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Forces at work to delay 3G auction, Sunil Mittal allegesThe 3G auction that was to take place on January 16 has been delayed. Sunil Mittal, Chairman and MD, Bharti Enterprises, termed it as unfortunate. He alleges that there have been forces at work to delay the 3G auction process.Source: Moneycontrol Top Headlines | 28 Feb 2009 | 4:47 pm Satyam board finalises sale process details : SourcesCNBCTV18 learns that the Satyam board has finally arrived at a decision on the sale process. The board may not need to meet again to discuss sale process. Lawyers are working on regulatory issues and proposal may soon be sent to the Sebi and the CLB. Details of the Satyam sale process will be made public over the next few days.Source: Moneycontrol Top Headlines | 28 Feb 2009 | 3:35 pm Chennai realty may see drastic price correctionIf you are thinking of buying a home, it may soon be time to celebrate. That\'s because with DLF leading the way, other buildres may also slash prices soon. CNBCTV18 Divya Rajagopal and Sweta Kukreti delves deeper.Source: Moneycontrol Top Headlines | 28 Feb 2009 | 2:37 pm Bidding issue key to retaining Satyams clients: BK ModiBK Modi, Chairman, Spice Group, said Satyam\'s clients may exit if the bidding issue does not get resolved by Marchend. He feels reserve price for Satyam will create controversy. According to Modi, an indicative price is not possible as the extent of Satyams liabilities is not known.Source: Moneycontrol Top Headlines | 28 Feb 2009 | 2:28 pm DLFs attempts to placate buyers failDLF has announced a package for buyers of its Garden City Project in Chennai. This was to prevent a consortium of buyers from pulling out as they are reportedly unhappy with the project\'s delay. CNBCTV18\'s Sunanda Jayaseelan delves deeper.Source: Moneycontrol Top Headlines | 28 Feb 2009 | 2:16 pm HSBC to announce $18 bln rights issue - sourcesLONDON (Reuters) - British bank HSBC plans a rights issue of up to $18 billion, two sources familiar with the situation said, and will announce the share sale when publishing results on Monday.Source: Reuters: Money News | 28 Feb 2009 | 2:09 pm See higher revenue post RILRPL merger: Shailesh HaribhaktiThe possible Reliance Industries merger with Reliance Petroleum Limited has created quite a buzz. Reacting to this news, Shailesh Haribhakti, Managing Partner, BDO Haribhakti, said post merger the turnovers would be significantly higher. \"Also, the double tax on dividends will be avoided which could be very significant releasers of share value.\"Source: Moneycontrol Top Headlines | 28 Feb 2009 | 2:00 pm Now, Tata Tele issues windingup notice to SubhikshaThe Subhiksha saga continues. After HUL and HCL Infosystems now Tata Tele has issued a windingup notice to the beleagured retailer. CNBCTV18s Divya Rajagopal and Sandeep Srikanth delve deeper.Source: Moneycontrol Top Headlines | 28 Feb 2009 | 1:59 pm RBI Governor discusses global economic issues with Montek - Hindu
Source: Google News India - Business | 28 Feb 2009 | 1:53 pm Govt demands complete supercession of Maytas boardThe Maytas Infra matter came up for another hearing and the CLB suggested the appointment of three independent directors and one representative of financial institutions on the board. But the governments is unhappy with the CLBs proposal and they want to complete supercession.Source: Moneycontrol Top Headlines | 28 Feb 2009 | 1:42 pm Plan panel allocates Rs.27 bn for Himachal PradeshThe Planning Commission has allocated Rs.27 billion for Himachal Pradesh for 2009-10, Chief Minister Prem Kumar Dhumal said Saturday.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 1:32 pm Punjab National Bank cuts car loan rates by 50 basis pointsPublic sector lender Punjab National Bank (PNB) has lowered interest rates for car loans by 50 basis points, effective from Sunday.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 1:31 pm Maytas Properties\' customers approach CLBFor hundreds of people, owning a home has turned into a nightmare. We are talking about people who have bought flats and villas from Maytas Properties. These customers have now written to the Company Law Board asking that it include them in its decision.Source: Moneycontrol Top Headlines | 28 Feb 2009 | 1:21 pm Titan puts expansion on fast track modeTitan has put its expansion plans on fast track. It\'s looking at opening 50 standalone Fastrack stores across 25 cities. CNBCTV18\'s Sunanda Jayaseelan delves deeper.Source: Moneycontrol Top Headlines | 28 Feb 2009 | 1:18 pm RBI chief meets govt officials before G20NEW DELHI (Reuters) - The Reserve Bank of India (RBI) governor Duvvuri Subbarao met top government officials on Saturday to prepare for the upcoming G20 meeting but said monetary policy was not part of the discussions.Source: Reuters: Money News | 28 Feb 2009 | 1:05 pm Aviation fuel price cut again, by 7 percentState-run oil companies Saturday slashed aviation turbine fuel (ATF) prices by seven percent, the 11th reduction since September last year.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 12:30 pm Singapore PM warns of lengthy global slump!Singapore`s Prime Minister Lee Hsien has warned the global economic slump may last several more years if the US doesn`t fix its creaking banking system, a newspaper reported on Saturday.Source: Zee News : Business | 28 Feb 2009 | 12:13 pm HSBC plans $17 bn share sale to raise funds!HSBC, Europe`s biggest bank, plans to raise more than 12 bn pounds ( USD 17 bn) in a share sale aimed at propping up its capital Top 20 Global Banks base in order to cope with the economic crisis, a media report said on Saturday.Source: Zee News : Business | 28 Feb 2009 | 12:13 pm Obama`s move to affect India`s IT industry: Pranab!As US President Barack Obama vowed to eliminate tax benefits for American firms shipping jobs to foreign countries, India has said it is against any protectionist move as it would affect its IT industry.Source: Zee News : Business | 28 Feb 2009 | 12:13 pm RIL-RPL merger on the cards!India`s Reliance Industries Ltd said it plans to absorb its Reliance Petroleum unit.Source: Zee News : Business | 28 Feb 2009 | 12:13 pm Economy to grow by around 7% in FY`09: Pranab!Revival in steel and cement sectors and ample funds available with states for spending on Saturday gave the centre the confidence that the country will grow by around 7 percent in the current fiscal.Source: Zee News : Business | 28 Feb 2009 | 12:13 pm Tata Steel to operate at full capacity in FY10 - Moneycontrol.com
Source: Google News India - Business | 28 Feb 2009 | 12:00 pm ASEAN summit needs measures to ease economic crisisHUA HIN, Thailand (Reuters) - Southeast Asian leaders must agree measures to deal with a deepening global financial crisis that has hurt their export-dependent economies, Thai Prime Minister Abhisit Vejjajiva said on Saturday.Source: Reuters: Money News | 28 Feb 2009 | 11:44 am United Bank hopeful of government nod for capital restructuringCity-based public sector lender United Bank of India (UBI) is hopeful that the government would approve its proposal to reduce equity capital by March 31, a top official said here Saturday.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 11:30 am Government to pay 10 per cent more on DAVP advertisements - domain-B
Source: Google News India - Business | 28 Feb 2009 | 11:29 am Market price can't decide Satyam's sale: ModiBK Modi, whose Modi group is interested in acquiring Satyam, on Saturday, said that the stock market valuation could not be the basis for putting a reserve price on Satyam.Source: Daily News & Analysis: Money News | 28 Feb 2009 | 11:23 am Combative Obama vows to fight for his budgetWASHINGTON (Reuters) - A combative President Barack Obama warned on Saturday he was bracing for a fight against powerful lobbyists and special interests who sought to pick apart the $3.55 trillion budget he wants to advance his agenda of reform.Source: Reuters: Money News | 28 Feb 2009 | 11:09 am China premier says stimulus is off to good startBEIJING (Reuters) - China's stimulus spending has started to nudge the economy in the right direction but the global financial crisis could still take a turn for the worse, Chinese Premier Wen Jiabao told an online forum on Saturday.Source: Reuters: Money News | 28 Feb 2009 | 10:59 am Govt, RBI sign MoU to amend MSS scheme - Moneycontrol.com
Source: Google News India - Business | 28 Feb 2009 | 10:14 am Naomi Campbell denies retirement rumoursSupermodel Naomi Campbell has denied that she will be retiring any time soon after rumours to this effect began circulating in the modelling circuit.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 10:01 am Christopher Kane teams up with VersaceLondon-based designer Christopher Kane has teamed up with fashion brand Versace to create a new range of accessories.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 10:00 am Weekly wrap: Sensex gains marginally - Sify
Source: Google News India - Business | 28 Feb 2009 | 10:00 am Over 300,000 Bihar government employees to lose pay over strikeMore than 300,000 Bihar government employees who had struck work for 33 days will not receive their salaries for this period as the state government has taken a 'no work no pay' stance.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 9:32 am Govt demands complete supercession of Maytas board - Moneycontrol.com
Source: Google News India - Business | 28 Feb 2009 | 9:11 am See higher revenue post RIL-RPL merger: Shailesh Haribhakti - Moneycontrol.com
Source: Google News India - Business | 28 Feb 2009 | 9:11 am Bulls edge forward as markets end tamelyBulls managed to inch forward at the Indian equities markets during the week just ended despite weak GDP numbers, the rupee falling to a lifetime low and uncertain global cues. A key index crawled upwards, gaining a meagre 0.55 percent over its last weekly close.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 8:30 am Chevron to exit RPL, sell 5% to RILMoving closer to merging its refinery subsidiary Reliance Petroleum with itself, Reliance Industries Ltd has said it will buyout US energy major Chevron Corp's stake in RPL.Source: Daily News & Analysis: Money News | 28 Feb 2009 | 8:03 am After IT, BT, it is time for FT revolution: Sahai'Doctor sahab, aap hamein kahaan chutney-bhaji mein phasaya (why have you got me stuck in this chutney-bhaji business)?' Minister of State for Food Processing Industries Subodh Kant Sahai had asked Prime Minister Manmohan Singh when he was given this portfolio after the United Progressive Alliance (UPA) government came to power.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 6:31 am Economy to grow by around 7 pc in FY'09, hopes FMRevival in steel and cement sectors and ample funds available with states for spending today gave the centre the confidence that the country will grow by around 7% in the current fiscal.Source: Daily News & Analysis: Money News | 28 Feb 2009 | 6:12 am 5 schemes to boost industriesAs the vote-on-account session ends, DNA sums up what transpired in the House on the last day.Source: Daily News & Analysis: Money News | 28 Feb 2009 | 6:01 am Will RIL lose credibility after merger with RPL?Market analysts, however, believe that the merger may affect the group's credibility.Source: Daily News & Analysis: Money News | 28 Feb 2009 | 5:52 am Obama’s vow to affect IT cos; India against protectionism: FMNew Delhi: As US President Barack Obama vowed to eliminate tax benefits for American firms shipping jobs to foreign countries, India has said it is against any protectionist move as it would affect its IT industry. “The IT industry will be affected due to the impact of financial meltdown...substantial number of Indian workers are there..we will have to address this issue...we are opposing protectionism, not only here but at every forum,” Finance Minister Pranab Mukherjee told Karan Thapar in an interview for Devil’s Advocate to be telecast on CNN-IBN. “We can’t just go for country specific solution for such problem...issue is that our IT industry will be affected,” he said. Mukherjee added that the protectionism of any kind at this time should be avoided and Prime Minister Manmohan Singh also made it quite clear at G-20 meeting last year. On 26 February, Obama in his maiden budget speech said the US government would do away with tax breaks for firms outsourcing jobs to overseas destinations, including India. At the same time, the administration would be providing tax relief to 95 per cent of American working families. Source: LatestNews-Home - Livemint.com | 28 Feb 2009 | 5:44 am India in talks with US for clarity on outsourcing - Sify
Source: Google News India - Business | 28 Feb 2009 | 5:03 am 3G may not mean more revenue for BSNL - Economic Times
Source: Google News India - Business | 28 Feb 2009 | 3:43 am Verizon offers direct connections through Mumbai, Chennai gatewaysVerizon Business, a global leader in communications and IT solutions, plans to offer direct connections to one of the world's largest global networks through its two international gateways in Mumbai and Chennai.Source: IndiaeNews.com: Business News | 28 Feb 2009 | 3:30 am Citigroup gets new rescue, U.S. may own 36 pctNEW YORK/WASHINGTON (Reuters) - The U.S. government will boost its equity stake in Citigroup Inc to as much as 36 percent, bolstering the bank's capital base in the latest emergency effort to save the banking giant.Source: Reuters: Money News | 28 Feb 2009 | 2:20 am Chevron likely to exit RPLNew Delhi, Feb. 27 Chevron Corp, which holds a five per cent stake in Reliance Petroleum Ltd (RPL), is likely to exit the company, say industry sources.Source: Business Line - Home Page | 28 Feb 2009 | 12:00 am India fares better than developed marketsMumbai, Feb. 27 Indian equity indices have fared better than their counterparts in developed countries in the past month. However, they have not done as well as the other BRIC nations, which have logged positive returns in the past month.Source: Business Line - Home Page | 28 Feb 2009 | 12:00 am Centre’s stimulus, RBI’s headache?After repeated announcements since January when the second stimulus plan was unveiled that there would be no more relief measures, key policymakers have suddenly discovered a rich lode of opportunity waiting to be mined before the Code of ConductSource: Business Line - Home Page | 28 Feb 2009 | 12:00 am Rupee slips to record low of 51.15Mumbai, Feb. 27 The rupee closed at a life-time low of 51.15 to the dollar on Friday on account of heavy month-end demand for the greenback, weak GDP numbers, and diminishing dollarSource: Business Line - Home Page | 28 Feb 2009 | 12:00 am Slowdown hurts Q3 GDP growthNew Delhi, Feb. 27 The country’s gross domestic product (GDP) expanded by 5.3 per cent in October-December 2008, the slowest in any quarter in the UPA regime and in almost the last six years. In the previous quarter, it grew 7.6 perSource: Business Line - Home Page | 28 Feb 2009 | 12:00 am Reliance moves to merge Petroleum with itselfMumbai, Feb. 27 It was not entirely unexpected from Mr Mukesh Ambani, but its timing took the investment worldSource: Business Line - Home Page | 28 Feb 2009 | 12:00 am L&T appoints investment bankers for SatyamMumbai, Feb. 27 Larsen & Toubro is believed to have appointed investment bankers Citigroup and Nomura to advise a possible deal with the scam-tainted Satyam Computer Services.Source: Business Line - Home Page | 28 Feb 2009 | 12:00 am Tata Steel consolidated Q3 net profit down 68%Mumbai, Feb 27 Hit by the 40 per cent cut in production in Europe, Tata Steel has reported a 68 per cent drop in the consolidated net profit at Rs 732 crore (Rs 1,402 crore) for the third quarter of the financial year ended December 30, 2008.Source: Business Line - Home Page | 28 Feb 2009 | 12:00 am RPL merger inevitable and expected: ExpertsMumbai/Chennai, Feb. 27 Reliance Industries’ proposal to merge Reliance Petroleum (RPL) with itself is “a move on the expected lines”, according to top industry experts tracking theSource: Business Line - Home Page | 28 Feb 2009 | 12:00 am Muted credit offtake adds to liquidity overhangBangalore, Feb. 27 Credit offtake has slumped leading to worsening of liquidity overhang in the banking system.Source: Business Line - Home Page | 28 Feb 2009 | 12:00 am RIL, RPL to discuss mergerReliance Industries Limited, India's largest company, plans to acquire the remaining shares of its subsidiary, Reliance Petroleum Limited (RPL).Source: Daily News & Analysis: Money News | 27 Feb 2009 | 11:14 pm Obama's vow to affect IT companiesAs Obama vowed to eliminate tax benefits for American firms shipping jobs to foreign countries, India has said it is against any protectionist.Source: Daily News & Analysis: Money News | 27 Feb 2009 | 11:14 pm Private banks to cut ratesIn a closed-door meeting with D Subbarao, the governor of the Reserve Bank of India, private sector banks promised that they will cut interest rates.Source: Daily News & Analysis: Money News | 27 Feb 2009 | 11:14 pm India shining no moreThe GDP in the three months from October to December grew by 5.3% only making this the slowest growth since the last quarter of 2003.Source: Daily News & Analysis: Money News | 27 Feb 2009 | 11:08 pm Real GDP growth slows, but not investmentshe overall pace of economic growth decelerated to a lacklustre 5.5% during the fiscal third quarter from 8.9% a year ago and 7.6% the preceding quarter.Source: Daily News & Analysis: Money News | 27 Feb 2009 | 10:27 pm TV channels and Trai slug it out in court - Times of India
Source: Google News India - Business | 27 Feb 2009 | 9:43 pm Reliance Ind plans to absorb refinery unitMUMBAI (Reuters) - India's Reliance Industries Ltd said it plans to absorb its Reliance Petroleum unit, giving it direct control of the world's largest refinery complex.Source: Reuters: Money News | 27 Feb 2009 | 9:18 pm Lenders decline seat on Maytas Infra boardThree financial institutions IDBI Bank, ICICI Bank and IL&FS Ltd that have lent money to Maytas Infra today informed the Company Law Board (CLB) that they are not interested in board membership in the Hyderabad-based firm.Source: Business Standard | Front Page Headlines | 27 Feb 2009 | 7:36 pm Stone-laying ceremonies set the foundation for poll campaignsIf foundation stones were a commodity listed on the stock exchange, their prices would have sky-rocketed, judging by the frenzied pace at which Union ministers have been laying foundation stones for various projects across the country.Source: Business Standard | Front Page Headlines | 27 Feb 2009 | 7:35 pm Citi gets third rescue as US plans to raise stakeThe US government ratcheted up its effort to save Citigroup, agreeing to a third rescue attempt to cut existing shareholders stake in the firm by 74 per cent. The stock fell as much as 37 per cent on the New York Stock Exchange (NYSE).Source: Business Standard | Front Page Headlines | 27 Feb 2009 | 7:34 pm Reliance, RPL set to mergeIn an action replay after seven years, Mukesh Ambani-promoted Reliance Industries (RIL), Indias largest company by market capitalisation (m-cap), today announced plans to merge its group firm Reliance Petroleum (RPL) with itself.Source: Business Standard | Front Page Headlines | 27 Feb 2009 | 7:33 pm The weekly recap: 23rd-27th FebNew Delhi: With the elections around the corner, the government this week threw all caution to the winds and opened the floodgates for unbridled spending. Stand-in finance minister Pranab Mukherjee, who stuck to the rule-book in the interim budget, announced a third stimulus package on Tuesday that would cost the exchequer an additional 0.5 % of GDP. Two days later, commerce minister Kamal Nath announced sops for exporters worth Rs 325 crore. The government raised the dearness allowance for central government employees and pensioners by 6%, costing another Rs 6,000 crore to the exchequer. Petroleum minister Murali Deora hinted that he could cut diesel prices and the Opposition was quick to hit at out at the government. BJP spokesperson Rajiv Pratap Rudy said, “It is a desperate bid to position themselves politically. I don’t think people are going to accept them through their press conferences. What they should have done was to perform, which they have not done in the last five years.” Meanwhile the real economy continued to gasp for breath in intensive care. Third-quarter GDP estimates plunged to 5.3% as opposed to 6% predicted by most polls. The rupee plunged to record low of Rs 50.69. In the coming days, it is expected to go even lower at Rs 51 to a dollar. S&P lowered its outlook on India and it now appears that Indian economy is in deep slowdown as any other Asian nation and in fact China may recover faster.  In the boom time preceding the slowdown, Indian companies went shopping across the globe and many high profile deals were struck, the high point being Tata’s $12.1 billion dollar acquisition of UK steel giant Corus and Hindalco’s Novelis buy of nearly 6 billion dollars. But with the meltdown kicking in, doubts are being raised about the rationale of such deals. Counting deals only above a 100 million dollars - 54 listed Indian companies concluded 45 billion dollars worth of mergers and acquisitions between 2005 and 2008. Now, 85% of these deals are valued at a loss and together they are worth less than half at $21 billion. Says CEO and equity head SMC Capitals, T. Jagannadham, “This raises the questions whether such deals were smart buys by Indian companies or smart sales by foreign companies.” Apart from telecom all other sectors have seen massive wealth erosion. The auto sector has seen maximum deterioration with media and entertainment coming second. Hospitality and aviation deals too are seeing a rough time. Analysts say part of the reason is the deals were done at the peak of their respective industry cycles, with no thought of a possible downturn. Perhaps indicating that it is time for Indian dealmakers to reassess their M&A strategies. When Slumdog Millionaire swept the Oscar awards, it didn’t come as a surprise to the world. The movie was a favourite through the run up to the final event. India rejoiced with A. R. Rahman winning two, one along with writer Gulzar and the third going to sound recordist Resul Pookutty. Those in the Mumbai music industry were ecstatic. Resul Pookutty’s win for sound engineering is expected to do a lot for the industry. The Oscar wins have made India proud. Now it is to be seen, how good the win will be for business. Source: LatestNews-Home - Livemint.com | 27 Feb 2009 | 7:07 pm Faith and stimulusWhat joins the dots between India’s IT honchos in cities and the large crowd of humble farmers spread across the country? They show the limits of the idea of consumption fuelling a slowing economy and contradictions inherent in the idea of stimulus packages. In the last two days, big IT companies such as TCS and Infosys have announed that the variable part of their employees’ pay may face the axe, given their dwindling growth. The government, on the other hand, is busy cutting indirect taxes to make a large number of goods cheaper and more attractive to consumers. In addition, it hopes that farm loan waivers may also fuel spending. In both instances, its faith may be misplaced. Employees are likely to hoard their cash, fearing bad times ahead. The farm loan waiver is at best a stimulus that occurred a while ago. Falling agricultural growth means farmers may have little disposable income to boost consumption. So, is it time to think about other “options” to revive economic growth? Source: Home - Livemint.com | 27 Feb 2009 | 6:58 pm Slowest GDP growth in six years at 5.3%New Delhi: Pressure mounted on the Reserve Bank of India (RBI) to further reduce interest rates after the government said on Friday that the Indian economy, in the third quarter (Q3) of the current fiscal year, grew at its slowest rate since 2003. Growth in the quarter came in at 5.3%, far lower than the 7.6% clocked in the second quarter. Farm output fell unexpectedly and capital spending slumped while government consumption spending soared, because of an increase in public sector pay in Q3 and helped support growth. Services and private consumer spending did not spring any major surprises, largely slowing in tandem with the economy as a whole. Click here to watch video The slowdown in economic activity was much sharper than most economists had expected. The consensus forecast was 6.1%. Growth will have to rebound to at least 7.6% in the fourth quarter (Q4) if the government’s first estimate of a 7.1% rate of economic growth for the full year is to be met. Government economists said the latest numbers were expected and that Q4 would be better. “The 5.3% growth is broadly in line with our expectation. Generally, the fourth quarter contribution to GDP growth is normally better,” economic affairs secretary Ashok Chawla told reporters. “Our expectation for (the) fourth quarter is that it will show robust growth, which will add up close to 7% for the whole year.” GDP, or gross domestic product, is a measure of the national economic output. Reacting to the data, Prime Minister’s economic advisory council chairman Suresh Tendulkar said the economy seemed to have bottomed out during Q3. “You can look at the data differently. My assessment is that growth has bottomed out and things will start improving from the next quarter onwards as a result of the two fiscal packages announced by the government previously. If growth in the fourth quarter is above 6.5%, we can still register a growth rate of 7% during 2008-09. However, export-related sectors will continue to be affected,” he said. Many private sector economists are sceptical. “The economy is expected to go down further, as there is no good news in sight,” said Dharmakirti Joshi, principal economist at ratings firm Crisil Ltd. “With an expected fourth quarter GDP growth of close to 5%, overall GDP growth may come down to around 6.5%.” Also See Govt Boost For Growth ( Graphic ) “The government’s advance estimate of 7% for the current fiscal year will certainly be missed,” Sherman Chan, a Moody’s Economy.com economist, said in a note in which the growth numbers were termed “disappointing”. “From the policy perspective, the onus is now squarely on monetary policy. The government has already announced large fiscal stimulus measures and no further fiscal announcements will be made once elections are announced. Moreover, we judge that monetary policy needs to be expansionary to accommodate the government. Therefore, we continue to expect the Reserve Bank of India to cut both the repo and reverse repo rates by 50bp (basis points) any time between now and the end of March, and by a further 100bp by mid-2009,” said Sonal Varma, an economist with Nomura Financial Advisory and Securities (India) Pvt. Ltd. A basis point is one-hundredth of a percentage point. India’s chief statistician Pronob Sen feels the central bank has to walk a tightrope: There is a contradiction in managing higher government borrowings and bringing down interest rates. “This is because the large amount of government bonds issued by RBI on behalf of the government will push up the yield curve in government securities (and put upward pressure on interest rates),” Sen said. The sharp growth slowdown shook the financial markets for some time. Traders responded with an early wave of selling of equities and the rupee. Shares recovered later in the day on expectations of a reduction in interest rates. The Bombay Stock Exchange’s benchmark Sensex ended Friday at 8,891.61, down 63.25 points from its closing level on Thursday, but above an intra-day low of 8,728.66. “The recovery (in stock prices) was only because of rate-cut expectations,” said R. Murali Krishnan, head of research at equity brokerage Ambit Capital Pvt. Ltd. “The GDP numbers came much below our expectations.” “Fund managers expect 50-100 basis points cut in both repo and reverse repo over the weekend or next week,” said the head of equity sales at a large foreign brokerage operating in India, who cannot officially speak to the media. “Bond traders also are betting on rate cuts. One bond trader pointed (out) that the yield on AAA-rated one-year paper is now lower than its lowest point in 2008.” The rupee, too, weakened, partly because the dollar rose against most Asian currencies as well as due to the growing worries that the sharp rise in the government’s fiscal deficit could lead to a ratings downgrade for India later in the year. The rupee touched a record low of 51.17 a dollar in intra-day trade and closed at 51.14, an all-time low. Offshore forward contracts were pricing a further fall in the rupee because of the slowing Indian economy: 51.50 to a dollar in a month and 52.48 in three months. Dealers said RBI did step in through state-owned banks to sell dollars in a bid to stabilize the rupee on Friday, but later withdrew. The unexpected drop in farm output worried economists. “This could be due to a high base as agriculture sector grew 6.9% during the same quarter a year ago. This could also be due to the erratic rainfall in parts of the country producing pulses,” said Joshi. Companies have been betting on strong demand from rural markets to keep their factories humming. “Is the rural consumption story at risk?” asked Citi economist Rohini Malkani in a report. Anup Roy and Nesil Staney in Mumbai and Reuters contributed to this story. Video by Rahul Sharma Graphics by Ahmed Raza Khan / Mint Source: Home - Livemint.com | 27 Feb 2009 | 6:58 pm Close: Low GDP drags Sensex by 0.7%, banks recoverNew Delhi: Markets continued to trade low under selling pressure but recovered some of the day’s lows to end 0.71% down. The Bombay Stock Exchange benchmark Sensex slid as investors off-loaded stocks on low GDP rate and weakening rupee. The government today released India’s GDP for third-quarter ended 31 December, 2008 - economy grew by only 5.3% against 7.6% (QoQ) and 8.9%(YoY). It is touted as the slowest economic growth in over five years. Click here to watch video In addition the domestic currency suffered a sharp decline with convertible rate of almost Rs52/ dollar, hence flaming worries that foreign funds may divert from buying stocks in India. Baking and FMCG sectors regained by 1.6% and 0.14% respectively but other indices traded in red with realty and oil and gas losing the most at 2.9% and 2% each. Markets opened in negative today as investors waited for GDP numbers before buying fresh positions. The 30-share BSE index then tumbled by 260 points in session after noon but recovered to close at 8,891.61 or 63.25 points down and 50-share NSE Nifty ended 22 points lower at 2,763.65. Tata Steel surged on the BSE index by 5.6% to Rs172.35 after the company announced better than expected quarterly results. Other gainers were Housing Development and Finance Corp by 4.75% to Rs1,269.20, HDFC Bank by 1.35% to Rs884.8, ICICI Bank by 1.03% to Rs328.10, Hindustan Unilever by 0.30% to Rs253.80, State Bank of India by 0.29% to Rs1,027.10 and Larsen & Toubro by 0.11% to Rs611.45. Ranbaxy Laboratories was one of the top loser, fell by 4.80% at Rs161.80. Stockholders reacted to charges of data falsification levied on the company by the US Food and Drug Administration (USFDA). Grasim Industries led the decline by 5.99% at Rs1,371.50, followed by Wipro by 3.98% at Rs207.35, Reliance Infra by 3.71% at Rs490.60, ACC Ltd by 3.55% at Rs539.80, Mahindra and Mahindra by 3.38% at Rs309.90 and ONGC by 3.37% at Rs691.15. Also there was not much positive indication from global markets – European markets opened negative as pharma stocks tumbled on Obama’s stringent healthcare plans. Japan’s stocks gained 1.5% with a brief boost to banks but Hang Seng fell by 0.7% on Wall Street loss. Video by Vaishali Jain Source: LatestNews-Home - Livemint.com | 27 Feb 2009 | 6:57 pm AI non-stop link soon for Delhi-San FranciscoNew Delhi: Starting this autumn, National Aviation Co. of India Ltd-run Air India will start flying between New Delhi and San Francisco—the longest non-stop flight between India and the US by any carrier. The longest Air India flight operates between Mumbai and New York.  Long haul: The new service will be the longest non-stop flight between India and US by any Indian carrier. Harikrishna Katragadda / Mint The date for starting the San Francisco service has not been decided but it will be only after August, Air India’s executive director Jitender Bhargava said. New international routes planned include daily New Delhi-Frankfurt-Chicago and Ahmedabad-Mumbai-Frankfurt-Newark from the summer, besides Ahmedabad-Frankfurt and Amritsar-Frankfurt-Toronto from winter. “Some of these flights are already available in the (reservation) system,” said a senior Air India executive, who didn’t want to be named, adding that the airline plans to shuffle its network in a way that domestic flights feed into the international flights at Indian metro airports and converge in Frankfurt to take the traffic forward, providing a wider choice of international destinations. The increase in flights comes despite a slowdown in global travel. India’s international air traffic between April to November last year expanded 9.4% at a time when domestic passenger traffic shrank by the same rate, according to data from civil aviation ministry. Four Boeing 777-200LR planes will join Air India’s fleet between July and September. Three more Boeing 777-200ER will join by August. “We are working on a schedule where Frankfurt will act as a hub,” said Bhargava, adding it is yet to be decided if the German airport will become its permanent European hub. Air India’s new flights to Chicago from New Delhi will touch Frankfurt as will also a Mumbai-Newark flight. The airline runs non-stop services to New York that takes around 16 hours and started in 2007 on Boeing 777-200LRs from Mumbai and New Delhi. The flight to San Francisco, expected to take under 18 hours, will be its third non-stop route to the US. No American airline offers such a long flight and Kingfisher Airlines Ltd, that had planned to start Bangalore-San Francisco flights last year, abandoned the plan and sold its Airbus SAS-made A340 aircraft. Jet Airways (India) Ltd, too, had started a flight between Mumbai-Shanghai-San Francisco but pulled it back last month, citing poor load factors. Other international carriers flying from the US provide non-stop services to their hubs in that country from which passengers can take a connecting flight across the region. American Airlines, for example, connects its New Delhi flights to Chicago, allowing passengers the option to take a connecting flight within few hours to San Francisco, while NorthWest Airlines uses Amsterdam as its hub for the same route. Air India says it is hopeful its non-stop flights will do much better. “With a lot of Indian population in the region (West Coast), we expect the flight to do well. After all a person wants to fly with the least hassles,” Bhargava said adding the airline expects to have its San Francisco-New Delhi flight to be fed by passengers from Los Angeles, Seattle and Vancouver to fill seats on its flight back to India. With the second largest population of Indians in the US living in San Francisco and surrounding areas, Robey Lal, former India head of International Air transport Association, rated Air India’s opportunity to fly passengers direct as good, so long as the airline maintains its quality of service. “It’s a great concept if you can make life on onboard comfortable,” he said. For instance, he said, passengers will want to walk around to stretch themselves on an 18-hour flight and the airline will need to factor this in “without charging them extra”. Also, he advised attention to other issues such as more leg room in the economy class, a chat area and attention to child travellers such a long flight. tarun.s@livemint.com Source: Home - Livemint.com | 27 Feb 2009 | 6:52 pm Ranbaxy shares continue to fall; Canada regulator takes actionNew Delhi / Mumbai: Share prices of Daichii Sankyo Co. Ltd and its India unit Ranbaxy Laboratories Ltd continued to fall for the second straight day after a US regulator said India’s top drug maker by sales falsified data on manufacturing standard compliances.  In a soup: Ranbaxy’s Malvinder Singh. The latest controversy has triggered varied reactions from regulators. Harikrishna Katragadda / Mint The latest development has already triggered varied reactions from other regulators. Also, India’s drug industry association has expressed concern that this could mean slower drug approvals for other pharma firms. Ranbaxy seems to be safe in the UK, for now. The country’s Medicines and Healthcare Products Regulatory Agency (MHRA) told Mint it was aware of the Food and Drug Administration’s report, and the US regulator’s concerns appear to have arisen from an associated Batamandi plant in Paonta Sahib, Himachal Pradesh, which does not supply products to the UK. “The Paonta Sahib site has been visited on a number occasions in the past by MHRA. As recently as October 2008, the site was inspected by MHRA inspectors in collaboration with inspectors from a number of other EU member states and MHRA partners,” MHRA press officer Florence Palmer said in an email. “In view of the MHRA findings at Paonta Sahib and at other Ranbaxy sites, we have no evidence to suggest that there are any data verification concerns, and hence, products will continue to be imported and marketed.” Ranbaxy’s UK sales was $38 million (Rs193 crore) in 2008. Health Canada, that country’s drug regulator said on Thursday that Ranbaxy Canada had already agreed to hold all drugs coming into the country from the Paonta Sahib factory. “Following Health Canada’s request, Ranbaxy Canada has quarantined all products imported into Canada from the Paonta Sahib site. Health Canada continues to review all information to determine if there is a risk to health or whether further regulatory action is required,” said spokesperson Alastair Sinclair in an email in response to queries from the Canadian Press. Mint’s emails and calls to Health Canada remained unanswered. Ranbaxy declined to comment on the development. “Ranbaxy had sales of $54 million in Canada in 2008, which is 3% of overall sales. So, it is not a very big market in the overall scheme of things,” said an analyst who did not want to be named. He added that if Ranbaxy is asked to stop sales in Canada, the firm’s inventory intended for that country would have to be written off. Meanwhile, the Indian industry feels cause for concern. Most of the top Indian drug makers are aggressively filing generic drug applications, or the abbreviated new drug applications (ANDAs), for registrations in the US and European markets. “We had feedback from many of our members that the FDA has tightened scrutiny of their documents, and the regulator is not ready to accept their explanations at face value since the document forging charges on Ranbaxy surfaced,” said Dilip G. Shah, secretary general, Indian Pharmaceutical Alliance, an industry body that represents top Indian drug makers. Indian companies have been experiencing delays in FDA approvals of generic drug applications, though the reasons cannot be directly linked to the Ranbaxy issue. In the last two quarters, the pace of regulatory approvals for drugs in the US has become slower due to a multifold increase in number of applications and limited expansion in resources and people in the department, among other reasons. “The average drug approval process time in the US has now extended to 30-36 months from the earlier 16-17 months,” Shah said. Whether the Ranbaxy issue will have an impact on the industry, will be “very difficult to say, though seems unlikely since the scrutiny is (already) tight,” an official of Sun Pharmaceutical Industries Ltd, India’s largest drug maker by market value, said on condition of anonymity. He added that “with the US FDA opening offices in India, which is in the long-term interest of our country, we expect to see a gradual improvement in approval time”. FDA, which is investigating a manufacturing standards non-complaince case against Ranbaxy, had on Wednesday issued a statement that it is halting review of new drug applications of Ranbaxy involving the Paonta Sahib plant because it had evidence of data falsification. radhieka.p@livemint.com Source: Home - Livemint.com | 27 Feb 2009 | 6:52 pm GMR, Malaysia Airlines arm plan maintenance facilityHyderabad: The operator of Hyderabad’s new international airport will build an aircraft maintenance facility in the city in a 50:50 joint venture with a unit of Malaysia Airlines Bhd. The GMR Hyderabad International Airport Ltd, a subsidiary of GMR Infrastructure Ltd, signed an agreement to this effect with MAS Aerospace Engineering, a wholly owned subsidiary of Malaysia Airlines, to set up an aircraft maintenance, repair and overhaul facility in the Andhra Pradesh capital. The first phase of project, involving an investment of about Rs400 crore with a debt to equity ratio of 60:40, will come up in 18 months and will have a capacity to handle 60-80 airplanes a year. GMR Infrastructure also said the global slowdown has helped it to renegotiate prices of two overseas coal mines it wants to buy. GMR Group chairman Grandhi Mallikarjuna Rao said the price renegotiation would save the firm $140 million (about Rs710 crore). GMR Infrastructure had agreed to acquire 50% in South Africa’s Homeland Mining and Energy for about $150 million and paid $15 million for a 5% holding in April. It recently decided to walk away from the deal. However, the company on 24 February acquired 33.5% in Canada’s Homeland Energy Group Ltd, the parent firm of Homeland Mining and Energy, for $30 million. Rao claims this reworked deal saved about $100 million for the company, without elaborating. Raaj Kumar, chief executive of GMR Energy Ltd, a subsidiary of GMR Infrastructure, said the steep fall in the market capitalization of the Canadian firm helped the group save substantially. In the second reworked deal, the company, which had negotiated a price of $120 million to acquire Indonesian coal mines of Barasentosa Lestari PT, renegotiated the deal at $80 million now. Using the coal available at the South Africa and Indonesia mines, GMR Infrastructure has drawn up a plan to set up coal-based power projects in India’s coastal areas. “We are scouting for suitable locations in states like Gujarat and Maharashtra in the west and Andhra Pradesh on the east coast,” Rao said. Kumar said the company is in talks with Gujarat and Maharashtra governments. “We have already signed a memorandum of understanding with the Gujarat government for setting up a 2,000MW imported coal-based power project along with a jetty. At an average cost of Rs5 crore per MW, the project is estimated to involve an investment of some Rs10,000 crore,” he said. Gujarat has offered three locations for the project, Kumar said, and the company hopes to finalize a location soon. It is also identifying a suitable location in Maharashtra, he said. Rao said the company is currently building three power projects that would have installed capacities of about 800MW. It expects to achieve financial closure for the coal-based 1,050MW power project coming up at Kamalanga, Orissa, by April this year, he said. “Another six projects with some 3,000MW capacity, mostly hydro-based that have long-gestation, are at different stages of implementation.” On Friday, GMR Holdings Pvt. Ltd, one of the promoter companies of GMR Infrastructure, informed Indian stock exchanges that it has hiked its stake in the listed infrastructure firm to 74.25% by open market purchase of some 700,000 shares during 18-24 February. “We plan to hike our holding to around 75% in the company through the open market purchases as permitted by the regulations,” said Rao. c.sukumar@livemint.com Source: LatestNews-Home - Livemint.com | 27 Feb 2009 | 6:52 pm SC notice to Centre on right to propertyNew Delhi: Following a petition asking for the restoration of the right to property to a fundamental right, the Supreme Court on Friday asked the Union government to explain why the petition should not be allowed. The court issued a notice to the government on the petition that questions a 1978 amendment to the Constitution that removed the right to property from the list of fundamental rights. In 1978, the Constitution (44th) Amendment Act was passed by the then ruling Janata Party, repealing the right to property accorded to every citizen in Article 19(1)(f) and Article 31. The fundamental right consequently became a mere legal right that could not be challenged in the courts on the basis of constitutional law. Article 31 had said: “No person could be deprived of property without due process of law” and “no property...shall be taken possession of or acquired for public purposes under any law authorizing the taking of such possession or such acquisition, unless the law provides for compensation...” The repeal of the right essentially gave the state eminent domain, or the power to take over private property for public use. Sanjiv Kumar Agarwal, a businessman and founder of the not-for-profit Good Governance India Foundation, had filed the petition in July 2007. The petition argues that since the judgement of the Supreme Court in the Kesavananda Bharati case in 1973, which held that fundamental rights are part of the basic structure of the Constitution, the later amendment abolishing the right to property was invalid. Chief Justice of India K.G. Balakrishnan issued a notice to the Union government seeking its response after senior counsel Harish Salve, appearing for Agarwal, told the bench that this was the first time a petition challenging the amendment had been brought before the court. The petition also questions the government’s SEZ policy, which allows the state to take over private property under the Land Acquisition Act. Should the right to property be restored to a fundamental right, citizens will be able to challenge state acquisition of land. The Centre’s SEZ policy is already under challenge in the Supreme Court in public interest litigations. However, Walter Fernandes, a former director of Indian Social Institute and currently head of North Eastern Social Research Centre, said even if the court decides in favour of Agarwal, it would only make a “marginal difference”. “Eighty per cent of those affected are ordinary people, many don’t have legal title over land, like landless labourers and small-time merchants, whose livelihood is attached to acquired land,” he said. He added that the Rehabilitation and Resettlement Bill, 2007 and the Land Acquisition (Amendment) Bill, 2007 approved earlier this week make it easier for the government to acquire land. malathi.n@livemint.com Source: LatestNews-Home - Livemint.com | 27 Feb 2009 | 6:51 pm SBI transfers Unitech exposure from debt funds to equity fundsMumbai: In a bid to cushion a blow to its debt schemes, SBI Funds Management Pvt. Ltd has moved debt papers it holds of embattled Delhi-based realtor Unitech Ltd into its equity schemes. This means investors in its equity schemes will have to bear any risk that the Unitech debt paper brings with it. Also See Damage Control (Graphic) By culling Unitech papers from its debt scheme, SBI Funds, the asset management venture of India’s largest bank by assets, State Bank of India, and French banking major Societe Generale SA, is essentially shielding these schemes from any default by Unitech. Credit rating agency Icra Ltd in October downgraded Unitech’s Rs100 crore short-term debt programme from A1+ to A2+ (above average credit quality). The rating was withdrawn in November after the papers matured. In January this year, Fitch Ratings India Pvt. Ltd downgraded Unitech’s Rs4,400 crore long-term debt to “B” from “BBB”, and Rs1,100 crore short-term debt programme to “F4” from “F3”. The “B” rating indicates a significantly weak credit risk relative to other issuers or issues in the country, and the “F4” rating means a highly uncertain capacity for timely payment of financial commitments. Unitech had earlier said it has cut its debt obligations due by March to Rs600 crore from Rs2,500 crore, by repaying in part Rs900 crore to mutual funds and restructuring some bank loans, as reported in Mint on 20 January. Debt schemes are conservative on their returns and a small exposure to a bad asset can severely dent performance of such schemes. Debt schemes are conservative on their returns; a small exposure to a bad asset can dent their performance Given that these five equity schemes with Unitech exposure are down 46-63% in the past year, and that investors have already factored in market volatility, a default by Unitech on this commercial paper can be better and less noticeably absorbed by equity schemes, two fund managers that Mint spoke with said. “The impact on the equity schemes in an already volatile market will be minimal,” said a distributor of funds, who didn’t want to be named as he also sells SBI Funds schemes. This is because the Unitech exposure in these schemes is 1.38-1.69% of their individual portfolios. “The larger issue is why you should penalize an investor in an equity fund for a hit that the debt fund investor should have taken, or the AMC (asset management company) itself should have taken for a call gone wrong,” he said. SBI Fund’s managing director and chief executive Achal Gupta, however, defended the firm’s move and said: “Inter-scheme transfers happen from time to time, and they’re done according to Sebi (market regulator Securities and Exchange Board of India) guidelines, in keeping with the objective of the schemes to which they are transferred.” Sebi rules say equity funds can have a debt exposure of up to 35% in their total portfolio. Mint could not independently confirm when these transfers were made, though Gupta said it would likely have been made before Unitech’s paper was downgraded by credit rating agencies. “As per law, we cannot make a transfer after the paper gets downgraded. So it must have been done in October, if not earlier,” he said, adding that even if there was a fear of a downgrade, SBI Funds would not have transferred the paper as it would have meant a dilution in the schemes’ portfolio quality. At the time of the downgrade, Fitch had said in a statement that “the downgrade reflects the company’s continued delay in raising the required funds as earlier projected and increasing uncertainty regarding its ability to service its interest cost and fulfil its immediate debt/land payment obligations.” It also said while Unitech had made some progress on its asset sales and fund raising from other sources, the quantum and timing of these remained uncertain, increasing the risk of delays in servicing its debt obligations on time. SBI Funds’ moving Unitech paper from debt to equity schemes comes in the wake of other AMCs also resorting to transferring some real estate debt papers they hold to their parent organisations. Mint had reported on 15 December, 2008, that state-owned Life Insurance Corp. of India Ltd had in October bought at least Rs1,755 crore worth of illiquid debt paper, largely of real estate firms, from its mutual fund subsidiary, LIC Asset Management Company Ltd (LIC MF). On 4 November, 2008, The Economic Times newspaper had reported that HDFC Asset Management Co. Ltd, the country’s second largest fund house by assets under management, had sold Rs650 crore worth of real estate paper to a firm that’s part of its parent, Housing Development Finance Corp. Ltd. sanat.v@livemint.com Photo by Ramesh Pathania / Mint; Graphics by Ahmed Raza Khan / Mint Source: Home - Livemint.com | 27 Feb 2009 | 6:49 pm India February gold imports nil, quiet trade seen aheadMumbai/London: India has not imported any gold so far in February as high prices dampened demand in the world’s largest market for the metal and the outlook in the coming weeks remains downbeat, the head of a leading trade body said on Friday. “Zero. There are no reports (of imports) so far,” said Suresh Hundia, president of the Bombay Bullion Association. India, which buys 500-700 tonnes of gold a year, had imported 23 tonnes last February. Prices in India have hit records over the past few weeks, partly reflecting a sharp depreciation in the value of the rupee that has made dollar-priced gold costlier. The rupee hit an all-time low of 51 a dollar on Friday, taking losses this year to 4.5%. The currency had fallen 19.15 in 2008. Domestic prices of gold climbed to a record of Rs16,040 ($316) per 10g on the Multi Commodity Exchange of India Ltd on 20 February, up 34% from a year ago. Traders said the high prices encouraged recycling of old jewellery, curtailing imports. “We sold merely 200kg,” said a dealer in a bank that imports gold for domestic consumption, about one third of what the bank sold the previous year. He said the sales were from its stock. “Who would like to place orders in such a volatile market where gold and rupee are moving randomly,” he said on condition of anonymity. Hundia said imports would remain down in the coming weeks if prices stayed around the current level. Imports in January had shrunk to 1.9 tonnes, slumping 89% from the same month last year, data from the trade body showed. Meanwhile, gold firmed in Europe on Friday as lingering risk aversion amid fresh losses on the equity markets lifted the metal from the two-week lows it hit earlier in the session. Spot gold edged up to $947.40/949.40 an ounce at 1217 GMT from $944.70 late in New York on Thursday. Earlier it touched a low of $935.70 an ounce. feedback@livemint.com Source: LatestNews-Home - Livemint.com | 27 Feb 2009 | 6:38 pm Growth nosedives to 5.3% in Q3The Indian economy grew at 5.3 per cent in the third quarter ended December 2008 the slowest pace in nearly six years as private consumption and demand for investment fell because of prevailing uncertainty in the wake of the global financial crisis.Source: Business Standard | Front Page Headlines | 27 Feb 2009 | 6:36 pm US budget: is Obama being too optimistic?US President Barack Obama’s budget combines a huge deficit in 2009 with ambitious plans to reduce it sharply by 2013, as well as major new government programmes. It’s a very high-risk strategy, requiring the economy and markets to be as responsive as US voters were to Obama’s optimism.  There’s a lot in the budget to like. Obama’s health care reforms are supposedly paid for by savings in the Medicare, the current US health plan for the elderly, and reductions in tax allowances for those earning more than $250,000 (about Rs1.26 crore). The detail evident in the medical savings proposals suggests serious thought, and that they may be achievable. Still, the $633 billion the measures are meant to save over 10 years doesn’t buy all that much healthcare reform these days. Another attractive change is the requirement for businesses that don’t currently offer retirement plans to establish them automatically for employees, who can opt out if need be. These are meant to supplement the government pension system, social security, for middle-income earners.  Charismatic numbers: US President Barack Obama’s budget assumes a modest recession with growth above 4% in 2011 and 2012. Gerald Herbert / AP However, the economic and fiscal assumptions seem optimistic. The budget assumes a modest recession with growth above 4% in 2011 and 2012. It assumes inflation below 2% annually and interest rates peaking at 5.1%, despite the large deficits. The budget also contains some uncertain revenue sources. It assumes government spending falls 10% in 2010 (which is probably feasible absent more bank bailouts) and then rises only 2% nominally in 2011 and 1% in 2012—that is, less than inflation. Finally, it assumes a 67% recovery on bailout investments, which, given the performance of recipients such as American International Group Inc., may be optimistic. Even so, the deficit would exceed $1 trillion in 2010 and is within a whisker of it in 2011. A trillion-dollar deficit for one year in a deep recession may be financeable, though the 12.3% of gross domestic product deficit in fiscal 2009 (plus refundable amounts in bailout investments) is stretching the debt markets’ capability. Three trillion-dollar deficits in succession look to be too much. Either they will crowd out private borrowers, perpetuating the recession, or they will need to be funded by money printing, producing inflation. It remains to be seen whether Obama’s optimism can work a miracle on the bond markets. Source: Home - Livemint.com | 27 Feb 2009 | 6:32 pm Fresh set of clarifications on FDI normsNew Delhi: The government on Friday issued a fresh set of clarifications on how it will define foreign direct investment (FDI), the third this month. The new clarifications defined different types of companies that can be used to bring FDI into India. The attempt is to loosen controls on Indian companies, say experts. For the first time, pure investment firms, which are used as vehicles only for FDI and have no other operations, were also defined. The definition, according to lawyers, provides a loophole for a foreign entity to use an Indian finance company as a front for its holding in another company, where the maximum possible stake it can take is limited on account of FDI rules. “The real intent is to liberalize Indian industry from the clutches of FDI norms,” said Gokul Chaudhri, partner at BMR Advisors. Rajiv Luthra, managing partner at law firm Luthra and Luthra, felt the new amendments were a booster for Indian companies as they gave them a chance to get hold of capital without losing management control. “Absolutely a great move. Before the problem was we wanted Indian-controlled companies and there was no access to capital. Now, after Press Note 4 (Friday’s clarifications), we have access to capital and control,” he said. Last week, the commerce ministry amended FDI policy (amendments were dubbed Press Note 2 and Press Note 3 of 2009 series). Interpretations of the amendments showed “back-door” FDI was now possible and sector ceilings could be violated. Also, new definitions meant companies such as ICICI Bank Ltd and Housing Development Finance Corp. Ltd, in which majority shareholding is with non-residents, would be classified as foreign companies even if their management is Indian. The new FDI amendments stem from a difference between the finance and commerce ministries on how FDI should be defined. The finance ministry felt share ownership should be the primary measure, while the commerce ministry felt it was time to shift to a joint consideration of share ownership and management control . Last week’s amendments, which received the Union cabinet’s approval, place FDI in the context of a simultaneous view of ownership and control. Consequently, guidelines have been loosened for companies in which Indian residents own majority stake and control the management of the company. The flip side is that foreign entities can use firms that are majority-owned and controlled by Indian companies to gain indirect access to sectors such as multibrand retailing, where FDI is prohibited, as the amendments’ wording does not close this loophole. “The liberal view is trust the Indian entrepreneur,” Choudhri said, while interpreting the spirit of the amendments. His analysis of Press Note 4 also showed an explicit prohibition was not built in. Officials in the department of industrial policy and promotion, who drafted the amendments, could not be reached for comment. Press Note 4, for the first time, defined an “investing company” in the context of FDI. Even as the amendments and clarification loosened norms for Indian companies, they tightened the grip on investment firms. Such firms, regardless of ownership, will be cleared by the Foreign Investment Promotion Board (FIPB), which screens FDI proposals. “Clearly, they have moved to a situation where any kind of investing company would need FIPB approval. An attempt is being made for the first time to distinguish between operating and investing companies,” Sudhir Kapadia, tax leader (technology, communications and entertainment) at audit and consulting firm Ernst and Young, said. Malathi Nayak contributed to this story. Source: Home - Livemint.com | 27 Feb 2009 | 6:30 pm Placements at IIM-B begin on a quiet note, mirror trend at peersBangalore: The first day of the placements season at the Indian Institute of Management, Bangalore (IIM-B) was quiet when compared with the rush in recent years to hire the brightest students of the graduating batch at this premier business school. The overall mood mirrored that at the Indian Institute of Management, Ahmedabad (IIM-A), where the first recruiters started their job interviews on 25 February. The economic storm and rising job losses have taken some of the sheen off a period that was till recently dominated by a frenetic rush to recruit B-school grads coupled with sky-high salary offers.  Slow uptake: Students at IIM Bangalore. The premier B-school has seen fewer recruiters this year during its placement process. Manjunath Kiran / Mint The placement process this year has been stressed, as fewer financial services firms visit campuses or recruit fewer students even if they come, says Jaivardhan Sinha, partner and co-head of the Indian practice for Booz, who was at IIM-B and made one offer for the post of a senior consultant at the India office. The exact number of companies present and offers made were not clear. Vineet Sharma, member of the IIM-B placement committee, said he would not comment until the whole process was over. The committee asked students not to speak to the media. Last year, 17-18 companies picked up 35-40% of the batch of 250 students on Day Zero. Most of them came from investment banks. Day Zero is a concept introduced by the IIMs in the mid-1990s to accommodate Wall Street investment banks without offending other recruiters. With Wall Street banks fighting for their survival and shedding jobs, Day Zero is not what it used to be. Consulting firms, consumer goods companies, engineering companies, private equity firms, commercial banks and technology firms were the major recruiters at IIMs this year. But some international banks, such as Citibank and HSBC, are visiting too. Citi made two offers at IIM Calcutta (IIM-C) and will visit IIM-B on Saturday. “We continue to remain active recruiters at B-schools,” said a Citi spokesperson over phone. The Citi India franchise typically recruits 30-40 MBAs from the country’s top B-schools and expects to recruit the same number this year. Two observers said HSBC would be visiting campuses, but the bank’s spokesperson was not available for comment. Public sector oil firms, widely believed to be the darlings of B-schools this year, said they will not hire management graduates in large numbers. India’s second biggest state-run refiner Bharat Petroleum Corp. Ltd (BPCL) said it will add 150 fresh graduates, 80% of whom will be from engineering schools such as the National Institutes of Technology. It plans to hire a total of 20-25 B-school graduates.  “(For the) public sector, pay and allowances are not a huge variable in attracting people,” said S. Mohan, director of human resources at BPCL. “If you are an engineer, you are putting a new pipeline. If you want to be part of it, come and join us. We are running 8,000 outlets. If you want to make a difference there, then you join us.” A member of Mohan’s on-campus recruitment team said BPCL has got invitations from IIM-B and IIM-C to recruit on campus, but may not be able visit them. IIM-C placed 207 out of a total of 265 students of its batch passing out in 2009, according to a statement issued on Thursday. This includes so called pre-placement offers and laterals, or jobs offered to students with work experience. The second leg of placements, which starts on 2 March, will seek to place the remaining 58 students. This is the first time placements at IIM-C are taking place in two parts. The school says this is due to the final examinations that started 25 February. India’s premier B-school, IIM-A, saw a mere seven companies turn up on 25 February, significantly down from 25 on Day Zero the previous year. The concept of Day Zero, Day One and Day Two hold little significance this year as it is widely acknowledged as a “buyers” market. Placements, which typically wind up in five days, are likely to extend to weeks this year. As with every other B-school in the world, IIM-C, too, faced an unprecedented challenge in placing its students this year, a statement from the school said. Salaries at IIM-C dipped by 10% over the previous year. According to T.C. Meenakshisundaram, founder and managing director at Bangalore-based venture capital firm IDG Ventures India Advisors Pvt. Ltd, there will be a drop in compensation. “Most companies, though it has not come out in public, have taken salary cuts. So, there is little reason for giving equal or more to freshers who are joining.” IDG took four B-school graduates for summer internships from IIM-B and the Faculty of Management Studies, Delhi in mid-2008, and is not participating in the placement process as they prefer to recruit after internships. Lateral placements, which concluded in mid-February at IIM-B, saw about 40-50 offers, down from 75 offers made in the previous year. This year, a number of students who got offers during lateral placements accepted them and signed out of the final placement process. In a good year, students who get offers during lateral placements delay accepting them, hoping to grab more attractive ones in the final process. Lateral placements, which took place from January to mid-February, are for students with at least 22 months of work experience. Other B-schools in the country are having it much worse, with some even reaching out to placement consultants for help. For instance, the Institute of Management Technology (IMT) at Nagpur, Maharashtra has tied up with a couple of consultants to help place their students, said Anwar Ali, director at IMT. Aveek Datta in Kolkata and Aparna Kalra in New Delhi contributed to this story. Source: Home - Livemint.com | 27 Feb 2009 | 6:28 pm Boards meet on 2 Mar for RIL-RPL mergerMumbai: In a move that was not unexpected, Reliance Industries Ltd, or RIL, India’s most valuable company, is considering merging its biggest subsidiary, Reliance Petroleum Ltd, or RPL, with itself as it becomes clearer that US energy firm Chevron Corp. is unlikely to increase its stake in the stand-alone refiner. A quick poll of three analysts tracked by Mint on the proposed swap ratio threw up two numbers. The first ratio was derived on the basis of the share prices of the two companies, with one RIL share for about 17 shares of RPL. On the basis of the book value, the ratio was put at one RIL share for every 24 shares of RPL. The book value of RIL shares is Rs700 and for RPL, Rs30. The boards of both companies will meet on 2 March to consider the move, the firms said in separate statements to the stock exchanges on Friday after market hours. Also See Joining Hands? ( Graphic ) Analysts say a merger was on the cards but the timing has come as a surprise. “It is on expected lines, when it became clear that Chevron would not exercise its option to subscribe to more shares in RPL,” said an analyst from a domestic brokerage, who asked not to be named. “The merger move makes it certain that Chevron will not increase its stake in RPL.” RPL, in which RIL has a 70% stake, started trial production in January at its 580,000 barrels-per-day (bpd) refinery in Jamnagar, next to its parent’s 660,000bpd refinery. With a combined capacity of 1.24 million bpd, they form the world’s largest refinery complex. Chevron has a 5% stake in RPL. It has till 27 July, or three months from commissioning of the refinery, to exercise an option to increase its stake. Mint had reported earlier in February that Chevron’s spending programme for 2009 had not factored in plans to exercise an option to raise its stake in RPL by 24 percentage points, an investment seen as crucial by many experts. Analysts said a merger was on the cards, but the timing was a surprise P.M.S. Prasad, RPL executive director and a senior executive in RIL, declined to comment on Chevron’s plans for RPL. However, at the KG basin site on Friday, he told reporters RPL had not signed any supply and offtake deal with Chevron. The proposed agreement had envisaged Chevron supplying 35% of RPL’s crude requirement for its new refinery and procuring 45% of the final product from the refinery. This is the second time RIL is merging a refinery business with itself. In 2002, under the chairmanship of Dhirubhai Ambani, the company had merged its earlier refinery subsidiary, also called Reliance Petroleum Ltd, with itself. The treasury shares accruing from the merger amounting to 11% of the merged company are still lying unsold with RIL. The latest merger, if approved by the board, will create a further tranche of treasury shares. Officials at RIL declined to comment on the proposed merger. However, persons close to RIL said the merger would enhance its position as an integrated energy company and the new entity would gain from significantly higher financial strength and flexibility. The merger is also likely to add to RIL’s earnings from the first year itself, they said. One reason, they said, is that the markets ascribe higher valuation for integrated energy companies vis-à-vis standalone refiners due to better competitive positioning and reduced earnings volatility. Further, the deal would put RIL among the world’s 50 most profitable companies and among the top 10 non-state owned refining firms globally. The merger will also give the combined entity enhanced weightage in domestic indices. In a 10 February report, Sanjeev Prasad and Gundeep Singh of Kotak Institutional Equities Research wrote while benchmark refining margins are bouncing back, led by expansion in gasoline and naphtha cracks, the impact would be muted for Indian public sector units as well as for RIL and RPL due to high proportion of diesel in product sales. Further, large capacity additions plus demand weakness would keep margins under pressure, they added. Analysts Pradeep Mirchandani and Adarsh Parasrampuria of JPMorgan wrote in a report on RIL and RPL, Testing Times, that the outlook for these companies was still cloudy even as refining margins and petrochem spreads rebounded in the fourth quarter of fiscal 2009. “However, the cyclical business outlook continues to depend on the sustainability of demand and supply discipline, clarity on this could take two quarters,” they wrote. “It (gains from the merger) is not obvious to me. Prima facie, I don’t see huge benefits accruing from this merger,” the analyst from a domestic brokerage mentioned earlier said. “In bank mergers, there are benefits like branch and employee rationalization. In this case, we don’t see such benefits accruing via a merger.” As another likely reason for the merger, the analyst said RIL would get tax benefits from its plant in a special economic zone, which provides for a complete tax holiday to SEZ units for a period of five years from commissioning. On 31 December, Standard and Poor’s Ratings Services downgraded its credit outlook on Reliance Industries to negative from stable, but reaffirmed its long-term corporate credit rating of “BBB”. The agency said the negative outlook reflected RIL’s increased debt to add pressure on profitability due to the downturn in the commodities and oil refining stemming from the economic slowdown. satish.j@livemint.com Graphics by Ahmed Raza Khan / Mint Source: Home - Livemint.com | 27 Feb 2009 | 6:27 pm Apple board forced into spotlight with Jobs on leaveSan Francisco: Directors at Apple Inc., after taking a back-seat role for years to chief executive Steve Jobs, were forced to respond to investors on 25 February as they pushed for an update on Jobs’ health. Apple’s co-lead directors, Arthur Levinson and Bill Campbell, each answered questions at the company’s annual meeting on how the board has handled disclosures about Jobs’ health, succession planning and executive pay at the firm. In past years, Jobs has dominated the meeting, with board members sitting quietly in the first row of the audience. Analysts have faulted the board for not talking about Jobs’ health sooner and in more detail Standing up to address a packed room, Levinson, CEO of Genentech Inc., said that “nothing has changed” since Apple’s disclosure on 14 January that Jobs was taking a five-month medical leave. “He certainly remains the CEO—he’s responsible and deeply involved in all strategic matters,” said Levinson, who has served on Apple’s board since 2000. Corporate governance experts have faulted Apple’s board, which includes former US vice-president Al Gore and Google Inc. CEO Eric Schmidt, for not talking about Jobs’ health sooner and in more detail after concerns about his weight loss last year caused movements in the stock price. Jobs, a cancer survivor, missed the annual meeting for the first time in at least a decade. While giving shareholders updates isn’t a rule, Apple’s board will probably be compelled to talk more about Jobs’ health if anything changes significantly, said Jahan Raissi, a partner at Shartsis Friese Llp. in San Francisco. He was a former senior counsel in the enforcement division of the Securities and Exchange Commission (SEC). Apple fell $1.97 (Rs100), or 2.2%, to $89.19 at 4pm New York time in Nasdaq stock market trading on Thursday. The shares have gained 4.5% this year. The gathering—held in the same auditorium at Apple’s Cupertino, California, headquarters where Jobs typically introduces new products—was the biggest public assembly of directors at an annual meeting in the past three years. Levinson and Intuit Inc. chairman Campbell, seated in the front row, were flanked by four other independent directors: Gore, J Crew Group Inc. CEO Millard “Mickey” Drexler, Avon Inc. CEO Andrea Jung and former International Business Machines Corp. finance chief Jerome York. The only board members absent were Jobs and Schmidt. On 5 January, Jobs had said treatment for his weight loss was “relatively simple”. Nine days later, he announced he would take leave after learning his health issues were “more complex” than he originally thought. SEC started an investigation into the disclosures to determine whether investors were misled, a person familiar with the matter said last month. The review doesn’t mean investigators have seen evidence of wrongdoing. Apple general counsel Daniel Cooperman declined to comment on the SEC investigation. Jobs, who co-founded Apple in 1976 and was ousted in a management coup in 1985, returned to lead the company in 1997. One of the first things he did was to replace all but two of the board members. His picks included Campbell, a former Apple executive, and York, an adviser to Tracinda Corp. chief Kirk Kerkorian. “It’s a very secretive culture, a very closed culture,” said Conrad Mackerron, director of corporate social responsibility for As You Sow, an environmental advocacy group in San Francisco. The group, which met Jobs two years ago to talk about Apple’s environmental policies, submitted a shareholder proposal asking that the company provide more details on its effort to cut carbon emissions. Only shareholders were allowed into the meeting hall and able to ask questions. Campbell, 68, used his time at the microphone to talk about the board’s decision to vote against a “say-on-pay” proposal. He said the board wanted to retain the flexibility to reward executives as “we see fit”. “You can sense there’s more disclosure”, in that board members were forced to answer questions, said Gene Munster, an analyst with Piper Jaffray and Co. in Minneapolis, who has recommended investors buy Apple’s shares since June 2004. “It’s a good thing that Apple is more transparent.” Investors still want more information, said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Oregon. “If I was a shareholder, I would have been upset if I heard them say, ‘He was fine, it’s a hormone imbalance’ and then nine days later, hear him say ‘I’m taking leave’,” said Hargreaves, who rates Apple shares “outperform”. Source: LatestNews-Home - Livemint.com | 27 Feb 2009 | 6:24 pm Apple board forced into spotlight with Jobs on leaveSan Francisco: Directors at Apple Inc., after taking a back-seat role for years to chief executive Steve Jobs, were forced to respond to investors on 25 February as they pushed for an update on Jobs’ health. Apple’s co-lead directors, Arthur Levinson and Bill Campbell, each answered questions at the company’s annual meeting on how the board has handled disclosures about Jobs’ health, succession planning and executive pay at the firm. In past years, Jobs has dominated the meeting, with board members sitting quietly in the first row of the audience. Analysts have faulted the board for not talking about Jobs’ health sooner and in more detail Standing up to address a packed room, Levinson, CEO of Genentech Inc., said that “nothing has changed” since Apple’s disclosure on 14 January that Jobs was taking a five-month medical leave. “He certainly remains the CEO—he’s responsible and deeply involved in all strategic matters,” said Levinson, who has served on Apple’s board since 2000. Corporate governance experts have faulted Apple’s board, which includes former US vice-president Al Gore and Google Inc. CEO Eric Schmidt, for not talking about Jobs’ health sooner and in more detail after concerns about his weight loss last year caused movements in the stock price. Jobs, a cancer survivor, missed the annual meeting for the first time in at least a decade. While giving shareholders updates isn’t a rule, Apple’s board will probably be compelled to talk more about Jobs’ health if anything changes significantly, said Jahan Raissi, a partner at Shartsis Friese Llp. in San Francisco. He was a former senior counsel in the enforcement division of the Securities and Exchange Commission (SEC). Apple fell $1.97 (Rs100), or 2.2%, to $89.19 at 4pm New York time in Nasdaq stock market trading on Thursday. The shares have gained 4.5% this year. The gathering—held in the same auditorium at Apple’s Cupertino, California, headquarters where Jobs typically introduces new products—was the biggest public assembly of directors at an annual meeting in the past three years. Levinson and Intuit Inc. chairman Campbell, seated in the front row, were flanked by four other independent directors: Gore, J Crew Group Inc. CEO Millard “Mickey” Drexler, Avon Inc. CEO Andrea Jung and former International Business Machines Corp. finance chief Jerome York. The only board members absent were Jobs and Schmidt. On 5 January, Jobs had said treatment for his weight loss was “relatively simple”. Nine days later, he announced he would take leave after learning his health issues were “more complex” than he originally thought. SEC started an investigation into the disclosures to determine whether investors were misled, a person familiar with the matter said last month. The review doesn’t mean investigators have seen evidence of wrongdoing. Apple general counsel Daniel Cooperman declined to comment on the SEC investigation. Jobs, who co-founded Apple in 1976 and was ousted in a management coup in 1985, returned to lead the company in 1997. One of the first things he did was to replace all but two of the board members. His picks included Campbell, a former Apple executive, and York, an adviser to Tracinda Corp. chief Kirk Kerkorian. “It’s a very secretive culture, a very closed culture,” said Conrad Mackerron, director of corporate social responsibility for As You Sow, an environmental advocacy group in San Francisco. The group, which met Jobs two years ago to talk about Apple’s environmental policies, submitted a shareholder proposal asking that the company provide more details on its effort to cut carbon emissions. Only shareholders were allowed into the meeting hall and able to ask questions. Campbell, 68, used his time at the microphone to talk about the board’s decision to vote against a “say-on-pay” proposal. He said the board wanted to retain the flexibility to reward executives as “we see fit”. “You can sense there’s more disclosure”, in that board members were forced to answer questions, said Gene Munster, an analyst with Piper Jaffray and Co. in Minneapolis, who has recommended investors buy Apple’s shares since June 2004. “It’s a good thing that Apple is more transparent.” Investors still want more information, said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Oregon. “If I was a shareholder, I would have been upset if I heard them say, ‘He was fine, it’s a hormone imbalance’ and then nine days later, hear him say ‘I’m taking leave’,” said Hargreaves, who rates Apple shares “outperform”. Source: Tech News - Livemint.com | 27 Feb 2009 | 6:24 pm The week in reviewNew Delhi: With the elections around the corner, the government this week threw all caution to the winds and opened the floodgates for unbridled spending. Stand-in finance minister Pranab Mukherjee, who stuck to the rule-book in the interim budget, announced a third stimulus package on Tuesday that would cost the exchequer an additional 0.5 % of GDP. Two days later, commerce minister Kamal Nath announced sops for exporters worth Rs325 crore. Click here to watch video The government raised the dearness allowance for central government employees and pensioners by 6%, costing another Rs6,000 crore to the exchequer. Petroleum minister Murali Deora hinted that he could cut diesel prices and the Opposition was quick to hit at out at the government. BJP spokesperson Rajiv Pratap Rudy said: “It is a desperate bid to position themselves politically. I don’t think people are going to accept them through their press conferences. What they should have done was to perform, which they have not done in the last five years.” According to some economists: “The RBI is now expected to cut rates further. But that alone may not help.” “The revival package addresses some of these concerns but as you know the slowdown has come after one and a half years of squeezing in monetary policy. I don’t think you can expect overnight improvement in performance either. One thing RBI can do to discourage banks form keeping funds with the RBI is to cut down reverse repo rates further”, says Anjan Roy, Advisor, FICCI. Meanwhile the real economy continued to gasp for breath in intensive care. Third-quarter GDP estimates plunged to 5.3% as opposed to 6% predicted by most polls. The rupee plunged to record low of Rs50.69. In the coming days, it is expected to go even lower at Rs51 to a dollar. S&P lowered its outlook on India and it now appears that Indian economy is in deep slowdown as any other Asian nation and in fact China may recover faster. At fraud-hit Satyam, the suspense over who would hold majority stake in the company may be coming closer to an end. Although the company’s new board has not yet made an announcement, Mint has reported it will initially offer only a 31% stake to a strategic investor through the preferential route. It wants the winning bidder to buy a further 20% through a mandatory open offer to minority shareholders. The board would consider another preferential offer if the investor fails to get a 51% stake after the open offer concludes. An official who did not want to be named told Mint that the intention was to provide an exit route to the company’s minority shareholders through the open offer and to bring much needed funds into the company. In the boom time preceding the slowdown, Indian companies went shopping across the globe and many high profile deals were struck, the high point being Tata’s $12.1 billion acquisition of UK steel giant Corus and Hindalco’s Novelis buy of nearly $6 billion. But with the meltdown kicking in, doubts are being raised about the rationale of such deals. Counting deals only above $100 million - 54 listed Indian companies concluded $45 billion worth of mergers and acquisitions between 2005 and 2008. Now, 85% of these deals are valued at a loss and together they are worth less than half at $21 billion. Says CEO and equity head SMC Capitals, T. Jagannadham: “This raises the questions whether such deals were smart buys by Indian companies or smart sales by foreign companies.” Apart from telecom all other sectors have seen massive wealth erosion. The auto sector has seen maximum deterioration with media and entertainment coming second. Hospitality and aviation deals too are seeing a rough time. Analysts say part of the reason is the deals were done at the peak of their respective industry cycles, with no thought of a possible downturn. Perhaps indicating that it is time for Indian dealmakers to reassess their M&A strategies. When Slumdog Millionaire swept the Oscar awards, it didn’t come as a surprise to the world. The movie was a favourite through the run up to the final event. India rejoiced with A.R. Rahman winning two, one along with writer Gulzar and the third going to sound recordist Resul Pookutty. Those in the Mumbai music industry were ecstatic. Resul Pookutty’s win for sound engineering is expected to do a lot for the industry. The Oscar wins have made India proud. Now it is to be seen, how good the win will be for business. Source: LatestNews-Home - Livemint.com | 27 Feb 2009 | 6:06 pm Corporate | L&T appoints Citi, Nomura on SatyamMumbai: Indian engineering and construction firm Larsen and Toubro Ltd (L&T) has appointed Citigroup and Nomura as advisers on a potential deal for Satyam Computer Services Ltd, three banking sources with knowledge of the deal said on Friday. L&T is the largest shareholder in Satyam, having built up a 12% stake last month, and has asked the two firms to start work on a possible bid, the sources said. They declined to be named as they are not authorized to talk to the media. “As expected, we are clearly waiting for the signals and guidelines from the Satyam board to proceed. We see some action next week,” one source said. L&T and Citigroup declined to comment, while Nomura could not be reached immediately. Separately, Price Waterhouse, the Indian affiliate of global accounting firm PricewaterhouseCoopers, said it received a notice from Securities and Exchange Board of India in connection with the investigation of the accounting fraud at Satyam Computer Services Ltd. The notice is under examination, Price Waterhouse said in an emailed statement on Friday. As this is an ongoing investigation at a preliminary stage, it is inappropriate to comment further. We continue to cooperate fully with the ongoing investigations into Satyam, the auditing firm said. ********* Elder Pharma to buy majority stake in UK’s NeutraHealth Elder Pharmaceuticals Ltd has informed Bombay Stock Exchange that its wholly owned Dubai subsidiary has made an unsolicited offer to NeutraHealth Plc, UK, in which it has 21% stake. “The approach may or may not lead to a partial offer that would result in the subsidiary’s shareholding increasing from 21% to between 50 and 60%. The indicative partial offer price is at or around 5.5 pence per share,” the company informed the stock exchange on Friday. The UK company, which is one of the leading nutraceutical companies, posted sales of around Pounds 25 million last year. Elder Pharma’s executive director Alok Saxena said the deal will help the Indian company to enter the UK’s growing nutraceutical market, besides a manufacturing outsourcing opportunity for Elder Pharma in India. — C.H. Unnikrishnan ********* Source: LatestNews-Home - Livemint.com | 27 Feb 2009 | 6:03 pm Telecom | I-T dept searches Alcatel-Lucent officeNew Delhi: The income-tax (I-T) department on Friday conducted searches in the Gurgaon office of global telecom company Alcatel-Lucent for suspected evasion of tax deduction at source (TDS) by the firm on goods and services sold in India. Official sources in the I-T department said the raids were conducted at the head office of Alcatel-Lucent in Gurgaon. A company spokesperson said the searches are part of the department’s “normal and regular routine survey”. Source: LatestNews-Home - Livemint.com | 27 Feb 2009 | 5:58 pm Banks to wait and watch on rates - chiefsMUMBAI (Reuters) - Banks will take a wait and watch approach before cutting lending and deposit rates, senior bankers said on Friday after a meeting with top RBI officials.Source: Reuters: Money News | 27 Feb 2009 | 4:38 pm Govt expenditure, inventories prop up growth; agriculture lags The government’s final consumption expenditure contributed as much as 42% to the y-o-y growth in GDP at market prices, less discrepancies. In contrast, the contribution of gross fixed capital formation was lower, at 33%. Here’s the contribution of the other items: private consumption expenditure 64%; imports less exports -56%; changes in stocks 19% and changes in valuables -2%. The change in inventory was high, implying unsold stocks. Inventories rose by a huge 101% compared with the level at the end of the previous quarter. That indicates a part of the GDP growth is illusory. Also See Illusionary Growth (Graphic) The surprise was mainly due to the dismal figures for agriculture. The government’s advance estimates of growth for the full year, made a few weeks ago, had implied a growth rate of 2.4% for agriculture in the second half of the year. If agriculture had grown at that rate in the December quarter, the GDP growth rate would have been 6.3%, higher than what the market was expecting. Some analysts said the contraction in agriculture was the result of a statistical quirk and Abheek Barua, chief economist at HDFC Bank Ltd, says reports on the ground indicate farm growth is likely to bounce back in the next quarter. Looking at the break-up of GDP growth by sectors, the y-o-y growth in GDP at factor cost is due to growth in the services secor, including construction. Here are the numbers: growth in services 106% of incremental GDP at factor cost, growth in manufacturing remains flat, growth in mining 2% of incremental GDP, growth in electricity, water, etc., 1% and agriculture declines by 9%. Within services, growth in community, social and personal services (mainly government pay) totalled 38% of incremental GDP growth. The key question: Is GDP growth going to get better in the March quarter? It’s true that the liquidity crisis of the last quarter has been overcome and the ABN Amro Purchasing Managers’ Index seems to show higher growth in manufacturing. But export growth could turn negative and it remains to be seen whether government consumption expenditure can continue to grow so rapidly. For how long can services carry the burden of the entire GDP growth? Both construction and real estate growth are expected to decelerate. Also, the December manufacturing data had shown a slowdown in consumption. Bank lending contracted in January and although it has since picked up, de-stocking by firms is continuing. Even if agriculture turns around, growth in the March quarter is likely be only slightly better than the previous quarter. It’s obvious that a monetary boost is sorely needed. Graphics by Paras Jain / Mint Write to us at marktomarket@livemint.com Source: Home - Livemint.com | 27 Feb 2009 | 4:18 pm Govt to use intervention bonds to fund deficitMUMBAI (Reuters) - The Reserve Bank of India (RBI) said on Friday it will convert 450 billion rupees ($8.8 bln) of intervention bonds into federal bonds in instalments by the end of March, helping the government plug a budget funding hole.Source: Reuters: Money News | 27 Feb 2009 | 3:54 pm
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