Bhatnagar / Mint Write to us at marktomarket@livemint.com Source: LatestNews-Home - Livemint.com | 7 Feb 2009 | 10:04 am ECB has room to cut rates, IMF saysKUALA LUMPUR (Reuters) - The European Central Bank, which left rates unchanged at 2 percent this week, has room to cut further, the head of the IMF said on Saturday, though the effectiveness of more rate cuts is questionable.Source: Reuters: Money News | 7 Feb 2009 | 9:46 am Recession forces Adani Power to scale down output targetsWith global economic recession affecting commercial and industrial demand for electricity in India, including in the States it has signed power purchasing agreements (PPAs) with, Adani Power Ltd (APL) has decided to scale down its production plans from 9,900 MW last year to 6,600 MW, at least for now.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 9:20 am Apollo to invest Rs 80 cr to buy cancer treatment systemApollo Hospitals expects to invest about Rs 80 crore in acquiring two CyberKnife a robotic radio surgery system.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 9:19 am Tata Motors begins rehiring laid off workersTata Motors has started the process of reengaging temporary workers at its commercial vehicle unit in Pimpri. Several thousands of them were laid off late last year following reduced production, in the wake of a slowdown in the industry.Source: Moneycontrol Top Headlines | 7 Feb 2009 | 9:17 am Fly from Mumbai to Nasik on Kingfisher Airlines at Rs 883/- - Moneycontrol.com
Source: Google News India - Business | 7 Feb 2009 | 9:12 am Uttar Pradesh rights panel seeks report from copsThe Uttar Pradesh human rights commission has pulled up the state police for the brutal assault of an eight-year-old Dalit girl by some policemen for allegedly stealing Rs.280 and sought a report by Feb 26, an official said Saturday.Source: IndiaeNews.com: Business News | 7 Feb 2009 | 8:31 am Dull week on Indian equities marketsIt was a lacklustre week for the Indian equities markets, with a key index Friday ending trade a marginal 1.31 percent below its previous weekly close.Source: IndiaeNews.com: Business News | 7 Feb 2009 | 8:02 am It is Roses and Dollars at Hosur as Valentine's day approachesExports of cut roses from Hosur, which accounts for 80 per cent or Indian rose exports is likely to touch Rs 100 crore in the next five years from the present Rs 30 crore.Source: Daily News & Analysis: Money News | 7 Feb 2009 | 8:00 am Weekly wrap: Sensex sheds 123 pts - Sify
Source: Google News India - Business | 7 Feb 2009 | 7:36 am “We do well in Economic Downturn” - Padmasree WarriorThis is Kamla Bhatt; today my guest is Padmasree Warrior who is the Chief Technology Officer at CISCO Systems. Padma as she is known joined Motorola in 1984 and worked there until she left the company to join CISCO in December of 2007. While at Motorola, she was the CTO and at one point had a budget of over $ 3 billion for her R&D efforts. Padma sits on the boards of various organizations and serves as a mentor in the State Department’s International Women Leaders Mentoring Partnership. Welcome to the show Padma.  Padmasree: Thank you Kamla. It is my pleasure to be here. Kamla: What does technology mean to you? Padmasree: Technology means a lot of things for me. Firstly, it is a passion for me and I had been interested in the science and technology since I was a little child. But fundamentally if you look at the role of technology and society, it is all about providing us as human beings, with a way to do things that will improve our lifestyle. Whether it’s how we work, how we live or how we even play or entertain ourselves. So it has a foundational role in almost every aspect of life. Kamla: What has been the first year for you like at CISCO? Padmasree: It has been great year actually it is gone by so quickly, it is actually only been 10 months since I got here. I actually joined Cisco in March, I left Motorola in November, I think culturally the transition has gone so well. It has exceeded all of my expectations. Cisco is a great place to work. People here have a “can do” attitude, there is a lot of expertise and it is truly a global company, which are the things that I enjoy being a part of. Kamla: This is a question that many people have in their mind. What does a Chief Technology Officer do in a big company like Cisco? Padmasree: Yes the role of a Chief Technology Officer is very different from any of the other Cxo roles. If you think of a COO or CMO or CFO, those kinds of roles tend to be very uniform across the industry and across different companies. Whereas the role of a Chief Technology Officer I would say is very dynamic. It changes depending on the company’s needs; it changes depending on the individual themselves and the skills that they bring to the role and it is a lot influenced by the time and the period of evolution of the technology. So in my own career I have been in a CTO kind of a role for the last probably 15 years or so and I would say everyone in those roles is very different. Sometimes you are a Chief Engineer, sometimes you are an evangelist preaching the new disruption and fostering new ideas in the company and sometimes you are working on improving R&D efficiency and it is all of the above. My role at CISCO is very much focused, I would say on technology strategy and understanding our customer needs and what the future needs are going to be for our customers. I spend a lot of my time talking to customers, figuring out what some of the problems are that they feel they are going to face as an entity and trying to influence back our product roadmaps to address those concerns. I also spend a lot of my time looking at our growth opportunities and helping our/my peers within the company, move those priorities to where they are operationalised. So it is very much focused around future, growth, looking at new opportunities and building the right products to serve our customers. Kamla: So strategy- it seems when like you are working on the strategy for Cisco you seem to be outbound focused. Padmasree: Yes my role I would say is very much externally focused. I serve as a key spokesperson for the company with respect to technology and areas of disruption. I also spend a lot of time with industry analyst and customers as I said trying to figure out their future needs. I do spend quite a lot of my time internally though trying to bring together our technical communities to address the roadmap needs. But I would say a large part of it is externally focused. Kamla: I just have to ask you, you have mentioned the word disruptive technologies more than once. So it looks like that is a major focus of what you are doing. Padmasree: Yes absolutely. I think one of the things-I think probably the common thread that any CTO for any company, if you look across the different segments would have is to look at what is changing and what will change the industry as we know it today. So obviously a clear focus of my role is to understand what some new opportunities are going to be for us to move in to market adjacencies and catch market transitions as they occur but also look at what could change the IT landscaping in the future and how might Cisco catch that transition. Kamla: That naturally leads us to the next question. You know the economic downturn. How is Cisco going to come out of the downturn in terms of the market place and the opportunities that you have and in terms of disruptive technologies. What is it that Cisco is focused on now and for the next 24 months? Padmasree: Yes it is interesting you should ask that. If you look at Cisco’s history as a company, Cisco has typically demonstrated that we actually do really well during a downturn and I think it is because this company, we see when there is an economic downturn, when there is industry consolidation happening, we see that as an opportunity for us to invest in new areas rather than stay the course or maintain the status quo. So it is a perfect opportunity for us, the way we look at it to think about what can we do with the technology that we have that allows us to invest in new opportunities acquired. Perhaps some companies that we would want you to build up our portfolio, etc. So we are very much focused on catching those market transitions and investing in growth opportunities to set us up for the future. With respect to that as a company we have identified 26 growth opportunities or priorities, some of them are large market transitions, some of them are new product categories and one of the things that we are focused on during this downturn is to try to prioritize our resource allocation across these 26 priorities so that we are prepared to drive the economy when it does come back out of this cycle we are currently in. Kamla: Could you list some of those top priorities? Padmasree: Sure, the large ones, perhaps the most critical ones that we are focused on currently are video or visual networking-one of the areas that we see as an exciting opportunity both in the enterprise space and the consumer space. The second is virtualization, leading up to cloud computing and the role of the data centering that is base and the role that the network plays as compute and networking come together and the third area is collaboration, this is involving unified communication along with Web2.0 technologies and the role that can play in becoming actually the e-business of the next decade. There are other opportunities like new markets-emerging markets is one of the priorities, globalization, the globalization east that we have the center in India that serves is yet another priority and they go all the way to putting routers into space which is very much a technical talent. So the priorities we have span the whole range of technology focus is to very much market driven. Kamla: So would the top 3 technology bets be the ones that you listed as priorities? Padmasree: Yes absolutely. The 3 areas that I would say we are very focused on are visual networking or video collaboration and virtualization. Kamla: You talked about Cisco East. So emerging markets is a strong focus for Cisco. Could you talk a bit about what you are doing in places like India, China and Dubai and what are the differences in terms of strategy because the opportunities in each market is different. Padmasree: Yes, you know at Cisco we have actually are very innovative in how we approach the emerging market as well you know emerging markets. Most companies when they look at emerging markets, especially India, start off their strategy with “lets use that as R&D outsourcing center”. Cisco took a very different approach with emerging markets especially with India where we said let’s actually move our second headquarters to India and our globalization east center in India is not only just a R&D outsource center but it is actually creating new solutions for all of the emerging markets. Those include the countries that you have mentioned: India, China, the Middle East, some of the countries like Dubai in the Middle East as well as Mexico, Brazil, you know there is a lot of opportunities we see in many of these countries. The focus we have is to develop new verticals as I call them in these countries. For example connected real estate is an area we are focused on in Dubai. There is a lot of construction that is going to happen there. Why not use the urbanization focus and combine that with the digital focus meaning bring IT technologies and an IT backed backbone into the new buildings and make them smart buildings that can be more energy efficient and be very technology driven buildings. So those are the kinds of things we are doing and so our center in India not only develops products and solutions to meet the needs of India market but actually is focused on developing solutions in many of the emerging markets. Kamla: My eyes are drawn to that Dubai book that you have there. I was thinking because the economic downturn has impacted Dubai. You talk about the connected real estate and there have been talks that, you know, the real estate market in Dubai is going to slow down. How are you factoring in the changed landscape in Dubai? Padmasree: It is not just Dubai, I think if you take any country in many we are seeing an impact of the economy slowing down in many countries so let me talk in general about that and we can use an example of the connected real estate for instance. One of the things that we believe will be an opportunity actually in the economic downturn is people are going to look more efficient ways of doing things and ways that we can save on energy for example. Ways on things we can create jobs for example, what new industries can we create and I think that is something that we are very focused on. You know when I say new verticals we are looking at new areas of applying technology that will actually boost the economy and create new jobs, etc. So yes I mean in terms of actually building and the construction that was planned for Dubai, perhaps there will be a slowdown. But if you look at the principles of what we are developing its applicable in any market it is not just something that is only specific to Dubai right. When we say combine building construction with IT technology that applies to any country that wants to urbanize and I think those urbanization needs are going to be there whether it is China or whether it is Mexico city or any of those opportunities within the US itself. You know President-elect Obama has announced a large stimulus package in the one of the areas of focus he sees for creating jobs is investing in infrastructure. So the construction of roads and buildings and so forth right and so one of the things we do very well is bringing digital infrastructure to that physical infrastructure. So many of the concepts that we are developing are on using IT backbone network as a platform or applicable. Whether it is in a developed market looking at additional stimulus to boost the economy or in an emerging country. Kamla: And how does IPv6 play into this? Padmasree: IPv6 is an area we are looking at. I do not think it is something that- I mean it is needed, I think as an industry we have to move to where we have better addressing capability and Cisco is driving it. I mean it is something that is foundational. Kamla: If IPv6 was factored into your digital infrastructure that you are talking about and then you think about the connected real estate, the whole picture changes. Does it not? Padmasree: I think there are a lot of examples like that and I think that in other areas we are looking at is this area of smart grade. How can we bring IP technologies and what we know about the Internet and how we can run the Internet efficiently into the electric grid, in the power grid. So there you are going to need things like sensors and how to manage these sensors to you can sort of see the beginning of internet of things that people have talked about for a long time. So there will be lot of new concepts with Ipv6 Internet of things bringing our strength from the networking to create these new opportunities for the future. Kamla: So where are the big multi billion dollar markets and opportunities? Padmasree: I think clearly we see a big market shifting towards video in the Internet. If you think about the internet-the first Internet as I call it the first Internet really was all about a data transport mechanism. It was like you can say e-mail was perhaps the killer rat in the first instantiation of the Internet and it was really a messaging platform. The next internet, I think the internet in the future, is really going to be focused more about being a collaboration platform around being more about media transport not just data transport. And so video we are just seeing the beginnings of the use of video in the enterprise right, I mean you see these big Telepresence units sitting here in my office and I have to tell you I use this on a regular basis. Within Cisco our own use of Telepresence is driving a significant cost savings and by the way it is energy efficient. It also saves in its carbon footprints is much lower. So video is a huge opportunity for us in a several billion dollars of opportunities and we see this evolving from video communications to what I call visual networking what we refer to as visual networking which is really a combination of video communications and social networking as we know it. So it is not too far away where perhaps you will be watching a game, whether it is a super bowl or a world series cricket test match or whatever it is that you are interested in, you have soccer, you can have people and your family and friends in multiple locations all watching the same game and having a conversation virtually without actually physically being there. So it really has a potential to change social dynamics even in the consumer space. So in the business space clearly we see telepresence and video communications and visual networking being the next opportunity moving them into perhaps V2C communications where it can transform healthcare, education, all of those applications in consumer as well so that is one big area. The second big opportunity for us for growth is what we call collaboration. Collaboration really you know I think we are just scratching the surface with that but if we think about collaboration and having virtual teams that can connect and work real time on a topic depending on your expertise and then disband once that project finishes. Allows a lot of flexibility in how companies can utilize resources. So we have multiple solutions in that area with unified communications web-ex and solutions like that that we want to extend more as a platform and bring Web2.0 capabilities on to our unified communications platform. We see that as driving a lot of productivity within businesses, and across businesses so it is a second area of huge growth potential that we see and the third has to do with what we call virtualization. We have seen the deployment of virtualization which kind of began with server virtualization. Our focus is more to extend that into the data center and virtualize the data center and eventually lead into cloud computing where we can have flexibility and agility in terms of how applications get written and deployed and I think fundamentally that is going to change IT as we know it in the next 5 years or so. Source: LatestNews-Home - Livemint.com | 7 Feb 2009 | 7:19 am India's emission cap can help resolve climate impasse - Hindu
Source: Google News India - Business | 7 Feb 2009 | 7:02 am Would the Satyam scam be discovered but for Maytas deal? - Moneycontrol.com
Source: Google News India - Business | 7 Feb 2009 | 6:53 am US Senate imposes strict conditions on H-1B hiringWashington: In what could be seen as a setback to Indian IT professionals, the US Senate has voted for imposing strict conditions on hiring of people with H-1B visas by American companies receiving federal bailout money. The amendment to the pending stimulus bill restricting the hiring of foreign workers, passed by the Senate through a voice vote on Friday, was a watered-down version of what was introduced earlier. The original amendment had called for a blanket ban on H-1B hiring by companies that would have received money under the Troubled Assets Relief Programme (TRAP). The amendment approved by the Senate was co-sponsored by Republican Senator from Iowa, Chuck Grassley, and independent Senator from Vermont, Bernie sanders. The modified amendment requires that a company receiving TARP funds and applying for workers under the H-1B process must operate as an ”H-1B dependent company.” This means, explained Grassley in a statement, that the companies will still be able to hire H-1B visa holders, but must comply with the H-1B dependent employer rules which include attesting to actively recruiting American workers; not displacing American workers with H-1B visa holders; and not replacing laid off American workers with foreign workers. “Hiring American workers for limited available jobs should be a top priority for businesses taking taxpayer money through the TARP bailout programme,” Grassley said. With the unemployment rate at 7.6%, there is no need for companies to hire foreign guest workers through the H1-B programme when there are plenty of qualified Americans looking for jobs, he argued. Even as he supports the H-1B programme, which has mostly benefitted Indian techies, Grassley said there is an urgent need for a reform in it. The programme should be used in the way it was intended as a temporary measure to supplement a company’s need for hi-tech or specialised workers when none are available in the US, he said. In another statement, Sanders said the amendment would require bailed-out banks, where there have been layoffs, to hire only Americans for two years. “The very least we can do is to make sure that banks receiving a taxpayer bailout are not allowed to import cheaper labour from overseas while they are laying off American workers,” Sanders said. “Wall Street caused the crisis, millions of people lost jobs, including 100,000 in financial institutions. Now they want to bring in foreign workers,” Sanders said, adding: ”Talk about adding insult to injury.” Economist Bhagwati against restrictions on H1B visa holders Opposing restrictions on hiring H1B visa holders, India-born international economist Jagdish Bhagwati has argued that the provision will deprive the US of the best global talent which comes in the form of highly trained and talented people. “The people whom you’re hiring from India and from, you know, China and from -- the top universities, they’re the smart lot, they’re not really substitutes for guys who can’t get jobs,” Bhagwati argued during at a conference organised by the prestigious Council on Foreign Relations (CFR). “In terms of broader considerations like the people who are coming in on H1B visas -- they’re frequently highly trained and talented people and... a lot of our progress and prosperity depend on having such people,” Bhagwati, Professor of Economics at the Columbia University said. Source: Home - Livemint.com | 7 Feb 2009 | 6:48 am Heavy fog over capital, several flights affectedA thick layer of fog enveloped the national capital early Saturday, severely affecting flight operations at the Indira Gandhi International Airport.Source: IndiaeNews.com: Business News | 7 Feb 2009 | 6:31 am India's emission cap can help resolve climate impasse: UNEP chiefA 'voluntary signal' from India on where and when it will cap its greenhouse gas emissions can help resolve the current impasse holding up a global deal to combat climate change, says UN Environment Programme chief Achim Steiner.Source: IndiaeNews.com: Business News | 7 Feb 2009 | 6:30 am Satyam's Raju brothers get special status in jailFrom having to share their cell and toilet with other prisoners like bootleggers and sleeping on the ground, disgraced Satyam founder B. Ramalinga Raju and his brother B. Rama Raju are now entitled to benefits like a special room, cots, pillows, a separate toilet and kitchen,Source: IndiaeNews.com: Business News | 7 Feb 2009 | 6:30 am U.S. senators reach deal on stimulus bill, vote TuesWASHINGTON (Reuters) - U.S. Senate Democrats agreed on Friday to cut their hopes for a larger economic stimulus package and support a $800 billion compromise that would give President Barack Obama an important but narrow victory.Source: Reuters: Money News | 7 Feb 2009 | 5:17 am Deal announced on stimulus; weekend vote likelyWashington: With job losses soaring nationwide, Senate Democrats reached agreement with a small group of Republicans Friday night on an economic stimulus measure at the heart of President Barack Obama’s plan for combatting the worst recession in decades. “The American people want us to work together. They don’t want to see us dividing along partisan lines on the most serious crisis confronting our country,” said Sen. Susan Collins of Maine, one of three Republican moderates who broke ranks and pledged their votes for the bill. Democratic leaders expressed confidence that the concessions they had made to Republicans and moderate Democrats to trim the measure had cleared the way for its passage. No final vote was expected before Saturday or Sunday. Democrat leaders put the cost of the measure at $780 billion, including Obama’s signature tax cut of up to $1,000 for working couples. Much of the new spending would be for victims of the recession, in the form of unemployment compensation, health care and food stamps. Other supporters said that the price tag was actually higher, at $827 billion. Republican critics complained that whatever the cost, billions were ticketed for programs that would not create jobs. Official cost figures were not yet available. In a key reduction from the bill that reached the Senate floor earlier in the week, $40 billion would be cut from a “fiscal stabilization fund” for state governments’ education costs, though $14 billion to boost the maximum for college Pell Grants by $400 would be preserved, as would aid to local school districts for the No Child Left Behind law and special education. A plan to help the unemployed purchase health insurance would be reduced to a 50 percent subsidy instead of two-thirds. The agreement capped a tense day of backroom negotiations in which Senate Majority Leader Harry Reid, joined by White House chief of staff Rahm Emanuel, sought to attract the support of enough Republicans to give the measure the needed 60-vote majority. Democrats hold a 58-41 majority in the Senate, including two independents. Uncertain of the outcome of the talks, Democrats called Sen. Edward M. Kennedy back to Washington in case his vote was needed. The Massachusetts senator, battling brain cancer, has been in Florida in recent days and has not been in the Capitol since suffering a seizure on Inauguration Day more than two weeks ago. In addition to Collins, Republican Sens. Arlen Specter of Pennsylvania and Olympia Snowe of Maine pledged to vote for the legislation. Whatever the price tag, the compromise marked a victory for the new president, who has veered between calls for bipartisanship and increasingly strong criticism of Republicans in recent days. And it indicated that Democratic leaders remain on track to deliver a bill to the White House by the end of next week. Late Friday night, White House press secretary Robert Gibbs said, “On the day when we learned 3.6 million people have lost their jobs since this recession began, we are pleased the process is moving forward and we are closer to getting Americans a plan to create millions of jobs and get people back to work.” Obama said earlier in the day that further delay would be “inexcusable and irresponsible” given Friday’s worst monthly unemployment report in a generation _ 598,000 jobs lost in January and the national unemployment rate rising to 7.6 percent. And late Friday, federal regulators announced the closures of two banks, First Bank Financial Services in Georgia and Alliance Bank in California, the seventh and eight failures this year of federally insured banks. “The world is waiting to see what we’re going to do in the next 24 hours,” said Reid who has spent much of the week trying to balance demands among moderates in both parties against pressure for a larger bill from liberals in his own rank and file. By midday, the majority leader had spoken once with Obama by phone and five times with Emanuel. He met with Collins and Specter as well as Sen. Ben Nelson, a conservative Nebraska Democrat who had long advocated cuts in the House-passed bill. Later, Nelson declared on the Senate floor, “We trimmed the fat, fried the bacon and milked the sacred cows.” He said the compromise included $350 billion in tax cuts that would reach 95 percent of all Americans. One Republican-proposed document that circulated earlier called for cuts of $60 billion from money Democrats want to send to the states. That money is targeted to avoid budget cuts for schools as well as law enforcement and other programs. Talk of cuts in proposed education funds triggered a counterattack from advocates of school spending as well as unhappiness among Democrats. One, Sen. Carl Levin of Michigan, told reporters he and others hoped that some of the funds on the chopping block would be restored next week when negotiations open on a House-Senate compromise. At its core, the legislation is designed to ease the worst economic recession in generations, and combines hundreds of billions of dollars in new spending with tax cuts. Much of the money would go for victims of the recession in the form of food stamps, unemployment compensation and health care. There are funds, as well, for construction of highways and bridges. But the administration also decided to use the bill to make a down payment on key domestic initiatives, including creation of a new health technology industry and so-called green jobs designed to make the country less dependent on imported oil. And Democrats in Congress decided to add additional huge sums for the states struggling with the recession, as well as billions more for favored programs such as parks, the repair of monuments in federal cemeteries, health and science research and more. With Obama enjoying post-inauguration support in the polls and the economy shrinking, Democratic leaders in Congress have confidently predicted they would have a bill to the president’s desk by mid-February. But Republicans, freed of the need to defend former President George W. Bush’s policies, have pivoted quickly to criticize the bill for its size and what they consider wasteful spending. The entire Republican rank and file voted against the measure in the House, effectively prodding senators to take up the same cause. In the intervening days, Republicans have appeared to catch the administration and its allies off-guard, holding up relatively small items for ridicule and routinely seizing on comments from Democrats critical of the House-passed bill. At the same time, they have stressed a desire to help the economy but have said they prefer tax cuts and spending that would have a more immediate impact on job creation. Privately, Democrats in Congress have been critical of Obama and his aides for failing to counter the Republicans more effectively. In recent days, the president has sharpened his rhetoric against unnamed critics of the bill whom he accused of trying to re-establish the “failed policies” of the past eight years. Despite the struggle, some Republicans seemed to sense the White House would ultimately prevail, and sought political mileage. Obama “could have had a very, very impressive victory early on,” said Sen. John Cornyn of Texas, who heads the Senate Republican campaign committee. “But this is not turning out to be an impressive victory. it is turning out to be a little bit of a black eye.” Source: LatestNews-Home - Livemint.com | 7 Feb 2009 | 4:51 am India for intl convention for prohibition of N-weapons’ useLondon: India has proposed an international convention for “complete prohibition” of the use or threat of use of nuclear weapons to reduce dangers posed by the arsenal to the humanity. Addressing an international security conference in Munich, National Security Adviser M K Narayanan underlined that India has been, and still remains, a strong and unwavering advocate of global verifiable and non-discriminatory nuclear disarmament, reflecting the passionate advocacy of nuclear disarmament of its first Prime Minister Jawaharlal Nehru. “Even today, India is perhaps the only nuclear weapons State to express its readiness to negotiate a Nuclear Weapons Convention leading to global, non-discriminatory and verifiable elimination of nuclear weapons,” he said yesterday while speaking on the topic ‘Non-Proliferation, Arms control and Future of Nuclear Weapons; Is Zero Possible? Referring to the Action Plan proposed by India at the UN General Assembly in 1988 for complete elimination of all nuclear weapons in stages by 2010, he said “by far the most comprehensive initiative” is relevant even today. He made a number of proposals to reduce the risks posed by atomic weapons, which include negotiating a Convention on the complete prohibition of the use or threat of use of nuclear weapons. The other proposals include reaffirmation of unequivocal commitment by all nuclear weapon States to the complete elimination of nuclear weapons; reduction of the salience of nuclear weapons in security doctrines; reduction of nuclear danger, including the risk of accidental nuclear war, by de-alerting nuclear-weapons to prevent unintentional or accidental use of nuclear weapons. Narayanan also advocated the need for a global agreement among nuclear weapons States on ‘no-first-use´ of nuclear weapons and negotiating a universal and legally-binding agreement on non-use of nuclear weapons against non-nuclear weapon States. The proposals also included negotiating a Nuclear Weapons Convention prohibiting the development, production, stockpiling and use of nuclear weapons and on their time-bound destruction, leading to the global, non-discriminatory and verifiable elimination of nuclear weapons. Narayanan regretted that despite the end of Cold War, there has not been any appreciable change in the centrality of nuclear weapons in the security doctrines of the major nuclear weapon powers. “Commitments must be clear and unambiguous and convey some urgency for achieving this goal. This would apply to NPT States as well as non-NPT States,” he emphasised. Source: LatestNews-Home - Livemint.com | 7 Feb 2009 | 4:31 am 'Petrochemical hub would devastate Sundarbans'Fisherfolk and green activists have voiced serious concern over the government's go-ahead to a petrochemical hub in Nayachar in West Bengal, saying it would cause immense ecological damage in the nearby world-famous Sundarban mangrove forests.Source: IndiaeNews.com: Business News | 7 Feb 2009 | 4:00 am Zara to enter India’s fashion market - Financial Times
Source: Google News India - Business | 7 Feb 2009 | 12:05 am Sales boost for cement stocksKolkata, Feb. 6 Cement stocks have shown tentative signs of revival after the third quarter results.Source: Business Line - Home Page | 7 Feb 2009 | 12:00 am General insurers keep away from corporate debt paperBangalore, Feb. 6 Public and private sector general insurers are staying away from corporate debt paper despite the high yields on offer.Source: Business Line - Home Page | 7 Feb 2009 | 12:00 am What recession? Pietersen, Flintoff hit $1.55-m jackpotMumbai Feb. 6 Former England cricket captains Kevin Pietersen and Andrew Flintoff hit recession for a six in Goa onSource: Business Line - Home Page | 7 Feb 2009 | 12:00 am Can a vote on account alter tax rates?New Delhi, Feb. 6 Can the Government change the rates of taxation in a request for a vote on account? The question has arisen following the statement made by Mr P. Chidambaram, former Finance Minister, that there is no constitutional bar to doingSource: Business Line - Home Page | 7 Feb 2009 | 12:00 am LIC hikes stake in banksMumbai, Feb. 6 Banking stocks were a favoured investment option for insurance companies, especially Life Insurance Corporation of India, during the DecemberSource: Business Line - Home Page | 7 Feb 2009 | 12:00 am Ambuja Cement net down 21 pcMumbai, Feb. 6 Ambuja Cement on Friday reported a drop of 21 per cent in net profit at Rs 1,402 crore in the year ended December 2008, against Rs 1,769 crore recorded the previous year.Source: Business Line - Home Page | 7 Feb 2009 | 12:00 am Now, imports too in the negativeNew Delhi, Feb. 6 Imports in January this year fell by 16 per cent over the same month the previous year, in line with the 22 per cent decline in exports during the month, provisional trade figures show.Source: Business Line - Home Page | 7 Feb 2009 | 12:00 am 6 shortlisted for managing citizen pension fundMumbai, Feb. 6 Three private sector groups – Reliance (ADAG), ICICI and Kotak Mahindra – are among the six bidders shortlisted by the Pension Fund Regulatory & Development Authority (PFRDA) for managing pension funds for citizensSource: Business Line - Home Page | 7 Feb 2009 | 12:00 am Demand for home loans continues to be passiveHyderabad, Feb. 6 Banks are yet to witness any tangible increase in home loan demand even as the interest rates are on a downwardSource: Business Line - Home Page | 7 Feb 2009 | 12:00 am Satyam probe: More entities under SFIO lensNew Delhi, Feb. 6 Price Waterhouse (Bangalore) and over 350 entities linked to Satyam Computer Services Ltd have now come under Serious Fraud Investigations Office (SFIO) scrutiny. The Minister for Corporate Affairs, Mr Prem Chand Gupta,Source: Business Line - Home Page | 7 Feb 2009 | 12:00 am Wall St Week Ahead: Bank rescue plan could extend gainsNEW YORK (Reuters) - Investors are heavily betting the Obama administration's bank rescue plan, to be unveiled at noon on Monday, will extend the stock market's rally into next week and bolster the fragile U.S. economy.Source: Reuters: Money News | 6 Feb 2009 | 10:19 pm Glaxo, Sanofi chasing Piramal - sourceNEW YORK (Reuters) - GlaxoSmithKline PLC and Sanofi Aventis SA have emerged as bidders for Indian drug company Piramal Healthcare Ltd, with the sale price perhaps going as high as $1.5 billion, a source familiar with the situation said on Friday.Source: Reuters: Money News | 6 Feb 2009 | 9:49 pm TRAI plans guidelines for cable TV services in non-CAS areas - Indian Express
Source: Google News India - Business | 6 Feb 2009 | 9:22 pm RBI to limit impact of govt borrowings on interest rate - Economic Times
Source: Google News India - Business | 6 Feb 2009 | 9:01 pm More steps in pipeline to support labour-intensive sectors: Pranab - Economic Times
Source: Google News India - Business | 6 Feb 2009 | 8:40 pm Glenmark sees 15-20 FDA nodsWill file 25 ANDAs more in next one yr.Source: Daily News & Analysis: Money News | 6 Feb 2009 | 8:35 pm Amul plans second White RevolutionTo double production capacity, sees sales of Rs 27,000 cr by 2020.Source: Daily News & Analysis: Money News | 6 Feb 2009 | 8:35 pm Sebi moots auction system for FII corp debt limitsSEBI has announced a transparent mechanism for allocation of recently enhanced debt investment limits in corporate bonds to FIIs.Source: Daily News & Analysis: Money News | 6 Feb 2009 | 8:35 pm CIL shortlists Rel Infra, 8 others for mines dealCoal India Ltd (CIL) has shortlisted nine firms to mine coal from seven new underground mines across the country.Source: Daily News & Analysis: Money News | 6 Feb 2009 | 8:35 pm Simplex Infra in Middle East moveSimplex Infrastructures is looking to consolidate its presence in the Middle East by venturing into new countries there.Source: Daily News & Analysis: Money News | 6 Feb 2009 | 8:35 pm Dow Jones costs News Corp $2.8 bln in writedownNEW YORK (Reuters) - Rupert Murdoch's News Corp wrote down half the value of Wall Street Journal parent Dow Jones & Co, which it bought for $5.6 billion in 2007, according to a U.S. regulatory filing on Friday.Source: Reuters: Money News | 6 Feb 2009 | 8:24 pm Reporter’s diaryGoa: With apologies to the unknown West Indian song writer of the 1960s, a calypso written about Friday’s player auction of the Indian Premier League would probably go like this: Cricket, lovely cricket,In Goa where I saw it In the second auction Where money was sunk into those two little pals of mine Freddie Flintoff and Pietersen Cricket purists profess a strong dislike for the Twenty20 game in general and the IPL in particular, deriding it as sideshow powered by glamour and money. And both were in lavish quantities today at the second auction. The who’s who of Indian industry and Bollywood descended upon the Taj Aguada resort in the somnolent state of Goa to buy players. There was heavy security around the hall where the action was scheduled with barricades that could be only be opened by RFID enabled identity cards. The normally hospitable hotel staff doubled up as stern security guards to bar pesky journalists like this writer from entering the sanctum sanctorum of Indian cricket’s riches. A lone portly sniffer dog which obviously was interested in snoozing in the warm sun was dragged around on a leash to complete the picture of full security. With the media cordoned off almost half a kilometer away (or so it seemed), all one could do was to wait at the gate for the rich and the powerful to arrive. Juhi Chawla, yesteryear sweetheart of the film-going masses, who is now associated with the Kolkata team, arrived almost half an hour before time, clad in outsized shades – that hallmark of celebrityhood designed more to attact paparazzi attention than keep them at bay. In keeping with the traditions of celebrityhood, she realized her faux pas of arriving before time rather than fashionably late — and retreated in a hurry. Meanwhile, her team managers lost their way around the huge resort to find themselves in the media room, from which they had to run away in a hurry, faced with a barrage of bouncers from the assembled hack pack. Bemused tourists — those few arrived at this time of the year to take advantage of smaller crowds in the off-season — were looking a bit harassed at the beginning, while a couple of adventurous ones, started to join the fun, whipping out cameras to shoot the array of cameras outside the entrance. One open-jawed tourist started took multiple photos of Nita Ambani on being told that she was the wife of the richest Indian. The stream of celebrities kept coming, long after 10am, the scheduled start of the auction; and apart from sunglasses, another thing they had in common — at least a couple of them — were personal security guards, who kept them out of harm’s and journalists’ way. The late entry didn’t seem to have pleased the auctioneer Richard Madley, formerly of Christies. He was shown on TV telling franchises to “take a five-minute break so that we can start in ten” to speed up proceedings. There were six rounds of bidding split into three sessions, between which Lalit Modi made appearances with various gushing team owners to discuss their latest acquisitions. Industry barons and Bollywood idols alike had lots of cricketing wisdom to share — even if they had in their teams people with actual cricketing knowledge to talk of such things.The favourite word of the day was balance and it was used by a whole lot by Shilpa Shetty, Preity Zinta, Nita Ambani, Vijay Mallya and Ness Wadia to hold forth on the virtues of their teams. It was not only the players who made money in this auction, but agents too. Spotted some distance away from the auction hall was Neil Fairbrother, a former England international, who remains etched in this writer’s memory for the dour innings he played in the lower-middle order of English one day international (ODI) squads a decade and a half ago. All he would say was that he was representing Andrew Flintoff, but with agents often getting 10% of a player’s earnings in deals like this, Fairbrother is likely to have made more money than some of the players who got sold in this action. ”It was a good series,” he said referring to a particular series against India, but remained mum about the business end of the IPL. Which was true of everyone in the end. There was a marked reluctance to discuss financials, except for expenditures, and all one got to hear was ‘development of Indian cricket’. Even in that no one discussed the why, how and when. Cricket purists: Take note. Source: LatestNews-Home - Livemint.com | 6 Feb 2009 | 7:28 pm FIs seek to dissolve Maytas Infra board; Karnik Satyam chiefHyderabad: Financial institutions (FIs) that have lent funds to promoters of Maytas Infra Ltd, promoted by family members of jailed Satyam Computer Services Ltd founder B. Ramalinga Raju, have approached the government to dissolve the board of the infrastructure company, according to people familiar with the development, who declined to be identified. Meanwhile, the government announced that the former president of software lobby group Nasscom, Kiran Karnik, had been appointed chairman of the new board of Satyam. Also Read Satyam: one month after Satyam’s woes began in the middle of December with a failed attempt to acquire Maytas Infra and Maytas Properties. On 7 January, Raju disclosed that, over the years, he had fudged the company’s accounts to the tune of at least Rs7,136 crore. Since then, Maytas, too, has come under the scanner of regulators and government departments investigating the fraud, some of its board members have resigned, and at least a few contracts awarded to it previously have been cancelled by awarding companies and local governments. Infrastructure Leasing and Financial Services Ltd (IL&FS), Sicom Ltd and IFCI Ltd loaned money to the promoters of Maytas Infra against shares pledged, but it was not immediately clear as to how much of the company’s holding has been pledged or how much money has been raised thus. Sicom, an investment and industrial development body of the Maharashtra government and development finance institution IFCI informed Maytas Infra on 21 January that they had together acquired 24.39% of the firm’s equity through invocation of shares pledged by some shareholders of the company. The company, in turn, informed the stock exchanges about this development on the same day. Maytas Infra did not respond to queries on the subject. A senior executive at Maytas Infra, who declined to be identified, claimed that the promoters held shares in the non-promoter quota and had not disclosed shares pledged despite a generic instruction to this effect by the country’s stock market regulator Securities and Exchange of India. A senior executive of one of the lending institutions, who also did not want to be named, said: “The institutions have approached the ministry of corporate affairs requesting it to invoke powers under the Companies Act to supersede the board of Maytas Infra and allow the institutions to claim ownership of the company.” Mint could not independently verify this. IL&FS managing director, Hari Shankaran, said he was not “in the loop on this subject”. However, a senior IL&FS official, who declined to be identified, confirmed that the institution did “approach the ministry of corporate affairs asking it to appoint additional directors on the board of Maytas Infra under section 408 of Companies Act to handle the affairs of the company”. The promoters of Maytas Infra hold 36.64% of the company’s paid-up equity of Rs58.85 crore under the promoters’ category. While institutions have 13.56%, other shareholders hold 49.79% stake, according to data as on 31 December. On Friday, according to Dow Jones, Maytas Infra told the Bombay Stock Exchange that the promoters had pledged 15.15% stake and that B Ramalinga Raju had pledged his entire stake as part of this. Maytas Infra ended the year to March 2008 with Rs1,660.15 crore in revenue and a net profit of Rs99.99 crore. 325 firms; new chairman Meanwhile, minister for corporate affairs Prem Chand Gupta said on Friday that as many as 325 companies and 25 individuals are part of the investigation by its Serious Fraud Investigating Office. “Some of them listed, some of them, private,” he added. Meanwhile citing un-named persons, PTI reported that Satyam’s new management had pledged land to secure a Rs600 crore term working capital loan, which was granted by IDBI Bank LtdBank of Baroda and Life Insurance Corp. of India. On Friday, on the heels of National Australia Bank Ltd suspending future contracts to Satyam, the World Health Organization (WHO) said that it was watching the developments at the technology vendor, but is yet to find any evidence of fraudulent practices by the company as a vendor. “WHO is reviewing carefully its current contractual agreements with Satyam and possible contingency arrangements for completion of (current) project work, in the event that Satyam were no longer able to perform,” a WHO spokesperson told PTI. cr.sukumar@livemint.com PTI contributed to this story. Source: LatestNews-Home - Livemint.com | 6 Feb 2009 | 7:22 pm Home rentals, property rates fall across various marketsBangalore: When entrepreneur Zafar Ansari declined to renew his apartment lease so he could move into a cheaper place, his landlord offered him an immediate discount of 20% on the rent. That’s a sizeable saving on the Rs15,000 monthly he had been paying for the 2,600 sq. feet penthouse in East Bangalore’s CV Raman Nagar.  Ground reality: Hiranandani Gardens, a township in the Powai suburb of Mumbai. At Verona building in the township, the rent for a 1,700 sq. ft flat on company lease has been slashed from Rs2.25 lakh to Rs1.65 lakh. Santosh Harhare / Hindustan Times So, if you think you are paying way too much for a two-bedroom flat that is 20km from the city centre, now is the time to negotiate a lower price or find a better home. Home owners are renegotiating existing rentals even before the lease ends in a market where lease rates have fallen by 30-40% amid all the gloom in the real-estate market. Over the last three months, post-Diwali, rentals have dipped in line with demand and property prices fell sharply across various markets as the Indian economy grows at a slower pace and the world battles recession. “If capital values go down, rentals have to go down too,” said Shveta Jain, national head, residential, at the property consultancy Cushman and Wakefield. With the US and Europe battling recession after the global banking industry turmoil, a number of multi-national companies have sent back Bangalore-based expatriates, pumping up residential vacancies, said a property consultant in the tech city. “With the banking crisis, a number of banks have also reduced their budgets for house rents and are looking at more affordable options,” said the consultant, who didn’t want to be named. It’s not just in Bangalore. At Verona building in Hiranandani Gardens, a township in the northern Mumbai suburb of Powai, the rental has been slashed from Rs2.25 lakh to Rs1.65 lakh for a 1,700 sq. ft flat given on company lease. The landlord discounted the rent even before the lease period ended. In Mumbai’s suburban Bandra, where rentals had peaked during the 2004-05 boomtime, there has been been a sharp decline in rentals in the past two months. K.K. Shetty, a Bandra-based broker, said that despite offering discounts, home-owners are still not finding tenants. Companies that used to rent huge apartments for three or five years at high rents “are not renewing leases as a result of which a number of premium properties are lying empty with us for the past few months,” said Shetty. For budget-home tenants, this is a good time, said Arvind Bhanushali, a broker in Navi Mumbai. “Even if you have a budget of Rs10,000, today you will get better, bigger flat within that. Landlords have been sitting with empty apartments, so they have no choice, but to negotiate,” said Bhanushali. A Cushman & Wakefield report on the residential sector in the fourth quarter, says that in Delhi and the National Capital Region centred on it, rentals have corrected the most in Gurgaon, by a maximum 18%. Rentals in south-central and south-east locations in Delhi have corrected because of varied suburban options providing a relatively better quality of living. For Samrat Basu, who works with a multi-national bank in Kolkata and is moving to Bangalore with his wife, there couldn’t be a better time to rent a home. “I was spoilt for choice, could bargain and got a far better flat in my budget compared to what I would have even six months back,” said Basu, who has clinched a two-bedroom flat for Rs12,000 a month in Koramangala in South-East Bangalore. Shabana Hussain contributed to this story. Source: LatestNews-Home - Livemint.com | 6 Feb 2009 | 7:22 pm What slowdown? It’s a high sixer for IPLPanaji: A Bangladeshi fast bowler went for 12 times his reserve price. A 34-year-old domestic South African player got six times his base price. And two others, both former England captains, became the world’s highest-paid cricketers. The Indian Premier League’s (IPL) second round auction on Friday in one of Goa’s priciest hotels seemed unaware of any slowdown.  Star power: (Clockwise from top) Rajasthan Royals’ new stakeholder Shilpa Shetty and IPL chairman Lalit Modi ( at the season 2 auction proceedings; Preity Zinta arrives for the bidding; as does UB Group chairman and Bangalore Royal Challengers’ owner Vijay Mallya. Pictures by Rozario Estibeiro / AP, PTI and Satish Kunkalkar / AP. “Look at the way they bid,” Lalit Modi, chairman and commissioner of IPL, said after he announced the bid prices for Pietersen and Flintoff. “… Without a doubt, it (cricket) is recession proof.” The 17 foreign players on the table were sold for an average $450,000, compared with the average $571,343 spent on 67 players in last year’s inaugural Twenty-20 IPL championship. The eight IPL teams spent an aggregate $10.06 million, or about 63% of the available $16 million on selecting these players from an available pool of 50 cricketers. They had up to $2 million each to bid for the players. “It was a conscious decision” to buy Pietersen, Vijay Mallya, chairman of United Breweries, told reporters at the sidelines of the auction. “I was prepared to pay up to $2 million for Kevin Pietersen.” Other teams such as Hyderabad’s Deccan Chargers, which spent some $3 million last year on Andrew Symonds, Adam Gilchrist and Shahid Afridi, spent only $250,000 for two players this year. Also Read On the spot coverage of the IPL auction (Reporters Diary) “The slowdown hasn’t affected us. We bought players to bring balance to the team,” said Darshan M., the team’s vice-president (commercial). Deccan Chargers had ended at the bottom of the league last year, with Mallya’s Royal Challengers last but second. For this edition, which runs from 10 April to 29 May, IPL has increased the number of foreign players allowed in each team to 10 from eight last year. Some franchisees acknowledged the overhang of the global economic slowdown, but are confident this edition will fetch them more revenues than the last one. The Kolkata Knight Riders and Rajasthan Royals are even planning to stage some games in so-called “catchment” areas such as Bangladesh, Orissa and Gujarat to bring in more crowds. Following the success of the Indian national team in the inaugural Twenty-20 World Cup in 2007, the Board of Control for Cricket in India (BCCI), the world’s richest national governing body for cricket, floated IPL on the lines of football leagues in Europe. IPL earned about Rs9,000 crore from selling broadcast rights and sponsorship deals. The Kolkata team paid $600,000 for Bangladeshi fast bowler Mashrafe Mortaza, who had a reserve price of $50,000. The reserve price is typically decided by IPL in consultation with the player, who puts a value on his services. Mukesh Ambani’s team, the Mumbai Indians, bought South African Jean-Paul Duminy for $950,000, at least three times his reserve price. “The slowdown is not going to affect us much. Most of our sponsors are locked in for the long term,” said Jeet Bannerjee, who is associated with the Kolkata franchise. Others such as N. Srinivasan, chairman and managing director of India Cements, echoes the spirit. “India (referring to the national cricket team) is doing well,” said Srinivasan. “I see a lot of enthusiasm for the game.” Some industry watchers such as Anirban Das Blah, chief executive of Globosport India Pvt. Ltd, aren’t buying that argument, citing the high prices paid for players and rising expenditure on operations. Television revenues account for only about Rs20 crore annually and franchisees have to recover their money from other avenues such as merchandizing and sponsorships. “From a business perspective, most of them bled last year,” said Blah. “No one has talked about new income streams, which is pretty much the same as last year, but they are still spending.” To be sure, television advertising deals for IPL’s second edition are being offered at a discount, as Mint reported on Thursday. Sony Entertainment Television (SET) MAX, the entertainment channel of Multi Screen Media Pvt. Ltd, is selling 30% of its spot inventory—the commercial airtime sold as independent 10-second advertising spots—as discounted packaged deals. Most of the teams are talking of three-year break-even plans, but none are willing to disclose financial details. “We are ahead of the three-year plan. We focused on only cricket last year and are now planning to build a brand,” said Ravi Krishnan (no relation to the writer), chairman of the Rajasthan Royals franchise. This team, which spent the least last year in terms of buying the franchise and spending on players, won the first edition of the competition. This year, it sold an 11.7% stake for $15.4 million to Bollywood actor Shilpa Shetty and Raj Kundra, CEO of Dubai-based Essential General Trading Llc., a deal that values the franchise at $140 million, at least double the price it was bought for. Krishnan’s view finds an echo in Mahesh Ranka, general manager (India), RelayWorldwide, a unit of the Starcom MediaVest Group, who says franchisees haven’t really spent too much this year. “Everyone wants to put his best foot forward,” said Ranka. “A few crores here or there won’t affect the profits of the franchises. Just look what it will do to the valuation if a team does well.” The amounts in the auction are annual contracted fees for the players and will be scaled down according to the number of matches they play. The two most paid English players are expected to feature only in the first three weeks of the six-week long tournament. Bloomberg contributed to this story. Source: LatestNews-Home - Livemint.com | 6 Feb 2009 | 7:22 pm 72% increase in interest costs at firms raises spectre of debt trapMumbai: Indian companies are struggling with mounting interest costs on the back of slowing sales, growing dependence on domestic debt and high interest rates. Interest coverage ratio of less than 1 means the firm is not making enough gross profit to service its debt Aggregate net profit of these firms for the same period is down by close to one-third—from Rs79,439 crore to Rs53,352 crore. The analysis excludes banks and financial institutions because they are in the business of borrowing and lending money. Analysts and economists say the economic slowdown will also see a weak fourth quarter ending 31 March, raising fears that some companies might be headed for a debt trap. Also, working capital cycles have lengthened, while foreign lenders have all, but shut off funding, leaving firms depending almost entirely on domestic lenders such as banks who have been reluctant to reduce interest rates. Also See Interest Burden (Graphic) In a reflection of new debt and high rates, the interest coverage ratio for these companies slipped to 3.42 for the quarter ended 31 December, down from a healthy 8.80 in the same quarter of last fiscal. Interest coverage ratio is the number of times a company can pay interest from its available earnings, and is calculated by dividing a firm’s earnings before interest and taxes by interest paid. “Interest cover ratio will deteriorate,” warned Dipen Shah of Kotak Securities Ltd. The interest coverage ratio for the firms reviewed has consistently declined over the past seven quarters, as interest rates have risen even as firms have taken on more debt due to a lack of other funding options. As a result, profitability has been affected. The decline in interest cover ratio has also had an impact on the credit quality of Indian firms. “There is a pressure on corporate credit quality,” said Raman Uberoi, senior director at ratings agency Crisil, a unit of Standard and Poor’s. “This is happening across companies,” but holds particularly true for real estate, auto ancillary and textile companies, he added. Recent cuts in policy rates by the Reserve Bank of India (RBI)—which cut its repo rate, or the rate at which it lends to banks, by 350 basis points to 5.5% and the reverse repo, the rate at which it soaks up excess liquidity, by 200 basis points to 4%—have translated into only marginal reductions in rates by lenders. One basis point is one-hundredth of a percentage point. Analysts expect the full effect of RBI cuts to reflect in corporate profitability only two or three quarters later. Given low profits and strapped credit lines, companies have had to borrow more because of extensions in working capital cycles. As demand slows, firms are facing an inventory pile-up. The chief financial officer with a manufacturing firm, who didn’t want to be identified because he is not authorized to talk to the media, said debtors are taking longer to repay, leading more to meet operational costs. D.D. Rathi, chief financial officer for yarn maker Grasim Industries Ltd, agreed that “working capital cycle has extended and its management is top priority”. Adding to domestic firms’ woes, foreign financial institutions are refusing to roll over old debt or offer fresh credit following the September near-collapse of the global financial system, and an equity market meltdown. With that funding pipeline closed off, domestic banks have emerged as a major source of credit for Indian companies. According to financial services firm Goldman Sachs, long- term external commercial borrowings by Indian companies fell by more than half in the current fiscal compared with a year ago, while short-term trade credit fell by $8 billion (Rs38,960 crore) from last year, to $2.5 billion in the April-November period. Goldman analysts Pranjul Bhandari and Tushar Poddar noted in a 3 February report that “in October and November, net external short-term trade credit totalled a negative $500 million”. Analysts such as Himanshu Varia of Asit C Mehta Investment Intermediaries Ltd say this has had a significant impact on companies in real estate, auto ancillary and textiles, some of whom are finding it difficult to service debt with existing revenues. “Many companies are feeling the stress and some in sectors like real estate are restructuring their debt,” he said. Real estate firms that depend significantly on borrowings from banks have an interest coverage ratio of 2.55 in the December quarter, compared with 5.03 a year ago. An interest coverage ratio of less than 1 means the firm is not making enough gross profit to service its debt. In the December quarter of this fiscal, the number of companies for whom this ratio slipped below 1 stood at 616, or almost one of every three firms considered in this analysis. For the 30 companies that constitute the Sensex, the benchmark index of the Bombay Stock Exchange, the interest coverage ratio is still at 8.99 for the quarter ended December, indicating that these firms have cash and are not hugely dependent on borrowings. However, even for these firms, the ratio was 16.51 in the same quarter a year ago. According to Crisil’s Uberoi, in the first nine months of fiscal 2008-09, there were three defaults by companies and 35 rating downgrades, compared with only one upgrade. In the past three years, there had not been a single default. Graphics by Sandeep Bhatnagar / Mint ravi.k@livemint.com Source: Home - Livemint.com | 6 Feb 2009 | 7:22 pm Dubai realty firm’s India plans stuck in Bidadi land delayBangalore: Close to two years after Dubai-based real estate company Limitless Llc. unveiled its India plans, its maiden venture in the country—the Rs24,000 crore Bidadi township project near Bangalore—is stuck. The 50:50 joint venture (JV) between Limitless and DLF Ltd, India’s largest publicly traded builder that is implementing the project, has threatened to pull out because the state government has failed to acquire land for it.  Liquidity constraints: The Madinat Jumeirah resort in Dubai, one of the projects being developed by Nakheel PSJC and Limitless. Karim Sahib / AFP If the JV falls through, the Dubai firm, that currently has only this project here, would have to start afresh and explore new options, the company admitted on Wednesday. “This is a setback for us and we are taking steps. Limitless and DLF have together notified the government that they are reconsidering their position on the project,” Rebecca Rees, manager, corporate media relations, Limitless, said by email. Pankaj Renjhen, managing director of Jones Lang LaSalle Meghraj, a property advisory, said the future of Limitless would depend on its financials: “The Dubai real estate scene is not positive at all and in times like this, Limitless would do well only if they have separate funds allocated for India and is committed to invest and develop in India.” Back home, dwindling sales and liquidity constraints have stalled a few projects of Nakheel and Limitless, which are developing properties in West Asia such as the Palm Jumeirah, The World and Jumeirah Islands. Rees, however, said: “We would look at different projects moving on from here though nothing has been finalized so far. We, however, remain optimistic about India as a future market, and will continue to explore viable opportunities there.” An analyst at a real estate advisory who didn’t wish to be identified, said Limitless has been trying to find its ground in India but the only deal it had was the DLF joint venture to develop Bidadi. The company was also in talks with the Hinduja Group for developing health care properties, but nothing came about, this person added. Meanwhile, Dharavi Development Authority in Mumbai received a letter last month from local builder Akruti City Ltd, saying that Limitless wants to pull out of a JV to redevelop Asia’s largest slum. Hemant Shah, managing director of Akruti, was unavailable for comment on Friday. The Akruti-Limitless consortium was a shortlisted bidder for the project. Both DLF and Limitless have complained that after 15 months of signing an agreement that says the government is responsible for acquiring the land on the Bangalore-Mysore highway, 30km from the state capital, no progress has been made on this front. Limitless had signed the venture with DLF in October 2007 for the 9,000-acre, mixed-use township. Construction was to begin in early 2008. Last Saturday, after announcing the company’s third quarter results, vice-chairman Rajiv Singh, said DLF has invested Rs400 crore in the project. On being asked whether the project would take off, Singh said, “I would be happy (if it did).” DLF Group executive director Rajeev Talwar declined comment when contacted on Wednesday. The firm has written to the state government asking it to return the Rs400 crore. Karnataka’s law and parliamentary affairs minister Suresh Kumar, who also has additional charge of urban development, said: “They want the Rs400 crore back. DLF is cash-strapped and is now asking for more concessions. From our side, we have given all clearances and have shown the green signal.” But he didn’t clarify whether land for the project has been acquired. Last Saturday, DLF reported a 68.72% decline in net profit to Rs670.79 crore for the third quarter ended December. In the next two trading sessions, its share price fell 25% to a low of Rs131.50. Its market capitalization now is Rs22,600 crore, only one-tenth of what its market value was a little over a year ago. Source: LatestNews-Home - Livemint.com | 6 Feb 2009 | 7:21 pm Airlines lure passengers with low fare, incentivesMumbai: India’s airlines, travel companies and websites are pulling out all stops to bring back passengers and stimulate demand. Some are sticking to the old formula of low prices: GoAir is leading that pack by offering a base fare of exactly zero. Others are providing other incentives such as freebies and insurance cover. Airline firms usually do not include taxes and surcharges in the base fare. These levies vary on airports of departure and arrival; on the Delhi-Mumbai sector, for instance, they would be around Rs2,500. High ticket prices—mainly due to higher jet fuel costs—and an economic slowdown has led to falling air passenger numbers. In the December quarter, they fell 18% compared with the same period a year ago. Also See Bounty in the Air (PDF) As a result, domestic airlines are posting heavy losses. For instance, Jet Airways (India) Ltd, the country’s largest carrier by passengers, reported losses of Rs236.18 crore in the December quarter and its closest private sector rival, Kingfisher Airlines Ltd, posted Rs626 crore in losses for the same period. India’s carriers are facing an estimated Rs8,500 crore in losses in the fiscal year that ends in March. Jet Airways, for example, is offering a home insurance package against fire or burglary, while passengers are away from home. The airline has tied up with ICICI Lombard General Insurance Co. Ltd for the campaign, which will be available to all fliers. This is in addition to compensating for delayed baggage, flight delays due to fog and even medical expenses for the duration of the flight, beginning when a passenger checks in. “We believe that there is more traffic which is available at lower fare levels. Obviously revenue maximization will be our goal in which scenario...we might even take up 15% yield drop, so long as it over-compensates in terms of higher traffic,” said Wolfgang Prock-Schauer, chief executive officer (CEO) of Jet Airways. Kingfisher Airlines has an all-inclusive fare starting at Rs885 between Nashik and Mumbai and Rs883 for the return. To be sure, most such deals are available only on online bookings. Travel websites are also coming up with packages that they hope will pull people: iXiGO.com, a travel site based out of Gurgaon that, like others, allows fliers to search and compare fares, is assuring passengers of a gift—including airline tickets and T-shirts—for booking Jet Airways’ tickets through it. “We are...associating with other airlines for similar schemes whereby passengers will be getting gifts by sending their PNR (passenger name record) numbers to us. The only condition is that they should navigate to respective airline’s website through iXiGO,” said Aloke Bajpai, CEO of iXiGO.com. “For airlines, cost of acquiring a customer is lower when it is done online,” claimed Dharmendra Yashovardhan, chief operating officer with iXiGO. After first abolishing a 5% commission to travel agents on each ticket sold, airlines backtracked in the face of opposition, and in late December, agreed to a 3% commission. A city-based analyst with a domestic brokerage, who declined being named because he is not authorized to speak to the media, said airlines will have to stimulate demand by lower ticket prices. “Airlines may have to continue with these stimulating fares till a passenger believes low fares still exist.,” he said. “To add (passengers), airlines are also encouraging direct booking through websites.” Others also have such promotional offers. For instance, online travel agent MakeMyTrip India Pvt. Ltd is offering four domestic tickets for every international ticket bought from them. Not be left behind, travel company Cox and Kings India Ltd is offering three options for travellers. “We have come out with...(a) ‘Thrice As Nice’ offer, where a customer can either take 45% cash back, or a free add-on holiday, or free goodies,” said Karan Anand, head, relationship and supplier management. “By providing value-adds, we are encouraging travellers to go on a holiday. With the ATF (jet fuel) prices coming down, airlines have also slashed fares. This makes travel packages cheaper.” January through March is typically a weak quarter for airline companies, coming as it does just after the holiday season and just before summer, for when most internationals packages are booked. Source: LatestNews-Home - Livemint.com | 6 Feb 2009 | 7:21 pm Tax revenues fall for third straight monthNew Delhi: After six buoyant years, the Union government’s tax revenues contracted at an accelerating pace for the third straight month in December. Click here to watch video Tax collections contracted by 13% in October, 15% in November and 25% in December over the previous 12 months. According to data on the website of the Controller General of Accounts (CGA), net tax revenue in the third quarter ended December contracted by a little over one-fifth to Rs1.07 trillion, compared with the same period in 2007-08. Also See Taxing Deficits (Graphic) The drop in tax collection is not unusual in a slowing economy—and points to a further deterioration in public finances that have already been hit by extra government spending to prop up domestic demand. The government is now likely to substantially overshoot its budgeted fiscal deficit target for this fiscal year. “Expectation was (that) expenditure would be overshot. Revenue impact to the extent (last quarter of 2008) was unknown,” D.K. Srivastava, director of the Madras School of Economics, said. Total tax revenue, the primary source of government income, was Rs3.09 trillion for the first nine months of 2008-09, around 61% of the budget target of Rs5.07 trillion. The fiscal deficit, the excess of total government expenditure over revenue that is made up through borrowings, as of 31 December, was Rs2.18 trillion, almost twice the 2008-09 budget estimate. The revenue deficit was Rs1.73 trillion, at least three times the budget target. Revenue deficit, a part of the fiscal deficit, is the excess of the current year’s expenses over revenue. The combination of an economic slowdown and a mid-course cut in indirect tax rates to stimulate demand had made economists mark down revenue collections. In January, the Prime Minister’s economic advisory council (EAC), in its review of the economy for 2008-09, had marked down tax collections by Rs52,800 crore (1% of gross domestic product or GDP). “Fiscal deficit calculations under the current situation are uncertain. It (deficit) depends on the responses of bankers, investors and consumers,” Suresh D. Tendulkar, chairman of ECA, said. CGA data on tax collections indicated the revenue shortfall could be higher. In December, the government cut excise duty, the so-called Central value-added tax rate, by four percentage points to 10%. The impact of the move will be felt in the last quarter of 2008-09. The first impact of a sudden change in the economic outlook was reflected in this quarter. Since then, gross direct tax collections in January grew by 34.29%, the finance ministry said in a statement. However, the crucial month for direct tax collections will be March, when companies pay the final instalment of advance tax based on 2008-09 profit estimates. Some economists said this quarter may see a revival in tax collections, thereby easing the pressure on government finances. “The quarter that went by was one of the worst quarters we have seen in a decade. There will be some recovery going forward from this quarter,” Manoj Vohra, director (research) at the Economist Intelligence Unit, said. Vohra based his optimism on three factors: Monetary policy measures should show results by the end of the current fiscal year, some of the government spending would show up in consumption and some amount of stabilization in the economy has started after last quarter’s shock. Even if tax revenues recover somewhat in the final quarter, their sudden contraction in the fiscal third quarter had Srivastava worried. According to him, last quarter’s net tax collections showed revenue buoyancy was below 1, which is “quite a shock”. Revenue buoyancy (a measure of how much growth in revenue collection exceeds growth in nominal GDP) has been at least 2 in the past few years. That is, for every percentage point growth in economic activity, tax revenue has grown twice as fast. According to Srivastava, in the current fiscal year, nominal GDP is expected to grow by about 11%, which made a mere 5% growth in tax revenue between April and December worrisome. More government borrowings to plug a growing fiscal deficit has pushed up interest rates on government bonds. The money market has been worried that the government may announce a large increase in bond auctions before the fiscal year ends on 31 March. The yield on the 2018 bond hit an eight-week high of 6.53% on Thursday, 167 basis points above a life-time low of 4.86% in early January. On Friday, after Reserve Bank of India governor D. Subbarao said the government’s borrowing programme would be managed in a way that would minimize market impact, the yield on the 8.24% 2018 bond closed at 6.19%, after falling as low as 6.14%. It had ended at 6.49% on Thursday. A basis point is one-hundredth of a percentage point. A higher fiscal deficit could also “crowd out” private sector borrowers, affecting investments in new capacity. “The costs of sticking to FRBM (fiscal responsibility and budget management legislation) are going to be far higher than crowding out in the current situation. The potential benefits (of increasing deficit) are quite significant in terms of revival,” ECA’s Tendulkar said. According to Montek Singh Ahluwalia, deputy chairman of the Planning Commission, one of the aims now of monetary policy is to neutralize the possibility that increasing fiscal deficit would crowd out private demand for funds. An accommodative monetary policy, such as the one prevailing over the past few months, was meant to complement the increase in government spending, Ahluwalia had told The Hindu in an interview in January. Graphics by Ahmed Raza Khan / Mint Reuters contributed to this story. Source: Home - Livemint.com | 6 Feb 2009 | 7:12 pm Income Tax officials search builders' offices in NCRIncome-Tax sleuths searched the offices of at least half a dozen real estate builders in the national capital region (NCR) Friday, sources said.Source: IndiaeNews.com: Business News | 6 Feb 2009 | 7:01 pm Budgeting for electoral reversesThe party whose government presents the Interim Budget does not return to power.Source: Business Standard | Front Page Headlines | 6 Feb 2009 | 7:00 pm SFIO to probe 325 firmsKarnik is Satyam chairman.Source: Business Standard | Front Page Headlines | 6 Feb 2009 | 6:59 pm Lenders now want Rajus out of Maytas InfraIL&FS, which, along with IFCI and Sicom, had extended loans to the Raju family against shares of Maytas Infra, has asked the government to supersede the board of the Hyderabad-based company.Source: Business Standard | Front Page Headlines | 6 Feb 2009 | 6:58 pm Kingfisher to sell 25% stock for Rs 2,000 crIn an operational and financial restructuring, UB Group-owned Kingfisher Airlines has put 25 per cent equity on the block, for which it hopes to get Rs 2,000 crore, and obtained a corporate guarantee from United Breweries Holdings, the groups investment arm, for loans worth Rs 6,400 crore.Source: Business Standard | Front Page Headlines | 6 Feb 2009 | 6:55 pm Ambuja reels under high fuel costs Profit margin fell by as high as 7 percentage points. The company has been impacted more than ACC Ltd, which reported results on Thursday, because of its higher reliance on imported coal, prices of which soared last year. Even the outlook for the current year is more bleak than other cement majors because of high exposure to the northern region, where additional capacity will come on stream before other parts of the country. Most parts of the country will be in an oversupply state by the January-March quarter of 2010, but additional capacities are expected in the north this year itself, points out an analyst with an institutional broker. While 38.5% of Ambuja’s domestic dispatches are to the northern region, another 13.5% of domestic sales are in the state of Gujarat, where prices get impacted depending on the dynamics in the Northern region. Also See Bleak Outlook (Graphic) Therefore, over half the company’s sales will face pricing pressure in the second half of this year. Indeed, the company itself points out in its press release announcing its annual results, “With a number of expansion projects in the pipeline, the cement industry is likely to experience surplus capacity, which may have some impact on pricing in the second half.” With this backdrop, it’s interesting that shares of Ambuja Cements have risen by nearly 60% from their lows in October 2008. A substantial part of the appreciation in the stock can be attributed to the double-digit growth in volumes the industry has witnessed in the past few months. But the decent growth, which is expected to last till March, is owing to the construction activity just before the general elections. With the real estate sector in a major slump, overall demand is expected to fall later this year. Ambuja’s valuation of about 11 times trailing earnings, in that context, is rather high. It ignores the fact that it’s a commodity play, which is at the brink of a downturn in its cycle, with excess capacity expected later in the year making things only worse for the cement industry. Write to us at marktomarket@livemint.com Graphics by Paras Jain / Mint Source: Home - Livemint.com | 6 Feb 2009 | 5:58 pm Satyam suitor backs away; new chairman appointedBANGALORE (Reuters) - A potential bidder for fraud-tainted Satyam Computer Services backed away from a deal on Friday, as one of the members of the new board was appointed as the chairman of the outsourcing company.Source: Reuters: Money News | 6 Feb 2009 | 5:56 pm Bancrofts gained at Murdoch’s costRupert Murdoch isn’t easily outfoxed. But the Bancroft family, which sold him Dow Jones, publisher of The WallStreet Journal, looks to have got the better of the media mogul.  The latest News Corp. earnings crystallize the value destruction that Murdoch’s pursuit of the financial publisher has wrought for shareholders. News Corp. paid $5 billion (Rs24,350 crore today) for Dow Jones in December 2007. As any reader of the Journal knows—and that should include News Corp. auditors—the bottom fell out of the financial industry shortly thereafter. News Corp.’s quarterly results include impairment charges of $3.06 billion, mostly related to Dow Jones. That suggests it still ascribes some $2 billion of value to the business. Is it worth that much? It’s hard to say. But it would be hard to call this a mark-to-market valuation when one considers how Dow Jones’ rivals have fared since Murdoch nabbed his quarry. The New York Times Co. shares have fallen 70%. Gannett Co. Inc. has lost 86% of its value. Take the average of those declines and apply it to the price Murdoch paid and Dow Jones would be worth $1 billion. That implies the $5 billion that Murdoch paid was fair. He paid a $2 billion premium. Had Dow Jones remained independent, it would be worth even less. Of course, Murdoch loves newspapers. He may be the last billionaire on the planet who does. And he may even have some tricks up his sleeve, and fairy dust in his pocket, to enable the Journal to buck the industry’s downward trend. But on the evidence so far, it’s hard not to conclude that the Bancrofts will have the last laugh. (News Corp. became a minority investor in breakingviews.com following its acquisition of Dow Jones. WSJ has an exclusive content partnership in India with Mint.) Source: Home - Livemint.com | 6 Feb 2009 | 5:44 pm Bond yields drop on RBI assuranceMumbai: Yields on government securities fell sharply to an intra-day low of 6.14% on Friday after Reserve Bank of India governor D. Subbarao said the central bank will “manage” the state’s borrowing programme “in the least disruptive manner”. The yields have been on the rise in the past few weeks on oversupply of government papers. The government raised its borrowing programme for the current fiscal to Rs2.05 trillion from Rs1.35 trillion, to bridge the rising fiscal deficit. The yield on the benchmark 10-year bond closed at 6.22% on Friday, down its Thursday level of 6.53%, which was a two-month high level. “We will see that the market is stable. We will see that there is no volatility. We will manage the government’s borrowing programme in the most efficient fashion,” Subbarao told reporters on the sidelines of a function in Mumbai. With the latest auction of two bonds, the government has completed Rs1.97 trillion worth of borrowing and will raise another Rs8,000 crore in the last week of February. The bond market expects the government to again borrow between Rs20,000 crore and Rs30,000 crore to fund its widening fiscal deficit. The bond market was concerned that this extra borrowing would strain the market and yields of bonds will rise, making them unattractive. Yields and prices of bonds move in opposite directions. According to bond dealers, RBI can prevent further rise in bond yields in many ways. One way of keeping the bond market alive is capping the amount commercial banks can park at RBI’s reverse repo window. Banks parked about Rs70,000 crore with RBI on Thursday. They earn 4% interest on this. “If the amount is capped, banks will have to hit the market and buy government bonds, thus pulling the yields down,” said N.S. Venkatesh, managing director of IDBI Gilts Ltd, a firm that trades in bonds. Saikat Chatterjee of Reuters contributed to this story. Source: Home - Livemint.com | 6 Feb 2009 | 5:37 pm Diverse growth forecasts reflect uncertainty in economy That was entirely expected, given the dramatic turn for the worse taken by the economy since the survey was last conducted in September. But one would have expected that, since the latest survey was conducted recently, the range of estimates for 2008-09 would narrow. Normally, forecasters would have a good idea of what this fiscal’s numbers will be like. Instead, the range of estimates has gone up quite sharply in the case of most indicators. The mean and median estimates of growth have come down, as is completely natural, but the difference between the maximum and minimum forecasts has increased significantly. That is probably yet another indication of the high levels of uncertainty prevailing in the economy at present. Also See Varying Indicators (Graphic) For example, RBI survey’s fifth round, held in September, forecast a maximum growth of real GDP of 8%, while the minimum level forecast was 7%. But in the sixth round of RBI’s survey held recently, the range between the minimum and maximum forecasts has increased to 5.8% to 7.8%. Although it’s rather surprising that there are some forecasters out there who still believe we’ll have GDP growth of 7.8% this fiscal, the increase in the range of forecasts indicates heightened uncertainty. The same trend holds true for most of the other indicators. For instance, bank credit growth in 2008-09 is now expected to be between 18% and 26%—this range was between 18% and 24% when the last survey was conducted. Corporate profits after tax are now estimated to be between 8% and 26%, compared to between 15% and 26% at the time of the last survey. Similarly, the dollar/rupee rate is now forecast to be between Rs45 and Rs52 at the end of the fiscal, while the last estimate was between Rs42 and Rs47. In many instances, however, what seems to have happened is that while the minimum has come down, there are apparently some forecasters out there who are sticking to their guns and not changing their bullish forecasts. In that case, perhaps all that the survey shows is that some forecasters continue to be delusional. Write to us at marktomarket@livemint.com Graphics by Paras Jain / Mint Source: Home - Livemint.com | 6 Feb 2009 | 5:30 pm
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