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Budget seems reactive, rather than proactive: Anil JainIn an interview with Moneycontrol.com, Anil Jain, MD of Refex Refrigerants Ltd. shares his thoughts about the Budget and what it means for India Inc. and the common man.Source: Moneycontrol Top Headlines | 13 Jul 2009 | 5:45 pm Will try to settle US lawsuits out of court: Mah SatyamVineet Nayyar of MahindraSatyam said that he would try to mediate before the trial of the class action suits and added that he would try for an out of court settlement if the two parties could find common ground.Source: Moneycontrol Top Headlines | 13 Jul 2009 | 3:04 pm McNally Bharat targets Rs 2K cr turnover in FY10Deepak Khaitan, Chairman, McNally Bharat Engineering, said the company hopes to achieve orders worth Rs 1,700 crore and a turnover up to Rs 2,000 crore in FY10. However, he was quick to add that it is difficult to get orders with earnings before interest and tax margins more than 78%.Source: Moneycontrol Top Headlines | 13 Jul 2009 | 2:57 pm Have not colluded with Maytas Infra to secure deals: SREIThe Registrar of Companies (RoC) has claimed that Maytas Infrastructure colluded with three firms to secure contracts for various projects by misrepresenting equity participation.Source: Moneycontrol Top Headlines | 13 Jul 2009 | 2:00 pm Failed to get govt nod for warrant issue: Nagarjuna ConstNagarjuna Construction has dropped its plans to issue warrants to Blackstone. Commenting on the issue, YD Murthy, VPFinance at Nagarjuna Constructions told CNBCTV18 in an interview that the warrants issue did not get the Foreign Investment Promotion Board (FIPB) approval.Source: Moneycontrol Top Headlines | 13 Jul 2009 | 1:28 pm Jet Airways June seat load factor at 67.8% vs 69.2% in MayAirline companies have announced their seat load factor for the month of June 2009. Jet Airways\' seat load factor stood at 67.8% as against 69.2% in May.Source: Moneycontrol Top Headlines | 13 Jul 2009 | 12:46 pm With Chennai edition, Mint goes national - Livemint
Source: Business - Google News | 13 Jul 2009 | 12:34 pm Nifty closes below 4000; metals, sugar worst hit - Economic Times
Source: Business - Google News | 13 Jul 2009 | 12:28 pm U.S. trial delay call brings UBS tax deal nearerZURICH (Reuters) - Hopes rose that Swiss bank UBS can finally move on from a damaging U.S. tax row, after a request for a delay to a high-profile trial scheduled for later on Monday brought a settlement nearer.Source: Reuters: Money News | 13 Jul 2009 | 12:24 pm With Chennai edition, Mint goes nationalNew Delhi: Mint, HT Media’s business daily in exclusive content partnership with The Wall Street Journal, is now national. With the launch of the Chennai edition on 13 July, Mint now has a national footprint that includes Delhi, Mumbai, Bangalore, Kolkata, Chandigarh and Pune. Mint, with an introductory price of Rs3.50, will provide discerning readers in Chennai the same Clarity that the rest of the country has so overwhelmingly embraced. Available six days a week, the daily brings with it an exhaustive suite of offerings — Market Watch, Campaign and the Weekend Magazine, Lounge. With its accent on clarity in reporting, standout design and printing, besides the exclusive WSJ section, Mint is the choice of decision-makers across industry and government. There is no better proof of this than the fact that four of five Mint readers do not read another business paper. The launch excitement will culminate on 12 August with a high profile Clarity Through Debate event, which will focus on the key issue of Financial Inclusion. With panelists that include policy-makers and business leaders from both the public and private sector, the event will underscore Mint’s commitment to bringing clarity in business to issues that matter. Mint was created to address the growing reader demand for clarity in business. To quote Rajiv Verma, CEO, HTML, from the media release, “Mint’s spectacular readership numbers have validated our belief that there is a market for unbiased, jargon-free reporting and analysis in the business news domain, across formats.” In just over two years, Mint has a readership of 200,000 everyday. With a readership of 175,000 in the Delhi and Mumbai editions (IRS 09), and a circulation of 25,000 plus in the other cities, Mint is a strong and growing No. 2 player in the category. Livemint.com makes available Mint content to audiences globally, apart from hosting rich content and platforms for its one million plus web audience. The one-third share of readers in the cities that matter makes Mint a critical choice of advertisers for reaching decision-makers. The clean design and printing quality, contextual content environment, an array of innovative advertising options and events, and the unduplicated high-profile reader base makes the daily the choice of premium advertisers. The addition of Chennai gives advertisers yet another reason to partner Mint. Source: Home - Livemint.com | 13 Jul 2009 | 12:19 pm Good G8 summit spurs India's hopes for global roleL'AQUILA, Italy (Reuters) - India made its voice heard on global trade and climate change at a G8 summit in Italy this month, in a sign of growing diplomatic heft that can help it push for a bigger role in global governance.Source: Reuters: Money News | 13 Jul 2009 | 12:16 pm Rupee remains weak as stocks fall againMUMBAI (Reuters) - The rupee bounced off a two-month low as the dollar fell against major currencies on Monday, but it still ended weaker as losses in the sharemarket renewed worries about foreigners pulling out funds.Source: Reuters: Money News | 13 Jul 2009 | 12:14 pm Web Exclusive | Travel agents win reprieveThiruvananthpuram: In a significant development, the Kerala high court on Monday issued orders to the ministry of civil aviation and aviation regulator Directorate General of Civil Aviation or DGCA to ensure payment of commission to travel agents. The high court issued this order after hearing the Iata Agents Association of India or IAAI, which has 600 members across the country and was fighting for reinstatement of 5% commission on air tickets. ”The high court has asked the ministry and DGCA to ensure that the Rule 135 (Tariff) of the Aircraft Rules, 1937 is upheld and to settle the issues in three months,” senior lawyer for IAAI K. R. Radhakrishnan Nair told Mint. For the last seven months, the travel agents have been protesting the carriers’ decision to not pay them commission. It has asked the agents to instead charge a fee from customers.Of the 72 international airlines operating in India, at least 16 international airlines have stopped paying the commission to India’s travel agents including United Airlines Inc., Continental Airlines Inc., Air France, Northwest Airlines Corp., Qatar Airways, KLM Royal Dutch Airlines, Delta Air Lines, Japan Airlines Corp., British Airways Plc., American Airlines Inc., Austrian Airlines and Swiss International Air Lines Ltd. Travel agents all over the country had stopped selling tickets of Singapore Airlines since early 2009, as a first step of their protest. Biji Eapen, president of IAAI said this is a major victory for travel agents. Representatives of foreign carriers were not available for an immediate comment. Source: Home - Livemint.com | 13 Jul 2009 | 12:12 pm Power Min rejects Tata Power\'s plea for D6 gasThe Power Minister has declined Tata Power\'s request for 3.2 mscmd gas from D6. The request is for 150 mw stranded units at Trombay, Bombay. Tata power had signed a binding term sheet with Reliance industries for 3.24 mmscmd.Source: Moneycontrol Top Headlines | 13 Jul 2009 | 12:05 pm Gammon scrip makes a comeback, ends in the greenThe shares of infrastructure major Gammon India, which took a beating Monday as authorities mulled action against the company, pulled back smartly to end the day in the green.Source: IndiaeNews.com: Business News | 13 Jul 2009 | 12:01 pm Chandigarh school buses continue strike for fourth dayBus operators of private schools in the city continued their strike for the fourth day Monday against a government order making it mandatory for all such buses to install speed governors.Source: IndiaeNews.com: Business News | 13 Jul 2009 | 12:01 pm State Bank to raise interest rates after DiwaliThe country's largest lender, State Bank of India (SBI), will raise interest rates by 25 to 100 basis points after Diwali, a top company official said here Monday.Source: IndiaeNews.com: Business News | 13 Jul 2009 | 12:01 pm Air India Expected to Submit Revamp Plan Soon - Wall Street Journal
Source: Business - Google News | 13 Jul 2009 | 11:58 am India Fund Houses Rush to Market Before Entry-Load Removal - Wall Street Journal
Source: Business - Google News | 13 Jul 2009 | 11:58 am Economic crisis far from over, says WTO chiefGeneva: The global economic downturn is far from over, and few countries have dismantled the dangerous protectionist barriers they imposed in response to it, World Trade Organization director-general Pascal Lamy said on Monday. In remarks to the WTO’s 153 members, Lamy said that import penalties and other border restrictions are closing off markets and causing more difficulty in a time of depressed demand. “There is no indication yet of governments more generally unwinding or removing trade-restricting or distorting measures that they imposed early on in the crisis,” he said. While saying there was no “outbreak of high-intensity protectionism” to date, Lamy raised the possibility of an amplification of trade disputes, retaliatory restrictions, and sanctions if unfair barriers are kept in place. The WTO is analysing economic stimulus measures to prop up banks, insurers, carmakers and other key sectors in developed markets, where the credit crisis began. So far, Lamy said, it has not been possible to tell whether the subsidies and bailouts have violated international law by crowding out competition. “This continues to be a particularly challenging part of the exercise because of the difficulties of collecting hard data in these areas,” he said of WTO efforts to assess the stimulus moves. “Without that data, it is not possible to asses the impact they are having on trade flows.” Lamy, who attended the G-8 summit in Italy last week where world leaders promised to work to conclude a new global free trade pact in 2010, told WTO members on Monday that it was too early to count on an economic recovery. “I would caution against excessive optimism,” he said. “Although financial markets are showing signs of stabilizing, the crisis is far from over, in particular in many developing countries that are only now starting to feel its full force on their trade and economic growth.” Trade diplomats are due to meet on Monday afternoon at the WTO’s headquarters, on the shores of Lake Geneva, for the first Doha Round negotiating session since the G-8 plus major emerging countries set the 2010 target. Packed Schedule Negotiators are expected to set a packed meeting schedule for the coming months in line with the Italy agreement to speed up the talks, which have been going on since 2001, and arrange meetings between trade ministers to settle tricky issues. The communique from the Group of Eight wealthy nations plus China, India, Brazil, South Africa and Mexico raised hopes that countries who had previously squared off in Geneva would be willing to yield enough to make consensus possible. Two signatories -- India and the United States -- caused the last major WTO push to fail last July when they locked horns about how poor-country farmers would be treated in a Doha deal, which would open up global food, goods and services markets. Both countries have had a change of government since then, but neither have spelled out any changed negotiating stances. Lamy has said a global trade deal would give the world economy a $130 billion annual boost. As in former WTO accords like the Uruguay Round, the Doha Round requires full consensus in all areas for the accord to be clinched. Source: Home - Livemint.com | 13 Jul 2009 | 11:57 am Axis Bank Q1 net jumps 70% - Livemint
Source: Business - Google News | 13 Jul 2009 | 11:56 am Govt says no plan to change FDI policy in retailNEW DELHI (Reuters) - The government has no plans to change the present policy on foreign direct investment in retail, as it seeks to safeguard small retailers from adverse impact of growing organised retail, the minister of state for trade told lawmakers on Monday.Source: Reuters: Money News | 13 Jul 2009 | 11:38 am Blackstone India warrant deal blocked by regulatorMUMBAI (Reuters) - Blackstone will not raise its stake in India's Nagarjuna Construction Co through warrants after the plan failed to get regulatory approval, the second time the private equity firm has hit a regulatory hurdle in the country.Source: Reuters: Money News | 13 Jul 2009 | 11:37 am Asia Q2 earnings to reflect downturn; H2 recovery eyedSeoul: Sluggish consumer demand and concerns about the strength of a possible second-half recovery are the main issues surrounding Asian companies’ second-quarter results. Following is a sectoral summation of what to expect. Technology Most Asian tech firms, from memory-chip makers to handset vendors, are still feeling the effects of the global financial crisis, which has weakened demand for electronics and gadgets. Brisk demand for flat-screen TVs in China and Japan, spurred by stimulus measures, likely helped Japanese electronics makers trim their losses in the latest quarter. But profitability at major high-tech exporters such as Sony Corp, Panasonic Corp and Sharp Corp has remained under pressure because of a strong yen, and further yen gains against the dollar this month bode ill for companies’ near-term outlook. Any earnings turnaround this year is expected to be mild as the electronics industry lacks strong growth products, in contrast to the decade’s start, when mobile phone demand hastened the sector’s recovery from the Internet bust. The worst may be over for the memory chip industry, which has been ravaged by two-and-a-half years of low demand and plummeting prices, thanks especially to a more stable market for dynamic random access memory (DRAM) chips, which are used widely in PCs. But the end of the downcycle isn’t expected to translate into any sudden windfall for the industry, where only market leader Samsung Electronics is set to report a divisional profit for the quarter. World No.2 Hynix Semiconductor should post a smaller operating loss and even swing to a profit later this year, but Toshiba Corp and Elpida Memory are expected to stay mired in losses this year. Major chip foundries saw a better second quarter versus the first as demand for PCs and consumer gadgets recovered. TSMC probably booked a bigger profit after second-quarter sales jumped 88%, and UMC is expected to return to profit in April-June after three quarters in the red. Sales growth could slow in the third quarter, and it could be a one-man TSMC show into next year if other second-tier players, including Chartered Semiconductor and SMIC fail to invest more in technology. Samsung and LG Electronics, the world’s No.2 and No.3 cell phone makers, are expected to pick up market share and show strong second-quarter performance, helped in part by a weak Korean won which at end-June was still 18% cheaper than a year earlier against the dollar. The liquid crystal display (LCD) sector, one of the few tech sector bright spots, is restarting production lines and securing raw materials after sharp output cuts in late 2008 resulted in a shortage of panels this year. Samsung and LG Display are set to return to profit in April-June, while Taiwan rivals AU Optronics and Chi Mei Optoelectronics are seen reporting significantly smaller losses than prior quarters. In the telecom sector, China Mobile, the world’s largest mobile carrier by users, leads a sector battling falling average revenue per user, rising costs from the rollout of third generation (3G) mobile services and the slow economy. Analysts polled by Reuters Estimates expect a modest rise in profit from a year ago in the second quarter and second half for China Mobile, but falling fixed-line users will weigh on smaller rivals China Unicom and China Telecom. In India, robust subscriber additions in the world’s fastest-growing wireless market should boost revenue growth at Bharti Airtel and Reliance Communications, but falling call tariffs will weigh on profitability. Bharti Airtel, which is in talks with South Africa’s MTN to become one of the world’s biggest telcos, should see its profit rise by around a fifth from a year earlier. Financials In the financial sector, bad loans and smaller fee income are expected to squeeze April-June earnings, but signs of economic improvement point to a better performance later this year. Japan’s top three banks Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group are all expected to return to profit after posting hefty losses in the year to March. But all are likely to see little growth from the same period a year earlier. Japan’s big banks predict a rebound in the value of their equity portfolios and an improvement in the country’s economy. Singapore banks are likely to post double-digit falls in second-quarter profits, hit by higher bad debt provisions and a drop in fees. But the second half should improve as the economy picks up and the city-state’s moribund property market shows signs of life. India’s banking sector should post healthy profit growth thanks to treasury income, primarily from trading in bonds. But operating income will remain subdued, dented by slower loan growth and lending rate cuts. Top lender State Bank of India is expected to report net profit grew 22.5%. Chinese banks’ profits are seen flat in the second quarter as lower interest margins offset a surge in new loans. Autos, Steel, Energy Japan’s auto sector is expected to mark an improvement from the previous quarter, when production at most companies hit a bottom while cars were sold off bloated inventory. Production levels have remained low and consensus forecasts have Toyota Motor Corp, Honda Motor Co and Nissan Motor Co all posting a loss. Small-car maker Suzuki Motor Corp, however, should show a quarterly profit, helped by its presence in the growing Indian market. Analysts expect further improvement in July-September as production gradually picks up, helped by demand-boosting incentive programmes rolled out by governments around the world. April-June results at South Korea’s Hyundai Motor should be helped by a still-weak won and tax incentives aimed at boosting local car sales. Hyundai is expected to post a profit in the second half thanks to the launch of new models. April-June should prove the 2009 low point for Asia’s big steel firms, after the industry’s worst downturn in decades. Steelmakers cut production by as much as half in the first half, but are now cranking up output as manufacturing demand picks up. Nippon Steel and JFE remain the hardest hit by the downturn and are seen posting heavy losses in April-June, but China’s Baosteel raised domestic prices for July and plans to increase them again for August, brightening its earnings prospects for the rest of the year. China’s three largest oil companies should report stronger quarterly profits in late August, on rising oil prices and fuel-pricing reforms, and analysts expect even better results in the coming quarters. Oil prices averaged about $60 a barrel in the second quarter almost double the level in January. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 11:37 am India says no plan to change FDI policy in retail - Reuters India
Source: Business - Google News | 13 Jul 2009 | 11:35 am Strict deadlines may have caused Metro mishap: ExpertsThe Delhi Metro mishap that killed six people and injured 15 others may have been caused by strict deadlines that led to outsourcing of work and poor quality control, say officials of the Indian Buildings Congress (IBC).Source: IndiaeNews.com: Business News | 13 Jul 2009 | 11:33 am Indefinite shutdown affects normal life in DarjeelingNormal life was affected in the three hill sub-divisions of Darjeeling as an indefinite shutdown, called by the Gorkha Janamukti Morcha (GJM) in support of a separate state of Gorkhaland, began at noon Monday.Source: IndiaeNews.com: Business News | 13 Jul 2009 | 11:33 am India half a degree warmer in 100 years: MinisterThere has been a warming of about 0.5 degrees Celsius in the average temperature in India over the past 100 years, the government informed parliament Monday.Source: IndiaeNews.com: Business News | 13 Jul 2009 | 11:33 am Metro chief Sreedharan withdraws resignationBowing to the request of Delhi Chief Minister Sheila Dikshit and other senior officials, 'Metro Man' E. Sreedharan Monday withdrew his resignation letter as managing director of the Delhi Metro Rail Corporation (DMRC).Source: IndiaeNews.com: Business News | 13 Jul 2009 | 11:32 am Will maintain operating margins at 26%: Geojit BNP ParibasSatish Menon, DirectorOperations, Geojit BNP Paribas Financial Services said the company would be able to maintain 26% operating margins if the markets remain good.Source: Moneycontrol Top Headlines | 13 Jul 2009 | 11:32 am Private sector not liable to job quota for minoritiesCorporate Affairs Minister Salman Khurshid Monday said the existing Companies Act did not empower the government to ask the private sector for providing minorities with jobs.Source: IndiaeNews.com: Business News | 13 Jul 2009 | 11:31 am Gammon India - profile of Delhi Metro's contractorGammon India, under public scrutiny after a viaduct it built for the Delhi Metro collapsed Sunday and killed six people, is a mid-size infrastructure company in the country that traces its history to 90 years.Source: IndiaeNews.com: Business News | 13 Jul 2009 | 11:30 am State Bank of India sees rates rising in 6 months - Reuters India
Source: Business - Google News | 13 Jul 2009 | 11:21 am Axis Bank Q1 net jumps 70%Mumbai: Private sector lender Axis Bank on Monday reported a 70% jump in its net profit at Rs562.04 crore for the first quarter ended 30 June, 2009, over the corresponding period a year ago. The company had a net profit of Rs330.14 crore during the June quarter a year earlier (2008-09), Axis Bank said in a filing to the Bombay Stock Exchange. Total income of the bank also rose to Rs3,864.13 crore during the first quarter of the current fiscal (2009-10) from Rs2,891.24 crore in the corresponding period a year ago. Shares of Axis bank were trading at Rs731.80, down 1% in late afternoon trade on the BSE. Source: Home - Livemint.com | 13 Jul 2009 | 11:09 am BSE Sensex falls 0.8 pct; Reliance, L&T dropMUMBAI (Reuters) - The BSE Sensex fell 0.8 percent on Monday to its lowest close in two months, as niggling worries about the health of the world economy and uncertainty over corporate earnings reduced risk-appetite across Asia and Europe.Source: Reuters: Money News | 13 Jul 2009 | 10:57 am SBI sees rates rising in six monthsKOLKATA (Reuters) - State Bank of India, the country's top lender, sees interest rates rising by up to 100 basis points in six months if cash conditions tighten, its chairman said on Monday.Source: Reuters: Money News | 13 Jul 2009 | 10:55 am Markets react to reduced risk-appetite across Asia & Europe; end lowerMumbai: Indian shares fell 0.8% on Monday to their lowest close in two months, as niggling worries about the health of the world economy and uncertainty over corporate earnings reduced risk-appetite across Asia and Europe. Major losers spanned companies from energy giant Reliance Industries and engineering and construction conglomerate Larsen & Toubro to top telecom firm Bharti Airtel. Analysts said foreign funds, which had been the main driver for the market to rally nearly a half in the June quarter, were on the backfoot now with prospects for a swift world economic recovery fading. “Risk-appetite abroad is going to determine how well emerging markets perform,” Avinash Gupta, assistant vice president of equity research at Bonanza Portfolio Ltd, said from New Delhi. “To that extent, global markets are going to impact India.” The 30-share BSE index ended down 0.77%, or 103.90 points, at 13,400.32, with 21 stocks declining, after falling as much as 2.1% during trade. It was the lowest close since 15 May. The next trading day, the benchmark had jumped 17% after Prime Minister Manmohan Singh’s coalition won re-election comfortably and spurred hopes for fast-paced reforms to boost growth. But the budget last Monday focused on social spending programmes, had little to offer for reforms and set a huge deficit of 6.8% of gross domestic product, the highest in 16 years. “The market had run up quite a bit, and the disappointing budget provided the trigger for a correction,” Gupta said. After rallying 22.5% since the election verdict, the BSE index dropped 9.4% last week in its biggest weekly fall in eight months that took it below the close on 18 May. Sentiment was also hit after monsoon rains, crucial for India’s domestic demand-led economy, made a weak start in June. “For now, there is no fresh trigger to attract investors to the market,” said Pisupati Subramanyam, president at Ventura Securities. Asian shares fell on Monday, with Japan’s Nikkei losing 2.6%, while MSCI’s measure of other Asian markets dropped 2.8%. At 1014 GMT, the FTSEurofirst 300 index of top European shares was down 0.4%. “We are going to react to overseas markets for a while, and the amount of foreign fund inflows and liquidity coming into the market will determine how it performs,” Subramanyam said. However, analysts do not see a significant fall in shares as longer-term prospects for the market remained bright. The benchmark is still up by more than two-thirds from a 2009 low in early March, and has risen almost 40 this year after losing more than half its value in 2008. Investors will watch corporate results for clearer signs of an economic recovery, traders said. For a preview on Asian firms’ April-June earnings. Reliance Industries, India’s largest-listed firm with the most weight in the main index, fell 1.7% to Rs1,747.85, while Larsen & Toubro dropped 2.1% to Rs1,330.35. Bharti Airtel, which is in exclusive merger talks with South Africa’s MTN, eased 2.1% to Rs766.20, while Reliance Infrastructure slid 6.1% to Rs966.65. In the broader market, losers led gainers by more than 3.5 to 1 on relatively light volume of 292.4 million shares. The 50-share NSE index fell 0.75% to 3,974.05. Source: Home - Livemint.com | 13 Jul 2009 | 10:54 am No plans to change retail FDI rules, says ministerNew Delhi: The government has no plans to change the present policy on foreign direct investment in retail trade, Union minister of state for trade said in a written reply to Parliament. Jyotiraditya Scindia also said there was no proposal to implement full capital account convertibility as of now. India’s retail business, the second largest employer after agriculture, is estimated to touch $590 billion in two years, Parliament was informed on Monday. “...the retail trade is estimated to grow at 13% per annum from $322 billion in 2006-07 to $590 billion in 2011-12...,” the minister said in a written reply to the Lok Sabha. The share of organized retail in total retail has grown from 3.3% in 2003-04 to 4.1% 2006-07. “Government also fully recognises the need to ensure that small retailers are not adversely affected by the growing organized retail and that there is no adverse effect on employment,” he added. A Parliamentary Standing Committee on Commerce has recommended a blanket ban on entering of domestic and foreign players into the retail trade. FDI is prohibited in retail trading except for single brand, where 51% foreign investment is permitted. Foreign investment up to 100% is permitted under the automatic route in wholesale cash and carry trading. Source: Home - Livemint.com | 13 Jul 2009 | 10:49 am SBI to roll out banking services in 50000 unbanked villages - Economic Times
Source: Business - Google News | 13 Jul 2009 | 10:41 am Tamil Nadu to setup 'country specific' industrial parksTamil Nadu Government has chalked out a major plan to setup 'country specific' industrial parks aimed at attracting more investments to the state.Source: Daily News & Analysis: Money News | 13 Jul 2009 | 10:41 am PREVIEW - Asia Q2 earnings to reflect downturn; H2 recovery eyedSEOUL (Reuters) - Sluggish consumer demand and concerns about the strength of a possible second-half recovery are the main issues surrounding Asian companies' second-quarter results. Following is a sectoral summation of what to expect.Source: Reuters: Money News | 13 Jul 2009 | 10:37 am Rupee pares loses; bounces from two-month low - Economic Times
Source: Business - Google News | 13 Jul 2009 | 10:28 am Investors pull out $365 mn from Asia funds; India sees inflowsNew Delhi: India-focused funds saw net inflows of $52 million even as global investors pulled out over $365 million from Asia-dedicated equity funds in the first week of July. According to the data compiled by the international fund- tracking firm, EPFR Global, all Asia - excluding Japan - equity funds surrendered $365 million in early July although they remain committed to investing in India and Russia. “Fresh doubts about US appetite for emerging markets exports and global demand for raw materials prompted investors to pull some money off the table in early July,” the EPFR report said. At the country level, investors removed $424 million from China Equity Funds and $244 million from Brazil Equity Funds. But they committed modest sums to Russia Equity Funds despite the pressure on oil prices and reacted to the general disappointment voiced about India’s latest budget by steering $52 million into India Equity Funds, it added. Besides, funds geared on all four of the BRICs (Brazil, Russia, India and China) and invested for the 16th consecutive week. So far this year, the net investment by funds focused on the combined BRIC region stood at $2 billion. Among the other emerging markets, Latin America and Europe, Middle East and Africa (EMEA) equity funds posted inflows for to the tune of $1 million. While the Latin America-focused equity funds pulled out $307 million, the diversified Global Emerging Markets (GEM) equity funds saw inflows for the first week of July of about $131 million. Collectively, the Global Equity Funds saw fresh money worth $659 million and Pacific Equity Funds witnessing inflows worth $84 million during the week. “Fears that spring’s green shoots could wither in the harsh light of the 2Q 2009 earnings season weighed on developed markets and the funds that invest in them during early July, with US Equity Funds recording outflows for a fourth straight weeks and Europe Equity Funds for the seventh time in the past eight weeks,” the report said. Besides, Japan Equity Funds posted inflows for the second straight week, taking in a net $147 million for the week. Also the EPFR global-tracked sector funds saw outflows during the first week of July as projections for demand remained flat. Energy sector funds saw redemption of $452 million by investors, their biggest weekly tally since late December, while financial sector funds surrendered $336 million. Money Market Funds also posted outflows of $2.68 billion for the week despite the general uncertainty evident among investors. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 10:23 am India industry raises Rs1.74 lakh cr via corporate bonds in FY09New Delhi: India industry has raised over Rs1.74 lakh crore through issue of corporate bonds on private placement basis in the fiscal 2008-09, driven by huge mobilisation by the private sector firms, a report says. According to data complied by capital market data provider Prime, the funds raised have increased substantially to Rs1,74,327 crore last fiscal from Rs1,15,423 crore in FY2007-08, a jump of over 51%. The major reason for the substantial increase in fund raising through corporate bonds was due to the significant growth in the raising by the private sector, whose mobilisation went up by 152% to Rs54,634 crore in FY09 from Rs21,691 crore in the previous fiscal. The other sector which continued to witness large mobilisation was financial institutions and banks, with their mobilisation going up by 18% to Rs1,02,886 crore from Rs87,542 crore, the Prime report said. “Government organisations and financial institutions, put together, witnessed a decline, mobilising 69% of the total amount in the year, down from 81% in the previous year,” it said. On an industry-wise basis, the financial services sector continued to dominate the market, mopping up Rs1,23,251 crore or 71% of the total amount. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 10:15 am NTPC not asked to sign deal with Reliance: GovernmentThe central government Monday said it has not issued any directive to the state-run power major NTPC, formerly National Thermal Power Corp, to sign a gas purchase deal with Reliance Industries Ltd (RIL).Source: IndiaeNews.com: Business News | 13 Jul 2009 | 10:02 am India not concerned over G-8 declaration on N-issue: Pranab - Business Standard
Source: Business - Google News | 13 Jul 2009 | 10:00 am PM reviews rain situation; wants contingency plans in placeNew Delhi: In view of a deficient monsoon, Prime Minister Manmohan Singh on Monday reviewed the crop situation in the country and directed officials to have contingency plans in place. Singh chaired a meeting to review the monsoon situation with top officials of the India Meteorological Department and the agriculture ministry before leaving for a five-day visit to France and Egypt. Highly placed sources said that Singh was apprised of the agricultural situation across the country and officials expected that 95% of sowing operations would be completed this month. The weather office expects monsoon to be near normal in July, which is crucial for the 235-million strong farming community. The Prime Minister directed the officials to keep a close track of the situation and have contingency plans in place to meet any eventuality, the sources said. The IMD had forecast below normal rainfall this year in June. It said the country was expected to receive 93% rains of the average rainfall for the season while northwestern regions would get deficient rains. The country as a whole has received near normal rainfall last week and 21 out of the 36 meteorological sub-divisions received normal to excess rains. In the rest 15 sub-divisions, rainfall was either deficient or scanty, the weather office said. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 10:00 am Gammon India shares plunge as bridge tumblesMUMBAI (Reuters) - Gammon India Ltd shares tumbled by nearly a fifth on Monday after a part of the bridge it was constructing for the Delhi Metro Rail Corp fell, unnerving investors.Source: Reuters: Money News | 13 Jul 2009 | 9:57 am India not concerned over G-8 declaration on N-issue: Pranab MukherjeeNew Delhi: India on Monday said it is not concerned about G-8 developed nations vowing to curb transfer of some sensitive nuclear technology to non-NPT members, saying for New Delhi clean waiver given by Nuclear Suppliers’ Group is only relevant aspect for cooperation in the field. “So far as civil nuclear cooperation is concerned, the appropriate agency is IAEA and the 45-member NSG. We have got clean waiver from NSG. We are not deeply concerned (over G-8 declaration)...,” finance minister Pranab Mukherjee told the Rajya Sabha. Mukherjee, who was external affairs minister when India got waiver from the NSG and signed India specific safeguards agreement with IAEA last year, was responding to opposition members’ concern on the G-8 declaration at Italy. At its summit in L’Aquila last week, the G-8 issued a declaration in which it underlined that they will curb transfer of enrichment and reprocessing technology and items to nations which are not signatories to nuclear non-proliferation treaty, a decision which may impact India. Mukherjee said India is not a member of G-8 grouping and it is only part of an outreach countries group of five countries. The issue was raised by senior BJP member Najma Heptulla who wanted a statement from the government on the development. Supported by her party colleagues and Left members, she asked the government whether the G-8 declaration would mean the extra conditionalities on the waiver given by the NSG. She wanted to know whether India was consulted before the declaration and if so whether the government had agreed. Brinda Karat (CPI-M) asked why the House has been kept in the dark over such an important issue. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 9:51 am Two lakh engineers unemployed; govt to create 15 million jobsNearly two lakh engineers and 1.32 lakh diploma holders were unemployed in 2007, the ministry of labour and employment told the Lok Sabha.Source: Daily News & Analysis: Money News | 13 Jul 2009 | 9:51 am India adds 4.487 cr wireless subscribers in Jan-Mar quarterNew Delhi: The country added a whopping 4.487 crore wireless telephone users during the quarter ended 31 March, 2009, taking the subscriber base to 39.176 crore. The wireless user base grew by 12.93% during the January-March quarter of this year. In the preceding quarter ended December 2008, the wireless subscriber base was 34.689 crore, the Telecom Regulatory Authority of India (Trai) said in a statement. The total telecom subscriber base (wireline and wireless) touched 42.972 crore for the quarter ended March this year from 38.479 crore in the quarter ended December 2008, registering an increase of 11.68%. The tele-density (number of telephones per 100 people) for the quarter ended March 2009 reached 36.98 as compared to 33.23 in the previous quarter, Trai said. However, the all-India blended Average Revenue Per User (ARPU) per month for the GSM segment decreased by 6.82% to Rs205 in March 2009 from Rs220 in December 2008. While the ARPU for GSM postpaid service declined 2.8% from Rs559 in December 2008 to Rs543 in March 2009, ARPU for prepaid service slipped 6% from Rs192 in December 2008 to Rs181 in March 2009. For the CDMA segment, the all-India blended ARPU per month for the quarter ended March 2009 stood at Rs99 as against Rs111 for the quarter ended December 2008. The huge difference between postpaid and prepaid ARPU in the CDMA segment, noticed in the last quarter, continued to remain valid for the current quarter as well, Trai said. “Postpaid ARPU has been five times that of prepaid ARPU, which perhaps, could be attributed to declining importance of processing fee on recharge coupon/voucher purchased by prepaid subscribers,” it said adding that the gap was the lowest in Circle C (3.68 times) and highest in Circle A (5.59 times). Subscriber base of wireline service has increased marginally from 3.790 crore for the quarter ended December 2008 to 3.796 crore for March quarter 2009. During the quarter, rural wireless user base increased 17.77% to 10.971 crore subscribers for quarter ended March 2009 from 9.315 million subscribers for the previous quarter, while rural wireline subscriber base showed a marginal decrease to 1.058 crore users from 1.068 crore for December quarter. Broadband subscriber base (with a download speed of 256 Kbps or more) stood at 0.622 crore for the quarter ended March 2009 as against 0.552 crore in the previous quarter, TRAI said. The total Internet subscriber base reached 1.354 crore for the January-March quarter from 1.285 crore in the previous quarter, registering an increase of about 5.3%. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 9:43 am May raise funds via QIP/NCD issue: Punj LloydAtul Punj, Chairman, Punj Lloyd, speaking to CNBCTV18, said the company may go for substantial fundraising and that they will take a decision on it in the next 48 hours. Fund raising, he added, will be done via QIP/NCD issue. Punj said part of the funds will be used for capex needs and part to retire debtSource: Moneycontrol Top Headlines | 13 Jul 2009 | 9:42 am Government to create 58 million job opportunities for labourersThe Eleventh Five Year Plan aims at creating 58 million job opportunities.Source: Daily News & Analysis: Money News | 13 Jul 2009 | 9:41 am KG D6 to have peak output by 2011-12: PrasadaNew Delhi: Reliance Industries’ eastern offshore KG D6 natural gas field will have a peak output of 80 million cubic metres per day for six years beginning 2011-12, said minister of state for petroleum and natural gas Jitin Prasada on Monday. “Currently gas production from KG D6 is 31 mmcmd,” Prasada informed the Rajya Sabha. RIL started gas production from the KG D6 fields on 2 April and has signed contracts with 15 fertilizer plants to sell close to 15 mmcmd gas. Additionally, it will also supply over 25 mmcmd to 19 power plants and 3.3 mmcmd to steel plants. Prasada said RIL will produce 21.9 billion cubic metres of gas in 2009-10 and 2010-11 before hitting the peak of 29.2 bcm (or 80 mmcmd) in 2011-12. “The plateau production of 80 mmcmd is for six years (till 2016-17).” From 2017-18, output will start declining first to 21.9 bcm and then to 14.6 bcm in 2018-19. Investment banker Morgan Stanley had last week stated that the KG D6 fields at peak production will help the nation save $8.3 billion annually or 0.7% of the GDP. Peak output could replace close to 26 million tonnes of crude oil, which is as much as ONGC produces domestically, or about 17% of the current demand in India. In addition, the 20 mmcmd gas to the fertilizer industry will help produce 13 million tonnes or 50% of the country’s fertilizer production, and about 12,500MW of power, or 8-9% of the overall power produced in the country, can run on RIL’s gas. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 9:39 am Goa mulls to optimise sponsorship, cut expenditure on IFFIPanaji: Goa government has unveiled plans to optimise sponsorships and minimise expenditure for International Film Festival of India (IFFI) 2009 scheduled in November-December here. “We want to be financially self-sustainable without relying on governments for funding. Optimising sponsorships and minimising expenditures at whatever level possible is our goal,” Manoj Srivastava,CEO, Entertainment Society of Goa (ESG), saidon Monday. The ESG is a state government promoted nodal agency to hold the festival in the tourist state, in association with Directorate of Film Festivals (DFF), a wing of Union information and broadcasting ministry. The blue print of master plan, prepared by Srivastava and placed before ESGs governing council, which is headed by Goa chief minister Digamber Kamat, has done thorough scrutiny of IFFI expenditures for past four years. The 200-page-long document suggests that there is immense scope for cutting the expenditure on the festival without compromising with the aura of the festival. For the first time, the festival will introduce barter system which will double up with the sponsorship collections from this year onwards, Srivastava said. The sizeable slash into the contribution by state government this year is projected to be much less than the earlier one. From Rs10.43 crore put in the form of state component last year, only Rs6.5 crore is expected to be the state liability this time. The DFF and state contribution ratio is 30:70. So, if the state ratio dips, that means even the DFF will have to shell out less, Srivastava said. Moreover, the ESG, a flagship body of the state government, plans to make up entire Rs 6.5 crore in terms of finances avoiding any burden on state coffers. “We aim to rise on our own. If we don’t stand on our feet now than it will become habit to get money from the state government,” the CEO said. The cost-cutting exercise executed by ESG has the peripheral activities contracted to the private event management companies on their black list. While we get Rs one crore in the form of sponsorship for such events, we spend Rs2.5 crores, Srivastava said pointing out the financial non-viability to have such programmes. The CEO said that Goa wants that the film festival should be more filmcentric. “We want to concentrate more on the cinema and branding of the festival’s image,” he added. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 9:31 am Sterlite Technologies bags Rs373 cr project from BSNLNew Delhi: Telecom transmission solutions provider Sterlite Technologies on Monday said that it has bagged a contract worth Rs372 crore from state-run Bharat Sanchar Nigam Ltd (BSNL) for a fibre-to-the-home (FTTH) network project. FTTH Network would enable BSNL subscribers to access high speed bandwidth (over 100 Mb/s) as well as utility applications such as high definition video conferencing or entertainment applications such as high-speed gaming, Sterlite Technologies said in a statement. BSNL plans to implement similar FTTH networks in 25 cities across the country by 2012, which would impact 2 million subscribers. The current phase of the FTTH network would be capable of providing high-speed internet, IPTV solutions, VoIP, and other value added services to about 5,00,000 subscribers, Sterlite Tech said. “We believe FTTH will offer subscribers limitless possibilities by serving the requirements of bandwidth-hungry applications and this would revolutionize the way subscribers work, live and play,” Sterlite Technologies CEO & Director Anand Agarwal said. BSNL will be the first telecommunication company in the country to deploy commercial scale FTTH network, the statement said. Sterlite Tech (formerly, Sterlite Optical Technologies) expects to execute this project in the current fiscal. Shares of Sterlite Tech were trading at Rs162.35, down 4.86% in the afternoon trade on the BSE. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 9:16 am European shares hit 11-week low on earnings uncertainitySource: Home - Livemint.com | 13 Jul 2009 | 9:00 am ONGC to invest $730 mn in Cairn India’s Rajasthan oilfieldsNew Delhi: State-run Oil and Natural Gas Corp (ONGC) will invest about $730 million in Cairn India’s main Rajasthan oilfields despite the project offering negative returns. The board of ONGC has approved its 30% share of the $2.431 billion revised field development cost proposed by Cairn India for the Block RJ-ON-90/1, petroleum minister Murli Deora informed the Rajya Sabha on Monday. ONGC will invest $729.43 million. “Under the existing set of fiscal terms and conditions, ONGC has negative net present value for its investment in the revised field development plan,” he said. The project offers negative returns to ONGC as the firm is liable to pay royalty on the entire crude oil production from the Rajasthan fields despite having just a 30% share. Deora, however, did not say if the government will reimburse ONGC for the royalty the firm will pay in excess of its share. ONGC says that its board had approved the revised cost on the assurance that the excess royalty paid will be reimbursed. Deora said Cairn’s Rajasthan fields would produce 2.6 million tonnes of oil in 2009-10 and 6.8 million tonnes in 2010-11 with a peak output of 8.9 million tonnes the following year. Cairn had previously pegged the cost of production of the Mangala and adjoining Aishwariya, Saraswati and Raageshwari fields in the Rajasthan block at about $1.5 billion. Besides, the $2.431 billion cost of developing the Mangala, Aishwariya, Saraswati and Raageshwari (MARS) oilfields, the Cairn-ONGC combine would also invest $471 million in bringing to production the Bhagyam field, the second-largest oilfield in the Rajasthan block. Mangala is the biggest field in the Rajasthan block. Additionally, $941 million is being spent on laying a pipeline to transport crude oil from Barmer district in Rajasthan to Gujarat coast. Deora said the main reasons for rise in the cost in the revised plan for MARS fields is increase in plateau production rate from 96,000 barrels of oil per day to 1,25,000 bpd. Besides, change in production and processing from individual gathering stations to a central processing hub, updated cost estimates and increase in service tax contributed to increase in the cost, he said. “ONGC’s Net Present Value (the value today of anticipated future incomes and expenditures) with revised field investment plan works out to negative $1.435 billion and negative $1.471 billion at a crude price of $60 and $70 per barrel, respectively,” ONGC had stated in a representation to the petroleum ministry. Negative NPV has been a result of ONGC being made liable to pay 20% royalty on the entire crude oil production, while Cairn being exempted from payment of any levy. Royalty at the time of signing of the production sharing contract for Rajasthan was Rs539.20 per tonne, while it today comes to Rs3,780 per tonne, considering crude price of $60 per barrel. Besides change in royalty rates, the oil development cess has also been increased to Rs2,500 per tonne from Rs900 per tonne at the time of signing the PSC for the Rajasthan block. Source: LatestNews-Home - Livemint.com | 13 Jul 2009 | 8:57 am Mahindra Renault venture posts Rs 490cr lossFollowing a 48 per cent fall in sales, Mahindra Renault Pvt Ltd has posted a loss of Rs 490.21 crore on a gross turnover of Rs 741.17 crore during 200809.Source: Moneycontrol Top Headlines | 13 Jul 2009 | 8:55 am Rupee off two-month low on profit-taking, stocksMumbai: The Indian rupee bounced off a two-month low in afternoon trade on Monday as the sharp fall in recent sessions triggered some profit-taking, while of paring losses in local shares also helped sentiment. At 2:20pm, the partially convertible rupee was at 49.21/23 per dollar, off an early low of 49.47, its weakest since 15 May. It had closed on Friday at 49.01/02. The rupee shed 2.4% last week, its biggest weekly drop since early March, when it lost 2.8%, tracking sharp losses in local shares, which lost 9.4%. Indian shares which dropped more than 2 percent on Monday, on concerns about the global economy, cut some losses and were trading down about 1%. One-month offshore non-deliverable forward contracts for the rupee traded in Singapore were at 49.35/45, weaker than the onshore spot rate, indicating a bearish near-term outlook. In the currency futures market, the most traded near-month contract on the National Stock Exchange and MCX-SX was quoting at 49.2950 and 49.2900 respectively, with the total traded volume on the two exchanges at about $1.44 billion. Source: Home - Livemint.com | 13 Jul 2009 | 8:43 am Gold demand slack as rupee hits two-month lowMumbai: Local demand for gold stayed slack on Monday as the rupee hit a two-month low making the imported yellow metal expensive, dealers said. “A weak rupee is driving buyers away,” said a dealer with a private bank in Mumbai. “They would rather wait for favourable prices.” The most-active August contract was 0.35% higher at Rs14,551 per 10 grams at 1:26pm, taking support from a weak rupee. The Indian rupee extended losses after falling the most in four months last week, as banks bought dollars in anticipation of foreign fund outflows from local shares. Dealers said a drop in prices to Rs14,000 level could spur buying interest as traders sought to stock for the upcoming festival demand. “I have some advance orders at $900 (per ounce),” said the dealer with the private bank. A series of festivals and auspicious days for weddings is expected to boost gold demand from August-end till the end of the year. Source: Home - Livemint.com | 13 Jul 2009 | 7:57 am Posco Q2 at 9-yr low, sees strong H2 reboundSeoul: Posco, the world’s No.6 steelmaker, reported its lowest quarterly profit in at least nine years due to low prices and weak demand from automakers and other manufacturers, but forecast second-half earnings would nearly quadruple from the first half. The worst may now be behind most Asian steelmakers, which had to cut output by as much as 50% in the first half, as manufacturers have now started to replenish low inventory, boosting prices by around 15% from recent lows in April. But a strong rebound in steel output growth worldwide is threatening to reverse the recovery, as demand has yet to fully recover amid fragile signs of a global economic rebound. “The steel sector has relatively underperformed because of oversupply worries. The poor (Posco) earnings only confirmed that those concerns were valid,” Kim Hak-kyun, an analyst at Korea Investment and Securities. “It looks like earnings have hit the bottom but the pace of recovery in the future will depend on supply control, such as a possible restructuring.” South Korea’s Posco, which competes with Japan’s Nippon Steel and JFE and China’s Baosteel , raised its 2009 crude steel output target by 6.4% to 29.8 million tonnes and gave its first guidance for 2009 operating profit at 2.6 trillion won ($2 billion). The figure suggests second-half profit would top 2 trillion won, up sharply from 543 billion won in the first half, as it cranks up production using cheaper raw materials and as global steel prices rebound. The firm cut second-quarter steel output by 15% from a year ago to 7.13 million tonnes, but that marked a 16% rise from the first quarter, when production fell by a quarter. Posco, the first major Asian steelmaker to report results, is faring better than rivals such as top-ranked ArcelorMittal and Nippon Steel, which have made output reductions of around 40% early this year. Japanese steelmakers including Nippon and JFE are the biggest casualties of the downturn in Asia and are seen reporting heavy losses later this month, hit by price cuts and reduced demand from the auto industry, their main customer. Higher Steel Prices Global steel prices have more than halved to below $500 a tonne early this year from record highs hit last year. Prices have since rebounded, with China, the world’s No.1 steelmaker, leading the recovery, helped by a near-$600 billion infrastructure-focused stimulus package. Posco expected a modest rise in global steel prices in the second half as automakers increase production and Chinese demand improves. April-June operating profit tumbled 91% to 170 billion won ($131.7 million), the lowest since it started releasing quarterly results in 2000, but in line with an average forecast for 172 billion won by 12 analysts. Net profit was 431 billion won, sharply above the 197 billion won forecast, thanks to increased foreign exchange related gains. Revenue dropped 15% to 6.34 trillion won as Posco made record steel price cuts in May and reduced output. In May, Posco agreed to cut fine iron ore prices by a third and coking coal prices by around 60% with Australian suppliers for 2009 contracts. Shares in Posco closed down 1.3% on Monday ahead of the earnings release, outperforming a 3.5% drop in the broader market. The cost of buying protection against default by Posco on its debt has fallen in recent months, with its 5-year credit default swap (CDS) spreads tightening to 147 basis points at the end of last week from 419 points in the first week of March, according to CDS data provider Markit. Source: Home - Livemint.com | 13 Jul 2009 | 7:52 am LCD makers set for improved Q2, recovery gathers steamSeoul: Recovery momentum will be key for quarterly earnings of leading LCD maker as the sector bounces back from one of its worst downturns, helped by robust demand for flat-screen TVs and shortages of key inputs. The liquid crystal display (LCD) sector is restarting production lines and securing raw materials after sharp output cuts in late 2008 resulted in a shortage of panels this year. Markets are pricing in a recovery for the sector, one of the few bright spots in the weak global technology industry, and many analysts have upgraded earnings forecasts and price targets. South Korea’s Samsung Electronics and LG Display, the top two LCD makers, are set to return to profit in April-June from losses in the previous two quarters, when the global recession battered demand for electronics. Taiwanese rivals AU Optronics and Chi Mei Optoelectronics are likely to report significantly smaller losses than prior quarters, analysts said. “Demand to replace bulky CRT TV with LCD model is propelling the market. It’s comparable to the shift from black-and-white tube to colour TV,” said Park Sang-hyun, an analyst at HI Investment & Securities. “There will be a slowdown in the fourth quarter in accordance with the usual seasonal pattern, but price declines are likely to be limited due to a glass shortage.” Demand for LCD televisions has got a boost from resilient North American markets and China’s massive state subsidy, helping the sector rebound faster than expected. Panel prices are set to rise further in the third quarter after increasing about 5% on average in the second quarter from the previous quarter, according to analysts estimates. Thanks to booming sales at Samsung’s own TV division, its LCD business likely swung to an operating profit margin of about 5% in the second quarter from an operating loss of 8% in the first quarter, analysts said. LG Display said last week its notebook PC panel sales rose 20% in June from a year ago, suggesting strong results. It also said it was not able to cope with surging demand for TV panels even with plants running at full capacity. Risks of Increased Output The rebound in LCD prices can be largely attributed to a shortage of glass substrates, as suppliers such as Corning Inc and Asahi Glass have been slow to raise output, keeping a lid on capacity growth especially in Taiwan. But the outlook is not all bright for the latter part of the year due to rapid growth of output and a fragile global economy. Some analysts warned prices and sales may plummet in the fourth quarter when demand usually weakens. “Since the business will slow down in the fourth quarter, companies want to squeeze as much profits as they can before the cycle turns weak,” said Jason Kang, an analyst at NH Investment & Securities. Last month, research firm DisplaySearch raised its forecast for 2009 LCD TV sales, predicting a 21% increase in global LCD TV shipments to 127 million units. Samsung shares have risen 43% so far this year and LG Display jumped 62% versus a 27% gain in the KOSPI. AU jumped 46% and Chi Mei surged 73% in a Taiwan market up 47%. The cost of protecting debt of LCD makers from defaults has dropped. For example, five-year credit default swap spreads on LG Display tightened to 467 basis points at the end of last week from 593 points at the start of the year, according to data provider Markit. Source: World Business - Livemint.com | 13 Jul 2009 | 6:42 am NASA to make fifth attempt to launch Endeavour on MondayCape Canaveral: The US space agency on Monday will make a fifth attempt to launch the space shuttle Endeavour Monday after stormy weather has forced four postponements of its mission to the International Space Station. “Looks like the team is ready but the weather is not. At this time we are no-go,” the US space agency’s launch director Pete Nickolenko said with the crew aboard and little more than 10 minutes to go before the planned takeoff on Sunday. The shuttle launch was rescheduled for Monday at 6:51 pm (2251 GMT), Nickolenko said. However, forecasters said the likelihood of favorable conditions was just 40%, far below the forecast leading up to Sunday’s scrapped attempt when meteorologists predicted a 70% chance of good weather. The cancellation was forced by a storm system that developed late afternoon near the launch site in Florida and gradually moved within 20 miles (32 kilometers) of launchpad 39A, where the Endeavour and its seven-astronaut crew were waiting to take off. NASA officials waited until just minutes before liftoff to scrub the launch, hoping that a sea breeze might shift the weather system further afield, as has happened before. But as the minutes ticked down, there were reports of lightning strikes within miles of the Kennedy Space Center, forcing the cancellation. The Endeavour crew left the launch pad at about 8:35 pm (0035 GMT Monday) and returned to crew quarters at the Kennedy Space Center for the night. Lightning strikes were responsible for the third of four delays to Endeavour’s mission to the International Space Station (ISS) to assemble the Japanese Kibo laboratory. A Friday night storm produced at least 11 lightning strikes that hit the shuttle’s pad, but did not damage the shuttle. Takeoff had been delayed previously twice after the discovery of potentially hazardous fuel leaks, apparently caused by a misaligned plate linking a hydrogen gas vent line with the external fuel tank. The US space agency said the problem had been fixed, and had filled Endeavour’s external fuel tanks with some two million liters (half a million gallons) of low-temperature liquid hydrogen on Sunday before the launch was scrapped. Endeavour’s crew — including six Americans and one Canadian — are expected to install a platform on the ISS for astronauts to conduct experiments in the vacuum of space, 350 kilometers (220 miles) above Earth’s surface. Canadian Julie Payette, an electrical and information engineer, is the only woman on board. She has been into space before, as have two other members of the crew, including shuttle commander Mark Polansky. The crew’s four other members will be on their maiden space voyage. American aerospace engineer Tim Kopra, 46, will replace Japanese astronaut Koichi Wakata, spending several months aboard the floating space station. He would be the latest addition to the permanent crew of the ISS, which is a joint collaboration between 16 different countries. The astronauts were also expected also undertake repair and replacement work, including installing six new batteries in the ISS. That mission will require two astronauts to conduct five space walks totaling 32.5 hours. Kibo’s two pressurized modules were attached to the ISS in 2008, along with the European lab Columbus. Source: Tech News - Livemint.com | 13 Jul 2009 | 6:18 am Honda says to launch hybrid sports car in FebTOKYO (Reuters) - Honda Motor Co plans to launch its CR-Z hybrid sports car in February next year, as it aims to bring more hybrid models to market quickly to tap growing demand.Source: Reuters: Money News | 13 Jul 2009 | 5:07 am Honda to launch hybrid sports car in FebruaryTokyo: Honda Motor Co plans to launch its CR-Z hybrid sports car in February next year, as it aims to bring more hybrid models to market quickly to tap growing demand. Honda, Japan’s No.2 automaker, also plans to launch its Fit Hybrid compact model in Japan by the end of 2010, Takanobu Ito, who took over as CEO last month, said in an interview with select media. Sales of Honda’s Insight flagship hybrid car have far outpaced Honda’s monthly target of 5,000 units in Japan since its launch in February. Honda is counting on the new Insight to support demand even as it expects its global car sales to fall 8.7% this year. Analysts are watching to see how the Insight fares overseas, especially against Toyota Motor Corp’s Prius, which is more spacious, fuel-efficient and costs just $2,000 more than the Insight. Honda, which is developing a new hybrid system for use on mid- to large-size vehicles, said production of the Insight began on the No.3 line at its Suzuka factory in mid-June, on top of production at Suzuka’s No.1 line. Honda is the only top-three Japanese automaker to have escaped a loss last year, and has forecast a 95% drop in operating profit to ¥10 billion ($108 million) for the financial year to March 2010. Source: World Business - Livemint.com | 13 Jul 2009 | 5:04 am Asia head of Blackstone’s GSO rejoining JPMorganHong Kong The Asia-Pacific head of Blackstone Group’s credit hedge fund group is leaving to re-join JPMorgan, according to a source familiar with the matter, roughly six months after the group’s Asia desk shut down. Timothy Donahue, the former Asia-Pacific head of GSO Capital Partners, is taking a senior managing director role with JPMorgan in New York on its leveraged loan and high-yield capital markets team, the source said. GSO Capital Partners LP, the hedge fund that Blackstone bought for nearly $930 million in cash and stock in March 2008, manages a credit hedge fund, mezzanine and senior debt funds, and collateralised loan obligation (CLO) vehicles. The fund had $10 billion under management at the time it was bought. After opening its Asia desk in Hong Kong last September, GSO closed it in January, failing to find attractive investments in the region as markets plunged across the globe. GSO’s Asia team was Donahue, managing director Sanjeev Khemlani, associate Angad Banga and vice-president Abhimanyu Prakash. Donahue, and his wife and family, moved with JPMorgan to Hong Kong about three years ago from New York. For the first two years he was JPMorgan’s Asia-Pacific head of structured leveraged finance, before moving over to Blackstone. The Massachusetts native and Fordham University graduate will re-join the team he left three years ago. Source: World Business - Livemint.com | 13 Jul 2009 | 4:06 am Ford aims at Asian small car market with Thai ventureRayong: Ford Motor launched a new $500 million passenger car plant in southeast Thailand on Monday, a move aimed at raising its share of a lucrative small car segment in Asia dominated by Japanese firms. The plant, a joint venture with Japan’s Mazda for producing Ford Fiesta and Mazda2 models, will export 85% of its annual capacity of 100,000 cars a year. David Alden, Ford’s president for southeast Asia and Japan, said Thai-built Fiestas would be shipped to southeast Asian countries, Australia, New Zealand and South Africa from early 2010 when production started. “A half a billion dollar investment is a huge investment in any business, especially in the economic environment that we are facing,” Alden told the agency in an interview. “It is a pretty important strategic statement that we are making of the importance of the Asean countries, with Thailand as its production base.” Asean is the 10-country Association of South East Asian Nations. The 1.4-to-1.6-litre-engine Fiestas to be exported from Thailand to Australia, New Zealand and South Africa will replace those now shipped from Cologne in Germany and Valencia in Spain. Ford is the only Detroit auto company not supported by emergency US government funding. The new General Motors emerged from bankruptcy on Friday. China Template Alden’s confidence in the market for the Fiestas was boosted by its launch in March in China, where 18,224 were sold in four months. But he was cautious about making sales projections, given the grip on the small car segment held by Japanese makers. “We look at our very successful launch of Fiesta in China as a template for our success and will build on the lessons learned in China,” the Ford executive said. “We make no sales projections. We want to under-promise things and over-do them,” he said. 90% of all passenger cars sold in Thailand, the biggest car market in southeast Asia, are built by Japanese companies led by Toyota and Honda. Sub-compact cars, such as Fiesta, make up 45% of the Thai passenger car segment. Ford sold 465 passenger cars in Thailand in the first five months of 2009, a paltry 0.6% market share. In contrast, Toyota sold 33,344 and had 43% of the market. Ford’s Rayong plant is on the same site as an existing truck factory, also jointly owned by Mazda, which produces 130,000 small pick-up trucks a year, mainly for export. With the additional passenger car capacity, the export-oriented plant will be equipped to build 275,000 passenger cars and commercial vehicles a year, up from 175,000. Its cost raised to $1.5 billion the total investment Ford and Mazda have made in Thailand since 1995 through their joint venture, AutoAlliance Thailand. Thailand is one of three Asian countries where Ford has made major investments in recent years. It invested $510 million in a passenger car plant in China’s eastern Nanjing that started production in January. The Chinese venture, Changan Ford Mazda, is a tie-up with Chongqing Changan Automobile Co and Mazda. It is also investing $500 million in Chennai in India, where annual capacities for its small car and engine production will be raised to 200,000 and 250,000 units respectively from 2010. Source: World Business - Livemint.com | 13 Jul 2009 | 3:57 am US, UBS seek court delay; may settle tax fightMiami: The US government and UBS AG asked a federal judge on Sunday to delay the start of a closely-watched trial, as they seek to resolve their dispute over US demands for the identities of thousands of wealthy Americans suspected of using the Swiss bank to dodge taxes. The request, in a joint court filing, came as the clock ticked down to the trial set for 9 am EDT Monday in Miami, where US authorities had been expected to move forcefully to pry the lid off Switzerland’s much-vaunted tradition of bank secrecy. In their filing, the US Justice Department and UBS asked that the trial be postponed until 3 August, giving the Swiss and US governments time “to continue their discussions seeking a resolution of this matter.” The Justice Department declined further comment, but UBS and the Swiss government have been signaling for weeks that they were open to an out-of-court settlement of the case. The case has been widely seen as perhaps the biggest challenge yet to Switzerland’s bank secrecy. There was no immediate response from US district judge Alan Gold, who is presiding over the case and was to have begun hearing arguments Monday about why he should force UBS to disclose information on up to 52,000 wealthy US clients suspected of tax evasion. But UBS said the motion for a delay would be formally submitted for the court’s approval Monday morning. In a court order last week, Gold asked the Justice Department to spell out how far it was willing to go to learn the identity of Americans with secret accounts at UBS, the world’s biggest wealth manager by assets. He asked specifically about “receivership and/or seizure of UBS’ assets within the United States” to enforce the demand that account data be turned over to US tax authorities. “COMPELLING NATIONAL INTEREST” Such remedies might be requested of the court, Gold said, if UBS failed to comply, or was prevented from complying by the Swiss government. He gave the US Justice Department until noon EDT on Sunday to respond. Switzerland has vowed to prevent UBS from handing over client information to US authorities, in an attempt to defend bank secrecy, and says the tax case targeting its biggest bank is souring diplomatic ties. In a separate court filing on Sunday, the Justice Department said it was still prepared to step up its legal fight against UBS. But apart from unspecified “monetary sanctions” it stopped short of saying what penalties it might seek to impose. “UBS knew that its US customers were using the bank -- with its tacit, if not explicit assistance -- to avoid paying their US income taxes,” the department said. The US government has a “compelling national interest” to obtain the client data it has demanded, it added, saying UBS was guilty of egregious conduct and “a bank that systematically broke US law on US soil.” Michael Weinstein, a former trial attorney with the Justice Department in Washington D.C., said Sunday’s request for a delay in the case pointed toward likely progress in talks aimed at settling the tax dispute. “I am of the philosophy that the US won’t take the nuclear option to seize the assets of UBS in the U.S.,” Weinstein said, citing risks to the economy and also the fact that they may be able to get the names by other, less confrontational means. The US government was criticized in 2002 over the collapse of accounting firm Arthur Andersen with the loss of thousands of jobs. Andersen failed to reach a settlement with the Justice Department over its auditing of Enron and surrendered its audit license after being found guilty on a single criminal charge. The US Supreme Court eventually overturned the verdict but Andersen never recovered. The UBS case, which comes during a global fight against tax cheats supported by the US administration, has damaged the UBS brand and could result in an expensive settlement for the bank. Swiss media have said UBS may have to pay anywhere from $2.76 billion to $4.6 billion. US prosecutors estimated last year that UBS was holding about $20 billion in assets for American clients in accounts hidden from US tax authorities. The so-called “undeclared business” accounts were estimated to produce about $200 million in annual revenues for the bank. The bank is due to report earnings on 4 August. Swiss newspaper Sonntag reported that the US request for names from UBS was likely to be scaled back considerably as part of any settlement. It said the names of thousands of people suspected of using the bank for tax fraud could still be revealed, however. Source: World Business - Livemint.com | 13 Jul 2009 | 3:32 am Higher govt expenditure will stimulate eco: Montek!Montek Singh Ahluwalia on Sunday endorsed the high fiscal deficit of 6.8 percent as projected in the Budget for 2009-10, saying that increased government expenditure will stimulate economic growth.Source: Zee News : Business | 13 Jul 2009 | 12:05 am US, Switzerland urge delay to UBS tax secrecy trial!The US and Swiss governments on Sunday called for the postponement of a court showdown seeking to force Swiss financial giant UBS to reveal thousands of offshore accounts held by US clients.Source: Zee News : Business | 13 Jul 2009 | 12:05 am CIA targets Wall Street talent in times of recession!The worst economic recession in generations has come as a boon for the CIA, which is targeting Wall Street workers to boost its pool of financially literate spies.Source: Zee News : Business | 13 Jul 2009 | 12:05 am China becomes world`s largest auto market!China has for the first time overtaken the United States as the world`s largest auto market with sales of locally-made vehicles surging 17.7 percent to 6.1 million units in the first six months this year.Source: Zee News : Business | 13 Jul 2009 | 12:05 am PPP is no privatisation: Rail expert panel chief!Appointment of an expert committee by Railways Min Mamata Banerjee for suggesting new financing models to build 50 world-class stations and other projects should not be seen as a step towards privatisation of Indian Railways.Source: Zee News : Business | 13 Jul 2009 | 12:05 am Lloyds to write off debts worth 13 bn pounds: Report!British entity Lloyds Banking Group will write off as much as 13 billion pounds on its loan to commercial property, businesses and mortgage holders, a media report has said.Source: Zee News : Business | 13 Jul 2009 | 12:05 am Pranab dispels fears about high fiscal deficit!Union Finance Minister Pranab Mukherjee on Sunday sought to dispel fears about the high fiscal deficit projected in the Budget for 2009-10, saying that the RBI would be able to manage govt borrowing programmes effectively.Source: Zee News : Business | 13 Jul 2009 | 12:05 am SAIL terminated contract in unprofessional manner: Posco!South Korean steel giant Posco has accused state-run SAIL of terminating a contract in an "unprofessional" manner after having delayed in signing the deal.Source: Zee News : Business | 13 Jul 2009 | 12:05 am IFCI not to imitate ICICI Bank: Rai!The country`s oldest financial institution, IFCI, on Sunday said the institution is not aspiring to be like its high-profile peer ICICI Bank but would aim at creating its own space as a niche financial intermediary.Source: Zee News : Business | 13 Jul 2009 | 12:05 am IT dept recovers over Rs 10,000 cr in arrearsNew Delhi, July 12 The Income Tax department’s task force-based approach towards recovery of arrears seems to have paid rich dividends.Source: Business Line - Home Page | 13 Jul 2009 | 12:00 am Oriental Bank (Rs 157.6): SellWe recommend a sell in Oriental Bank of Commerce from a short-term trading perspective. After bottoming in March at Rs 94, the stock was on a medium-term uptrend till the late May high of Rs 202. However, the stock changed trend triggered by theSource: Business Line - Home Page | 13 Jul 2009 | 12:00 am Mahindra Renault venture posts Rs 490-cr lossFollowing a 48 per cent fall in sales, Mahindra Renault Pvt Ltd has posted a loss of Rs 490.21 crore on a gross turnover of Rs 741.17 crore during 2008-09.Source: Business Line - Home Page | 13 Jul 2009 | 12:00 am Infosys’ revenues from BT to shrink furtherBangalore July 12 Infosys Technologies Ltd said revenue contribution from its largest client could come down further as British Telecom Plc looks to keep costs under control fighting a recession and consolidate its IT vendorSource: Business Line - Home Page | 13 Jul 2009 | 12:00 am Open offer for Great Offshore: The race for controlling stakeWith Bharati Shipyard raising its open offer price for Great Offshore last week, the next move in the bidding war for the Mumbai-based offshore oilfield service firm, is expected to come from ABG Shipyard. Though ABG has time till the third weekSource: Business Line - Home Page | 13 Jul 2009 | 12:00 am Day Trading GuideThe analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. The stop-loss level provided with the recommendation is important. The original view would stand negated if the stop-loss levelSource: Business Line - Home Page | 13 Jul 2009 | 12:00 am Precious metals reel under downward pressureMumbai, July 12 Commodity markets witnessed a huge sell-off last week with prices taking a cue from currency movements in addition to being influenced by renewed macro-economic concerns.Source: Business Line - Home Page | 13 Jul 2009 | 12:00 am Delhi Metro Rail chief Sreedharan quitsNew Delhi, July 12 Taking moral responsibility for the bridge collapse incident in South Delhi on Sunday morning, the ‘Metro Man’ Dr Elattuvalapil Sreedharan quit as Delhi Metro Rail Corporation (DMRC) chief.Source: Business Line - Home Page | 13 Jul 2009 | 12:00 am Will taxes match Budget hopes?The Finance Minister’s Budget speech kindled a great deal of interest among analysts and economists. The discussions range from whether the Budget has been too timid in respect of reforms to whether it has been too ambitious in undertakingSource: Business Line - Home Page | 13 Jul 2009 | 12:00 am Best paid among India Inc are pharma top brassBL Research Bureau Software or financial service companies may be the best pay-masters for management graduates or fresh engineers at the entry level. When it comes to top management, however, the most lucrative jobs in India lie elsewhere!Source: Business Line - Home Page | 13 Jul 2009 | 12:00 am What is the rating accorded to India by the rating agency S&P?Source: Daily News & Analysis: Money News | 12 Jul 2009 | 11:30 pm Healthy margins make IDBI Bank a good long-term betIDBI Bank (IDBI) is one of the leading banks in India. The bank was set up as the private banking arm of the erstwhile Industrial Development Bank of India in 1994.Source: Daily News & Analysis: Money News | 12 Jul 2009 | 8:29 pm Large gain on Wednesday if Tuesday ends in redThe bearish trend is likely to continue until at least the July 22 eclipse.Source: Daily News & Analysis: Money News | 12 Jul 2009 | 8:27 pm Govt, auto firms hit the green roadThe government and the automobile industry's efforts to develop environmentally friendly technologies could turn even greens green with envy.Source: Daily News & Analysis: Money News | 12 Jul 2009 | 8:24 pm How the govt decrees death by committeePranab Mukherjee's Budget sends several critical decisions to expert groups when he knows all the answers.Source: Daily News & Analysis: Money News | 12 Jul 2009 | 8:22 pm Gold will shine brighter if rupee slips any furtherCrude oil will see an immediate support at the Rs 2,750 level.Source: Daily News & Analysis: Money News | 12 Jul 2009 | 8:19 pm Lower govt borrowing to spur yield rallyThis week's auction is down to Rs 12,000 cr from Rs 15,000 cr.Source: Daily News & Analysis: Money News | 12 Jul 2009 | 8:17 pm Sreedharan proposes to quit, govt disposesDelhi Metro Rail Corporation Managing Director Elattuvalapil Sreedharan today resigned after a section of an overhead bridge under construction in New Delhi collapsed before dawn, killing five workers and an engineer, the second such collapse in eight months.Source: Business Standard | Front Page Headlines | 12 Jul 2009 | 7:07 pm Lockheed Martin India head takes off in a hurryWith several major defence procurements blocked after the arrest of former Ordnance Factory Board Chairman Sudipta Ghosh on May 19, alarmed defence contractors posted in New Delhi are riveted by another drama.Source: Business Standard | Front Page Headlines | 12 Jul 2009 | 7:05 pm Sebi rejects plea to ease QIP pricing normsAfter the initial wave, Qualified Institutional Placements (QIP) are expected to pause as the capital market regulator has rejected proposals made by investment bankers to relax the pricing formula for such issues.Source: Business Standard | Front Page Headlines | 12 Jul 2009 | 7:03 pm Rakesh Mohan to join McKinsey as global adviserMumbai: Former Reserve Bank of India (RBI) deputy governor Rakesh Mohan, who quit the central bank in May to take up an assignment at the Stanford Center for International Development at Stanford University in the US, is now set to join global consultancy McKinsey and Co.’s economic research wing. Mohan, 61, who had moved to Stanford Center as a distinguished consulting professor, will be a global adviser at the McKinsey Global Institute, or MGI. McKinsey and Co. is a management consulting firm that advises leading companies on issues such as strategy, organization, technology and operations.  Shifting gears:Former RBI deputy governor Rakesh Mohan. Ashesh Shah / Mint The first deputy governor born after India’s independence in 1947, Mohan came to RBI in September 2002, but moved to the finance ministry as secretary, department of economic affairs, in October 2004 before his three-year term ended. He returned to RBI in July 2005 and left in June this year, seven months before his term was due to end. Mohan, a former chief economic adviser to the finance minister, was seen as a strong contender for the top job at the Indian central bank when Y.V. Reddy retired in September, but was pipped to the post by D. Subbarao, then finance secretary. Confirming the development, McKinsey said in an email on Saturday that he “will join the McKinsey Global Institute as a part-time global adviser starting this fall”. Fall is autumn in North American English. Mohan said in an email: “I understand that you have got a statement from McKinsey’s. I am in full concurrence with that.” Mohan’s assignment at Stanford was for six months, beginning 15 June, and it is not known whether he will cut short his stint. Set up in 1990, MGI’s primary purpose is to undertake original research on critical economic issues facing businesses and governments around the world. Its research is funded by the partners of McKinsey and not commissioned by any business, government, or other institutions. By integrating economics and management, MGI has insights into the microeconomic underpinnings of broad trends shaping the global economy. As a global adviser, Mohan joins a long list of prominent academics providing insights and perspectives on a range of MGI research projects. Martin Baily, a senior fellow at the Institute of International Economics who headed former US president Bill Clinton’s council of economic advisers, is currently an MGI senior adviser. Other academic advisers on recent projects include Richard Freeman of Harvard University and Olivier Blanchard, chief economist of the International Monetary Fund, on offshoring research, and Richard Cooper and Kenneth Rogoff, both of Harvard, on capital markets work. The list of past advisers includes Diana Farrell, deputy director of the National Economic Council and deputy economic adviser in the administration of US President Barack Obama. At RBI, Mohan was in charge of monetary policy, financial markets, economic research and statistics, secretary’s department and communication. Recently, he headed the committee on financial sector assessment that conducted a stress test on the Indian financial system. In an interview in end-May, Mohan said he drew comfort and optimism from the fact that fiscal and monetary measures taken by the government and RBI were working and said there was some room left for the government to provide more fiscal stimulus to bolster the economy. He also said there was scope for specific capital expenditure and accelerating projects that the government could identify in such sectors as roads and urban infrastructure. Source: World Business - Livemint.com | 12 Jul 2009 | 6:33 pm US requires another stimulus package, says Warren BuffettSun Valley, Idaho: Last week, one of US President Barack Obama’s economic advisers suggested that the US may need a second stimulus package. The suggestion now has a strong backer from the business community. In a CNBC interview, Warren Buffett, who runs Berkshire Hathaway Inc., says that while he supports the idea of a second stimulus, there is no quick fixing of the US economy. Edited excerpts:  Tough period: Berkshire Hathaway Inc. chairman Warren Buffett says he doesn’t know how long the global economic downturn is going to last, but that it will have a good ending. Andrew Harrer / Bloomberg The global economic downturn was a big topic of conversation here (Sun Valley media conference). Yesterday (on Wednesday), I know, there was a big panel discussion on it. From everything I have heard, sounds like the mood was very glum. I have heard sombre. I have heard glum. It was not a positive mood. It was not a positive mood. Do you agree with that sentiment? I would say that right now we are in a very, very tough period. We have been in it—it really took off last September, when it hit the financial world like nothing we have ever seen, and that’s gotten spilled over into the economy. And it’s a tough period now. On the other hand, this movie will have a good ending. Good ending over what sort of time period? I don’t know how long the movie is. I know the ending will be good but I don’t know whether it’s a two-hour movie or a four-hour movie. You have said that the stimulus has done little, not enough, to get the economy moving. Do you think that people here agree with you on that? I don’t know about people agreeing with me. But the stimulus was never designed to act fast. People hoped it would start trickling in. In general, I believe in the stimulus and would probably believe in another one; they may be overrated in terms of their ability to end the recession fast. But if you are advocating another one, are they overrated? I think they are useful, but I think that anybody who looks on them as a panacea is making a mistake. But they are useful, they are useful. What do you think should be done now? Do you think there should be another stimulus right now? I think there probably should be. But I wouldn’t expect miracles out of it. But so little of the $800 billion (around Rs39 trillion) stimulus has already been spent. Does it make sense to do another stimulus now, or do we want until some of that money, or more of that money, is out there? If you had another one you would try to load as little on the Christmas tree as possible for specific constituencies, and you would try to get it spent fast. But the (US) President said that originally; let’s try to go with the shovel-ready projects. Then Congress got into the act and I think watered it down some. So if the stimulus is not a panacea, what is the solution? There is no silver bullet. I mean, the original cause of this was the housing bubble. Now a lot of things were contributing to it and flowed out of it and all of that. We built a couple million housing units a year. We formed a million, 300,000 households a year, surprise; we had too many houses at a point. You can’t work that off in a day, or a week, or a month. The best thing we can do is not to be building a lot of new houses now. I mean, we will work off the excess inventory faster. If you want to end the recession as soon as possible, you do nothing to encourage new housing construction. Very tough on the home builders but that is the prescription for getting supply and demand back into balance. So what does that mean in terms of interest rates? You want low interest rates. The more affordable houses are, I mean people have to have a job, too, but low interest rates are a boon to housing in that they mean people qualify for owning housing of a given type that they wouldn’t otherwise. But we still have too many houses. And the only way to do that, we can either form more households, get all the 14-year-olds to start living together, which they would probably like, or we can blow up a bunch of houses, which I don’t think any of us would like, or we can produce more than the household formation and we will use up the inventory and we will get back to a vibrant economy. You supported President Obama... Hundred per cent. What do you think of his behaviour, his decisions since he’s been in office? He is been terrific. I think it’s very important that the people in the country, just as in the 1930s, that they have a leader they believe in. They have got good reason to believe in him. Plus, he communicates extraordinarily well so they can understand what he is doing and why he is doing it and what the timetables may be and all that sort of thing. So we have the right person in the White House. But you feel like the stimulus hasn’t done enough, so do you agree with the way he’s handled the financial crisis? Well, the (US) Congress wrote the stimulus Bill. You have mentioned that you are not worried about inflation right now. You are concerned about inflation down the line. What can the government and the Fed (Federal Reserve) do right now to minimize that risk? Right now, they’re pouring the medicine on. Unfortunately, the medicine will have an after-effect, and it will be inflation, and the question is how much and how extreme? We are going to apply a lot of medicine, and we are likely to get a lot of inflation down the road. But it’s better to have the patient recover than to sit there and say I am worried about the after-effects of the medicine so we’ll just ignore it. Oil prices have come way down over the past six weeks. Will that help the situation? It always helps. I mean, we are importing 10-million-plus barrel a day of oil and that’s a tax that the rest of the world imposes on us. We give them goods and services that we produce in exchange for that. And the cheaper we buy oil, the better off we are. cnbctv18@livemint.com Source: World Business - Livemint.com | 12 Jul 2009 | 3:49 pm
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