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Shree Renuka in talks to buy stake Balrampur: SourcesShree Renuka has initiated talks to buy stake in Balrampur Chini reports CNBCTV18 quoting Sources. Balrampur Chinis market cap stands at about Rs 3,600 crore with a promoter holding of 36.6%.Source: Moneycontrol Top Headlines | 11 Dec 2009 | 7:28 am Bank staff plan oneday strike on Dec 16About 600,000 employees of India\'s banks plan to go on a oneday strike on Dec. 16 to protest the move to merge stateowned banks.Source: Moneycontrol Top Headlines | 11 Dec 2009 | 6:35 am Four Soft repays debt by selling assets in UKFour Soft has been very strong over the last few days. It is seeing correction to 2.5% today because of the runup to more than Rs 33. Srikanth Palem Reddy, Managing Director of Four Soft Limited, spoke about the new developments with the company.Source: Moneycontrol Top Headlines | 11 Dec 2009 | 5:00 am See good business from dedicated freight corridor: KalindeeIn an exclusive interview with CNBCTV18, AP Verma, Chief Financial Officer, Kalindee Rail Nirman, speaks about the company and his outlook going forward.Source: Moneycontrol Top Headlines | 11 Dec 2009 | 4:55 am Gammon raises Rs 305 cr via QIP, sees no further dilutionGammon India has managed to raised Rs 305 crore via qualified institutional placement (QIP) that closed on December 9. Morgan Stanley and Reliance Mutual Fund were among the investors that participated in the QIP, Director Pervez Umrigar said. He added that Gammon was not looking at any further equity dilution at the current valuations.Source: Moneycontrol Top Headlines | 11 Dec 2009 | 4:48 am Liberty Shoes plans to add 50 retail stores in FY11In an exclusive interview with CNBCTv18, Adesh Gupta, Chief Executive Officer, Liberty Shoes, speaks about the company and his outlook going forward.Source: Moneycontrol Top Headlines | 11 Dec 2009 | 4:45 am Sistema Shyam approves $750 mln share issueSistema Shyam Teleservices, the Indian mobile unit of Russian oiltotelecoms group Sistema, has approved a new share issue that could raise nearly 35 billion rupees ($750 million), Sistema said on Thursday.Source: Moneycontrol Top Headlines | 11 Dec 2009 | 4:25 am Cairn starts Sri Lanka oil huntCairn Lanka, a fully owned subsidiary of Cairn India, said on Thursday it had started a USD100 million seismic survey off Sri Lanka\'s northwestern coast to explore for crude oil.Source: Moneycontrol Top Headlines | 11 Dec 2009 | 4:25 am KRBL Ltd says board to consider stock splitKRBL Ltd says board to consider stock splitSource: Moneycontrol Top Headlines | 11 Dec 2009 | 4:25 am INTERVIEW Allahabad Bk sees loans rising on disbursalsStaterun Allahabad Bank expects to maintain loan rise at 18 percent in 2009/10 as major part of its approved credit lines get disbursed, its new chairman said on Thursday.Source: Moneycontrol Top Headlines | 11 Dec 2009 | 4:25 am Jindal Power lines up Rs 65000 cr projects - Economic Times
Source: Business - Google News | 11 Dec 2009 | 3:27 am Nifty closes in red; Bharti, Unitech, AXIS Bank down - Economic Times
Source: Business - Google News | 11 Dec 2009 | 3:20 am Google backs world's fastest internet cable - guardian.co.uk
Source: Business - Google News | 11 Dec 2009 | 3:10 am India Industrial Production Grows Less Than Forecast - Bloomberg
Source: Business - Google News | 11 Dec 2009 | 2:37 am Rupee extends rise in line with regional peersMumbai: The Indian rupee extended its rise on Friday afternoon helped by stronger regional peers with losses in the dollar versus major units also helping sentiment. At 2:50pm, the partially convertible rupee was at Rs46.53/54 per dollar, off a low of Rs46.6075 and stronger than its close of Rs46.64/65 on Thursday. On Wednesday, it fell as low as Rs46.87 during trade, its weakest since 27 November. Dealers said the largely in line factory output data failed to provide any additional push to the rupee, and instead briefly pushed it to the day’s lows. India’s industrial output in October rose more than 10% from a year earlier, suggesting the economy maintained a healthy growth rate after a strong September quarter. Almost all Asian units were stronger compared to the dollar, which was also helping the local unit. The index of the dollar against six majors was down 0.1%. In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were quoting at Rs46.5825 and Rs46.5800 respectively, with the total traded volume on the two exchanges at about $3 billion. Source: Home - Livemint.com | 11 Dec 2009 | 2:23 am Sistema Shyam approves $750 mln share issue - Moneycontrol.com
Source: Business - Google News | 11 Dec 2009 | 2:00 am Oct industrial output surges, rate dilemma seenNew Delhi: India’s industrial output in October rose more than 10% from a year earlier, suggesting the economy maintained a healthy growth rate after a strong September quarter. Analysts said the output figures reinforced their views of the economic outlook, so would support expectations that the central bank would have to start raising interest rates in the first half of next year. Industrial output rose 10.3% in October from a year earlier, matching the median forecast in a Reuters poll. September’s annual growth was revised up to 9.6% from 9.1%, data showed on Friday. The figures suggested the economy was maintaining healthy momentum after annual GDP growth hit 7.9% in the September quarter, its strongest in 18 months. That was further backed by car sales, which surged in November by 61% from a year earlier. “Going forward, we expect IIP to clock growth around 9-12% with support coming from a low base,” said Shubhada Rao, chief economist at Yes Bank in Mumbai. Analysts said the rise from a year earlier was exaggerated by a weak output in October 2008, when the economy was hit harder than expected by the global downturn. The overall level of output was also the lowest since May. “We do not expect rate action from the RBI in the current fiscal (year). However, it may get difficult for the RBI to ignore food inflation and may have to tighten liquidity through a CRR hike by Dec/Jan,” Rao said, referring to cash reserve ratio, or bank reserve requirement. The stock market swung from 1% higher to slightly down on the day and 10-year bond yields fell 5 basis points to 7.51% after the data as there had been some market expectations for stronger output growth. Aggressive rate cuts by the central bank and heavy doses of government spending have revived factory output, which slowed to 2.6% in the 2008-09 fiscal year (April-March) from 8.5% in 2007-08. Consumer durables goods output continued to surge on the back of stimulus spending, growing an annual 21% in October. Manufacturing production rose 11.1% on year, while mining output was up 8.2% and power generation rose 4.3%. India’s industrial output, which grew for the 10th consecutive month, still lagged neighbouring China, which posted annual factory output growth of 19.2% in November, its fastest pace since June 2007. Food, tightening After focusing on getting the economy growing again, inflation has also returned as a concern for policymakers. The Reserve Bank of India has said it needs to strike a balance between growth and inflation, but has also noted most inflation pressures are coming from food supply shortages, where monetary policy is not an effective tool. Governor Duvvuri Subbarao has said the danger was that food price inflation -- running at an annual 19.05% at end-November -- spilt over into broader inflation expectations. “Recent RBI comments have already indicated that tighter policy is on the way, and this number should reinforce the case for a rate hike early next year,” said Brian Jackson, economist at Royal Bank of Canada in Hong Kong. He expected the central bank to move on rates in the first quarter and forecast 175 basis points of rate increases over 2010. The central bank’s repurchase rate is currently 4.75% and the reverse repurchase rate is 3.25%. At its October policy review, the Reserve Bank of India left its key rates steady, but began scaling back its stimulus by removing some of the liquidity support measures implemented to help India weather the effects of the global downturn. Source: Home - Livemint.com | 11 Dec 2009 | 1:57 am India Industrial Output Highlights Recovery - Wall Street Journal
Source: Business - Google News | 11 Dec 2009 | 1:55 am ICICI Bank to focus on home-loans as real estate picks up Mumbai: “With the real estate segment witnessing a comeback after the economic slowdown, banks are now focussing on the home-loan segment,” ICICI Bank’s managing director and chief executive officer Chanda Kochhar said. “We are focussing on the home-loan segment at the moment as there is a lot of activity in this sector. People who stopped buying a few months ago, are back again,” Kochhar said. The bank had recently launched a home-loan scheme under which 8.25% interest rate will be fixed for the first two-years for loans sanctioned from 1 December, 2009 to 31 January, 2010 irrespective of the loan amount. The first disbursement of the loan should be availed before 31 March, 2010. From the third-year onwards, the lender would charge a floating interest rate depending upon the then prevailing floating reference rate. Source: LatestNews-Home - Livemint.com | 11 Dec 2009 | 1:53 am Industry grows by robust 10 3 per cent in OctoberIndustry grew by a robust 10.3 per cent in October against a paltry 0.1 per cent a year ago. The strong industrial production data came days after economic growth of 7.9% in the second quarter of this fiscal, reflecting that the economy would sustain the recovery provided agriculture does not slide too much.Source: HindustanTimes.com - Top Business News Headlines | 11 Dec 2009 | 1:41 am CRPF to get micro gadgets, precision weapons New Delhi: The home ministry is in the process of procuring micro gadgets and precision weapons for the Central Reserve Police force (CRPF), which is preparing for a major anti-Naxal offensive. Official sources said that the ministry is looking at buying night vision enabled sniper rifles for the force, which could be a major advantage for the personnel in anti-Naxal operations. “The guns can prove to be of great help in operations as snipers can be used for undertaking precise strategic assault on Naxal hideouts,” a source said. The CoBRA personnel have already been provided with carbon fibre AK 47s, which are not only lighter than a normal AK 47 but are equally sturdy. The new weapons that are being procured include the under barrel grenade launcher (UBGL) that could be fitted on any gun including an AK 47 to fire grenades to a distance of 50-150 metres, light weight automatic MP 5A rifles and Fragmentation Grenades which can cause heavy damage as it breaks into pieces. Also included in the shopping list is lightweight fibre based glock pistol that is more accurate and has less recoil. The commandos of the special unit will also have the option of using ‘laser sights´ that can be fitted on any gun to provide accuracy while dealing with the Maoists. Besides, special telescopic manipulator with high-end lens and portable X-ray machines will also be given to the force. The force which would operate in heavy naxal-infested areas, especially deep forests and remotest villages, would get high frequency transmitters along with better satellite phones to remain in contact with the control station. While security personnel are currently using bullet proof jackets that weigh about 14 kg, the ministry is now procuring special light-weight jackets which weigh about six kg. The CRPF have already invited tenders for 59,000 such jackets. Source: LatestNews-Home - Livemint.com | 11 Dec 2009 | 1:24 am Cox and Kings shares surge after listing at discount - Economic Times
Source: Business - Google News | 11 Dec 2009 | 1:10 am Rupee up 7 paise at 46 57 a dlr in early tradeThe Indian rupee strengthened by 7 paise to 46.57 a dollar against in early trade on hopes of fresh capital inflows into equity markets in line with firming trends on the Asian markets.Source: HindustanTimes.com - Top Business News Headlines | 11 Dec 2009 | 1:03 am Industrial output trend likely to stay: MinisterIndia's industrial output rose 10.3% in October from a year earlier.Source: Daily News & Analysis: Money News | 11 Dec 2009 | 12:51 am October industrial output up 10.3%: GovernmentManufacturing production rose 11.1%in October from a decline of 0.6% a year earlier.Source: Daily News & Analysis: Money News | 11 Dec 2009 | 12:49 am Bank staff plan one-day strike on Dec 16MUMBAI (Reuters) - About 600,000 employees of India's banks plan to go on a one-day strike on Dec. 16 to protest the move to merge state-owned banks.Source: Reuters: Money News | 11 Dec 2009 | 12:46 am Dubai economy to rebound 2% in 2010: reports Dubai: “The economy of Dubai is expected to grow 2-3% in 2010 after contracting about 2% this year due to slowing real estate and construction sectors,” Sami al-Qamzi, the head of the economic development department of Dubai was quoted as saying on Friday. Qamzi told the state television that the economy shrank 1.47% in the first half of 2009, al-Ittihad and al-Khaleej newspapers reported. “This year’s slowdown will be partly offset by a 9.1% growth in the financial sector and a 5.9% expansion in the consumer goods industry,” Qamzi added. Dubai, which enjoyed years of stellar property-fuelled growth until the end of 2008, alarmed global markets on 25 November when its asked for a repayment freeze on billions of dollars worth of debt issued by state-owned conglomerate Dubai World. The issue raised concerns about the economy of the regional trade and business hub, one of seven members in the United Arab Emirates federation. The federation’s economy was seen rising 2.9% next year, after a 1.1% contraction in 2009, well below a nearly 8% average expansion in the previous three years, a Reuters poll showed ahead of Dubai’s debt announcement. Dubai’s property boom was brought to a grinding halt after the global financial crisis hit the market of the emirate’s major developments that include man-made islands. Developers in the emirate delayed or cancelled developments worth tens of billions of dollars, a move that weighed on the construction and mortgage sectors. Qamzi was reported as saying the Dubai economy may grow by as much as 5% in 2011. Earlier this month, a senior official at the International Monetary Fund (IMF) said that it might revise its growth forecast for the UAE’s non-oil gross domestic product to ‘significantly lower’ than the 3% it had projected in October. Abu Dhabi is the UAE’s largest member and is the main oil producers in the country, the world’s third-largest oil exporter. Source: LatestNews-Home - Livemint.com | 11 Dec 2009 | 12:40 am GLOBAL MARKETS - Stocks firm on China data, yen dips vs dollarSINGAPORE (Reuters) - Asian stocks, oil and most metals rose on Friday after a slew of Chinese data showed the world's third-largest economy is on a brisk recovery path, while the yen dipped against the dollar.Source: Reuters: Money News | 11 Dec 2009 | 12:39 am Cox and Kings shares surge after listing at discountMUMBAI (Reuters) - Shares of travel operator Cox and Kings (India) Ltd listed at 304.10 rupees on the BSE on Friday, about 8 percent lower than its issue price of 330 rupees a share, but soon surged to 415.90 rupees.Source: Reuters: Money News | 11 Dec 2009 | 12:36 am Bank staff plan one day strike on 16 December Mumbai: About 600,000 employees of India’s banks plan to go on a one-day strike on 16 December to protest the move to merge state-owned banks. “We are against any move for merger and consolidation in the banking industry,” C.H. Venkatachalam, general secretary of All India Bank Employees Association (AIBEA) said. “We term the move as closure of public sector banks,” he said. “The employees were also protesting the ongoing move to merge State Bank of Indore with its founder State Bank of India, the country’s largest bank,” he added. Earlier, Indian Banks Association, the apex banker’s body, said that it got a notice from All India Bank Officers’ Association and AIBEA informing its members working in state-owned, private and foreign banks would strike work on 16 December. State-run Corporation Bank also informed stock exchanges normal functioning in bank branches may be affected owing to the strike. Source: LatestNews-Home - Livemint.com | 11 Dec 2009 | 12:36 am Industry grows by robust 10.3% in OctoberIndustry grew by a robust 10.3 per cent in October against a paltry 0.1 per cent a year ago, powered by manufacturing, particularly consumer durablesSource: India Business News | Business News - Times of India | 11 Dec 2009 | 12:29 am Air India to operate flight six days a week from ShillongAir India will operate flights six days a week from the Umroi airport on the outskirts of Shillong beginning December 12, official sources said on Friday.Source: HindustanTimes.com - Top Business News Headlines | 11 Dec 2009 | 12:21 am Shares briefly turn negative on IIP dataMumbai: Indian shares briefly turned negative on Friday afternoon, even as industrial output data for October met estimates, as market participants had built hopes the data would beat estimates. India’s industrial output rose 10.3% in October from a year earlier, matching market forecast, helped by stimulus measures and robust domestic demand, data showed. At 12:07pm, the 30-share BSE index was up 0.31% at 17,242.20 points, with 21 components advancing. It had briefly turned negative after rising as much as 0.94% earlier. The 50-share NSE Index was up 0.4% at 5,153.35. Source: Home - Livemint.com | 11 Dec 2009 | 12:20 am Hope India's industrial growth sustains - AhluwaliaNEW DELHI (Reuters) - The deputy chairman of India's planing commission said on Friday he hoped the momentum in the country's industrial output would be sustained in coming months.Source: Reuters: Money News | 11 Dec 2009 | 12:19 am Nifty touches year's high on better IIP dataThe wide-based National Stock Exchange index Nifty surged to a year's high of 5,182.55 points in mid-session today on brisk buying by funds in fundamentally strong stocks on robust industrial growth data.Source: India Business News | Business News - Times of India | 11 Dec 2009 | 12:19 am Industrial output trend likely to stay - minNEW DELHI (Reuters) - The current trend in industrial output is likely to continue in the coming months, the trade minister said on Friday.Source: Reuters: Money News | 11 Dec 2009 | 12:16 am Tiger s woes spawn online gameThe woes of Tiger Woods have spawned the inevitable online game. "Tiger Hunting," located at Break.com, features an animation of the golfer and another woman in his car being chased by his golf-club wielding wife.Source: HindustanTimes.com - Top Business News Headlines | 11 Dec 2009 | 12:09 am Cox and Kings shares surge after listing at discountMumbai: Shares of travel operator Cox and Kings (India) Ltd isted at Rs304.10 on the BSE on Friday, about 8% lower than its issue price of Rs330 a share, but soon surged to Rs415.90. “We expected it (the rise), but not this much. We expect the movement to continue because of its better business model compared to peers,” said Neha Pathak, analyst at KR Choksey. “Its presence across the globe is the key driver for it”. Cox and Kings (India) is the parent of UK-based unlisted Cox and Kings, and accounts for nearly 66% of the group’s global revenues. It operates in 20 countries across the globe through subsidiaries and branch offices. The firm raised Rs6.1 billion through the IPO, of which Rs5.1 billion will be used to retire debt and for acquisitions. The remainder would go to Deutsche Securities Mauritius Limited, Merrill Lynch Capital Markets Espana and Lehman Brothers Opportunity Ltd, who sold stakes in the firm during the IPO. Cox and Kings chairman Anthony B.M. Good told reporters growth in India would be driven by the outbound travel segment. “It’s difficult to pick one sector growing faster than the others, but if I had to, it would be outbound,” he said, adding easier foreign exchange regulations over the past 10 years were contributing to the outbound market. He, however, did not give a revenue projection for the fiscal. “As the market grows we shall grow with it.” At 1:00pm, Cox and Kings India shares were trading at Rs408.05 on the BSE, up nearly 24%. Source: Home - Livemint.com | 11 Dec 2009 | 12:07 am ‘Telangana' turns AP industry jitteryThe Centre's announcement to initiate the process to form a separate Telangana State sent jitters through industry, especially the IT and realty sectors, while pushing Andhra Pradesh into a major politicalSource: Business Line - Home Page | 11 Dec 2009 | 12:00 am IT professionals worried over Telangana developmentsThe Chidambaram statement on the formation of Telangana State on Wednesday night created ripples in the IT industry in AndhraSource: Business Line - Home Page | 11 Dec 2009 | 12:00 am Cairn India to merge some subsidiaries with itselfCairn India Ltd has said that it plans to merge businesses of its group companies withSource: Business Line - Home Page | 11 Dec 2009 | 12:00 am Corporate Affairs Ministry on talent huntThe Corporate Affairs Ministry is likely to go in for lateral recruitment of top-notch professionals as it is faced with a major manpower shortage in handling the higher workload and increasing complexities in the corporateSource: Business Line - Home Page | 11 Dec 2009 | 12:00 am Capital flows in line with expectations: SubbaraoThe capital inflows into the country are in line with the Reserve Bank of India's expectations and there is no cause for concern of a possible build-up of asset price bubbles, according to the RBI Governor, Dr D.Source: Business Line - Home Page | 11 Dec 2009 | 12:00 am Telangana decision plunges AP into a crisisOn a day of rapidly unfolding developments and incidents of pelting and attempts at self-immolation in parts of Andhra Pradesh, the Centre's decision agreeing to take up separate statehood for the backward Telangana region has created politicalSource: Business Line - Home Page | 11 Dec 2009 | 12:00 am Day Trading GuideWe recommend a buy in DFL with tight stop-loss at Rs 375. Fresh long position can be initiated if ICICI Bank moves above Rs 887 and ONGC advances above Rs 1,201 with tight stop-loss. Infosys is experiencing selling interest at higher levels.Source: Business Line - Home Page | 11 Dec 2009 | 12:00 am Nuclear Power Corpn hopes to buy land for projects in 18 monthsNuclear Power Corporation of India is confident of completing the land acquisition process for its five coastal-based plants in the next 18 months, said Mr S.K. Jain, Chairman and Managing Director, on Thursday. He was speaking to reporters onSource: Business Line - Home Page | 11 Dec 2009 | 12:00 am Chambal Fertilisers and Chemicals (Rs 60.5): BuyWe recommend a buy in the stock of Chambal Fertilisers and Chemicals from a short-term horizon. It is apparent from the charts of the fertilizer company that after recording a 52-week high of Rs 75 in June it has been on a medium-term downtrend,Source: Business Line - Home Page | 11 Dec 2009 | 12:00 am Tax bias, market access issues brew trouble for States with EUThe European Commission has sought a fourth round of WTO (World Trade Organisation) consultations with the Indian Government on violations by some States on import of wine andSource: Business Line - Home Page | 11 Dec 2009 | 12:00 am Sensex rises by 158 pts in opening trade on global cuesThe Bombay Stock Exchange benchmark Sensex rose by 158 points in opening trade on Friday on buying by funds driven by strong global cues.Source: HindustanTimes.com - Top Business News Headlines | 10 Dec 2009 | 11:52 pm BSE Sensex briefly turns negative on IIP dataMUMBAI (Reuters) – The BSE Sensex briefly turned negative on Friday afternoon, even as indutrial output data for October met estimates, as market participants had built hopes the data would beat estimates.Source: Reuters: Money News | 10 Dec 2009 | 11:49 pm Oct industrial output up 10.3 pct y/y - govtNEW DELHI (Reuters) - India's industrial output rose 10.3 percent in October from a year earlier, matching market forecast, helped by stimulus measures and robust domestic demand, data showed on Friday.Source: Reuters: Money News | 10 Dec 2009 | 11:45 pm Cairn starts Sri Lanka oil hunt - Moneycontrol.com
Source: Business - Google News | 10 Dec 2009 | 11:45 pm Citi plans $15 bln offering, talks to US: SourcesCitigroup Inc is talking with the US government about paying back its bailout money, but it is not clear whether a deal is imminent.Source: Daily News & Analysis: Money News | 10 Dec 2009 | 11:41 pm Even after gains, emerging markets are top picksA growing middle class unburdened by the excessive debt plaguing Western consumers means emerging markets still offer plenty of opportunities.Source: Daily News & Analysis: Money News | 10 Dec 2009 | 11:36 pm Russia's debt time bomb brought into focus by DubaiRussian companies are sitting on a multi-billion dollar debt time bomb after allowing overseas borrowings to rise since April.Source: Daily News & Analysis: Money News | 10 Dec 2009 | 11:22 pm VW ties up with Suzuki; aims to be top car maker on planet - Moneycontrol.com
Source: Business - Google News | 10 Dec 2009 | 11:20 pm Krishna, Lankan FM discuss resettlement of IDPs Nay Pyi Taw, Myanmar: External affairs minister S.M. Krishna met his Sri Lankan counterpart Rohitha Bogollagama and is understood to have enquired about the progress in the resettlement of internally displaced persons (IDPs) in northern parts of the country. Krishna had a long chat with Bogollagama on the sidelines of a dinner hosted by Myanmar foreign minister U. Nyan Win in the honour of participants of the 12th ministerial meeting of the Bay of Bengal Initiative for Multi Sectoral, Technical and Economic Cooperation (BIMSTEC) here on Thursday night. “Krishna is understood to have enquired about the details about the IDPs who have left the settlement camps,” the sources said. “The issue of Indian fishermen straying into Lankan waters was also discussed with Bogollagama. The Lankan minister is understood to have assured Krishna that the Navy has been directed to handover such fishermen to Indian authorities directly,” they said. “Krishna also sought to know the progress on a memorandum of understanding (MoU) to be inked for cooperation between the navies of the two countries,” the sources said. The meeting in Myanmar comes hours after a three-member Lankan delegation comprising Basil Rajapaksa, senior adviser to President Mahinda Rajapaksa, Lalith Weeratunga, secretary to the president, and defence secretary Gotabhaya Rajapaksa held a series of meetings with the Indian leadership in Delhi. They had also called on Krishna on Thursday morning. The Lankan delegation had told the Indian side that more than 158,000 IDPs have since left the camps and around 115,000 still remained there. They indicated their resolve to resettle the IDPs before end-January 2010. The Sri Lankan government had set a 180-day deadline for resettling IDPs after the Lankan forces defeated the LTTE in May, bringing to an end decades-long insurgency in the island nation. Last night, Krishna also met Nepalese Deputy Prime Minister Sujatha Koirala and Myanmar counterpart U. Nyan Win. Source: LatestNews-Home - Livemint.com | 10 Dec 2009 | 10:48 pm Volkswagen, Suzuki plan small car for IndiaThe planned new car would be priced at $4,000-$5,000 in the European market, well below the $8,800 price tag for the Up, the cheapest car in Volkswagen's stable.Source: Daily News & Analysis: Money News | 10 Dec 2009 | 10:45 pm Smartphones are hot and so are their stock pricesTaipei: Shares of major smartphone makers and other suppliers of microchips and touch-sensitive screens in Asia have been stellar performers recently thanks to optimism over sales growth next year. As more feature-jammed smartphones fly off the store shelves, South Korea’s Samsung, the world’s no.2 mobile phone maker which also supplies touch panels, saw its share price rise to a more than two-month high this week. In Taiwan, shares of Asustek Computer, one of major PC brands that piled into the smartphone segment this year, are hovering at their highest level in more than one year. CONSUMER BOOM Worldwide smartphone shipments are expected to rise about 20% next year, faster than the 9% growth predicted for global PC shipments, according to research firm IDC. “There is a huge opportunity,” said Derek Lin, who manages a $18 million fund covering markets in Asia for Taiwan’s Uni-President Asset Management. “The two biggest players in South Korea, and HTC and some other components makers in Taiwan are all likely to benefit from the boom,” said the fund manager, who owns shares of Samsung and LG in his portfolios now. Samsung and LG have recently boosted their smartphone line-ups to compete with Apple and Research In Motion, even though some analysts have doubts about Samsung’s own software platform. Of 45 brokers tracked by Thomson Reuters I/B/E/S, 43 rate Samsung Electronics, which also makes memory chips and sells flat-screen TVs, as either a buy or a strong buy. Another strong performer is chip designer and supplier Mediatek. Its shares have more than doubled this year, outpacing a 67% rise on Taiwan’s main TAIEX index. Mediatek and Qualcomm entered a patent arrangement last month, paving the way for it to gain a bigger share in the fast-growing smartphone chip market. US chip desinger Marvell Technology expects smartphones to take the lion’s share of the global cellphone market in the next six years. PRICE WAR? With big PC names, including Acer and Dell, entering the market where telecom operators are selling more models running on new software, a price war looks set to intensify and hurt margins next year. Analysts also attributed lower handset prices to the rollout of new technologies, including cheaper panels and chips that help save more power and extend battery life. Investors have started selling shares of some smartphone makers, such as Taiwan’s HTC, after the world’s no.4 smartphone vendor posted worse-than-expected November sales this week. The stock has fallen 10% since a near four-month high on 26 November. “I want to be cautious about the sector because selling prices are going down next year,” said Vincent Chen, a technology analyst at Yuanta Securities. “Not just HTC, other players will also get hurt,” said Chen, who put a ‘sell’ rating on HTC Corp. “HTC shares are trading above most Taiwan tech rivals at about 14 times Yuanta’s 2010 earnings per share forecast,” Chen added. Given a lack of scale and 3G patents, Citi also rated HTC at ‘sell’ and forecast HTC’s 2010 net profit would fall 16% from 2009, with its operating profit margin shrinking to 13.1% from this year’s 16.4%. “Mediatek was also not a good target at its current price around T$517 a share,” said Kevin Chung, manager at Jih Sun Investment Consulting. “There are risks and I don’t think foreign investors will add their holdings. If the stock falls to T$400-T$450, then I would believe some people will pay attention to the stock again,” Chung said, citing growing pricing pressure on the smartphone market. Source: Tech News - Livemint.com | 10 Dec 2009 | 10:44 pm Smartphones are hot and so are their stock pricesTaipei: Shares of major smartphone makers and other suppliers of microchips and touch-sensitive screens in Asia have been stellar performers recently thanks to optimism over sales growth next year. As more feature-jammed smartphones fly off the store shelves, South Korea’s Samsung, the world’s no.2 mobile phone maker which also supplies touch panels, saw its share price rise to a more than two-month high this week. In Taiwan, shares of Asustek Computer, one of major PC brands that piled into the smartphone segment this year, are hovering at their highest level in more than one year. CONSUMER BOOM Worldwide smartphone shipments are expected to rise about 20% next year, faster than the 9% growth predicted for global PC shipments, according to research firm IDC. “There is a huge opportunity,” said Derek Lin, who manages a $18 million fund covering markets in Asia for Taiwan’s Uni-President Asset Management. “The two biggest players in South Korea, and HTC and some other components makers in Taiwan are all likely to benefit from the boom,” said the fund manager, who owns shares of Samsung and LG in his portfolios now. Samsung and LG have recently boosted their smartphone line-ups to compete with Apple and Research In Motion, even though some analysts have doubts about Samsung’s own software platform. Of 45 brokers tracked by Thomson Reuters I/B/E/S, 43 rate Samsung Electronics, which also makes memory chips and sells flat-screen TVs, as either a buy or a strong buy. Another strong performer is chip designer and supplier Mediatek. Its shares have more than doubled this year, outpacing a 67% rise on Taiwan’s main TAIEX index. Mediatek and Qualcomm entered a patent arrangement last month, paving the way for it to gain a bigger share in the fast-growing smartphone chip market. US chip desinger Marvell Technology expects smartphones to take the lion’s share of the global cellphone market in the next six years. PRICE WAR? With big PC names, including Acer and Dell, entering the market where telecom operators are selling more models running on new software, a price war looks set to intensify and hurt margins next year. Analysts also attributed lower handset prices to the rollout of new technologies, including cheaper panels and chips that help save more power and extend battery life. Investors have started selling shares of some smartphone makers, such as Taiwan’s HTC, after the world’s no.4 smartphone vendor posted worse-than-expected November sales this week. The stock has fallen 10% since a near four-month high on 26 November. “I want to be cautious about the sector because selling prices are going down next year,” said Vincent Chen, a technology analyst at Yuanta Securities. “Not just HTC, other players will also get hurt,” said Chen, who put a ‘sell’ rating on HTC Corp. “HTC shares are trading above most Taiwan tech rivals at about 14 times Yuanta’s 2010 earnings per share forecast,” Chen added. Given a lack of scale and 3G patents, Citi also rated HTC at ‘sell’ and forecast HTC’s 2010 net profit would fall 16% from 2009, with its operating profit margin shrinking to 13.1% from this year’s 16.4%. “Mediatek was also not a good target at its current price around T$517 a share,” said Kevin Chung, manager at Jih Sun Investment Consulting. “There are risks and I don’t think foreign investors will add their holdings. If the stock falls to T$400-T$450, then I would believe some people will pay attention to the stock again,” Chung said, citing growing pricing pressure on the smartphone market. Source: LatestNews-Home - Livemint.com | 10 Dec 2009 | 10:44 pm DE Shaw sells 36% stake in India's DLF unitDE Shaw sold the stake to the promoters of DLF Assets Ltd, but still has a 4% stake.Source: Daily News & Analysis: Money News | 10 Dec 2009 | 10:43 pm India's 3G spectrum auction on schedule: MinisterThe auctions are slated to be conducted on January 14.Source: Daily News & Analysis: Money News | 10 Dec 2009 | 10:42 pm Cox and Kings lists at discount to issue price, shares soarCox and Kings (India) is the parent of UK-based unlisted Cox and Kings, and accounts for nearly 66% of the group' global revenues.Source: Daily News & Analysis: Money News | 10 Dec 2009 | 10:40 pm Rupee up 7 paise at 46.57 a dlr in early tradeThe Indian rupee today strengthened by 7 paise to 46.57 a dollar against in early trade on hopes of fresh capital inflows into equity markets.Source: Daily News & Analysis: Money News | 10 Dec 2009 | 10:38 pm Wipro to set up 2nd centre in West Bengal - Times of India
Source: Business - Google News | 10 Dec 2009 | 10:37 pm Obama plans TARP aid for small businesses - reportWASHINGTON (Reuters) - The Obama administration plans to channel money from the government financial bailout fund to small businesses in an effort to stem the political and economic fallout of high unemployment, the Washington Post said in its Friday editions.Source: Reuters: Money News | 10 Dec 2009 | 10:29 pm Gold futures snap six-day losing streakMumbai: India gold futures edged higher on Friday, snapping a six-day losing streak on bargain-buying and a steady dollar, analysts said. The most-traded February gold contract on the Multi Commodity Exchange (MCX) was 0.60% higher at Rs17,180 per 10 grams at 10:59am. The contract had shed 6.1% in the previous six sessions. “Gold may see some upside till Rs17,300 on bargain buying at support levels,” said Pranav Mer, an analyst with India Infoline in Mumbai. The dollar index was steady against a basket of major currencies. Buying could be initiated at Rs17,150, with a target of Rs17,300 and a stop loss of Rs17,090, said Mer. Open interest for February gold on MCX was at 16,148 lots, down from 16,220 a day earlier. Gold is likely to trade in the range of Rs17,000-17,200, said Aurobinda Prasad, head of research, Karvy Comtrade. Source: Home - Livemint.com | 10 Dec 2009 | 10:29 pm Sensex rises by 158 pts in opening trade on global cuesThe Bombay Stock Exchange benchmark Sensex rose by 158 points in opening trade today on buying by funds driven by strong global cues.Source: India Business News | Business News - Times of India | 10 Dec 2009 | 10:10 pm Farmers outsmart nature, adapt to weather shiftsGorakhpur: As world leaders and top scientists in Copenhagen debate how to deal with climate change, farmers a world away in flood-prone areas of northern India are taking it into their own hands to adapt to shifts in the weather. For decades, inhabitants of Uttar Pradesh state have been witnessing erratic weather, including increasingly intense rainfall over short periods of time. The rain, combined with heavy mountain runoff from nearby Nepal, which is also seeing heavier-than-usual rains, has inundated villages, towns and cities in the region. The flooding often results in thousands of people being displaced, homes damaged and possessions destroyed. It has also brought major livestock and crop losses for many of India’s poorest farmers. But farmers in Manoharchak village, on the banks of the Rohini river, are outsmarting nature and using simple but effective techniques to deal with negative impacts of climate change. “For the last three years, we have been trying to change our ways to cope with the changing weather,” said Hooblal Chauhan, a farmer whose efforts to adapt have included diversifying his farm production from traditional wheat and rice to incorporate a wide variety of vegetables. ‘We are doing what we can to help ourselves’ “I don’t know what those big people in foreign countries can do about the weather, but we are doing what we can to help ourselves,” said the 55-year-old from Manoharchak, situated 56 miles (90 km) north of the bustling city of Gorakhpur. Villagers in Manoharchak have raised the level of their roads, built homes with foundations of up to 10 feet (3 metres) above ground, elevated community hand pumps and created new drainage channels. Supported by the Gorakhpur Environmental Action Group - a research and advocacy organization interested in environmental and resource management issues - farmers are also planting more flood-tolerant rice, giving them two harvests a year where they once had one, and diversifying from traditional crops to vegetables such as peas, spinach, tomatoes, onions and potatoes. The diversity of crops, they say, is particularly beneficial when their wheat and rice fail. And the vegetables give them not only a more varied and nutritional diet but help in earning an income when excesses are sold. Increasingly intense rain means farmers in the region also have to contend with water-logged soil. Vast swathes of fertile land in the area have been turned into massive ponds. The water-logging is a serious problem, experts say, and is caused not only by the low-lying terrain but by build-ups of silt which restrict water flows, leaving farmers unable to work their land for months until the water has drained. But 50-year-old widow Sumitra Chauhan, who grows about 15 different vegetables as well as rice and wheat on her two-acre plot, says she has learned ways to overcome the problem. “We used to have to wait up to one month for the water-logged land to drain before we could plant any crops. But now we use nurseries for our vegetables,” said Chauhan, standing in her lush green plot packed with vegetables including mustard, peas, spinach and tomatoes. “We plant our seedlings in the nurseries and then when the water drains, we transfer them to the land so there are no delays,” she said. Crops raised above water-logged soil Farmers have also started using “multi-tier cropping” where vegetables like bottle gourd and bitter gourd are grown on platforms raised about five to six feet (1.8 meters) above the ground and supported by a bamboo frame. Once the water-logged soil drains, farmers can then plant the ground beneath the platforms with vegetables and herbs such as spinach, radish and coriander that require less sunlight and do not grow very tall. Warmer temperatures and an unusual lack of rain during monsoon periods in eastern Uttar Pradesh have also led to dry spells. To cope, villagers have contributed to buying water pumps for irrigation, lowering their dependency on rain-fed agriculture. While developing countries battle with industrialised nations at the UN climate talks in Copenhagen, including over the provision of billions of dollars to help poorer nations adapt to climate change, experts say farmers can start adapting even before a deal is struck by using low-cost strategies like those in Manoharchak. “It is true that developing countries need a lot of investment to adapt to the effects of climate change, but small and marginal farmers, who are some of India’s poorest, can make a start by using simple, cheap techniques to help themselves,” said Ekta Bartarya of the Gorakhpur Environmental Action Group. About three-quarters of farmers struggle to survive on as little as a third of an acre of land, experts say. Most are vulnerable to the effects of climate change. Shifts in weather patterns have made it difficult for them to predict when to sow, reap and harvest their crops, and meager harvests as a result of temperature hikes, floods and droughts have often left them with little to survive on. 4.5 million in India affected by climate shifts According to Oxfam, which is supporting the action group’s work in eastern Uttar Pradesh, around 4.5 million people in India have been affected by climate-related problems. Some have been forced into debt. Others have migrated to towns and cities to search for manual labor or have had to sell assets such as livestock to cope. Experts say low-cost adaptation techniques, developed by combining scientific knowledge with existing community knowledge, can be used to help farmers across India who are vulnerable to climate change. “Certainly each region in India would require a different kind of adaptation technique,” but all are aimed at building climate resilience, said Aditi Kapoor, a specialist in economic justice for Oxfam India. But she warned that successes in home-grown adaptation do not mean developed countries should be able to avoid financing adaptation projects. “We estimate that rich countries must provide at least $200 billion per year of new and additional public money (by 2030) to help poor countries cope with the impact of climate change,” she said. Source: Home - Livemint.com | 10 Dec 2009 | 9:52 pm Rupee up 7 paise at 46.57 a dollarThe Indian rupee today strengthened by 7 paise to 46.57 a dollar against in early trade on hopes of fresh capital inflows into equity markets in line with firming trends on the Asian markets.Source: India Business News | Business News - Times of India | 10 Dec 2009 | 9:36 pm China industry output soars, inflation returnsBEIJING (Reuters) - Chinese industrial output surged in November to its fastest pace since June 2007, underlining the economy's brisk recovery from the global downturn andSource: Reuters: Money News | 10 Dec 2009 | 9:12 pm Debt-hit Dubai tries to keep up glitz at filmfestDubai: Once a central player in Dubai’s ambitions to be a major world city, its international film festival kicked off this week with the shadow of the emirate’s debt troubles hanging over it. Over 160 films from around the world—many of them by Arab directors—play over seven days in the Gulf Arab emirate that shocked global markets last month with its announcement that a state-linked conglomerate was seeking a delay in debt repayment. The festival was launched to great fanfare in 2004, when Dubai—a member of the United Arab Emirates federation—was a boomtown on a mission to become a Singapore-style global trade and tourism center where money was easy and living was fast. But the tone was more downbeat on Wednesday night. Gulf Arab, Egyptian and a few Indian actors walked down a red carpet graced in previous years by stars such as George Clooney and Goldie Hawn as Dubai—promoted as the ‘vision’ of its ruler Sheikh Mohammed bin Rashid al-Maktoum—sought Hollywood’s eye. The stars who turned up, including Indian superstar Amitabh Bachchan who received a lifetime achievement award, were in defensive mode about the city of 1.7 million Asians, Arabs and Europeans that has reveled in excess and opulence. “This festival is something Dubai should be proud of. Everything that’s being said about Dubai is not true. We are living in comfort,” Emirati actress Hala al-Khatib said. “It has such energy, this city. I very much enjoy the ’yes we can’ attitude in Dubai,” said British actress Natalie Dormer, who stars in ‘City of Life’, a drama in English and Hindi about life in Dubai that premieres this week. The organizers—who declined to say how much money they were spending this year—said that the festival’s aim remained building bridges between cultures of the world. “We have 200 nationalities here and Dubai goes on with its people and its residents,” said artistic director Masoud Amralla Al Ali. “This is not a city of ghosts, everyone is here. Dubai has so much movement it’s tiring, it’s not a deserted city,” he said. At a lackluster after-party on a windy beach next to the iconic sailed-shaped Burj al-Arab hotel, conversation centered on Dubai’s debts of at least $100 billion. “Everybody’s talking about it,” said a Lebanese hotel manager, clutching his champagne glass and complaining that festival costs had been pared back. “What’s this?” he said kicking the green felt carpet, suggesting it was gaudy. A few fireworks went off in the unseasonably chilly sky, as hired dancers pranced around the thin crowd—a contrast to the extravagant launch costing millions of dollars last year for the Atlantis Hotel on the man-made Palm Jumeirah island. “They still have some money,” an Arab television executive said. “It’s like the Weimar Republic,” a local journalist answered wryly, referring to the doomed German state that collapsed in the 1930s amid skyrocketing inflation and economic ruin. Mandy Moore, the only American name to show, said that she was thrilled to be in the enigmatic city. “This is my time in Dubai and it’s beautiful,” said the singer and actress, wearing a black Escada dress and Cartier jewellery. Source: LatestNews-Home - Livemint.com | 10 Dec 2009 | 9:09 pm Asian stocks gain on China data, gold edges upSingapore: Asian stocks rose on Friday after a slew of Chinese data showed the world’s third-largest economy is on a brisk recovery path, while gold prices rose as the dollar steadied. China’s industrial growth in November accelerated to 19.2% from a year earlier, its highest since June 2007, while investment expansion remained robust. Chinese imports surged 26.7%, their first rise in 13 months, though exports disappointed slightly with a drop of 1.2%. China’s strong rebound from the global downturn has boosted many of its Asian neighbours even as consumer demand in the region’s key Western export markets remains sluggish. The MSCI index of Asia Pacific stocks outside Japan rose 0.8%, with the energy sector providing the biggest lift. The Thomson Reuters index of Asia ex-Japan equities was also up 0.8%. Stocks in Hong Kong, a key gateway to China for international investors, led regional gains with a jump of 1.7%. Property stocks were particularly firm after a recent sell-off, with Hang Lung Properties surging 3.8%. The Shanghai Composite Index rose 0.8%. Other data released on Friday showed the Chinese economy has also tentatively shaken off a bout of profit-eating deflation as the consumer price index turned positive in November after nine straight months of declines. Japan’s Nikkei share average gained 0.8%, with exporters boosted by the Chinese data and improving trends in the US job market, which gave a modest boost to Wall Street overnight. A decline in the US October trade deficit also reassured investors that the world’s largest economy was steady albeit slow recovery path. The dollar was steady against a basket of major currencies, while the Australian dollar stayed firm as higher stock markets abroad and the greater prospect of further interest rate hikes at home kept it well supported. Gold prices rose above $1,130 an ounce as the dollar steadied, after snapping a four-day losing streak the day before when investors returned to buy bullion. Still, gold prices have slipped nearly 8% from an all-time high of $1,226.1 on 3 December as the dollar rallied last week, contrary to market expectations. US crude for January delivery rose 33 cents to $70.87 a barrel after hitting a two-month low on Thursday, its seventh straight losing session as ample supplies stoked worries about weak demand. Source: Home - Livemint.com | 10 Dec 2009 | 8:59 pm Oil rises near $71; strong China data supportsSingapore: Oil edged up on Friday, supported by solid industrial growth in China, after falling for a seventh straight session a day earlier on concerns over global oversupply, dipping below $70 for the first time in two months. Signs that the US economy is on a steady growth track also offered some relief to oil even though the dollar held firm. US crude for January delivery rose 41 cents to $70.95 a barrel by 0352 GMT, after touching an intraday low of $69.81 on Thursday. Over the past seven sessions, front month crude has sunk by almost $8, or about 10%, the biggest loss for the front month since July. London Brent crude gained 37 cents to $72.23. Some analysts said the sharp drop in prices reflected growing pessimism about a potential recovery, but others pointed to support from Asia. “The current market is too pessimistic,” said Sumisho Sano, general manager for Research and SCM Securities in Tokyo. “The fundamentals are not so good in the United States, but China and Asia are not so bad, driven by industrial demand in the region.” He expected oil prices to hold firm within the $65 to $80 range, down from the previous $75-80. While US distillates stocks are abundant, Sano pointed to forecasts for falling temperatures in the world’s largest energy consumer to help ease bulging stockpiles, while pushing natural gas prices higher. Nymex natural gas futures jumped 8% on Thursday, backed by cold Northeast and Midwest weather forecasts and a government report showing an unexpectedly-large weekly inventory decline. AccuWeather.com expects temperatures in the Northeast, the key heating oil market, to average below normal for the next 10 days, while the National Weather Service called for below-normal temperatures for the eastern half including Texas, with seasonal or above seasonal seen for the rest of the United States. China supports China’s November industrial output growth surged to its strongest since June 2007, underscoring the economy’s robust recovery from the global downturn in response to massive fiscal and monetary stimulus, and analysts expected the trend to continue in coming months. Refining rates in the world’s second-largest oil user also posted a record high in November, up 21% from a year earlier to 8.12 million barrels per day (bpd), signalling recovering demand. But strong production also led to a build-up in fuel inventories in China’s two oil majors last month. Also while oil product exports rose, imports fell last month. Data from the US was mixed. In the United States, while the number of workers filing new claims for jobless benefits rose more than expected last week, continuing claims fell, the Labor Department said. US exports of goods and services hit their highest level since November 2008, narrowing the trade gap as the U.S. dollar helped boost exports, the Commerce Department said. The dollar held steady on Friday, up 0.09% against a basket of major currencies, after the upbeat Chinese data and some improvement in US figures. Source: Home - Livemint.com | 10 Dec 2009 | 8:52 pm Economic recovery remains tentative - IMF's LipskyNEW YORK (Reuters) - Economic recovery around the world remains tentative and the return to growth is still vulnerable to new shocks, a senior International Monetary Fund official warned on Thursday.Source: Reuters: Money News | 10 Dec 2009 | 4:37 pm Russia to buy into Shyam JVRussia will acquire 19.8% stake in the joint venture Sistema Shyam Teleservices Ltd (SSTL) between Sistema of Russia and the Shyam Group of India for $676 million (around Rs 3,150 crore).Source: India Business News | Business News - Times of India | 10 Dec 2009 | 1:33 pm Rel Global, Airtel to build undersea cableA group of global telecom and technology firms, comprising India's Reliance Globalcom and Bharti Airtel, on Thursday signed an agreement to build and operate a submarine cable system with the world's highest capacity.Source: India Business News | Business News - Times of India | 10 Dec 2009 | 1:30 pm Govt to auction only 3 slots of 3G spectrumIn a surprise move that could deprive it of over Rs 5,000 crore in revenue, the government has said the 3G telephony spectrum available with it for sale currently could accommodate only three operators.Source: India Business News | Business News - Times of India | 10 Dec 2009 | 1:28 pm 'Home loan rates to remain easy'The interest rate scene in the country will remain easy for the next three-four quarters as there is excessive liquidity in the financial system, said Keki Mistry, managing director, HDFC Ltd.Source: India Business News | Business News - Times of India | 10 Dec 2009 | 1:23 pm Food inflation up at 19%Food prices continued to rise, with the index for daily living cost rising to over 19% in the fourth week of November, year-on-year, mounting pressure on the government to rein in rates of essential items and RBI to tighten purse-strings.Source: India Business News | Business News - Times of India | 10 Dec 2009 | 1:21 pm Panasonic, Sanyo complete dealPanasonic will take majority control of Sanyo Electric in a $4.6 billion deal, forging one of the biggest electronics makers in the world with an edge in green technologies.Source: India Business News | Business News - Times of India | 10 Dec 2009 | 1:21 pm Osian’s art fund fails in art of investingMumbai / New Delhi: The Rs100 crore Osian’s Art Fund, India’s first such fund floated by Neville Tuli, promoter of the country’s first art auction house, is struggling to repay investors. Five months after the scheme closed, Tuli and his colleagues are still “trying” to return money, many investors claim. While some of them are yet to receive any payment at all, others have been given around 30% less than their entitlement, according to the net asset value (NAV) declared by the fund. Click here to read an editors post on why it is important to report stories like the Osian Art fund NAV is the market value of the units of a fund. An art fund is like a mutual fund where investors do not pick the individual investment vehicles and instead invest in a pool of artworks.  Graphics: Sandeep Bhatnagar / Mint Osian’s-Connoisseurs of Art Pvt. Ltd launched the fund in 2006. It was quickly followed by Edelweiss Capital Ltd’s Yatra Art Fund. Religare Arts Initiative, Copal Art fund, Crayon Capital Art Fund, Kotak India Art Fund and Indian Fine Art Fund are some of other funds that hit the market between 2006 and 2008. According to industry estimates, collectively, these funds raised around Rs300 crore. Art funds started wooing investors after Indian artists started making waves at global auctions. In December 2005, Tyeb Mehta’s Mahishasura went for $1.6 million (Rs7.5 crore today) at a Christie’s auction. In 2008, M.F. Husain’s Battle of Ganga and Jamuna: Mahabharata 12 fetched an identical amount at yet another Christie’s auction. These were widely reported and caught the fancy of investors and art emerged as a new asset class. But the euphoria seems to be on the wane and after the credit crunch that swept the world in 2008, prices collapsed along with other assets such as stocks and commodities. While the stock market has regained a large part of the lost ground, experts say art, being an illiquid asset, will recover with a lag effect. Osian’s launched its first fund, Contemporary 1, on 9 July 2006—a closed-ended scheme with a lock-in period of 36 months. As of July 2006, the total corpus held by the fund was Rs102.40 crore, with 656 unit holders spread across 39 cities in India. Going by the fund’s prospectus, the redemption process was to start from 10 July 2009. The entire process was to be completed by 10 November. Unhappy investors Pankaj Butalia, a retired economics professor and part time film-maker based in New Delhi, invested Rs20 lakh along with his wife in July 2006. They are yet to get their money back. “ABN Amro Bank sold the art fund to us. We had just sold a flat then, and the bank made us invest (in the fund). Now leave alone the fantastic returns they promised, I am not even sure whether we’ll get back the money we had invested.” said Butalia. Butalia claimed his emails to Osian’s have bounced and Tuli has stopped responding to his calls. Deepak Daftari, a Kolkata-based investor who had invested Rs10 lakh in the fund, said “after repeated calls to Osian, I finally received Rs9 lakh a few weeks ago”. He also claimed that the official mail from Osian’s accompanying the payment said it was 90% of the investment. “But if the NAV was Rs112.29 in July when the fund closed, then the full payment should be Rs11.23 lakh and I’ve received around 80%. According to Daftari, there is confusion about payment dates and NAV. “We were told that the NAV for the month of July was Rs112.29, which was declared in October. Now I learn that the NAV has gone down to Rs110. I don’t understand how the NAV can go down since it was closed in July.” He also alleged that NAV for 9 July, the day the fund closed, was not announced till the first week of November as the fund claimed the audit was going on for four months. Tuli, chairman of the firm and chief adviser to the fund, claimed 90% of all the unit holders’ capital has been returned, and the remaining amount will be returned within a few days. “The downturn in the art market made it very difficult to sell all the inventories and realize the dues owed as per original schedule, and so we have been as patient as possible so that the unit holders did not suffer a loss. It has been a very difficult time for all the art market, and for the fund especially as we entered at the top of the market in 2006 and are forced to exit at the bottom of the market,” he said in an email response to Mint’s queries. An ABN Amro Bank spokesman said: “ABN Amro has stringent standards governing its sales processes and client suitability assessments that are in compliance with internal policies and local regulations. We treat all client concerns and complaints seriously and will review and investigate any case thoroughly.” In the first week of November, Tuli had told Mint that the capital of unit holders had been preserved despite the market dropping by more than 45%. But the rate of return was to be 5% a year as opposed to 20-22% (after tax), as the fund’s disclosure report had suggested in January 2007. He had also said payments to all investors were being processed and would be made within a week. In his email to Mint, Tuli said: “The final redemption value will be approximately Rs111.85.” This means on an investment of Rs10 lakh, an investor will get Rs11,18,500. Had Butalia or Daftari invested their Rs10 lakh in gold, it would have fetched them Rs18.81 lakh—a return of 88%. During this time, the Bombay Stock Exchange’s benchmark index Sensex has risen 60.28%, and an investment in bank deposits would have earned a compounded return of around 26%. An official at Osian’s, who identified herself only as Arthi, said on the phone: “There has been a delay. We have started the process last week. We are trying to do it by the end of the month.” An official of BNP Paribas, one of the distributors of the fund, said, speaking on condition of anonymity: “There was some trouble in calculating NAV after deducting the winding up charges, etc. If the market knows that a person is holding certain kind of artwork and he needs to sell it, the prices instantly crash. So he needs to do it in a phased manner.” Liquidity risk Amit Sarup, head, wealth management, Religare Wealth Management Services Ltd, said: “Art is illiquid. But in a market like what we saw six-eight months back, it was difficult to sell anything, be it art, real estate or any other property. Liquidity risk is always there in an art fund. You have to start early. It is not like equity mutual fund that you can sell on day of redemption. You need to plan it over a long period.” Religare did not have any investments in the Osian’s fund. According to Ella Datta, an author and art critic, the market is neither large nor dynamic enough to nurture several art funds but that discerning funds will still manage to succeed. “A good work of art will always have a market. There are two categories of people—the genuine collectors who have been buying art per se and the investors who want to buy and sell art. There aren’t too many belonging to the second category in the market now,” Datta said. Datta is an adviser to Crayon Capital’s art fund, launched in November 2006 with a lock-in period of 36 months. At the time of its launch, the fund had indicated a 30-40 % return to investors. On its website, the fund now claims an NAV of Rs1,101 per unit of Rs1,000 (a return of 10.10%) at the end of its 11th quarter on 30 September. Amit Vadehra, managing partner of the fund, did not respond to repeated emails and phone calls about the fund’s repayment schedule. Yet another fund, Religare Arts Initiative, isn’t disclosing its payment schedule or current NAV. Set up in 2008 with a 36 month lock-in period, the fund is due for closure in January 2011. Sumithra Ravindran, vice-president, Religare Arts Initiative, said the payment schedule and information would be shared only with investors. Unlike mutual funds, art funds are not regulated by the Securities and Exchange Board of India, the capital market regulator, and are not required to make public their NAV. n.subramanian@livemint.com Source: LatestNews-Home - Livemint.com | 10 Dec 2009 | 12:45 pm Golf moves out of elitist mould on to level fieldKolkata: Until five years ago, Chikkarangappa would run around the Eagleton Golf Resort, on the outskirts of Bangalore, retrieving strayed balls for recreational players. Teeing off against them was just a dream for this lanky lad. Click here to view a slideshow showing young golfers in India Today, the 16-year-old has gone beyond that humble aspiration, becoming one of the most promising young golfers in India.  Promising career: Chikkarangappa during a tournament in November. Indranil Bhoumik / MintBut thanks to support from Eagleton, which allowed him to use its facilities for free, he is now the country’s No. 1 golfer in the under-18 category. Chikka’s success is an indication of the sport’s growth over the last few years. In 1955, there were only six golf courses in India, whereas now there are 194, according to The Indian Golf Union (Tigu). Yet, golf predominantly remains the preserve of elite clubs and army cantonments, says Gaurav Ghosh, a member of the governing council of Tigu, the national regulator for the sport. “But young players such as Chikka, Ashbeer Saini and Gaganjeet (Singh) Bhullar, who have come up from humble backgrounds, are proving that you don’t need rich parents to become a professional golfer,” he says. Fifteen-year-old Saini from Kapurthala in Punjab is the son of a sports officer in the railways. He has been playing golf for the past five years. Bhullar, too, is from Kapurthala, and is now one of the top professionals in India. Even five years ago, hardly 40 children would take part in junior-level tournaments, according to Satish Aparajit, secretary general of Tigu. “Now we have around 300 youngsters training at Chandigarh’s National Golf Academy alone,” says Aparajit. “It’s only now that we can see how much talent India has.” Tigu is also trying to introduce golf in schools through adaptations such as Go-Go Golf and Snag Golf, which are designed to make the sport more popular among young people. These variants aren’t played on golf courses but in rooms of around 2,000 sq. ft using plastic balls and clubs. But what could make a big difference to the sport in India is its inclusion in the 2016 Summer Olympics in Rio de Janeiro. With its sights firmly set on the Olympics, Tigu is expanding the National Golf Academy. “Our plan is to have at least one training centre under the academy in every zone of the country,” says Aparajit. “The aim is to build a contingent of strong players before the 2016 Olympics.” Inclusion in the Games could lead to substantial administrative changes, says A.S.V. Prasad, a director at the Indian Olympic Association (IOA). “Tigu isn’t recognized by IOA yet, and for it to be recognized as the national governing body for golf, it would have to establish that state golf associations support it,” he says. Tigu is currently supported by some 14 “affiliates” across the country, and states such as Andhra Pradesh, Gujarat, Uttarakhand and Tripura have shown interest in joining the union, according to Aparajit. Ghosh believes that for golf to comply with IOA’s requirements, it cannot remain confined to a few clubs. “The sport must expand and this will lead to more democratization,” says Ghosh. “The success of players such as Chikka, Saini and Bhullar will increase the sport’s popularity even among those who thought golf was beyond their means.” “The democratization of golf” is likely to happen in the same way as cricket, according to sports historian Boria Majumdar. Winning the 1983 World Cup was the “turning point” for cricket. “Till then, very few people from the weaker sections of the society would take interest in the sport, but the win turned the sport into a national obsession,” says Majumdar. “A similar thing could happen to golf as well if Indians did well in big international events.” Source: Home - Livemint.com | 10 Dec 2009 | 12:45 pm Misra panel wants quotas for minoritiesNew Delhi: A panel headed by former chief justice Ranganath Misra has recommended wide-ranging affirmative action, including quotas for Muslims, Christians and other religious minorities in educational institutions, government jobs and employment programmes, and suggested that the scheduled caste (SC) net be made “fully religion-neutral”. Also See Quota Conundrum (Graphics) The National Commission for Religious and Linguistic Minorities, formed in March 2005, has proposed that 15% of posts in “all cadres and grades under the Central and state governments” be earmarked for such minorities in a report that one social scientist said could trigger a backlash. Within the 15%, the commission suggested that 10% be set aside for Muslims, in line with their 73% share in the total minority population. If there aren’t enough Muslims to fill the 10%, the vacancies can be filled by members of other minorities, but in no case by the majority community, it said. “Yet, should there be some insurmountable difficulty in implementing this recommendation”, the commission suggested carving out an 8.4% sub-quota for such religious minorities within the 27% reservation for other backward classes (OBCs). The 8.4% is in line with an estimate of religious minorities as a proportion of the OBC population. Within the sub-quota, 6% should be earmarked for Muslims and the remainder for other religious minorities, it said. Mint reviewed a copy of the commission’s recommendations, which have not yet been made public by the government. Prime Minister Manmohan Singh said on Wednesday that the report would be presented in Parliament during the current session, PTI reported. Newspaper Mail Today ran a story about the recommendations on Thursday. The five-member commission was appointed in March 2005 during the first term of the Congress party-led United Progressive Alliance government. The report was submitted on 22 May 2007. “Since the minorities—especially the Muslims—are very much under-represented, and sometimes wholly unrepresented, in government employment , we recommend that they should be regarded as backward in this respect...,” the commission said. The panel recommended that at least 15% of seats in all non-minority educational institutions be earmarked by law for the minorities, with 10% going to the Muslims. Minority candidates who can compete with others and secure admission on their own merit shall not be included in the 15%. It proposed that a 15% share be set apart for the minorities—with 10% going to the Muslims—in government schemes such as the Rural Employment Generation Programme, Prime Minister’s Rozgar Yojna and Grameen Rozgar Yojna, among others. In addition, the panel recommended amending the Constitution (Schedule Castes) Order, 1950, which originally restricted the SC net to Hindus and later was opened to include Sikhs and Buddhists, but still excludes Muslims, Christians, Jains and Parsis, among others. The commission recommended that the order be “wholly deleted by appropriate action so as to completely de-link the scheduled caste status from religion and make the scheduled castes net fully religion-neutral like that of the scheduled tribes.” This recommendation of the commission is, however, not unanimous. Asha Das, member-secretary of the commission, gave a note of dissent. The Constitution Order was religion-based and, “therefore, the condition of religion” should not be deleted, Das said in her note. The Misra panel consisted of Tahir Mahmood, former chairman of the National Commission for Minorities; Anil Wilson, former principal of St Stephen’s College, Delhi; and Punjabi scholar Mohinder Singh, apart from Das and Misra. “We have found no indication whatsoever in the Constitution...of an intention that scheduled castes must remain confined to any particular religion or religions,” Mahmood said in a rejoinder endorsed by Misra, Wilson and Mohinder Singh. The recommendations of the commission, likely to tabled in Parliament together with an action taken report by the government, are set to be strongly opposed by the main Opposition Bharatiya Janata Party (BJP). “It is not only unconstitutional, but it would also encourage conversions. We would oppose any move towards reservations for Dalit Christians and Muslims,” said BJP spokesperson Prakash Javadekar. Some social scientists also disagree with the recommendations. “Reservation is not a poverty alleviation programme. There could be many other ways to enhance the condition of a deprived community,” said Vivek Kumar, associate professor at the Centre for the Study of Social Systems at New Delhi’s Jawaharlal Nehru University. “The reservations for Dalits are in place by virtue of their qualitative and structural position in the Hindu class system for ages and is best not to be diluted by moves like this.” Kumar also warned that the implementation of the suggested quotas could trigger a backlash and “may prove counterproductive for the greater aim of maintaining amity among different strata in the society, which is a must for any social progress”. Minority communities have for long sought such affirmative action. “The plight of a Dalit is due to the larger social status and is irrespective of the religious considerations. We strongly feel that justice to minority Dalits and backwards are close at hand and cannot be denied for long,” said Babu Joseph, a spokesperson for the Catholic Bishops Conference of India. Graphics by Sandeep Bhatnagar / Mint santosh.j@livemint.com Source: LatestNews-Home - Livemint.com | 10 Dec 2009 | 12:26 pm The Mint report for 10 Dec 2009New Delhi: Japanese company Panasonic has announced a major acquisition. It has bought a 50.2% stake in Sanyo Electric for $4.6 billion. Sanyo Electric is the world’s largest manufacturer of rechargeable batteries and a major manufacturer of solar cells. Panasonic, on the other hand, already makes fuel cells, giving it a much larger portfolio of alternative energy technology. Toyota plans to launch a new product to challenge Maruti in the country. The company says it will unveil a low-cost compact car in India next month. Production of the car will begin in 2010 and sales will start in 2011. Barclays says it is cooperating with Sebi over questions about some of its transactions. One day earlier, Sebi had stopped Barclays from trading in new offshore derivatives instruments. In an order on Wednesday, Sebi said Barclays had not fully disclosed the details of the derivatives that are used by foreign investors to buy Indian equities. Prime Minister Manmohan Singh has said India needs to spend a lot more on money on agriculture. He said public spending in irrigation and farming technology were crucial for increasing the country’s output of food. Food inflation continues to rise. The food price index rose 19.05% in the week ending 28 November, the highest it has risen in 11 years. India’s reserve bank has indicated it may be necessary to raise interest rates to counter the increase in food prices. Also on Thursday, the reserve bank said it is not concerned about current levels of capital inflows into India. It says that the inflows are lower than the capital surge between 2006 and 2008 and that it cannot create an asset bubble. The statement came just a day after. Source: LatestNews-Home - Livemint.com | 10 Dec 2009 | 12:22 pm Jindal Power plans second biggest IPOIn what would be the second biggest initial public offer (IPO), Naveen Jindal-promoted Jindal Power Ltd (JPL) plans to raise up to Rs 10,000 crore in this financial year.Source: Business Standard | Front Page Headlines | 10 Dec 2009 | 12:04 pm Congress govt in Andhra under threatHyderabad / New Delhi: The six-month-old Congress government in Andhra Pradesh is facing its second crisis, with the latest one threatening to lead to its collapse.  Mission successful: Telangana Rashtra Samithi chief K. Chandrashekar Rao sips coconut water from his wife to end his 11-day fast at NIMS Hospital in Hyderabad on Wednesday. PTI On Thursday, 53 of its state legislators and two members of Parliament (MPs) resigned to protest the decision of the Congress-led United Progressive Alliance (UPA) to agree to the creation of a Telangana state out of Andhra Pradesh. The legislators belong to the two other regions of Rayalaseema and coastal Andhra. The decision, not unexpectedly, has raised questions about the fate of state capital Hyderabad since it falls within Telangana, provided a fillip to demands by other statehood movements in the country and triggered a fresh round of infighting within the Andhra Pradesh unit of the Congress party. In its second consecutive term after a strong victory in the April-May assembly election, the Congress in Andhra Pradesh has been on shaky ground ever since chief minister Y.S. Rajasekhara Reddy, popularly known as YSR, was killed in a helicopter crash in September. Also See Simmering Tensions (Graphics) A section of Congress MPs from the state, including YSR’s son Jagan Mohan Reddy, met Congress party president Sonia Gandhi to argue their case against the creation of a separate state. According to one of the MPs, who was part of the delegation but did not want to be identified, the delegation argued that there was no “political mandate for the creation of Telangana. If it was so, then it would have been an issue in the recent elections and the TRS (Telangana Rashtra Samithi) would have won”.  The delegation also pointed out that investors who had funded projects in Hyderabad would not favour a division of the state. However, a senior Congress leader at the Centre, who also did not want to be identified, maintained that after YSR’s death, the Congress was unable to provide a strong political leadership to counter the mobilization by the TRS for the creation of a separate state. “The only option was to go with the public mood,” the person added. Gandhi, according to the member of the delegation, was non-committal and maintained that she would convey their sentiments to the UPA. Meanwhile, Gandhi’s political secretary Ahmed Patel and law minister M. Veerappa Moily propose to hold a round of discussions with the same delegation of MPs later on Thursday night. The Central leadership is being careful since legislators owing allegiance to Mohan Reddy had threatened to split the party after the high command declined to name him chief minister following the demise of YSR. In fact, one Andhra MP alleged that the resignations had been encouraged by people close to Mohan Reddy—he could not be immediately reached by Mint—to partly show up the current state leadership. A senior Congress leader from Rayalaseema blamed chief minister K. Rosaiah for the crisis. “Had late chief minister Y.S. Rajasekhara Reddy been alive, the situation would not have reached this level. He would have fizzled out the movement for Telangana, while successfully controlling the law and order situation,” the Congress member said, asking not to be named. “He stood against the bifurcation of the state and prevailed over the Centre on the issue for over five years.” The Telangana region comprises 10 districts and accounts for 119 of 294 assembly seats; the Rayalaseema region has 52 seats from four districts, and the rest of Andhra Pradesh comprises nine districts with 123 assembly seats. The Congress party has 91 legislators from the Andhra and Rayalaseema regions, while the Telugu Desam Party (TDP) has 53 and the Praja Rajyam Party, led by actor Chiranjeevi, has 16. The Telangana region includes Hyderabad, a rival to Bangalore as an information technology destination and home to key India centres of multinational firms such as Google Inc. and Microsoft Corp. Telangana will be the 29th state in India when it is created. Andhra Pradesh assembly speaker Kiran Kumar Reddy said 53 of Congress’ 156 legislators in the 294-seat assembly had resigned. Lagadapati Rajagopal and Anantha Venkata Rami Reddy, both Congress MPs, also resigned. “This decision (to create a Telangana state) is very painful for us,” P. Venkatramaya, a Congress legislator from Krishna district, said in the assembly. “Lakhs of people from other regions of the state have come to Hyderabad in search of livelihood. What would be their fate if the state is split?” In a bid to mitigate the political fallout, Rosaiah said the Union government’s decision was only to initiate the process of creating a Telangana state and not to simply concede statehood without generating a consensus through debate. “It is a long process, which will take into consideration the views of people from across the state,” he said. “Statehood to Telangana is possible only if the Bill introduced in the assembly gets majority support and I request the MLAs to withdraw their hasty resignations.” Opposition parties in the state, too, have entered the debate on the issue. “The hasty and short-sighted decision to carve out a Telangana state without taking into consideration the views of the public in other regions would badly affect the prospects of future generations,” said N. Chandrababu Naidu, president of the TDP, the main opposition party in the state. “Such hasty moves will also prove counterproductive in attracting investment flows into the state.” According to the assembly speaker, 29 of the TDP’s 92 legislators also resigned in protest. Overall, 93 legislators across parties resigned on Thursday. The TDP had for years strongly opposed bifurcating Andhra Pradesh, but reversed its stance ahead of the 2009 elections, saying it was not against a separate Telangana state. The party draws its political support primarily from coastal Andhra and parts of Rayalaseema. At the national level, the main opposition Bharatiya Janata Party (BJP) welcomed the Congress’ decision to carve out a Telangana state, but the Communist Party of India (Marxist), or CPM, opposed it saying this would open a Pandora’s box of demands for smaller states. “Though it is a good initiative taken (by the Centre) to defuse the situation in Andhra Pradesh, we have been opposed to the formation of separate states,” CPM leader Sitaram Yechury told reporters. “However, our opposition did not stop the formation of Uttarakhand, Chhattisgarh and Jharkhand which have seen no development since they came into being.” Soon after the Congress announced its decision on Telangana, supporters of a separate state called Gorkhaland announced a shutdown in Darjeeling, West Bengal. In Uttar Pradesh, Rashtriya Lok Dal president Ajit Singh threatened to resume his agitation for a separate state called Harit Pradesh. In Andhra Pradesh itself, some Rayalaseema-based Congress legislators led by T.G. Venkatesh are now seeking to carve out the region into a “Greater Rayalaseema” state. Jandhyla Ravi Shankar, a constitutional expert, says reconstituting a state would take several years, citing the 18 years it took for Uttarakhand though there weren’t any objections to its formation. “The issue of carving out a Telangana state is a highly complicated one with potential serious objections from north Andhra, south Andhra, Rayalaseema and Hyderabad regions,” said Shankar. “The process of asset-liability allocation involves much more complex processes that take into account investments, tax collections, revenues, surpluses, assets and river water disputes,” he added. “I will be surprised if the process of carving out a Telangana state takes place before the 2019 elections.” In the Lok Sabha, leader of the House Pranab Mukherjee said all processes regarding formation of a separate Telangana state will be “fully followed”. After the Centre’s announcement, TRS’ K. Chandrashekar Rao ended his fast and was undergoing treatment at the Nizam’s Institute of Medical Sciences in Hyderabad. Protesting against the Centre’s decision on Telangana, students from across Andhra and Rayalaseema regions boycotted schools and colleges on Thursday, demanding a unified state. A committee of students’ associations affiliated to various political parties has given a call for a shutdown in the Andhra and Rayalaseema regions on Friday to protest the proposed bifurcation. c.sukumar@livemint.com PTI contributed to this story. Source: Home - Livemint.com | 10 Dec 2009 | 12:03 pm Telangana formation raises political, business concernsThe Union governments move to initiate the process for a separate Telangana state has raised both political and business concerns.Source: Business Standard | Front Page Headlines | 10 Dec 2009 | 12:00 pm DE Shaw reaps $500 mn in DAL dealUS hedge fund DE Shaw has sold 36 per cent stake in DLF Assets Limited (DAL) for $500 million (Rs 2,333 crore in current exchange rate).Source: Business Standard | Front Page Headlines | 10 Dec 2009 | 11:58 am Honda Motorcycle forays into entry level bikesThe world’s largest motorcycle manufacturer Honda Motorcycle and Scooter India forayed into the entry-level commuter segment with the launch of 110cc CB Twister, reports HT Correspondent.Source: HindustanTimes.com - Top Business News Headlines | 10 Dec 2009 | 11:12 am Russia to buy 20 in Sistema ShyamThe Russian government will acquire 19.8 per cent stake in Sistema Shyam Teleservices Ltd (SSTL), a joint venture between Russia-based Sistema Group and Shyam Group for $676 million (Rs 3,150 crore), reports HT Correspondent.Source: HindustanTimes.com - Top Business News Headlines | 10 Dec 2009 | 10:51 am We re positioning as a one stop solution for N plantsWith the DAE putting the domestic opportunity at $43 bn from the country’s emerging nuclear scenario in the next 10 years, L&T is hoping to rake in big business and has put in place big plans to exploit this opportunity. MV Kotwal, board member and senior executive vice-president, L&T, spoke to Hindustan Times about his company’s preparedness in this regard.Source: HindustanTimes.com - Top Business News Headlines | 10 Dec 2009 | 10:27 am RBI allows external loans for 3G servicesThe Reserve Bank has eased external commercial borrowing norms for telecom companies bidding for spectrum to offer 3G telecom services that will ease up broadband video, gaming and other high bandwidth applications on mobile handsets. Source: HindustanTimes.com - Top Business News Headlines | 10 Dec 2009 | 10:23 am Carrefour plans to open stores in 7 citiesThe French retail giant Carrefour has chalked out its expansion plans for opening cash & carry stores across India. The company would open its cash & carry stores in seven tier-I cities across the country. A cash & carry store sells in wholesale to small retailers but is not allowed to retail to an ordinary consumer. Source: HindustanTimes.com - Top Business News Headlines | 10 Dec 2009 | 10:20 am It’s boom time in China as global economies recoverGuangzhou (China): For the first time, the Chinese will buy more cars this year than the Americans. Demand is so high that drivers have put their names on long waiting lists for the most popular models. “I’m disappointed, but what can I do?” asked Zhang Ge Lu, a 28-year-old interior designer. He came recently with two friends to a row of dealerships in south-eastern China to buy a black Toyota RAV4, only to be told that he would have to wait two months for delivery. And it is not just cars. For more and more consumer goods, China is surpassing the US as the world’s biggest market—from cars to refrigerators to even desktop computers. The Chinese market is “on full tilt, booming is an understatement these days”, said John Bonnell, the director of Asia vehicle forecasting at JD Power and Associates. China is pulling ahead at this particular moment partly because Americans, debt-laden and worried about their jobs, are pulling back. While Americans are saving, the Chinese, whom economists thought were addicted to saving, are spending more.  Economy overdrive: Visitors at an auto fair in Jinan, China. The Asian giant is expected to lead recovery of the world economy. Among China’s 1.3 billion people, rising incomes are finally making large numbers of Chinese prosperous enough to make big-ticket purchases. The question is: Will they keep spending? The Beijing government is increasing consumption with rebates, subsidies and heavy bank lending. Whether China can turn the spending spree into the seeds of a true consumer society matters not just to China, but to the world. For years, the West has pushed China to increase domestic consumption and reduce its dependence on exports—that’s because its overdependence on exports has distorted global trade. To keep its export machine humming, China kept its currency undervalued to make its goods more competitive in foreign markets. The county beggared its own citizens, keeping salaries and bank deposit interest rates artificially low to support exporters. China’s trade surpluses and extensive intervention in currency markets have led it to amass $2.27 trillion (Rs106 trillion) in reserves, mainly in US treasury, mortgage-backed securities and other dollar-denominated investments, helping to keep interest rates low and finance Americans’ borrowing. If the Chinese buy more and Americans save more, a more stable global economic exchange can take shape. That does not mean crises will disappear, but Americans will have to spend less, rather than borrowing so much, and China will be able to buy more of its own goods, building up less lopsided foreign reserves. Meanwhile, China’s rapid consumption growth is good news for the whole world. For the first time, China, not the US, is the locomotive helping to pull the global economy out of recession. But China’s tiny appetite for American exports means that the main benefit has gone to commodity exporters and to businesses in China. While it is spreading creature comforts, China’s lending-based prosperity may also be sowing the seeds of future economic problems. China’s Banking Regulatory Commission recently told banks to show restraint in lending for the rest of the year, fearful that some of this year’s loans could become bad debts in the next several years, as happened with the mortgage lending spree in the US. The size of China’s consumer market, notwithstanding its growth, will make it hard for China to rescue the world economy by itself. Total consumer spending in China is still less than a sixth of American consumer spending at current prices and exchange rates. That is mainly because China has relatively few restaurants, hotels and other service businesses, even as sales of manufactured goods have risen. And though annual incomes still average just $2,775 a person in cities and $840 in rural areas, Western economists predict economy will grow almost 12% in each of the next two years and the renminbi is widely expected to appreciate someday, further increasing consumers’ buying power. feedback@livemint.com Hilda Wang contributed to this story. Source: World Business - Livemint.com | 10 Dec 2009 | 8:52 am
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