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Will exit Satyam if financial data is incomplete: iGATECommenting on the Satyam sale, Phaneesh Murthy, CEO of iGATE, said that the availability of financials brought them back into the bidding race. iGATE, Murthy added, is bidding along with large US PE fund and stated that he would walk away if he is uncomfortable with the disclosed financials.Source: Moneycontrol Top Headlines | 14 Mar 2009 | 3:21 pm MAs prejudicial to minority members interest: SP TulsianSP Tulsian of sptulsian.com said even if minority shareholders find a merger or acquisition prejudicial to their interest, they cannot raise their voice as concerns should be first raised by the nonpromoter category. \"In the recent past, we have seen promoters merging their closely held companies to increase their stakes in the merged entity.\"Source: Moneycontrol Top Headlines | 14 Mar 2009 | 2:55 pm Mergers acquisitions: A historical perspectiveHistorically, there are lot of controversies involved as far as the MA deals are concerned, reports CNBCTV18s Sunita Nagpal. Shareholders of Tata Steel found the acquisition price of Corus ar USD 12.2 billion too high. Similar concerns were expressed when Hindalco acquired Novalis.Source: Moneycontrol Top Headlines | 14 Mar 2009 | 1:20 pm Qualified Satyam bidders to show bank guarantee of Rs 100crSatyam has mailed the Request for Proposals, or RFPs, to the registered entitites late last night. It is believed that the qualified bidders will have to furnish a bank guarantee of Rs 100 crore two days before submitting the final bid. It has also attached a twoyear lockin period on the sale of Satyam assets.Source: Moneycontrol Top Headlines | 14 Mar 2009 | 1:13 pm Plastic lobby fights back against Delhi govts banAfter a plastic ban by the Delhi government, the plastic lobby has hit back. Use plastic to be environment friendly, that\'s the latest message across the city. CNBCTV18\'s Priyanka Dube delves deeper.Source: Moneycontrol Top Headlines | 14 Mar 2009 | 1:10 pm Toyota India Increases Prices - Autorama.in
Source: Google News India - Business | 14 Mar 2009 | 12:57 pm G20 skirts discord to focus on rescue fund boostHORSHAM, England (Reuters) - G20 finance ministers sought on Saturday to reassure struggling countries that they could rely on international aid, but they differed on what to do next about fighting the worst economic crisis since the 1930s.Source: Reuters: Money News | 14 Mar 2009 | 12:53 pm Washington Post to cut business section !The Washington Post will stop publishing a business section six days out of the week and move business news to the front section of the paper at a time when finance stories dominate world headlines.Source: Zee News : Business | 14 Mar 2009 | 12:18 pm US assures China over bond investments!President Barack Obama`s aides scrambled to assure China that its hundreds of billions of dollars in US bonds were safe, after Premier Wen Jiabao expressed concerns about "the safety" of its investments.Source: Zee News : Business | 14 Mar 2009 | 12:18 pm BRIC nations say no contribution to IMF without representation!Brazil, Russia, China and India will contribute no extra money to the International Monetary Fund until they have bolstered their voting power at the agency, Brazil`s finance minister said on Friday.Source: Zee News : Business | 14 Mar 2009 | 12:18 pm `Inflation lowers, not prices`!Lower inflation rate only means the rate of rise in prices has come down, not the actual prices.Source: Zee News : Business | 14 Mar 2009 | 12:18 pm G20 minister meet, deny split!Ministers of G20 countries hold talks today to form consensus ahead of a vital April 2 summit.Source: Zee News : Business | 14 Mar 2009 | 12:18 pm Pakistan govt asks army to deploy troops in IslamabadIslamabad: Pakistan on Saturday ordered troops to be deployed at sensitive areas in the capital as the threat by the opposition to go for a mass sit-in outside the Parliament neared, but the army said the deployment would take place “only if the situation warrants.” The army said it had received a request from the government to deploy troops at sensitive locations to maintain law and order during the protest by lawyers and opposition parties. The troops will remain on alert and will “move only if the situation warrants it”, chief military spokesman Maj Gen Athar Abbas told Dawn News channel. He refused to identify the sensitive locations. The lawyers’ movement and opposition parties, including former premier Nawaz Sharif’s PML-N, launched a “long march” on 12 March to pressure the ruling Pakistan People’s Party to reinstate judges deposed by former President Pervez Musharraf. The organisers of the protest have said it will end with a sit-in near parliament but the government has said it will not let the demonstrators enter Islamabad. Source: LatestNews-Home - Livemint.com | 14 Mar 2009 | 12:04 pm IT Dept attaches Pyramid Saimira\'s bank accountsChennaibased media company Pyramid Saimira is in trouble. It admits that the Income Tax Department has attached all its bank accounts, and operations have come to a stand still.Source: Moneycontrol Top Headlines | 14 Mar 2009 | 11:52 am Diamond workers of Gujarat revert to agriculture due to recessionDiamond workers in Gujarat, who lost their jobs due to ongoing economic recession are making profits by taking up agriculture.Source: Daily News & Analysis: Money News | 14 Mar 2009 | 10:43 am Lijjat - Empowering women through papads for 50 yearsA group of illiterate housewives with lots of time but no resources used to spend the day gossiping in their cramped, lower middle-class Mumbai building till they hit upon the idea of selling papads. Fifty years later, their entrepreneurial effort, Lijjat Papad, is an award-winning company with an annual turnover of Rs.5 billion (Rs.500 crore/$97 million).Source: IndiaeNews.com: Business News | 14 Mar 2009 | 10:30 am World economy could stifle OPEC's urge to cutVIENNA (Reuters) - OPEC ministers in Vienna this weekend will debate whether the best policy is strict compliance with existing curbs or a new set of output cuts as they balance the issues of bulging oil stocks and a bruised world economy.Source: Reuters: Money News | 14 Mar 2009 | 10:13 am Bajaj Auto denies delay in car project with Renault-Nissan - India Infoline.com
Source: Google News India - Business | 14 Mar 2009 | 9:42 am Qualified Satyam bidders to show bank guarantee of Rs 100cr - Moneycontrol.com
Source: Google News India - Business | 14 Mar 2009 | 9:37 am Opec estimates oil demand to dip by 1 mb/d as global growth declines - Financial Express
Source: Google News India - Business | 14 Mar 2009 | 9:14 am Colourful splash at Dalal Street; Sensex up 5.17% in the week - Hindu Business Line
Source: Google News India - Business | 14 Mar 2009 | 8:45 am DLF to seek cheaper funds for Haryana metro projectDLF Metro Ltd on Friday said it will approach India Infrastructure Finance Company Ltd (IIFCL) to seek lower cost funds for the Rs 742crore project of building 6.1 km of metro rail tracks in Haryana.Source: Moneycontrol Top Headlines | 14 Mar 2009 | 8:42 am Global rally prompts Indian bulls, Sensex up 5.17 percentIndian equities markets raced to keep up with a global rally after a two-day break as bulls overshadowed the sceptics, pushing a key index up 5.17 percent from its close the previous week.Source: IndiaeNews.com: Business News | 14 Mar 2009 | 7:31 am CFL lamps to cost Rs.15 eachThe government will provide energy-efficient compact fluorescent lamps (CFL) at Rs.15 each all over the country, says the head of India's Bureau of Energy Efficiency (BEE).Source: IndiaeNews.com: Business News | 14 Mar 2009 | 7:00 am Hind Unilever to focus on developing food biz - Sify
Source: Google News India - Business | 14 Mar 2009 | 6:27 am Wipro Infotech bags Rs 1180 cr outsourcing deal - Sify
Source: Google News India - Business | 14 Mar 2009 | 6:13 am Need to work with other countries on economic crisis: ObamaWashington: US President Barack Obama said there is a need to coordinate with other countries on the economic crisis so that there is match of the efforts being undertaken by the US in this regard. “We’ve got to do some coordination with other countries in order to assure that what we do here in the United States corresponds with strong efforts overseas,” Obama said in his remarks after meeting Paul Volcker, chairman of his Economic Recovery Advisory Board. Obama has been talking with the world leaders in the past few weeks in this regard, and this would be his agenda at the upcoming G-20 summit at London next month, which among others would also be attended by India Prime Minister Manmohan Singh. Lawrence H Summers, Obama’s top economic adviser, said the President will be working on the global growth strategy at the G-20. “Priorities will include spurring demand around the world and assuring the adequacy of funding for emerging markets,” Summers, the director of the National Economic Council, said in his speech at the Brookings Institute. “These are issues both for global recovery - at a time when 2009 is likely to be the first year of negative global growth since the Second World War - and for a healthy, less debt-dependent US expansion,” he said. ”Globally, the US must lead a levelling-up of regulatory standards, not as has happened all too often in the recent past, trying to win a race to the bottom,“ Summers said. Later the White House spokesman, Robert Gibbs said: “The President and the economic team believe that it’s important that we monitor what will and has been done by different countries in order to make up for the projected downturn in GDP and how that affects the global economy.” However, he said Obama and his team are not going to Europe “looking for everyone to sign on the dotted line and accept a certain percentage, but to evaluate continually what is suggested, what is being done, and to ensure that as our economies change, that we’re continuing to evaluate whether additional steps - if the 2% in some countries haven’t been made, can be looked at.” The US President looks forward to working with countries in the G-20 to ensure that they are making progress and continually evaluating what has to happen to address the economic challenges. Gibbs said on the agenda of G-20 will be a continued discussion about how to update the financial regulatory framework. Source: LatestNews-Home - Livemint.com | 14 Mar 2009 | 6:10 am Oh dear! Lower inflation doesn't mean lower pricesAlpana Singh, a homemaker in north Delhi, should be rejoicing that India's annual rate of inflation has fallen to a six-year low. Instead, she is ruing that her household budget has hit the roof.Source: IndiaeNews.com: Business News | 14 Mar 2009 | 6:00 am Stimulus plan beginning to have its impact: SummersThe USD 787-billion stimulus plan has started showing signs of positive impact on the US economy within a month of being put into force.Source: Daily News & Analysis: Money News | 14 Mar 2009 | 5:51 am BRIC nations say no IMF cash without representationHORSHAM, England (Reuters) - Brazil, Russia, China and India will contribute no extra money to the International Monetary Fund until they have bolstered their voting power at the agency, Brazil's finance minister said on Friday.Source: Reuters: Money News | 14 Mar 2009 | 4:36 am American recklessness led world to recession: Canada PMIn the first such attack by any western leader, Canadian Prime Minister Stephen Harper has blamed reckless American consumers and investors for leading the world into the current recession and said the marketplace is not the solution to the problems.Source: IndiaeNews.com: Business News | 14 Mar 2009 | 4:30 am U.S. energy chief urges OPEC to spare world economyWASHINGTON (Reuters) - U.S. Energy Secretary Steven Chu said late on Friday that OPEC ministers should take into account the harm high oil prices can do to the global economy when they meet in Vienna this Sunday to discuss whether to carry out another oil production cut.Source: Reuters: Money News | 14 Mar 2009 | 2:40 am Sunil Mittal clears air on Kohli's stake sale - Economic Times
Source: Google News India - Business | 14 Mar 2009 | 12:53 am Sensex makes highest one-day gain in 3 monthsMumbai, March 13 Sensex on Friday recorded its highest single-day point gain (413 points) in three months, pushed up by short covering and institutional buying.Source: Business Line - Home Page | 14 Mar 2009 | 12:00 am Rains soon for Maharashtra, Andhra PradeshThiruvananthapuram, March 13 Stray moisture continued to be dumped as cloud-bursts over Kerala and a few places over interior Tamil Nadu and south interior Karnataka through Thursday.Source: Business Line - Home Page | 14 Mar 2009 | 12:00 am Aviation cos leave lease rental exposures unhedgedBangalore, March 13 Aviation companies have left their lease rental exposures unhedged despite the sharp 30 per cent exchange rate depreciation since the beginning of this financialSource: Business Line - Home Page | 14 Mar 2009 | 12:00 am Unilever steps up drive to cut costs at global levelMumbai, March 13 Consumer goods major Unilever Group has stepped up its cost cutting drive at the global level, with more focus on protecting cash flows, to battleSource: Business Line - Home Page | 14 Mar 2009 | 12:00 am Spice Corp, L&T get ready with expert teamsHyderabad, March 13 Even as the Satyam Computer Services board is in the process of sending Request for Proposals (RFPs) to the registered entities, serious contenders such as L&T, Spice Corp and Tech Mahindra are getting ready with dedicatedSource: Business Line - Home Page | 14 Mar 2009 | 12:00 am February halts airlines’ descentNew Delhi, March 13 The combination of downturn in the economy and relatively high airfares continues to plague the domestic airlineSource: Business Line - Home Page | 14 Mar 2009 | 12:00 am Govt asks IPL to rework schedulesNew Delhi/Mumbai, March 13 The Ministry of Home Affairs has bowled the Indian Premier League (IPL) another googly.Source: Business Line - Home Page | 14 Mar 2009 | 12:00 am ‘Invest in infrastructure to combat meltdown’Mumbai, March 13 India can turn the current gloomy economic scenario into an opportunity by investing in infrastructure projects, aimed at removing bottlenecks, to create demand, generate jobs, and spur 5-6 per cent growth in the short term, theSource: Business Line - Home Page | 14 Mar 2009 | 12:00 am Satyam gets over 100 applicationsHyderabad/New Delhi, March 13 The Satyam Computer Services’ call for registrations for the bidding process has received an overwhelming response, with over 100 requests coming in from India andSource: Business Line - Home Page | 14 Mar 2009 | 12:00 am DTH operators to give 15-day notice for removing channels from packageNew Delhi, March 13 Direct-to-Home (DTH) operators will now be obliged to give a 15-day notice before removing any channel from a package. They would have to replace the channel with a similar one, alternatively offer a reduction in the packageSource: Business Line - Home Page | 14 Mar 2009 | 12:00 am Wall St Week Ahead: Fear still in focus after strong rallyNEW YORK (Reuters) - Investors are dubious that Wall Street's best week since November means the stock market has found a bottom.Source: Reuters: Money News | 13 Mar 2009 | 11:03 pm Madoff to appeal bail, net worth revealedNEW YORK (Reuters) - Lawyers for jailed swindler Bernard Madoff argued for his release pending sentencing and a list of assets put he and his wife's net worth between $823 million and $826 million, according to court papers filed on Friday.Source: Reuters: Money News | 13 Mar 2009 | 10:54 pm Lucky Friday the 13thThis was one Friday the 13th that turned out to be lucky for the markets. The Bombay Stock Exchange Sensex went up by 413 points (4.95%) from its last close.Source: Daily News & Analysis: Money News | 13 Mar 2009 | 10:22 pm Vishal Retail ask banks to float loans with longer tenureRetail chain Vishal Retail is neck deep in debt and the company is negotiating with banks to float its loans for a longer period.Source: Moneycontrol Top Headlines | 13 Mar 2009 | 10:01 pm WiMAX gadgets to hit the shelves ahead of spectrumA report by the WiMAX Forum and industry body Assocham says that the Indian market is expected to support about 19 million WiMAX connections by 2012.Source: Daily News & Analysis: Money News | 13 Mar 2009 | 9:50 pm Airlines witness spike in load factors in FebThere has been a spike in load factors, a measure of occupancy, across most airlines in February. Spicejet, Indigo, and Kingfisher share the top slot with a 10% jump in load factor. JetLite comes second with a much lower score of 7% more load factor in February.Source: Moneycontrol Top Headlines | 13 Mar 2009 | 9:48 pm Travelling abroad? Check out the forex cardsYou get a card issued for a denomination of your choice, depending on the amount you intend to spend on your foreign trip.Source: Daily News & Analysis: Money News | 13 Mar 2009 | 9:39 pm Shareholders demand removal of 3 directors from Hirco boardThere\'s more trouble brewing between Hirco, the AIM listed investment arm of the Hiranandani Group and its shareholders. In a latest twist, the shareholders are demanding the removal of three directors from Hirco\'s board, including Niranjan Hiranandani, Chairman of the Hiranandani Group.Source: Moneycontrol Top Headlines | 13 Mar 2009 | 9:33 pm Hirco EGM in May seeks Hiranandani ousterThe clock may have started ticking for Niranjan Hiranandani, one of the biggest real estate promoters in the country.Source: Daily News & Analysis: Money News | 13 Mar 2009 | 9:32 pm All holding co pledges may need to be shownSebi may ask promoters to disclose the details of shares of unlisted holding companies that have been pledged to raise loans.Source: Daily News & Analysis: Money News | 13 Mar 2009 | 9:31 pm 'There is a tremendous upside to our foods business'Paul Polman was the first external candidate to be chosen as chief executive officer of Anglo-Dutch fast-moving consumer goods giant Unilever Plc.Source: Daily News & Analysis: Money News | 13 Mar 2009 | 9:25 pm Crisis won't hinder free trade: InfosysMeanwhile, Infosys said it would honour all the 20,000 job offers, given out through campus placements.Source: Daily News & Analysis: Money News | 13 Mar 2009 | 9:24 pm World Bank urges divided G20 to fix banksHORSHAM, England (Reuters) - More spending will give only a brief "sugar high" if G20 nations fail to clean up their banks, the World Bank said on Friday as economic powers struggled to agree a response to the worst downturn in decades.Source: Reuters: Money News | 13 Mar 2009 | 9:21 pm Realtors woo Big Retail with zero rentsThat the days of skyrocketing mall rentals are over is old news. Now, mall owners are looking to woo big brands with zero-rental schemes.Source: Daily News & Analysis: Money News | 13 Mar 2009 | 9:16 pm Spend on removing bottlenecks: WB economist - Business Standard
Source: Google News India - Business | 13 Mar 2009 | 8:42 pm Bearish market forces RBI to kill auction of Rs 12000-crore bonds - Economic Times
Source: Google News India - Business | 13 Mar 2009 | 8:35 pm Home ministry rejects IPL’s revised dates over securityNew Delhi: The Indian Premier League (IPL) suffered a major setback on Friday after the home ministry withheld security clearance for the event despite organizers submitting a revised playing schedule. The home ministry told IPL officials it “may not be feasible to play matches as per the submitted schedule” due to a shortage of central security forces, which will be busy safeguarding the country’s general election at the same time. IPL is scheduled to be held from 10 April to 24 May, while the elections for the Parliament’s Lower House will take place across the country in five different phases between 16 April and 13 May. Tournament organizers had altered their original match schedule after home minister P. Chidambaram cited security problems due to the clash between the elections and the league. After a video conference involving the interior ministry and senior police officials of seven states that are scheduled to host matches, the home ministry asked IPL officials to again redraw the schedule. IPL commissioner Lalit Modi said he was prepared to adjust the schedule so that it satisfied all security agencies. “We’ll announce a new schedule soon,” he said. Source: LatestNews-Home - Livemint.com | 13 Mar 2009 | 7:31 pm Relationships and marketsAs global capitalism goes through its greatest crisis in seven decades, a robust new debate on the role of the market versus the state has begun. Much of it focuses on perceived failures of markets, and the need to reassert state action through regulation of markets. Certainly, in an economic crisis, effective governnance is a crucial guarantor against total systemic meltdown. Market fundamentalists in the US seem to be having a difficult time accepting this fact. At the same time, I would argue that the right way to think of the long-run solution to the problem is to frame it in terms of redesigning and modernizing market institutions, not just regulating or constraining them. The shortcoming of much of the market versus state debate is that it deals in abstractions rather than the institutions that underlie each concept. Going deeper, it is people and their relationships that underlie or precede the institutions, and relationships may be the starting point for thinking about market design. Relationships, and the trust embedded in and supported by them, allowed international trade to span continents centuries ago in the absence of government regulation and effective legal remedies. Avner Greif, an economic historian at Stanford, is famous for having argued that the Maghribi traders of the 12th century succeeded in international trade without relying on governments or formal legal systems. More recently, the concept of Guanxi, describing complex personalized networks of influence and social relationships, has been used to explain the success of China in international trade and investment early in its economic reform process and before developing anything like standard property rights and other legal protections for contracts. Investors who follow a Madoff or a Stanford do so in a mistaken understanding of well-functioning markets In many cases, market institutions are chiefly shaped by the underlying legal institutions. Retail stores must post prices clearly for customers, for example. In some cases, maximum and minimum prices may be legally mandated or enforceable. But in other cases, stores may go below posted prices if they choose. The products themselves must satisfy certain disclosure requirements, which can affect how buyers search and choose among sellers and products. In formal retail markets, relationships start to recede to second-order importance: personalized discounts or credit arrangements, extra service and so on. Financial markets are the most challenging to organize and maintain. The products that are bought and sold are abstract, they are assets whose returns are uncertain, and the choices are almost limitless. The best functioning financial markets rely on strong explicit rules to improve information flows and transparency of trading, and the nature of price agreement and trading itself, thereby allowing market participants to trust the rules rather than just individuals or individual firms. Modern electronic stock exchanges are relatively anonymous, but transactions and intentions are well documented and disclosed. The failures we have seen have been failures of the old relationship model of trading, rather than a failure of modern markets. Investors who follow a Bernard Madoff or an Allen Stanford based on reputation and trust, do so in a misunderstanding of well-functioning markets, which strips away easy advantage from individuals, no matter how clever (that cleverness being distorted towards fraud instead). The US investment banking industry had also persisted as a relic of a pre-modern era of relationships and secrecy, ultimately bilking the entire world with its pretence of knowing something special. They were all too good to be true in a competitive market economy. There was too much trust, not enough verification, unlike other financial markets where verification is continuous and pervasive. Relationships can substitute for weak market institutions. They can also subvert market institutions, as in the Satyam case, where Ramalinga Raju used relationships with those who should have been monitoring and verifying to undermine those necessary functions. Relationships can also be important where markets cannot work well, or where market transactions would be deemed to be ethically or morally indefensible. But the failings of markets based on relationships cannot be used as a justification for condemning, constricting or shutting down those markets—instead, better market design is the correct prescription. Nirvikar Singh is professor of economics at the University of California, Santa Cruz. Your comments are welcome at eyeonindia@livemint.com Source: LatestNews-Home - Livemint.com | 13 Mar 2009 | 7:05 pm Rediscovering historyAs economic activity around the world shrinks at a pace that few expected, the obligatory amnesia of bull markets is now being replaced by a new respect for the past. Bull markets inevitably lead to the arrogant and ignorant belief that the old rules can be swept away and that economic history is irrelevant. And wiser people who warn that grief has inevitably followed earlier bubbles are scoffed at. As the intensity of the recession in the rich nations increases, the urge to dig deeper into history rises in tandem The tendency to dismiss what happened in the past is less common these days. In fact, as the intensity of the recession in the rich nations increases, the urge to dig deeper into history rises in tandem. And many old and buried ideas are being resurrected. The initial trek into the past that started after the first credit shock in September 2007 did not go too deep into history. Most economists and analysts were content comparing the downturn—and speculating about the revival—by looking at the mild recessions of the 1990s and the early part of the current decade in the US and Europe. This one was expected to be a repeat of the immediate past. But they started travelling further back in time when the initial hopes of a quick dip and rebound evaporated. After jumping to the sharp and painful recession of the early 1980s, the debate has now settled into the 1930s: What caused the Great Depression and how can a repeat be avoided in these times? The D-word has already got an airing in recent weeks. British Prime Minister Gordon Brown said earlier this month that the world needed to agree on monetary and fiscal stimulus to get out of depression. His opponents pounced on him while his media managers dismissed it as a slip of the tongue. But the International Monetary Fund said a few days later that the rich nations are already in depression. Memories of the gloomy 1930s and greater attention to Japan’s economic stagnation over the past two decades have also helped resurrect economists who provided unconventional explanations for what happened during these two episodes. The old consensus has crumbled. We have already seen the Keynes revival, as economists have scrambled to learn from the insights of the most influential economist of the interwar years. But others have also got a new prominence. I will just mention two economists here: an American who lived during the Great Depression and a Japanese who has a refreshingly different take on why his country’s economy has stagnated. Irving Fisher has been the target of several barbs because he made one of the worst market calls ever. He said mere days before the US shares fell off a cliff in the crash of 1929: “Stock prices have reached what looks like a permanently high plateau.” But Fisher also later came up with an explanation about the depression that followed. This is the debt deflation theory, which essentially says that indebtedness forces families and businesses to sell collateral that pushes down their prices even more and further raises the threat of insolvency. I doubt Fisher is taught to economics students these days. In an article in VoxEU.org, Enrique G. Mendoza of the University of Michigan offers some advice to government around the world: Hire Irving Fisher. Meanwhile, many are taking a closer look at what Richard Koo of the Nomura Research Institute described earlier this decade as Japan’s balance sheet recession. In an analysis that has striking parallels with Fisher’s prognosis in the 1930s, Koo says over-leveraged Japanese firms trying to reduce debt did not have the stomach for new investment. The fall in the value of pledged shares is creating a milder variant of this problem in India. The point is not that economists such as Fisher and Koo have the keys to the kingdom. Economists will struggle to explain why economic activity waxes and wanes—and why some recessions can be long, brutish and nasty. One of the few good things to emerge from the current crisis is that it is has partially rehabilitated heterodox economists such as Fisher, Koo, Hyman Minsky and even John Kenneth Galbraith. And there is a greater respect for economic history. It is easy to pretend that you are living in unique times when the laws of economics are suspended. But that is only till you get ambushed by reality. Your comments are welcome at cafeeconomics@livemint.com Source: LatestNews-Home - Livemint.com | 13 Mar 2009 | 7:04 pm Recession helps consumer goods firms: Unilever CEOMumbai: Paul Polman is unlikely to ever forget his first visit to India as group chief executive officer of Unilever Plc. About four months ago, on 26/11, Polman and the top brass of Unilever and Hindustan Unilever Ltd (HUL) were at the Taj Mahal hotel in Mumbai, when their dinner meeting was rudely interrupted by terrorists.  Unfinished business: Unilever Group chief executive officer Paul Polman. Abhijit Bhatlekar / Mint “It was absolutely important to meet the heroes at the Taj Mahal and express our gratitude,” he said more seriously. Polman’s two-day visit packed a schedule that included visits to a cancer hospital, a few shopping malls and meeting consumers from “different economic classes”. Polman addressed the media, flanked by Harish Manwani, president (Asia Africa) and a member of the Unilever board, and Nitin Paranjpe, CEO of HUL. The press briefing was followed by a town hall meeting with HUL employees. Polman said the recession could help firms such as Unilever. “Consumers postpone buying cars, televisions and that frees up a lot of money to spend on everyday needs. We don’t see personal care or food markets go down substantially,” said Polman, the only lateral hire for the top job in Unilever in many years. Before joining Unilever, Polman spent 26 years at arch rival Procter and Gamble (P&G) and two years in Nestle SA. “We are fortunate, that India, Indonesia and South Africa are growing at 5-6%,” he said, adding that when he set a target on how HUL could double its turnover, the company’s executives had appeared unfazed. “Obviously the population helps,” he quipped. “We are in an industry that drives the economy. We put a little bit of powder in a box and a little bit of liquid in a bottle and we sell it to improve the lives of people a little bit more.” Unilever is also getting nimbler as it launches products simultaneously in several markets. For instance, its deodorant Axe Chocolate was launched in 52 countries simultaneously. But the company’s foods business has been a laggard in India. It accounts for roughly half of Unilever’s worldwide business, but in India, it remains a small part of HUL’s overall business. Paranjpe admitted that there is work to be done. “Food as a packaged food category is less than 5% of the total market.” Paranjpe said the food category would be a tactical play in the short-term, and that the company was focused on getting its brands to “win the end game”. Polman is unfazed by the recent trend of organized retailers promoting private labels to compete against the mega brands of consumer product firms. “They don’t exist as a value proposition,” said Polman, adding that while companies such as Unilever keep innovating their products, private labels are not very innovative. Polman implied that a company such as Unilever is more focused than retailers: Unilever, he said, is present in 11 product categories unlike retailers such as Wal-Mart that dabble in at least 100,000 categories. In response to a mischievous question on whether he would borrow best practices from Unilever’s arch rival P&G, Polman, with his tongue firmly in cheek, said customer practices of Japanese car maker Toyota and supply chain principles of Fedex, the global logistics firm, may be a better choice. Like all major corporations, Unilever, said Polman, is now focusing on cash flows. The company has also stopped issuing earnings guidance to investors and analysts. It has also appointed global procurement officers to buy inputs at the best rates from any part of the world. “We’ll save on costs and invest that money in our brands,” said Polman. satish.j@livemint.com Source: Home - Livemint.com | 13 Mar 2009 | 7:02 pm iGate re-joins fray to acquire SatyamFormer Chief Justice S P Bharucha to oversee selection process, guide govt-nominated board.Source: Business Standard | Front Page Headlines | 13 Mar 2009 | 6:56 pm RBI verifying solvency of 10 realty firmsInternal assessment follows banks worries over systemic risks.Source: Business Standard | Front Page Headlines | 13 Mar 2009 | 6:55 pm We have a fantastic product: BindraMumbai: Sanjay Bindra likes to swim against the tide—much like his mentor Kishore Biyani. He offered an unusual explanation for the growth of Biba Apparels Pvt. Ltd, a company that sells women’s wear, which he started in 2001: “I have got everything wrong and the product right, unlike other retailers, who got everything right, but the product wrong.”  The right fit: Sanjay Bindra of Biba Apparels. “India’s women’s wear is primarily product and consistency. They neglect the product while everything else is right. In our case the management and officials are very mediocre. Our stores are mediocre looking, but we have a fantastic product.” And now, as most retailers throttle back on expansion plans in the face of slowing consumer spending, Bindra’s Mumbai-based retailing firm is expanding its store network, gobbling up cheap outlets. While some of these spaces are going cheap, others have been vacated by foreign brands that signed properties at the height of the retailing frenzy and are now surrendering unviable outlets. Even an inveterate risk-taker such as Biyani has sounded a word of caution. “Sanjay, zyada garmi mat dikhao (don’t show too much enthusiasm)” was the veteran retailer’s advice to Bindra. When Mint contacted Biyani, he explained the different capacities in which he relates to Biba—as an investor, partner in business and as a buyer of Biba’s merchandise. Bindra, however, sees it as just another day at the office. “We are not an exception (in the retail industry), there are other retailers such as Café Coffee Day who have done well too. We stand out because the apparel business in the country is witnessing a bloodbath,” he said in an interview. A Macquarie Research Equities report in February had found that same-store sales growth for Indian retailers turned negative for the first time in the fourth quarter of calendar 2008, largely because of slowing economic growth, fear of job losses and a high base effect. The problem was more pronounced in the high-end product segment, or lifestyle retail, rather than value retail, which is mostly about daily consumption products. But Bindra is busy signing up properties at rentals that have almost halved in the past two months. Now, he says, is the perfect time for expansion as real estate prices have softened to a great extent, and expects same-store sales growth by around 18-22% for fiscal 2009, and about 60% sales growth for the firm. In fact, Bindra claims, he is asking for 12-year contracts for rental spaces to hedge against rent hikes once the economy recovers. In fact, Biyani’s Future Capital Holdings along with Goldman Sachs in 2007 invested Rs12 crore in Biba Apparels —which is promoted by his mother Meena Bindra—a move that Bindra calls a stroke of luck since it found the right funding at the right time to help it scale up. The relationship with Biyani, however, is one that goes back to 2001 to Kolkata, when Bindra was trying to swing a deal with a Pantaloon store for a window display. There was only one catch: the store manager wanted Rs50,000, a king’s ransom at the time. Distraught, he approached Biyani, who was supervising the opening of the store; Biyani overruled his manager when Bindra came up with a plan to offer free merchandise for Biyani’s first and only movie Na Tum Jaano Na Hum, which released in 2002. “It was done in Biyani’s inimitable style, over a cup of tea and one samosa, across the table with no paperwork at the Pantaloon’s Kolkata store,” reminisces Bindra. That Bollywood connection has flowed over into the retail business as well, and Biba launched its own movie line in 2002. “All multi-brand retailers had warned us, saying that the stores would look like theatres. The movies we tied up succeeded... Devdas, Hulchul, Baghban, (and) it rubbed off on our products,” Bindra recalls. After making a mark in multi-brand retail outlets such as Lifestyle and Shoppers Stop —the label is available in about 100 retail outlets across 20 cities, including 69 stand-alone retail outlets, and plans to add 30 more by 2010. “We started our first retail outfit at InOrbit mall at 2005, (I was) forced by Ravi and Neil Raheja after I gave a presentation in front of them.” Ravi Raheja and Neil Raheja are the promoters of the Shoppers Stop retail chain. Bindra expects sales of Rs135 crore in fiscal 2009, more than twice the Rs65 crore in fiscal 2008, and a long way from the Rs1 crore the firm made in 2001, its first year of operations. jharna.m@livemint.com Source: Home - Livemint.com | 13 Mar 2009 | 6:55 pm FIIs return to market, push Sensex up 412 ptsThe benchmark Sensex registered its highest gain in the current calendar year, up 412.86 points, on the back of all-round buying triggered by stronger global cues, despite sustained capital outflows.Source: Business Standard | Front Page Headlines | 13 Mar 2009 | 6:54 pm Unilever CEO looking at India for growth tipsIn his opening remarks at the Taj Mahal Hotel in Mumbai, site of last Novembers terrorist attacks, where he was also trapped, Unilever CEO Paul Polman said: Nobody should give in to such threats.Source: Business Standard | Front Page Headlines | 13 Mar 2009 | 6:41 pm Regulator may give working capital to push road projectsNew Delhi: Desperate to get highway projects moving, the National Highways Authority of India (NHAI) proposes to provide working capital loans to contractors having trouble raising funds. If it goes ahead with the proposal, the highways regulator will provide such loans on a case-to-case basis against bank guarantees furnished by the contractors. It will redeem the loans against payments due to the contractors after a project is concluded.  Coming along: A file photo of a road being built in New Delhi. NHAI already makes advance payments to help contractors purchase materials. Raj Kumar / Mint Projects developed on the so-called build, operate and transfer model, which account for a little more than one-tenth of the projects in the country, will not be eligible. The proposal was discussed at a 7 March meeting between road contractors, the highways regulator and the ministry of road transport, among others, according to people present at the meeting. The proposal comes at a time when contractors, citing difficulties in raising project finance, are staying away from highway bids, or finding it difficult to continue work. An NHAI officer, who didn’t want to be named, said the regulator will consider such requests “in light of the current scenario”. The highways regulator does not need any clearances to proceed because it is allowed to provide discretionary advances to contractors, the official said. An advance will be made against targets that can be clearly monitored and only apply to the so-called engineering, procurement and construction contracts, where a private contractor completes specified work on a road and hands it over to the government for a fee. NHAI already makes advance payments to help contractors purchase materials to start a project. These advances, too, are typically redeemed at the time of paying the contractors. Contractors have been complaining of difficulties in accessing project finance, despite several measures taken by the government to ease liquidity concerns that include a refinance window for banks lending to infrastructure projects. The Reserve Bank of India, the country’s central bank, has cut policy rates several times since October. The government also agreed last year to revise upwards the costs of projects in which detailed estimates were made before 2007, to reflect current commodity prices. In spite of this, the government’s plans to auction projects to upgrade or widen 60 stretches of highways has drawn little response. Contractors have stayed away from several auctions while others have received solitary bids. The regulator has sought the Election Commission’s approval for auctioning 50 highway projects. “We have approached the Election Commission to let the process carry on,” NHAI member (finance) Didar Singh told an industry conference on Friday. Since dates for the general election have been announced, government agencies need the commission’s approval before any auctions. Another NHAI official, speaking on condition of anonymity, raised concerns on whether the regulator could lend money for working capital. “A working capital loan implies hypothecation of materials. There is no mechanism through which NHAI can keep track of these things,” said another NHAI official. “Also, how will you ensure that he (a contractor) would put it in this project? He may play the market or put it in real estate.” Analysts said a cash infusion was ideal. “It’s a war-like economy. And a war-like economy is a command economy. At one level, in an era where cash is king, any cash injection helps,” said Siddhartha Das, national public-private partnership practice leader for audit and consulting firm Ernst and Young Pvt. Ltd. “Now, whether there is a risk that the money may be used elsewhere, I think that is a risk worth taking.” PTI contributed to this story. rahul.c@livemint.com Source: Home - Livemint.com | 13 Mar 2009 | 6:38 pm Tally hopes to make its biz software countBangalore: For thousands of small and medium sized businesses in the country, Tally is a generic name for an accounting software and the eponymous company behind it has now dusted off plans for a business software product—a move that makes it the competitor of large software firms such as SAP AG and Oracle Corp.  Pitching ahead: Bharat Goenka of Tally Solutions. That’s a pitch that will likely work with most companies that are looking at ways to cut costs as the economy slows. According to technology researcher IDC, the Indian business software market was worth $250.4 million (Rs1,295 crore today) in 2008. Tally says its business software will help companies access information remotely either through the Internet or a mobile phone even as it seeks to minimize maintainance costs. “Continuity is not critical for small firms, but super critical in a large enterprise. Most people spend exorbitant sums for continuity (of the business software) and maintain(ing) them,” says Bharat Goenka, co-founder and managing director of Tally. “What we have achieved is that the functionality is easy and you don’t require technical help.” Many companies invest almost as much in training people to use the software and maintaining it as they do in buying it. Tally won’t be the first Indian company with plans for the market. Several local firms such as 3i Infotech Ltd and Ramco Systems Ltd compete with SAP and Oracle in the Indian business software market. Still, the company starts with an advantage—its name and its accounting software. Tally training schools dot the countryside. Tally’s software will help firms access information either through the Internet or a mobile phone “Tally is better placed in its ability to really relate to user requirements. But (when it comes to) the probability of getting it right with the correct business strategy—any company has the equal chance of making it,” he says. It won’t be easy for the company to compete with larger business firms, says another expert. “Oracle and SAP are mature products, while Tally is known for base level financing and accounting,” says Abhijeet Ranade, associate director (information technology) at audit and consultancy firm PricewaterhouseCoopers. It’ll be quite a journey for the company to make it in the business, he adds. That’s where Goenka sees price and years spent understanding how to make software easy to use for customers playing a part. Large companies would buy Tally’s business software because of its lower price and user-friendly features, he says. Goenka adds that the company is “cash rich”. He declines to specify the quantum of Ambani’s investment in the firm. “There is no operational involvement of any (person) or organization (in Tally),” he says. The firm expects to end the fiscal year to March with revenue of around Rs150 crore. raghu.k@livemint.com Source: Home - Livemint.com | 13 Mar 2009 | 6:38 pm Satyam moves into phase II of stake saleHyderabad: Satyam Computer Services Ltd invited so-called requests for proposals from investors who expressed their interest in buying a stake in the company, taking the saga of the fraud-hit software company a step closer to its denouement, even as speculation continued on the number of interested parties and their identity.  Rebuilding process: A file photo of Satyam Computer Services’ office in Hyderabad. The Satyam board, which met on Friday, said it ‘has received adequate response from Indian and international bidders’. Noah Seelam / AFP The company, however, looked to be playing hardball with the potential bidders by asking them to formally respond to the request for proposals by 20 March, along with proof that their net worth was at least Rs1,500 crore—one of the eligibility criteria for the bidders. Satyam said that once this was done, interested bidders will be provided “data and information regarding the company to enable them to submit technical and financial bids”. That may not go down well with the bidders, some of whom are already asking for more information. “iGATE is now expecting to receive from Satyam Computer Services the latest financial statements, including those for the quarter ended December 2008 and the months of January and February 2009, and updated position on liabilities and potential liabilities of the company,” a statement released by the company in California, US, where it is headquartered, said. “In the event of iGATE not receiving this information immediately, it has no option, but to withdraw its expression of interest.” The Hinduja Group pulled out of the race before the 12 March deadline. Meanwhile, Satyam’s recently appointed chief executive officer A.S. Murty is set to visit the US early next week, in a bid to assuage clients worried about business continuity. Around 62% of the company’s revenue comes from the US. Satyam’s woes started on 7 January when its founder B. Ramalinga Raju disclosed that he had, over the years, fudged the company’s books to the tune of Rs7,136 crore. The government responded by asking several regulatory agencies to investigate Satyam and dissolved the company’s board, appointing in its place a new one, headed by Kiran Karnik, the former head of India’s software lobby group Nasscom. The new board decided to sell a 31% stake in the company through the issue of new shares, with the winning bidder acquiring 20% shares from the market. The board retained the option of issuing another 20% of new shares if the winning bidder was unable to buy shares from the market. Satyam’s accounts are being restated by audit firms KPMG and Deloitte Touche Tohmatsu, but there’s no clarity on when this process will be completed. There’s also no fix on the exact quantum of damages likely from the several class action suits filed against the company in US courts—Satyam is listed on the New York Stock Exchange—although some estimates put this at a maximum of $500 million (Rs2,585 crore). The Satyam board met on Friday and said that it “has received adequate response from Indian and international bidders, including private equity firms”. It did not disclose how many bidders had responded nor did it identify them. It added that it would invite requests for proposals from all registered bidders on Friday itself.  Reassuring: Satyam chief executive A.S. Murty. He is set to visit the US soon, in a bid to assuage clients worried about business continuity. So far the company has lost one client, US-based State Farm Insurance Co., while others, including storage device maker Sandisk Corp., have expressed reservations about continuing their association with Satyam. Upaid’s warning In a move that could raise the apprehensions of potential bidders, British mobile payment technology services provider Upaid Systems Ltd said on Friday that it will hold Satyam’s acquirer responsible for payment of damages in the event of a favourable judgement in its pending case against the Indian firm. Upaid has a pending fraud and forgery lawsuit against Satyam in a Texas court. The case, filed in April 2007, pertains to transfer of intellectual property rights arising from a project the companies jointly worked on in the late 1990s. The case has a trial date set for 1 June. “The legal proceedings will go ahead as planned and if there is a favourable judgement, whoever is in control of the company at that time will be responsible for paying the damages,” said Joanne Hunter, senior vice-president (communications) at Upaid. The British firm claims that it has suffered damages to the tune of nearly $1 billion on account of the wrongdoings of Satyam. lison.j@livemint.com Source: Home - Livemint.com | 13 Mar 2009 | 6:38 pm Tally hopes to make its biz software countBangalore: For thousands of small and medium sized businesses in the country, Tally is a generic name for an accounting software and the eponymous company behind it has now dusted off plans for a business software product—a move that makes it the competitor of large software firms such as SAP AG and Oracle Corp. Pitching ahead: Bharat Goenka of Tally Solutions. That’s a pitch that will likely work with most companies that are looking at ways to cut costs as the economy slows. According to technology researcher IDC, the Indian business software market was worth $250.4 million (Rs1,295 crore today) in 2008. Tally says its business software will help companies access information remotely either through the Internet or a mobile phone even as it seeks to minimize maintainance costs. “Continuity is not critical for small firms, but super critical in a large enterprise. Most people spend exorbitant sums for continuity (of the business software) and maintain(ing) them,” says Bharat Goenka, co-founder and managing director of Tally. “What we have achieved is that the functionality is easy and you don’t require technical help.” Many companies invest almost as much in training people to use the software and maintaining it as they do in buying it. Tally won’t be the first Indian company with plans for the market. Several local firms such as 3i Infotech Ltd and Ramco Systems Ltd compete with SAP and Oracle in the Indian business software market. Still, the company starts with an advantage—its name and its accounting software. Tally training schools dot the countryside. Tally’s software will help firms access information either through the Internet or a mobile phone “Tally is better placed in its ability to really relate to user requirements. But (when it comes to) the probability of getting it right with the correct business strategy—any company has the equal chance of making it,” he says. It won’t be easy for the company to compete with larger business firms, says another expert. “Oracle and SAP are mature products, while Tally is known for base level financing and accounting,” says Abhijeet Ranade, associate director (information technology) at audit and consultancy firm PricewaterhouseCoopers. It’ll be quite a journey for the company to make it in the business, he adds. That’s where Goenka sees price and years spent understanding how to make software easy to use for customers playing a part. Large companies would buy Tally’s business software because of its lower price and user-friendly features, he says. Goenka adds that the company is “cash rich”. He declines to specify the quantum of Ambani’s investment in the firm. “There is no operational involvement of any (person) or organization (in Tally),” he says. The firm expects to end the fiscal year to March with revenue of around Rs150 crore. raghu.k@livemint.com Source: Tech News - Livemint.com | 13 Mar 2009 | 6:38 pm Corporate | Hirco asks shareholders to reject Laxey’s moveBangalore: India-focused property firm Hirco Plc. on Friday urged its shareholders to reject the resolutions by hedge fund Laxey Partners Ltd to oust its chairman and two board members at an extraordinary general meeting on 6 May, terming the move as “misguided”. Hirco said it had received on 20 February a requisition to convene an extraordinary general meeting from Credit Suisse as custodian to Laxey’s 10.05% stake in Hirco. —Reuters ********* Indian firms’ confidence at a new low: NCAER New Delhi: The confidence of Indian companies dipped to a new low in January as the economy slowed down under the impact of global financial meltdown, economic think tank National Council of Applied Economic Research (NCAER) said in its quarterly review. The Business Confidence Index, formulated by NCAER, stood at seven-year low of 91.4 points in January, plummeting 41% compared with the year-ago period. “This (BCI) is the lowest since January 2002,” NCAER said in its quarterly review of business expectations survey. — PTI Source: LatestNews-Home - Livemint.com | 13 Mar 2009 | 6:34 pm Insurers need to give payment details: IrdaNew Delhi: With an aim to control growing management expenses of life insurance companies, Insurance Regulatory and Development Authority, or Irda, has issued a circular on Friday that life insurers must give details of all payments to its intermediaries, except individual agents. The table would indicate the total business procured in a financial year through various intermediaries, including, corporate agents, brokers and referrals. Another circular issued by the regulator on Friday states that all life insurers are required to submit the scrip-wise details of available investments to arrive at the solvency margin. Meanwhile, in a relief to insurers, National Consumer Disputes Redressal Commission has said that the concealment of material facts on health and failure to give satisfactory explanation for long absence from duty can be reasonable grounds for a life insurance company to repudiate a policy claim. Source: LatestNews-Home - Livemint.com | 13 Mar 2009 | 6:29 pm BJP and the JD(U) in talks for a seat-sharing formula in BiharNew Delhi: Senior leaders of the Bharatiya Janata Party are squabbling. Arun Jaitley, the man known for his election management skills on Friday skipped party’s central election committee meeting where candidates were be chosen for Bihar. He is said to be miffed over the manner in which party president Rajnath Singh is handling the election campaign. Jaitley is known to be close to the party’s prime ministerial candidate L K Advani. BJP leaders tried to play down the incident. Click here to watch video In Bihar the BJP and the JD(U) are involved in last-minute talks to arrive at a seat-sharing formula. Bihar Chief Minister and JD(U) leader Nitish Kumar is in New Delhi to hold talks with the top BJP leadership including L K Advani. JD(U) is insisting on having two more seats from the BJP quota - Kishanganj and Madhubani - and a 26-14 formula in favor of it. Under the last arrangement, the BJP got 16 seats. But the BJP could breathe easy as its alliance with the Shiv Sena has finally come through in Maharashtra. The two parties have agreed that the BJP will contest 26 seats and the Sena in the remaining 22 constituencies. Though the formula is the same as it was in the 2004 Parliamentary elections, leaders of the two parties said all contentious issues have been resolved. Meanwhile, CPI’s veteran leader A B Bardhan on Friday threw cold water on the ambitions of BSP’s Mayawati to emerge as the prime ministerial candidate for the Third Front. The veteran leader said the Third Front would not name any leader for the top post in the run-up to the elections. He said the question of the Prime Minister would be taken up only after the elections. And finally some heartburn in the Left ranks. CPI and the CPI(M) were locked in a slugfest that threatened to go dirty. The CPI was angry that its senior partner was refusing to part with the Ponnani parliamentary seat in Kerala. The fight went so far that CPI threatened this could result in a split in Left Democratic Front in Kerala and could even spread to alliances outside the state. With the intervention of senior leaders, the two parties have buried the hatchet for now. CPI gets to keep the seat. Source: LatestNews-Home - Livemint.com | 13 Mar 2009 | 6:22 pm The week in reviewNew Delhi: There are at least four bidders in the race for a 51% stake in Satyam, the company caught in the country’s biggest corporate scandal. India’s largest engineering firm Larsen and Toubro Ltd, Mahindra Group’s Tech Mahindra Ltd and B.K. Modi’s Spice group are among the companies bidding for a majority stake in Satyam. The Hinduja Group pulled out quietly on Thursday without giving any reasons. On Friday, the board met to discuss the expressions of interest. Click here to watch video Factory output contracted for the second straight month in January while the wholesale price-based inflation dropped to 2.43% in the week closing 28 February, the lowest in at least six years. This is the first time in 16 years that industry production shrank for two consecutive months. Inflation dipped to a six year low of 2.43% for the week ended February 28 as compared to 3.03% for the previous week. It was at 6.21% for the corresponding week last year and the lowest ever in India at 1.13% on 2nd February 2002. The index of industrial production for January fell by 0.5% as compared with a fall of 0.6% in December 2008. The cumulative growth for the period April-January 2008-09 stood at 3 % over the corresponding period last year. Experts say what the two key indicators mean for the Indian economy for the next few months. “I expect inflation to fall further while IIP will worsen over the next four months and get better towards the second half of calendar year 2009-10,” says analyst DK Joshi of Crisil. P N Vijay of P N Vijay financial services says, “If you look at numbers like credit growth , consumption of steel, cement, auto etc numbers you see that, IIP will be better in Feb and march.” The good news is that the experts definitely see light at the end of the tunnel. Ever since they fell out with their erstwhile alliance partner the Congress, the Left parties have been keen to come up with an alternative that is non-Congress and non-BJP. They launched such an alliance at Tumkur in Karnataka this week. Eight political parties, led by the Left have come together to form the third front---an alliance to take on the might of Congress-led UPA and BJP-led NDA in the upcoming elections. The two leaders who could be kingmakers AIADMK’s J. Jayalalithaa and BSP’s Mayawati skipped the meeting and had instead sent their representatives. Mayawati’s emissary had a clear message – that she’ll join the front only if she is its prime ministerial candidate. NCP president Sharad Pawar who is in the final stages of sewing up an alliance with the Congress has however opted to keep the doors open for any post poll scenario. On Thursday he said the third front cannot be ignored, if the ruling alliance does not get enough numbers on its own. He also set the cat among the pigeons by saying Manmohan Singh was only Congress Party’s prime ministerial candidate and not that of the UPA. The global meltdown has not spared even the billionaires. Forbes, releasing its annual list, said the number of billionaires fell to 793 from 1,125 last year and the net worth dropped for almost all of them. For Indians the story is even more traumatic. More than half of the billionaires, who were on the list last year, have dropped off. Only two Indians---Reliance Industries CMD Mukesh Ambani and NRI tycoon Lakshmi Mittal continue to be among the world’s 10 richest. The rest---that included Anil Ambani, DLF’s K P Singh, Unitech’s Ramesh Chandra, Liquor baron Vijay Mallya, Wind-power man, Tulsi Tanti and India Bulls Sameer Gehlaut have fallen off the cliff . The ultra modern abattoir in East Delhi, which has been caught in controversy since its inception, has started functioning after persistent intervention from the Supreme Court. But it continues to be a cause for concern for the Central Pollution Control Board. Source: LatestNews-Home - Livemint.com | 13 Mar 2009 | 6:20 pm Sensex rises most since December, advances 5%The Bombay Stock Exchange’s (BSE) key index climbed the most since December on Friday, led by financial companies, after Bank of America Corp. said it’s profitable and Japan and China signalled they will increase efforts to bolster growth. Click here to watch video ICICI Bank Ltd surged more than 8% for a second day to its biggest weekly advance in 12. State Bank of India (SBI) climbed 4.6%. Asian financial stocks had their best week since 19 December as Bank of America joined JPMorgan Chase and Co. and Citigroup Inc. in saying January and February were profitable. The Sensex rose 412.86 points, or 5%, to 8,756.61, the biggest gain since 10 December. The measure rose 5.2% this week, the most in six. The S&P CNX Nifty index on the National Stock Exchange added 101.80 points, of 3.9%, to 2,719.25. “The market is getting support from banks,” said Shashank Khade, who helps manage $400 million (Rs2,068 crore) at Kotak Securities Ltd in Mumbai. “Indian banks had gone down substantially in terms of valuations and they are recovering now.” The global financial crisis has caused write-downs and losses at institutions worldwide to swell to more than $1.2 trillion. ICICI Bank rose 8.6% to Rs308.65, after surging 8.1% on Thursday. SBI rose by the most in more than a month to Rs953.05. HDFC Bank Ltd rose 4.5% to Rs834.25. Housing Development Finance Corp. Ltd rose 6.8% to Rs1,377.50. Reliance Industries Ltd surged after a report that the company may start producing gas from its biggest field next month. The stock rose 6.8% to Rs1,284.25. Indian software exporters, which get about half their revenue from the US, gained for the second day as prospects for banks brightened in the world’s biggest economy. Tata Consultancy Services Ltd rose 6.2% to Rs506.85. Infosys Technologies Ltd advanced 5.6% to Rs1,297.05. Wipro Ltd gained 6.1% to Rs224.90. Governments from the US to Japan and China have stepped up efforts to avert what the World Bank predicts will be the first global economic contraction since World War II. Prime Minister Taro Aso ordered a third spending plan aimed at easing Japan’s recession. China can add at any time to 4 trillion yuan (Rs30.92 trillion) of stimulus measures to revive the world’s third biggest economy, Premier Wen Jiabao told reporters in Beijing. He reaffirmed China’s target for 8% growth in 2009. Source: LatestNews-Home - Livemint.com | 13 Mar 2009 | 6:02 pm Indian, foreign firms register for Satyam; PEs in raceBANGALORE (Reuters) - Fraud-hit Satyam Computer Services Ltd said on Friday that Indian and international firms, including private equity companies, had registered to bid for a controlling stake.Source: Reuters: Money News | 13 Mar 2009 | 5:36 pm How have Indian IT stocks done vis-a-vis global peers?The rapid decline in the fortunes of India’s outsourcing services firms has been well documented. Both volumes and pricing are taking a hit due to the recession in the developed world and the industry is expected to report a drop in revenues in dollar terms in the next fiscal year that begins 1 April. This is reflected in the share prices of Indian software companies as well, which have more than halved since January last year.  An interesting report by Edelweiss Securities Ltd’s IT analysts, Viju George and Kunal Sangoi, documents the performance of top Indian IT firms in the global market capitalization league table. Since January 2008, only Cognizant Technology Solutions Inc. has improved its ranking among global tech firms, from 83 in last January to 65. Infosys Technologies Ltd held its position at 25, while Tata Consultancy Services Ltd fell to 35 from 24 and Wipro Ltd to 58 from 38. Meanwhile, their closest competitors, International Business Machines Corp. and Accenture Ltd, improved their rankings to second and 16th positions from 6 and 22, respectively. Hewlett-Packard Co., which now has a large software services exposure thanks to is purchase of EDS, maintained its eighth position. Also See Ranking Declines (Graphic) Of course, these companies have many revenue streams other than IT services, and hence, aren’t directly comparable. But it does look like Indian IT has underperformed global IT services companies. The report says that one reason for this is the higher valuation multiples enjoyed by Indian IT firms last year. The other reason is that the slowdown in growth for Indian IT is much higher compared with global peers. While Indian firms have grown at an average rate of about 30%, growth for peers such as IBM and Accenture has been much lower. Now, both sets of companies are expected to report flat or marginally negative growth. The fall in the case of Indian IT is much harder. As a result, the argument that the offshoring model is defensive and companies will increase offshore work in a downturn seems overstated. At least, global investors don’t seem to think so. This brings us to the question of the outperformance of Infosys and Cognizant vis-a-vis TCS and Wipro and other Indian IT firms. Both these firms have consistently grown at superior rates and are expected to have a higher cushion in terms of profit margin. Besides, they also benefited in the portfolio reallocation after the swindle at Satyam Computer Services Ltd came to light. Graphics by Paras Jain / Mint Write to us at marktomarket@livemint.com Source: Home - Livemint.com | 13 Mar 2009 | 5:30 pm Standard and Poor’s downgrade: time GE split its businessesBeleaguered General Electric Co.’s (GE) credit rating has finally been cut. Standard and Poor’s has lowered the conglomerate’s rating, which has been triple-A since 1956, to double-A-plus. This shouldn’t affect its financing cost—markets have ignored the rating for some time.  Beleaguered: A General Electric Co. facility in Lynn, Massachusetts. Brian Synder / Reuters But the conglomerate’s top rating was a big reason for keeping its industrial and finance arms together. The strength of the industrial business theoretically allowed the financial arm to raise debt more cheaply, allowing it to thrive. The downgrade guts this rationale. The downgrade has been a long time coming. GE had maintained a high overall rating because of the steady cash thrown off by the industrial side of its business. But its finance division has been struggling for some time. Its problems caused S&P to slice its estimate of GE’s creditworthiness. GE’s cost of funding probably won’t change much. The credit default swap spreads on the finance unit recently ballooned to levels consistent with much lower credit ratings, meaning the market is ignoring the ratings agencies’ still-Pollyannaish estimates. Nonetheless, there’s a risk—if its ratings fall below double-A-minus, it would be forced to post additional collateral to its counterparties.  Click here for breakingviews.com Despite this, GE’s rationale for keeping the industrial and finance businesses together is now much weaker. Granted, S&P thinks the stand-alone finance unit would only merit a single-A rating, so splitting up would probably force it to pony up more collateral on its trading positions. That could be painful, though it is unlikely to pose as a significant a threat to GE Capital’s business since it doesn’t have massive derivatives portfolios such as, say, American International Group Inc. There is one other rationale for keeping the two businesses together. GE may say it has an easier time selling turbines and jet engines if it can offer attractive financing to customers. But GE Capital’s ability to provide cheap debt has been undermined by the market’s lack of confidence in its rating. GE has no more excuses for keeping these businesses together. Source: Home - Livemint.com | 13 Mar 2009 | 5:26 pm Rupee strengthens as stocks stage rallyMumbai: The rupee strengthened on speculation global stock gains will encourage investors to increase purchases of emerging market assets. The currency climbed as the Bombay Stock Exchange’s Sensex index rallied 5%, the most since 10 December, adding to Thursday’s 2.3% gain. The MSCI Asia-Pacific Index of regional shares rose 3.5% as the US S&P 500 Index headed for its biggest weekly advance since November.  Currency rebounds: The rupee closed at 51.52 to the dollar on Friday,rebounding 1.3% from the record low of 52.19 it touched on 3 March.Indranil Mukherjee / AFP “Looks like conditions are turning more favourable for a rebound in the rupee from recent lows, with stock markets sustaining a positive trend,” said Sudarshan Bhatt, chief currency trader at state-owned Corporation Bank in Mumbai. The rupee climbed 0.7% to 51.52 per dollar at close on Friday in Mumbai, according to Bloomberg data. It rose as high as 51.41 earlier. The currency has rebounded 1.3% from a record low of 52.1850 touched on 3 March. It is still the fourth worst performer among the 10 most traded Asian currencies this year, with a 5.5% loss. The Sensex has dropped 9% so far this year as overseas funds sold $2.3 billion (Rs11,891 crore) more Indian equities than they bought. Offshore contracts indicate traders bet the rupee will trade at 51.80 to the dollar in a month, compared with expectations of 52.16 on Thursday. Forwards are agreements in which assets are bought and sold at current prices for future delivery. Non-deliverable contracts are settled in dollars rather than the local currency. The rupee pared gains on concern inflows of foreign direct investment will slow as a slump deepens in Asia’s third largest economy. India on Thursday reported its first back-to-back decline in industrial production in 16 years. “The rupee continues to have a bias for weakening given the bleak economic outlook,” said K.V. Mallik, treasurer at state-owned UCO Bank in Kolkata. Output at factories, utilities and mines fell 0.5% in January from a year earlier after a revised 0.6% drop in December, the Central Statistical Organization said in New Delhi on Thursday. India’s $1.2 trillion economy expanded 5.3% last quarter from a year earlier, the slowest pace in five years, the government said on 27 February. Overseas direct investment in India averaged $3.1 billion a month in 2008, compared with $1.3 billion in the previous year, government data show. Source: Home - Livemint.com | 13 Mar 2009 | 5:26 pm India has scope for more rate cuts - World BankMUMBAI (Reuters) - India has scope for more rate cuts as inflation was no longer a concern, the World Bank's chief economist said on Friday.Source: Reuters: Money News | 13 Mar 2009 | 4:43 pm Corus debt revamp: Tata declines to commentMumbai: Mumbai-based Tata Steel Ltd, India’s largest producer, declined to comment on a newspaper report that it had held informal talks with bankers on restructuring debt at its UK unit Corus Group Ltd. Tata Steel may ask its UK unit, which owns Corus, to amend covenants on about £3 billion (Rs21,570 crore) of loans taken to buy Corus, the ‘Financial Times’ said, citing people with knowledge of the situation. Source: Home - Livemint.com | 13 Mar 2009 | 4:43 pm Key facts of funds in different categoriesMorningstar, a US-based provider of investment research that set up its India office a few months ago, presented its first India fund awards last week. The awards recognized funds and fund groups for their performance in 2008, a particularly brutal year for financial markets the world over, taking into account both the returns they delivered over the past year and over the long run. Also See Funds in India conservative allocation category (Graphic) Also See Funds in India immideate/long-term bond fund category (Graphic) Graphics by Paras Jain / Mint Source: Home - Livemint.com | 13 Mar 2009 | 4:38 pm Wipro bags Rs.11.8 bn outsourcing dealWipro Infotech has bagged a Rs.11.82-billion (Rs.1,182-crore) IT outsourcing contract from the state-run Employees State Insurance Corp (ESIC), the company said Friday.Source: IndiaeNews.com: Business News | 13 Mar 2009 | 3:31 pm Goa casino operators move court after relocation ordersAnother casino company moved court Friday seeking relief a day after Panaji bench of the Bombay High Court directed the Goa government to freeze its directive to offshore casino operators to move outside the city limits and drop anchor in a nearby bay.Source: IndiaeNews.com: Business News | 13 Mar 2009 | 3:30 pm Pressmart, Singapore publishers institute magazine awardsMagazine Publishers Association of Singapore (MPAS) with support from city-based digital publisher Pressmart has launched Singapore magazine awards to recognise the best magazine publishers in that country.Source: IndiaeNews.com: Business News | 13 Mar 2009 | 3:03 pm Cochin Port has another good cruise seasonDespite the global slowdown, the current fiscal is another good business season for the Cochin Port, which would host 36 cruise ships by March-end, an official statement said Friday.Source: IndiaeNews.com: Business News | 13 Mar 2009 | 3:00 pm 'Meltdown forcing rich nations to shelve anti-greenhouse projects'The global financial crisis is forcing developed countries to put off plans to build projects to curb greenhouse gases emissions in developing nations, an industry lobby report said Friday.Source: IndiaeNews.com: Business News | 13 Mar 2009 | 2:33 pm Citigroup to boost SE Asian equity businessSingapore: Citigroup said on Friday it plans to start equity brokerages to serve institutions in Malaysia, Vietnam and Indonesia, and is seeking more branches in Thailand in a bid to expand its business in Southeast Asia. The moves are a sign that the US bank, which has been hit by massive losses in the United States due to the collapse of the housing market, is betting on Asia to boost its international business. “Our current focus is to invest all across the region,” Piyush Gupta, who heads Southeast Asia and the Pacific region for Citigroup, said. “We have been through two major downturns in this region, one in 1997 and then during the SARS (outbreak in 2003). We didn’t choose to scale back during these periods.” Gupta said the equity brokerages in Southeast Asia will serve institutional clients and help boost its capital market business. “We are doing more capital market activities now than we did anytime during the last several months,” Gupta said. Citigroup was among underwriters for DBS’s $4 billion ($2.60 billion) rights issue and is advising Chartered Semiconductor on its $300 million share sale. In January, Citigroup agreed to merge its Smith Barney brokerage with Morgan Stanley, but in Asia many of Citi’s brokerage units are part of bank. Gupta said Citi was keen to add to its single branch in Bangkok and was in “active dialogue with the regulators” about expanding its operations in Thailand. He said lending to Southeast Asia, Australia and New Zealand saw marginal growth in 2008 and might remain flat this year as trade financing suffers from a downturn in exports and consumer demand. “This year would be flat as well, it has grown in the first two months, but the growth is marginal. “The reason we weren’t able to do as much trade finance was because exporters’ demand vanished. People didn’t want to borrow money because their export orders from the U.S. and China were collapsing since September-October.” But the slowdown in the two segments will be balanced by rising demand in Asia to refinance debt and loans, and corporate lending and underwriting share sales. Gupta said the turmoil in global markets has badly hit the wealth management business after the collapse of Lehman Brothers in September. Fees and commissions from sale of wealth management products slumped 60-70% in the fourth quarter and stayed poor in the first quarter in the region, he said. “The whole wealth management space is seeing a sharp slowdown. In the fourth quarter, it crashed to about a third of its business,” he said. “People are not buying wealth products and their net worth has shrunk because of the markets.” The US lender has received two federal bailouts, $45 billion of capital from the Treasury Department’s Troubled Asset Relief Program, and a government agreement to cap losses on $300.8 billion of troubled assets. Last month’s bailout would make the government Citigroup’s largest shareholder, with a potential 36% stake. The Government of Singapore Investment Corp (GIC) is the second-biggest shareholder in Citi with an 11% stake. Gupta said 80% of Citicorp’s business comes from its international units, so it was crucial the U.S. bank grows outside its home market. But Gupta said it would be difficult to do acquisitions this year, given five quarters of losses suffered by the group. “It is unlikely that we will be a big buyer this year, which is why the thrust of our ambition is really organic,” he said. He said the bank continues to grow in Asia, where its loan-to-deposit ratio is in the mid-60s, meaning it had the ability to grow its businesses through its own resources and without having to raise funds. In the United States, many banks have total loans that far exceed their deposits. “As Mark Twain would put it, reports of our demise are greatly exaggerated,” Gupta said. Source: World Business - Livemint.com | 13 Mar 2009 | 12:15 pm
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