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US forgoes billions in tax on Citi: Report!The US government "quietly" agreed not to collect billions of dollars in potential taxes from Citigroup Inc (C.N) as part of its deal to allow the bank to repay its taxpayer bailout.Source: Zee News : Business | 16 Dec 2009 | 7:31 am Banking disrupted as employees go on strike over merger!Bank employees owing allegiance to four Left-leaning unions today went on a strike protesting the proposed merger of the State Bank of Indore with parent SBI, disrupting normal banking operations in the country, a top union official said.Source: Zee News : Business | 16 Dec 2009 | 7:31 am Domestic air passengers number up 5.45% in Jan-Nov period!Domestic passengers carried by air-carriers expanded by 5.45% on a year-on-year basis during the January-November period this year, with domestic airlines adding capacity from July.Source: Zee News : Business | 16 Dec 2009 | 7:31 am BA launches legal action to stop Christmas strike!British Airways launched legal action on Tuesday to prevent cabin crew striking for 12 days over Christmas and the New Year, with up to one million travellers facing festive travel chaos.Source: Zee News : Business | 16 Dec 2009 | 7:31 am RBI may raise rates in Jan: Stanchart!The Reserve Bank of India (RBI) may raise its key policy rates by 25 basis points in January, earlier than previously thought, to tame accelerating inflation, Standard Chartered Bank said on Wednesday.Source: Zee News : Business | 16 Dec 2009 | 7:31 am Australia`s economy slows in Q3 as stimulus fades!Australia`s economy, insulated from the worst of the global downturn by lavish government spending, slowed in the third quarter as the boost from the first phase of the stimulus faded.Source: Zee News : Business | 16 Dec 2009 | 7:31 am Sylvania to post EBIDTA profit in 12 mths: Havells IndiaHavells India had acquired Sylvania in Europe for USD 300 million in 2007. In an exclusive interview with CNBCTV18, Anil Gupta, Joint Managing Director, Havells India, talks about Sylvania and his outlook going forward.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 7:30 am South Asian Petrochem to merge with Dhunseri TeaSouth Asian Petrochem will merge with Dhunseri Tea. In an exclusive interview with CNBCTV18, Chandra Kumar Dhanuka, Vice Chairman, South Asian Petrochem, speaks about the merge and his outlook going forward.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 7:05 am Bhushan Steel inks production, sales pact with SumitomoBhushan Steel has signed an initial pact with Sumitomo metals. The company has inked production and sales pact with Sumitomo. Bhushan Steel would supply Sumitomo with steel from the companys Orissa plant and the produce would then be sold under the Sumitomo brand.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 6:31 am Godrej Consumer board okays raising Rs 3000 crGodrej Consumer Products Ltd board has approved raising up to Rs 3,000 crore via qualified institutional placement (QIP) or debentures. Confirming the news, Adi Godrej, Chairman and Managing Director of Godrej Industries said that the fund raising would be a combination of debt and equity. This was being done mainly to finance acquisitions.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 6:21 am Gitanjali Lifestyle buys 76% stake in Salasar RetailGitanjali Gems Ltd said on Wednesday its unit Gitanjali Lifestyle Ltd has acquired 76% in Salasar Retail Ltd.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 5:59 am Hospira deal +ve for Orchid shareholders: Cyrus PoonawalaSerum Institute holds about 10% in Orchid. In an interview with CNBCTV18, Dr Cyrus Poonawala of Serum Institute, spoke about the sale.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 5:47 am TCS sole bidder for UK pension projectTata Consultancy Services, India\'s largest software outsourcer, is the only firm left in the running for the contract to administer Britain\'s new national pension scheme, the Mint paper said on Wednesday.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 5:27 am Ad was \'offensive to people with ginger hair\'An advert for a TV dating show has been banned for suggesting that people with ginger hair are unattractive.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 5:24 am Bharti Airtel to buy 70% stake in Bangladesh operator WaridSunil Mittals Bharti Airtel plans to buy 70% stake in Bangladeshs operator Warid. The BhartiWarid deal size is likely at USD 900 million.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 4:55 am HEG plans to ramp up capacityIn an exclusive interview with CNBCTV18, Riju Jhunjhunwala, Executive Director, HEG, speaks about the company and its future plans.Source: Moneycontrol Top Headlines | 16 Dec 2009 | 4:32 am Sensex ends in green; IT, metals, auto gain - Economic Times
Source: Business - Google News | 16 Dec 2009 | 3:24 am Sumitomo considering India steel JV with Bhushan - Reuters
Source: Business - Google News | 16 Dec 2009 | 3:22 am Rupee extends gains as shares rise, dollar fallsMumbai: The Indian rupee extended its gains in afternoon session on Wednesday tracking a steady domestic sharemarket, with the dollar’s losses against some major units also supporting sentiment. At 2:55pm, the partially convertible rupee was at Rs46.64/65 per dollar, higher than Rs46.71/72 at close on Tuesday. Moody’s Investors Services on Tuesday raised its outlook on India’s local currency rating to positive from stable, citing the country’s strong external position and resilience to the global credit crisis. The index of the dollar against six major currencies was down 0.1%. Local shares were trading up 0.6% after having dropped 0.6% earlier. In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were quoting at Rs46.6925 and Rs46.6900 respectively, with the total traded volume on the two exchanges at about $2.8 billion. Source: Home - Livemint.com | 16 Dec 2009 | 3:00 am Tata Steel's Corus gets French rail contract - Moneycontrol.com
Source: Business - Google News | 16 Dec 2009 | 2:59 am Philips sees pick-up in consumer electronics salesAMSTERDAM (Reuters) - Dutch Philips Electronics signalled a continued pick-up in the consumer electronics market, saying it expected fourth-quarter sales of about 2.8 billion euros ($4.1 billion) at its Consumer Lifestyle unit.Source: Reuters: Money News | 16 Dec 2009 | 2:49 am Fidelity's Bolton sees recovery stalling in H1LONDON (Reuters) - Anthony Bolton, Fidelity International's figurehead, expects technology and healthcare stocks to prosper when the recovery in western markets loses momentum in the first half of 2010.Source: Reuters: Money News | 16 Dec 2009 | 2:46 am Godrej to raise 3000 cr for acquisitions: Chairman - Economic Times
Source: Business - Google News | 16 Dec 2009 | 2:37 am Lawmakers walk out of Parliament over inflationNew Delhi: Lawmakers walked out of Parliament on Wednesday protesting against inflation, as the opposition piled up pressure on the government to curb rising prices and threatened to carry out street protests. The speaker adjourned proceedings for the day after lawmakers from the Bharatiya Janata Party (BJP), the main opposition, as well as from other parties walked out of Parliament with many shouting:“The government needs to be changed.” India’s food inflation was at 16.7% in November as the worst dry spell in nearly four decades and annual floods in some states slashed farm output. Higher prices paid by government agencies to buy grains from farmers have pushed the headline inflation to 4.78%. Rising food prices have given a political boost to the BJP, which has been riven by internal feuding after losing the May national election. Inflation and a high fiscal deficit, projected to rise to 6.8% of the gross domestic product, are major risks to India’s ambitious plan to ratchet up economic growth back to 9% level seen between 2005/06 and 2007/08. In Parliament, demands from sugar cane farmers last month asking higher prices and issues like formation of a new state have disrupted proceedings on a regular basis. Many bills, including one on land acquisition and on the pension sector to allow entry of private players are likely to be now taken up in the next session. Source: Home - Livemint.com | 16 Dec 2009 | 2:34 am Investors like DB Corp as a brand, its biz model: Experts - Moneycontrol.com
Source: Business - Google News | 16 Dec 2009 | 2:30 am Protest erupts in parliament over inflationNEW DELHI (Reuters) - Lawmakers walked out of parliament on Wednesday protesting against inflation, as the opposition piled up pressure on the government to curb rising prices and threatened to carry out street protests.Source: Reuters: Money News | 16 Dec 2009 | 2:27 am Bank of Baroda to sell $500 million bonds: SourcesA Bank of Baroda official said the bank had looked at raising funds through an offshore bond sale last month, but postponed the plan as it wanted market conditions to improve.Source: Daily News & Analysis: Money News | 16 Dec 2009 | 2:14 am Airtel looking at expanding to other SAARC countriesLeading mobile service provider Bharti Airtel on Wednesday said it was looking at expanding its base in various SAARC (South Asian Association for Regional Cooperation) countries and would start with Bangladesh.Source: HindustanTimes.com - Top Business News Headlines | 16 Dec 2009 | 2:06 am UPDATE 1-Orchid shrs drop as Hospira deal sparks profit fears - Reuters India
Source: Business - Google News | 16 Dec 2009 | 2:02 am Spirits business sloppy globally, but not in IndiaDespite the hard times, spirit sales grew over 15% - about the same it did in 2008 - to take the market size to about 214 million cases, which excludes country liquor.Source: Daily News & Analysis: Money News | 16 Dec 2009 | 2:00 am Decision on floating bonds up to Reserve Bank: Ashok ChawlaLast Friday, the central bank said it will auction Rs90 billion of bonds, 20 billion of which would be in 11-year floating rate format, on December 18.Source: Daily News & Analysis: Money News | 16 Dec 2009 | 1:56 am Pinewood Shepperton gets Malaysia film studio dealPinewood Shepperton Plc said it had entered into an agreement for the development of a new studio facility in southern Malaysia and that its trading for 2009 remained in line with market expectations.Source: Daily News & Analysis: Money News | 16 Dec 2009 | 1:52 am Alliances, local demand drive auto ancillary companiesGeneral Motors and Chinese partner SAIC Motor Corp have teamed up to make small cars and commercial vehicles in India, while Volkswagen took a stake in Suzuki MotorSource: Daily News & Analysis: Money News | 16 Dec 2009 | 1:50 am Projects with Volkswagen to start rolling in Jan: Suzuki CEOJapan's fourth-largest automaker and Volkswagen last week announced a comprehensive tie-up that will see Europe's top automaker take 19.9% of Suzuki.Source: Daily News & Analysis: Money News | 16 Dec 2009 | 1:47 am Bharti set to buy Bangladesh’s Warid: regulatorDhaka: No.1 Indian telecom Bharti Airtel may be looking to buy Bangladesh’s Warid Telecom, indicating a shift in focus to smaller targets after talks for a $24 billion merger with South Africa’s MTN failed. Bharti is set to buy a 70% stake in Warid, Bangladesh’s fourth-biggest telecom company, the country’s telecoms regulator said on Wednesday. The UAE-based Dhabi Group, which controls Warid Telecom, sought approval from the Bangladesh Telecommunications Regulatory Commission for the sale on Sunday, commission Chairman Zia Ahmed said. “Bharti initially intended to invest $300 million,” he told Reuters, adding that a written proposal put forward by Dhabi did not mention the value of the deal. Bangladesh’s Daily Star reported the deal could be worth $900 million, citing Warid officials. Bharti said it would keep evaluating international opportunities, but declined to comment on a possible deal to buy Warid, whose shareholders are Abu Dhabi Group and Bharti partner Singapore Telecommunications. The news comes two-and-a-half months after talks between Bharti and MTN Group to create the world’s third-largest mobile operator collapsed for the second time in just over a year over South Africa’s reluctance to allow a flagship corporate to lose its national character. Analysts and bankers had speculated Bharti would look to buy parts of another company’s operations or a smaller firm after the failed MTN deal. Any deal would probably exclude Warid’s operations in Pakistan, India’s neighbour and political rival, analysts have said. Bangladesh’s telecoms regulator will ask for details on the deal from the Warid next week, Zia said. At the end of October, Warid had 2.79 million subscribers -- far fewer than Grameenphone, which is majority owned by Norway’s Telenor. Orascom Telecom of Egypt’s Banglalink and Telekom Malaysia’s Aktel also operate in the country. Bangladesh’s fast-growing telecoms sector has been a magnet for investment by foreign operators, with Japan’s NTT DoCoMo Ltd last year paying about $350 million for a 30 percent stake in No.3 cellphone carrier TM International (Bangladesh) Ltd, also known as Aktel. Bharti, which has more than 100 million subscribers in India, is looking to replicate its staggering growth at home in other emerging markets, where scale is vital and penetration rates are low but rising fast. Bangladesh’s mobile sector has grown rapidly, with subscriber numbers reaching more than 51 million at end-October from 200,000 in 2001, helped by competitive tariffs, cheap handsets and steady economic growth. Analysts predict the number of subscribers could top 70 million by 2011, nearly half the country’s population of 150 million. Warid started its Bangladesh operations in 2007. Source: Home - Livemint.com | 16 Dec 2009 | 1:46 am India urgently needs a new negotiating strategyThe reactions of the Congress-led United Progressive Alliance (UPA) to the final round of negotiations ahead of the climate change meet in Copenhagen leave us with a sense of déjà vu. We have seen it before—at the global trade negotiations in the 1980s—and we are seeing it unfold yet again. Till the last minute, India will be a perennial outlier—leaving it open to isolation. And then, once outmanoeuvred, talk tough for the benefit of domestic audiences while suffering the consequences.  So far, the script has read true. Till last week, it appeared that the Copenhagen talks were heading for a dead heat—with disagreements seemingly insurmountable. All this began to change after US President Barack Obama’s visit to China, eventually leading to voluntary commitments—some like China claiming reduction in energy intensity and others like the US on emission reductions. The very same day China, which is the world’s largest polluter, announced its symbolic intent (but not binding) at reducing emissions, India’s final scramble commenced. Environment minister Jairam Ramesh rushed to Beijing to call on the Chinese leadership and hold consultations with representatives of other major emerging economies. Two plans have emerged: one, where India has proffered similar energy intensity cuts as China. Second, the emerging economies have decided to combine forces to combat pressures from developed countries to change the contours of the climate change negotiations as set out in the Bali action plan hammered out under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC). The big question is, what is Plan A and what is Plan B for India. If a united stand of emerging economies is India’s Plan A, then it is going to once again fall into a familiar trap; trusting China or any other country in such a crucial negotiation, where self-interest is paramount, would be naïve, to say the least. If its voluntary actions are Plan A, then it begs the question as to why India had to wait to make its proclamation well after the US—which till a month ago held the dubious distinction of being the worst polluter and also a non-signatory to the previous deal on climate change—and China made their claims. Especially since Ramesh had done sufficient heavy lifting in this context after the stage had been set in July when India was co-signatory to a statement put out by the Major Economies Forum on energy and climate on the sidelines of the G-8 deliberations. The gist of the statement was that all countries (including developing countries such as India) would have to be prepared to make some emission cuts linked to their growth strategy—it was a tacit acceptance, at least that is how the developed countries see it, of emission cuts. Ramesh accelerated this process in subsequent months as India positioned itself as a deal maker. In an interview, while elucidating the new approach, he said: “We (India) have to learn to conduct bilateral dialogue and negotiate multilaterally. That is what I call walking on two legs.” Later, addressing a conference on climate change in Copenhagen in the first week of October, he articulated India’s new position as the “per capita plus” approach—a refinement of its earlier stand. Until then, India, along with other developing countries, had argued mitigation efforts should be in proportion to a nation’s historical record of emissions on per capita terms. According to this measure, vehemently opposed by developed nations, India is well behind the worst polluters. Ramesh maintained that not only has India placed a “self-imposed” cap of per capita emissions—by committing that it will never exceed the levels attained by developed countries—the country was now moving to take on “mitigation efforts voluntarily”. This, he said, will be captured in the new legislation—Nationally Appropriate Mitigation Outcomes (Namos)—that the UPA was proposing to put up for public discussion. Parts of a leaked communication (which distorted the context) from Ramesh to Prime Minister Manmohan Singh articulating the above, and activism—in the media and among political parties— scared off the government. Not only did the UPA not place Namos in the public domain and gain some crucial brownie points, it now comes across as a “me too” emulating China; India has failed to keep the contours of the per capita argument in the negotiations lexicon. A debate in Parliament—it would have also underlined our democratic credentials— could have helped the UPA generate political consensus on an issue which will be critical to current and future generations of Indians. What was the UPA thinking? More importantly, will we ever learn? Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comment at capitalcalculus@livemint.com Source: LatestNews-Home - Livemint.com | 16 Dec 2009 | 1:38 am Orchid shares drop as Hospira deal sparks profit fearsMUMBAI (Reuters) - Shares in Orchid Chemicals hit a 52-week high in early trades on the sale of its key generic injectable business but growth concerns sparked a sell-off depressing the stock 10.6 percent on Wednesday.Source: Reuters: Money News | 16 Dec 2009 | 1:35 am Gold demand abates after slight pick-upMumbai: India’s gold demand turned weak on Wednesday afternoon, as traders sought lower prices, after the offtake picked-up slightly in late previous session, dealers said. “There are no buyers today. Yesterday we did a few deals when gold was at $1,112 (an ounce),” said a dealer with a state-run bullion dealing bank. The most-traded February contract on the Multi Commodity Exchange (MCX) was 0.27% higher at Rs17,087 per 10 grams at 2:07pm. “Buyers are looking at sub $1,100 levels... there was slight buying yesterday in between 1,110-1,115 levels,” said another dealer with a state-run bank. Dealers said December was proving to be positive for gold, with some traders stationed on the sidelines to take advantage of lower prices. “The first-half of the month was good as some correction triggered buying,” said the second state-run bank dealer. India’s December gold imports are likely to spurt to 15-20 tonnes from 3 tonnes a year earlier, mainly on the back of the wedding season demand and easing prices, the head of the Bombay Bullion Association (BBA) said in an interview on 9 December. Wedding season will last till December-end. Source: Home - Livemint.com | 16 Dec 2009 | 1:33 am Neepco gets Meghalaya nod on thermal projectShillong: Meghalaya has given its nod for a 500 MW thermal power project by North Eastern Electric Power Corp. Ltd, or Neepco in the state. “One per cent of the project cost would be used for the development works in the project area in the East Garo Hills district,” Meghalaya power minister Mukul Sangma told reporters after a cabinet meeting on Tuesday evening. Expressing hope that the project would create employment opportunity for local people, Sangma said 80% of employment scope in C and D categories would be reserved for the locals. The project would tide over the power crisis in the state, Sangma said. The power company has selected Narengri in East Garo Hills district as the site and the coal would be brought in from the neighbouring mines of South and East Garo Hills. Neepco, officials said, had identified the project area and had carried out preliminary survey works, before the MoU signed with the government was kept in suspension for more than a year along with four other deals in the wake of a controversy over allotment of projects to private companies. The preparation of DPR would take about an year, while the project is expected to be completed in about four years time, the officials said. Although Meghalaya has a hydro-electric potential of 3000 MW, the present power generation capacity of the state is only 175 MW as against the demand of 600 MW. Source: LatestNews-Home - Livemint.com | 16 Dec 2009 | 1:31 am Sugar imports halt as local prices dipNew Delhi: Indian buyers have stopped contracting new sugar import deals as local prices are lower than the landed cost of imports, a top industry official said on Wednesday. Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories, told reporters that no new deal had been signed in the past 45 days. Mills in India, the world’s top sugar consumer, began crushing cane early last month, boosting supplies and helping spot prices fall 10 percent after hitting a record Rs3,443.50 ($73.7) per 100 kg on 6 November. “There is no import deal in the last month and a half. Import deals are not happening due to higher global prices, lower Indian prices and shortage of railway wagons is also delaying imports,” Kumar said. New York’s March raw sugar contract declined 0.46 cents on Tuesday as the market took a breather from a rally, but analysts said the outlook for the sweetener remained bullish because of tight supplies and strong demand. Sugar futures have rallied to the highest in nearly three decades propped up by large imports by India and expectations that the country would remain a big buyer next year, particularly after the end of cane crushing season by March. India imported 5 million tonnes of sugar, mostly raws, in 2008/09 as many farmers gave up cane cultivation, while this year’s failed monsoon also hit cane output raising prospects of large imports. Kumar said the shortage of railway wagons to transport imported sugar had clogged ports including Kandla in western India, where large quantities of imported sugar had landed. “All godowns are full at Kandla. There is no space there,” he said. Source: LatestNews-Home - Livemint.com | 16 Dec 2009 | 1:31 am Bhushan Steel in pact with SumitomoThe Indian firm would commission a plant with a capacity of 2.2 million tonnes by January next year.Source: Daily News & Analysis: Money News | 16 Dec 2009 | 1:25 am Bharti Airtel rings on acquisition reports - India Infoline.com
Source: Business - Google News | 16 Dec 2009 | 1:24 am Dell to lay off 700 workers in Malaysia reportsUS computer giant Dell will cut 700 jobs in Malaysia as it looks to slash costs, newspaper reports said Wednesday.Source: HindustanTimes.com - Top Business News Headlines | 16 Dec 2009 | 1:14 am Yo-Yo Sensex slips from day's high - India Infoline.com
Source: Business - Google News | 16 Dec 2009 | 1:08 am Sensex opens weak, down 53 pointsA key Indian equities index opened on a weak note Thursday and was ruling 53 points lower than its previous close, about 15 minutes into trade.Source: IndiaeNews.com: Business News | 16 Dec 2009 | 1:00 am The tech behind Avatar: How does 3D work? What kind of cameras does somebody like Cameron use to shoot his movies? How does the projection in the cinema hall work? What in heaven’s name is the role of those glasses? And how do our eyes get tricked into perceiving depth where there is none? Our guest today is Pramod Dhaval, the chief technology officer at Sanraa Media, a Chennai-based new media firm specializing in film production, graphics and animation. Source: Home - Livemint.com | 16 Dec 2009 | 12:59 am Bharti set to buy Bangladesh's Warid - regulatorDHAKA/NEW DELHI (Reuters) - No.1 Indian telecom Bharti Airtel may be looking to buy Bangladesh's Warid Telecom, indicating a shift in focus to smaller targets after talks for a $24 billion merger with South Africa's MTN failed.Source: Reuters: Money News | 16 Dec 2009 | 12:58 am Bank staff strike work to protest consolidation - Moneycontrol.com
Source: Business - Google News | 16 Dec 2009 | 12:55 am Bharti Airtel declines comment on possible Warid dealBharti Airtel is set to buy a 70% stake in Warid, Bangladesh's telecoms regulator said on Wednesday.Source: Daily News & Analysis: Money News | 16 Dec 2009 | 12:52 am DLF board approves plan to absorb AssetsDLF will take over DLF Assets by merging the latter's holding firm, Caraf Builders and Constructions Private Ltd, with DLF Cyber City Developers.Source: Daily News & Analysis: Money News | 16 Dec 2009 | 12:50 am Export growth sustainable in coming months: Anand SharmaIndia's November exports rose an annual 18.3% to $13.2 billion, the first rise after 13 straight months of decline.Source: Daily News & Analysis: Money News | 16 Dec 2009 | 12:48 am Alliances, local demand drive auto ancillary cosMUMBAI (Reuters) - A bouyant domestic market and a wave of alliances between local auto firms and foreign players is expected to increase business for parts players, even as the outlook for the global sector remains grim.Source: Reuters: Money News | 16 Dec 2009 | 12:46 am PM adviser: RBI may tighten in Dec - report - Economic Times
Source: Business - Google News | 16 Dec 2009 | 12:40 am Fiat defies downturn to post sales increaseItalian car giant Fiat defied the economic downturn and recorded a dramatic increase in car sales across Europe in November.Source: HindustanTimes.com - Top Business News Headlines | 16 Dec 2009 | 12:38 am Bhushan Steel in pact with Sumitomo - officialNEW DELHI (Reuters) - Bhushan Steel has entered into a production and sales pact with Japan's Sumitomo Metal, a senior official said on Wednesday.Source: Reuters: Money News | 16 Dec 2009 | 12:35 am Bank staff strike work to protest consolidationMUMBAI (Reuters) - About 400,000 bank employees went on strike on Wednesday to protest merging state-owned banks, partially affecting cash transactions and clearing operations, a bank union official said.Source: Reuters: Money News | 16 Dec 2009 | 12:13 am Narrow movement to continue in rupeeRupee continued to meander sideways in a narrow range between 46.3 and 46.8 against the dollar. Slowdown in FII inflows and the year-end holiday season are taking their toll on the rupee movement. There was, however, plenty of action in dollar asSource: Business Line - Home Page | 16 Dec 2009 | 12:00 am Higher outgo in store for HULThe proposal of Hindustan Unilever (HUL) to increase the royalty and licence fee payable to parent Unilever Plc is not likely to go down well with the stock markets, coming as it does when there has been a marked slowdown in the FMCG giant'sSource: Business Line - Home Page | 16 Dec 2009 | 12:00 am Day Trading GuideFresh short position can be initiated if DLF declines below Rs 375 with tight stop-loss. The near-term stance is negative for ICICI Bank and SBI. We recommend sell in both the stocks with tight stop-loss. We re-affirm our buy recommendation inSource: Business Line - Home Page | 16 Dec 2009 | 12:00 am Corporates shell out 36% more as advance tax in Q3The early signs of economic revival seem to have emerged from the increase in advance tax payments made by most of the Mumbai-based corporate houses and banks in the third quarter ofSource: Business Line - Home Page | 16 Dec 2009 | 12:00 am M&M flies high with stake buys in two cos Down UnderMahindra & Mahindra, as part of its efforts to expand its presence in aerospace, has acquired a majority stake in two AustralianSource: Business Line - Home Page | 16 Dec 2009 | 12:00 am MFs told to pay interest for delayed dividendsThe market regulator on Tuesday made another set of modifications to mutual fundSource: Business Line - Home Page | 16 Dec 2009 | 12:00 am Apex court questions DoT for advancing cut-off dateThe Supreme Court on Tuesday questioned the Centre regarding the Department of Telecom's (DoT) decision to advance the cut-off date for granting 2G mobile service licences with spectrum to new telecomSource: Business Line - Home Page | 16 Dec 2009 | 12:00 am Union Bank of India (Rs 257.6): SellWe recommend a sell in the stock of Union Bank of India from a short-term perspective. It is apparent from the charts of the stock that it had been on an intermediate-term uptrend from its March low of Rs 115 to an all-time high of Rs 291Source: Business Line - Home Page | 16 Dec 2009 | 12:00 am Hind Unilever to pay royalty to parent for trademarkCome January, and FMCG major Hindustan Unilever (HUL) will pay a royalty of one per cent of the net sales on specific brands that use the UnileverSource: Business Line - Home Page | 16 Dec 2009 | 12:00 am Exports enter positive zone with 18% increase in NovThe country's merchandise exports, after months in the negative zone, turned positive in November 2009 logging a growth rate of 18 per cent in dollar terms as compared to the year-agoSource: Business Line - Home Page | 16 Dec 2009 | 12:00 am Asia stocks lower after Wall Street snaps gainsBangkok: Asian stock markets mostly fell on Wednesday, taking a lead from Wall Street where investors fretted over the prospect of higher interest rates after a measure of US inflation rose. Several of Asia’s markets have risen 70% or more this year and investors are reluctant to back further gains while worries continue to simmer about mounting government debt in the West and the strength of the economic recovery. In the US on Tuesday, stocks fell for the first time in five days and Treasurys slipped after a jump in wholesale prices stoked concerns that the Federal Reserve would be forced to raise interest rates. The Fed isn’t expected to raise rates from their record low level at this week’s two-day policy meeting but the economic data was a reminder the central bank could be forced to act sooner than expected to keep inflation at bay. Japan’s stock market bucked the regional trend as banks jumped amid reports they will be given 10 to 20 years to meet stricter capital rules. The banking regulator, however, said no agreement was in place. The Nikkei 225 stock average was up 88.29 points, or 0.9%, at 10,170.97. Hong Kong’s Hang Seng shed 190.36, or 0.9%, to 21,623.56 and South Korea’s Kospi fell 0.2% to 1,662.85. Elsewhere, Australia’s benchmark lost 0.3% after figures showed the economy slowed again in the third quarter as the boost from government stimulus spending faded. Taiwan’s market dropped 0.8% while China’s Shanghai index advanced 0.1%. Oil prices hovered below $71 a barrel in Asia after a US crude supply report showed an unexpected increase last week. Benchmark crude for January delivery was down 1 cent to $70.68 in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract added $1.18 to settle at $70.69. In currencies, the dollar fell to 89.50 yen from 89.67 yen. The euro was little changed at $1.4531. Source: LatestNews-Home - Livemint.com | 15 Dec 2009 | 11:52 pm Suzuki CEO: projects with VW to start rolling in JanTOKYO (Reuters) - Suzuki Motor Corp and Volkswagen AG will start the ball rolling on joint projects from around Jan. 10, after the year-end holidays, Suzuki Chief Executive Osamu Suzuki said on Wednesday.Source: Reuters: Money News | 15 Dec 2009 | 11:46 pm Markets edge down; banks fall, Infosys upMumbai: Indian shares were slightly lower on Wednesday morning, with banks extending losses on fears the central bank may tighten monetary policy sooner than expected given concerns about rising inflation. The Reserve Bank of India might tighten monetary policy in December as inflation could rise to near 7% in March, the prime minister’s economic adviser, C. Rangarajan, was quoted as saying in a report. Top lender State Bank of India shed 0.9% to Rs2,161.05 and smaller rival HDFC Bank dropped 1% to Rs1,680.90. “For banks, it’s more of sentiment being beaten after inflation data showed a spike,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services. “But the long-term prospects of our banks continue to be good,” added Rawal. At 11:15am, the 30-share BSE Index was down 0.1% at 16,861.02, with 17 components declining. The 50-share NSE index was down 0.2% at 5,023.45. The market has shed 1.6% so far this week. It is up around 75% so far in 2009, and is set to post its best gains since 1991, powered by robust foreign fund inflows. “Market prices are liquidity driven in the short run, and there is ample liquidity here in India as well as globally,” Rawal said. “People will be looking for growth assets and I don’t think there are too many interesting opportunities like India,” he added. Leading mobile operators Bhhrti Airtel and Reliance Communications bucked the trend and rose 1.9% and 1% respectively. IT bellwether Infosys Technologies climbed 0.3% to Rs2,514.60 rupees. A senior company official told Reuters the company expects revenue growth in the fiscal year starting in April to be better than 2009/10 as a recovery in the global economy spurs investments by its clients. In the broader market, losers led gainers in the ratio of 1.2:1 in a volume of 98 million shares. Source: Home - Livemint.com | 15 Dec 2009 | 11:43 pm BSE Sensex edges down; banks fall, Infosys upMUMBAI (Reuters) – The BSE Sensex was slightly lower on Wednesday morning, with banks extending losses on fears the Reserve Bank of India (RBI) may tighten monetary policy sooner than expected given concerns about rising inflation.Source: Reuters: Money News | 15 Dec 2009 | 11:26 pm IIFCL will be asked to follow RBI normsNew Delhi: India Infrastructure Finance Co. Ltd, or IIFCL, conceived as the leading edge of the Union government’s infrastructure financing initiative, will soon be asked to follow the central bank’s guidelines for finance companies, but simultaneously be kept out of its regulatory purview. The development would result in streamlining the way the government-owned lender functions and, at the same time, retain room to manoeuvre according to the government’s aims. “We want them to get subjected in the same manner in which RBI (the Reserve Bank of India) regulates NBFCs (non-banking finance companies),” finance secretary Ashok Chawla told Mint in a recent interview. “It will not be under RBI’s purview, but the same sort of prescriptions will apply to it. It will be monitored by the government,” Chawla said. IIFCL was conceived as the Union government’s financial special purpose vehicle to supplement other forms of lending in infrastructure in 2005-06. The company, with a balance sheet size of Rs18,906 crore (as of 30 September), has so far voluntarily followed RBI guidelines on most things except capital adequacy and exposure norms. Analysts say that any move to reduce prudential regulations could be fraught with risk considering the fact that the lender had a higher cost of raising capital compared with banks, and also did not independently appraise its own projects. “If the spread available is not significantly above the cost of capital and then you are making huge loans and (there is) no appraisal, you are taking a huge risk,” said Amrit Pandurangi, who heads the transport and infrastructure practice for consulting firm PricewaterhouseCoopers. “Somebody needs to regulate IIFCL, whether it is RBI or somebody else.” Some company officials, speaking on condition of anonymity, said the government had hobbled IIFCL, not allowing it to lend more than 20% of total project loans and restricting the extent to which it can refinance bank loans to infrastructure. IIFCL chairman and managing director S.S. Kohli declined to comment, saying he had not received any instructions in this regard. The finance ministry would soon approach the cabinet to institutionalize the framework, said a senior official in the ministry, who did not want to be named. Separately, Chawla, who explained the logic behind the move, said: “We are acutely conscious of the fact that IIFCL is a big business, has lots of exposure and is raising a lot of money which should be regulated in a proper manner. Just because the government owns it, it should not fall between the cracks.” The government’s plan for IIFCL found favour with D.R. Dogra, managing director and chief executive officer of Credit Analysis and Research Ltd. Dogra, who was a banker before he moved to the credit rating agency, felt the framework proposed for IIFCL would allow it to find the balance between being nimble and disciplined. “It (IIFCL) should be less regulated, but should have some regulations at least,” he said. sanjiv.s@livemint.com Source: LatestNews-Home - Livemint.com | 15 Dec 2009 | 11:10 pm Sensex down 67 pts in early trade on global cuesExtending its slide for the third day in a row, the BSE benchmark Sensex lost another 67 points in early trade on Wednesday.Source: HindustanTimes.com - Top Business News Headlines | 15 Dec 2009 | 10:53 pm DIAL may get more from land than expectedNew Delhi: The Ltd-led Delhi International Airport Pvt. Ltd (DIAL), which is modernizing the Indira Gandhi International Airport, may raise Rs1,300 crore from the sale of 45 acres to developers, a jump of 42% from the Rs912 crore it had expected from the same parcels in January. The proceeds from the prime real estate south of Delhi are key to the funding of the project and a greater-than-expected amount from the sale could reduce the burden on passengers. Travellers are now paying Rs1,827 crore directly to fund the project by way of a so-called airport development fee levied on each ticket. “There is an improvement. We expect, because the market has picked up slightly, 10-20% better realization than what we achieved in the first eight (parcels),” said Sidharth Kapur, chief financial officer (airports), GMR Group, the majority stakeholder in both Delhi and Hyderabad airports.  Photo: Ramesh Pathania/Mint; Graphics: Sandeep Bhatnagar/Mint In January, DIAL sought to levy a development fee on passengers to bridge the funding gap in the at least $2 billion (Rs9,360 crore) project that is scheduled to be completed in March. The assessment had shown a realization of Rs912 crore from the sale to hotels and commercial developers. “We are expecting about Rs500 crore for the remaining,” Kapur said, adding that of the five parcels, at least three will be given out to hotels and two for commercial development. Hotel chains such as Accor Hotels, Bird Group-Dusit Thani Group and the Lemon Tree Hotel Co. have bid aggressively and won, Kapur said. Besides, another reason for the prices going up includes the airport operator’s division of parcels into smaller plots. The lease agreement for these plots includes a fixed security deposit for three years and an annual licence fee that would increase at least 5.5% every year for the lease duration of 57 years. The airport operator will submit its final cost of development to the Airports Economic Regulatory Authority, or Aera, by end-January, including the additional funds garnered from the land sale. The development fee is likely to be reviewed after this cost is submitted. However, since the first phase of the airport expansion ends in March, DIAL does not expect to lease out any more land any time soon. It is allowed to use 250 acres of the 5,000 acres for commercial development. “We don’t want to monetize everything right now because the market also needs to absorb it,” Kapur said. For the rest of the commercial area, “we will have to wait for the opportune time”, he said. Besides DIAL, GMR Group runs GMR Hyderabad International Airport Ltd and Sabiha Gökçen Airport, Istanbul’s second airport, which it’s developing with a Turkish consortium led by Limak Inc. and Malaysia Airports Holdings Bhd. Airports contributed 30% to its revenue for the fiscal ended 31 March, next only to its power business, which contributed 53.21%. The Hyderabad airport garnered Rs382 crore and the Istanbul airport Rs270 crore. DIAL, whose other consortium members include Frankfurt airport operator Fraport AG, a unit of Malaysia Airports Holdings, the Airports Authority of India and private equity firm India Development Fund, contributed the biggest chunk of Rs507 crore in the last fiscal, up from Rs468 crore the previous year. Delhi airport’s integrated Terminal 3, with a capacity to handle 34 million passengers and spread over 5 million sq. ft, will be commissioned in July, bringing to an end the development that started in late 2006. The construction work is expected to be over by March-end, and will be followed by systems testing till April. Delhi airport handled 23.4 million passengers in the last fiscal year and is served by 70 domestic and international airlines connecting at least 110 destinations across the world. With the opening of the new terminal, all domestic and international passengers will use the same integrated facility. Currently, operations are split between domestic and overseas terminals. Source: LatestNews-Home - Livemint.com | 15 Dec 2009 | 9:48 pm Costlier food may impact RBI rates, says StanchartMumbai: The Reserve Bank of India may raise its key policy rates by 25 basis points in January, earlier than previously thought, to tame accelerating inflation, Standard Chartered Bank said on Wednesday. The bank sees India’s wholesale price index-based inflation near 7% before the RBI meets to review policy on 29 January. It also raised its inflation forecast to 8.5% by end-March 2010 from 7%. “There will be further pressure on the RBI to act because there have been few innovative steps on the fiscal side to tackle food price inflation,” analyst Samiran Chakraborty wrote in a note. “Monetary action would, to some extent, reduce the clamour over rising prices which is growing uncomfortable for the government.” Standard Chartered had earlier said the RBI may tighten liquidity by raising the amount banks have to keep in deposit with the central bank by 50 basis points before the 29 January policy review but had not seen a hike in policy rates. India’s wholesale prices rose a faster-than-expected 4.78% in November, with the food price index soaring 16.7%. The headline number is higher than October’s 1.34% rise and faster than a Reuters poll of 4.14%. Finance minister Pranab Mukherjee said on Tuesday India would take measures to tame rising prices and enable the economy to recover faster, but did did not elaborate on the steps planned. Standard Chartered said it expected an exit from monetary stimulus to be gradual because growth indicators were undergoing a phase of tentative recovery and any significant tightening may derail this recovery. The RBI’s repo rate, at which it injects cash into the system, currently stands at 4.75% while the reverse repo rate, at which it absorbs cash, is 3.25 percent. The cash reserve ratio (CRR) is at 5%. The central bank had cut its policy lending rate by 425 basis points between October 2008 and April 2009, slashed CRR and pumped in liquidity in financial markets to revive the economy hit hard by the global slowdown. Source: Home - Livemint.com | 15 Dec 2009 | 9:42 pm Oil ends 9-day fall, steady under $71Singapore: Oil hovered below $71 a barrel on Wednesday, after snapping a nine-day losing streak a day earlier, as data showing a deep drawdown in US distillate stockpiles outweighed a surprise rise in crude inventories. Another set of oil inventory data from the US Energy Information Administration (EIA), due later in the day, could offer more clues on the pace of demand recovery in the world’s top energy consumer. The US Federal Reserve’s monetary policy decision will also be closely eyed. Interest rates are seen staying unchanged at near zero, but the tone of comments made could shed light on when the Fed might start tightening policy, amid the spectre of higher inflation. Crude for January delivery rose 10 cents to $70.79 a barrel by 0240 GMT, after settling up $1.18 at $70.69 on Tuesday. London Brent crude was up 16 cents at $72.21. Oil prices rebounded on Tuesday from their longest slide since 2001, after they had fallen more than 11% since 1 December, amid persistent worries over high global inventories and weak consumption. “We think that the rebound in oil prices is sustainable, as the factors that underpinned gains in the past few weeks will remain in place -- that the global economic recovery is underway,” said David Moore, a commodity strategist with the Commonwealth Bank of Australia. “Markets will increasingly focus on the global recovery story, and with Opec likely to keep output targets unchanged at its meeting next week, this will support oil prices further.” The pace of the US economic recovery appears to be gathering steam, after November producer prices jumped a surprise 1.8% and industrial output rose firmly, sparking inflation jitters in financial markets. But any recovery in US fuel demand remains patchy. Distillate stocks, which include heating oil and diesel, fell by 2.6 million barrels last week, eclipsing analysts’ projections of a 600,000-barrel drop, but crude supplies rose by 924,000 barrels, countering forecasts of an 1.8 million-barrel decline, data from the American Petroleum Institute (API) showed. Gasoline inventories rose by 2.1 million barrels, topping expectations of a 1.3 million-barrel build. A further drawdown in distillate stockpiles could be on the cards, after a 10-day National Weather Service forecast earlier this week called for lower-than-normal temperatures in most of the eastern US, the world’s biggest regional consumer of heating oil. More economic data, due later, will also offer clues on the US recovery pace and the possible threat of inflation. At 1330 GMT, the Labor Department will release the November consumer price index. Economists expect a 0.4% rise compared with a 0.3% increase in October. On the supply side, the Organization of the Petroleum Exporting Countries is expected to hold production targets steady at its next meeting on 22 December. The producer organisation on Tuesday said it sees the oil market staying weak until the second half of next year, as a rise in oil demand is countered by a huge volume of excess supply. Source: Home - Livemint.com | 15 Dec 2009 | 9:37 pm Mutual funds open NSE shop windowMumbai: Beginning Monday, investors will be able to buy and redeem open-ended mutual fund (MF) schemes on the National Stock Exchange (NSE) through a stockbroker, the same as with equity. Following a framework for MF transactions issued two weeks ago by market regulator Securities and Exchange Board of India, or Sebi, the country’s largest stock exchange will launch a platform that will enable such trades. The Bombay Stock Exchange, Asia’s oldest bourse, is expected to follow suit soon. Units will also be available in dematerialized, or demat, form, but for those who do not have a demat account or do not wish to open one, the platform will enable physical delivery of units. At present, investors can only buy MFs either from a distributor or directly from mutual fund houses. A few online portals also sell these units. Also See Game Changer (Graphics) The exchange platform will be a critical additional distribution channel for the Rs7.2 trillion Indian MF industry, which has had to rework its selling strategies after Sebi banned entry loads on MF transactions, effective 1 August. Entry loads are charges that MFs collected from investors at the time of investment and eventually used to pass on to agents as their commission. Limited incentives doled out to distributors have resulted in negative sales for the industry for the past four months. A.P. Kurian, chairman of the Association of Mutual Funds in India, or Amfi, an industry body, described the initiative as path-breaking (see interview). However, this is not the first time MFs will be available on stock exchanges. Zurich Mutual Fund, later acquired by HDFC Mutual Fund, started offering five of its schemes— Equity Fund, Top 200 Fund, Capital Builder Fund, Prudence Fund and Tax Saver—on NSE beginning November 2000, making it the first MF in India to offer its open-ended schemes on an exchange. IDBI MF, later Principal MF, followed in May 2001 by offering its Equity, Growth, Balanced, Income and Tax Savings schemes. Both were withdrawn because of the poor response. This time, say experts, the exchange, with its 200,000 terminals across 1,500 locations, will help expand the reach of MFs, allowing fund houses to concentrate on performance rather than sales functions. “The emphasis will now shift to performance as it has become difficult to gather assets through marketing efforts,” said Sandip Sabharwal, chief executive officer (CEO) of PMS (portfolio management services), Prabhudas Lilladher Ltd, who was a fund manager at leading mutual funds for at least a decade before moving to PMS last year. Sundeep Sikka, CEO, Reliance Capital Asset Management Ltd, which manages Rs1.16 trillion, said it’s a step in the right direction. “Having both offline and online options for investors makes it more efficient and definitely increases reach. In the long term, this will help all parties,” he said. Jaideep Bhattacharya, chief marketing officer, UTI Asset Management Co. Ltd, said: “The platform will take care of the back-end work of the sales staff and free up more time for transactions.” Currently, he pointed out, an agent in the Mumbai suburb of Ghatkopar must dispatch applications by 11.30am or noon so that the office in downtown Mumbai can process them and make sure that the investor gets the same day’s NAV (net asset value). With the new system, an agent will be able to make transactions up to 2.59pm. The cut-off time for same-day NAV is 3pm for equity funds. Ayes and nays Brokers, naturally, are thrilled at the new opportunities for revenue generation. Raamdeo Agrawal, managing director, Motilal Oswal Financial Services Ltd, a large retail brokerage, called the move “exciting” and said it was common sense, but declined to estimate the growth of inflows. “The point of sale for distribution of MF units gets pushed up by leaps and bounds so fast and easily,” he said. Motilal Oswal has 1,500 outlets, many of which retail MFs but did not have trading terminals to do so. “Now these branches can leverage on the strength of our terminals and get their clients’ orders executed. At the end of the day, this will be a one-stop shop for MFs and stocks,” Agrawal said. However, the trading platform will likely not be an overnight game changer. “The platform will evolve over a period of time; it’s not going to immediately reach at a level where you’d think substantial business is being generated,” cautions Mayank Shah, CEO (retail business), Anagram Stockbroking Ltd. “With this facility, brokers will also provide the value-added services such as helping the investors to choose funds, switching, dilute, exit and so on.” Agrawal also feels that small-ticket investors will benefit. “There are few places that a small retail investor—with an amount of Rs1-2 lakh to invest in MFs can go to. The adviser may not entertain him and at best provide ‘courier’ service,” he said. “Now that MFs will be traded on the stock exchange, the investor gets a little bit of stock trading and at the same time can get some investments done in MFs, under one roof.” In other words, a single demat account statement will be able to consolidate direct equity as well as MF holdings. Investors in MFs that already have demat accounts will now be eligible to make transactions but will need to open a broker’s account first. For the MF distributor community, which is already hurting from the ban on entry loads, the move is a setback. Distributors that do not have NSE trading terminals will first need to become sub-brokers for an existing broker who has access to the MF NSE platform. Distributors are concerned because they will need to share client details with the broker. Also, a section of MF distributors—especially those that do not have trading terminals or are not sub-brokers or brokers—say that by allowing stockbrokers to sell MFs, their own incomes will take a hit. Limited choice To begin with, only 30 schemes (equity- and debt- oriented) of UTI Asset Management will be available, as other asset management companies (AMCs) are yet to sign up with NSE. Fund houses will have to enter into an agreement with the exchange/clearing corporation and notify the schemes that will be traded on this platform. Top officials at Reliance Capital Asset Management, JM Financial Ltd and Mirae Asset Global Investments (India) Pvt. Ltd said on condition of anonymity that they are yet to complete formalities and are assessing operational and business issues. Many smaller AMCs are also still evaluating the prospects of getting into this channel. Further, very few brokers, among them Anagram Stockbroking, Geojit BNP Paribas Financial Services Ltd and Bonanza Portfolio Ltd, will offer MFs to their clients through the NSE exchange platform. Also, only stockbrokers that are registered with Amfi as mutual fund advisers and who have signed up with specific AMCs will be eligible to participate in the system. They will also not have to go through the Know Your Customer norms’ verification again. A fully-automated online order collection system, called NEAT-MFSS, will be provided to “participants” who can use their existing telecom network to connect to the system and enter requests for subscription and redemption of MF units. Hiccups One key issues according to Rajesh Krishnamoorthy, CEO, Fundsupermart.com, an MF portal, is of brokers getting Amfi registration numbers. “At present, out of the 94,000 Amfi registered agents, only around 600 are shares and securities firms. Many of these firms are already selling mutual funds through their distribution arms.” But brokers argue that this should not be a big issue as the Amfi registration only requires clearing an examination. Also, with mis-selling rampant—coupled with the fact that many brokers tend to churn their client’s portfolio—it remains to be seen how well the brokers advise their clients and whether they will encourage churning or genuine long-term investment. Suresh Sadagopan of Ladder 7 Financial Advisories, a Mumbai-based financial adviser, said the move is a U-turn from an earlier Sebi move to switch to an advisory model. “Brokers are going to charge fees at the time of buying as well as selling. Some brokers charge up to 80 basis points. This will only increase churning. I am not sure how this will be cheaper than the existing model,” he said. Ranjit Dani of Think Consultants, a Nagpur-based financial advisory firm, welcomed the move but worried about the quality of advice, calling it “doubtful”. “Typically, the model of the broker is to churn customer’s money. Brokers make 5-7 paise on a transaction, but they entice you with tips and make you trade so many times that they end up (charging) 5-7% in brokerage,” he said, expressing concern that the move might lead genuine long-term investors to start behaving like traders. There is no clarity on whether the NSE platform will allow systematic investment plans and systematic transfer plans. National Securities Depository Ltd (NSDL) is looking at making changes to its system to be more relevant for mutual fund units. “At present, share prices are quoted in rupees-paise. For this, the NSDL system supports only up to three decimal points. But mutual funds declare asset values which go up to four decimals. In some debt funds, missing out a decimal can result in huge difference in returns,” said Krishnamoorthy of Fundsupermart, warning that unless the system was fixed, most funds with four decimals could be left out. n.subramanian@livemint.com Source: LatestNews-Home - Livemint.com | 15 Dec 2009 | 9:24 pm Quick Edit | A money-spinning operationIn India, it is money and not revolution that flows from the barrel of a gun. If Chhattisgarh’s police chief Vishwa Ranjan is to be believed, Maoists in different parts of India extort as much as Rs2,000 crore annually from businesses. Most of it comes from iron ore and coal dealers, road contractors and tendu leaf suppliers. Rajan said that of this amount, roughly 20% is siphoned off by low-ranking outlaws, and the remaining 80% goes to the Maoist top brass. Given that investments in weapons, publications for propaganda and other assorted equipment cannot account for more than a couple of hundred crores, this is a phenomenal return on invested capital. There are, of course, a few hiccups. There is risk of death to those in the business, and the trade is unlawful. That apart, the lesson here is that absence of transaction costs, bureaucracy and taxes mostly has turned a small investment into a money-spinner. Imagine what legitimate businesses could do if the government did not intrude. Source: LatestNews-Home - Livemint.com | 15 Dec 2009 | 8:59 pm Quick Edit | A matter of credit ratingGlobal credit rating agency Moody’s belatedly raised its outlook on India’s local currency rating on the very same day that finance minister Pranab Mukherjee told Parliament that the government would bring down its fiscal deficit to 3% of gross domestic product (GDP) after fiscal year 2012. The fiscal deficit is currently budgeted at 6.8% in 2009-10. Bringing it down to 3% of GDP will be a tall task. India has never managed such a sharp fiscal correction in so short a time, even during the boom we had earlier this decade when tax collections soared. The parlous state of India’s public finances is the most significant macroeconomic risk right now. Despite the finance minister’s soothing promises, the credibility of the government’s fiscal fitness plans is not very high. So, it is interesting that Moody’s has more or less glossed over the mess in public finances, all the more so given that it has been more pessimistic about India’s credit rating than peers such as Standard and Poor’s and Fitch. Is it a sign that fiscal fears are receding? Source: LatestNews-Home - Livemint.com | 15 Dec 2009 | 7:00 pm 3G auction: govt pares its revenue expectationThe Union government has lowered its minimum revenue expectation from the auction of high-speed 3G, or third generation, spectrum early next year by 10-20%, according to two officials. The government had expected at least Rs35,000 crore from the auction, but a finance ministry official said even if the revenue from this was lower, it would be offset by manufacturing-led tax inflows. “Internally, they have reduced the minimum expectation by around 10-20% to around Rs25,000 crore,” a senior official in the department of telecommunications (DoT) said. “But it is nothing to worry about. We are sure that the auction will not fall short of expectations. This is just the minimum expected price.” The finance ministry has not revised its budget estimate of revenue inflow from the 3G auction, but internal expectations have been marked down on account of developments in the telecom sector. India’s fiscal deficit would remain unchanged, the finance ministry official said, as a pick-up in manufacturing would boost revenue from corporate taxes and central excise. Both the officials spoke on condition of anonymity as they are not authorized to speak to the media. The fiscal deficit for the Union in 2009-10 was estimated to be 6.8% of the gross domestic product in the budget estimates, or Rs4 trillion in absolute terms. Since then, the finance ministry has said the government will not overshoot this estimate. “The government has estimated earnings at a minimum level by taking into account the reserve price... Given the artificial scarcity that DoT has created by not allocating spectrum for the last so many months, the final auction prices should be far higher than the reserve price,” a senior analyst with the Mumbai-based branch of an international brokerage said on condition of anonymity. “The government will still make its money but the viability of 3G services in a market with so many other problems may take a while to be seen,” he added.  Poor reception: The finance ministry has not revised its budget estimate of revenue inflow from the 3G auction, but internal expectations have been lowered on account of developments in the telecom sector. Rajkumar/Mint The government said the air waves currently available with it for the auction could accommodate only three operators in this calendar year, as the defence ministry refused to vacate the required spectrum immediately. In August, an empowered group of ministers (EGoM) had decided four slots of spectrum would be auctioned. One slot of 5MHz has already been allotted to state-owned telecom operators Bharat Sanchar Nigam Ltd, or BSNL, and Mahanagar Telephone Nigam Ltd, or MTNL. The EGoM has fixed the reserve price of a slot of countrywide 3G spectrum at Rs3,500 crore and Rs1,750 crore for broadband wireless access (BWA) spectrum. The auction is now scheduled to begin on 14 January. 3G spectrum refers to the spectrum needed for telecom firms to offer services that enable higher capacity for mobile networks and faster data transfer speeds on mobile phones. BWA spectrum is needed for Wimax-based services—short for worldwide inter-operability for microwave access, a standard that is capable of data speeds of 10 megabits per second up to 2km away from a radio transmitter. Another DoT official said 10MHz of spectrum has been vacated. Another 5MHz would be given by June and an additional 5MHz in September. This would mean only three operators apart from MTNL and BSNL would be allotted 3G spectrum in the current fiscal. The government is now also contemplating allowing successful bidders from the auctions to pay only 25% of the bid amount initially and pay the rest on receiving the spectrum. DoT, in an internal note on the renewed number of slots, said, “Good auction practice requires that only spectrum that is available should be auctioned. As there is a maximum of 20MHz available from (the) defence (ministry) by September 2010, 5MHz out of this should be retained for BSNL/MTNL and 15MHz (3 blocks of 5MHz each) could be auctioned in this fiscal year with the provision that bidding would be for three blocks of spectrum, pan-India.” shauvik.g@livemint.com Source: LatestNews-Home - Livemint.com | 15 Dec 2009 | 12:26 pm Goods Services Tax in final legA task force under the 13th Finance Commission has proposed a single 12% rate for the ambitious goods and services tax (GST) system that is expected to come into force next year. Source: HindustanTimes.com - Top Business News Headlines | 15 Dec 2009 | 12:19 pm China, India in a huddle over Danish draftIndia and China have gone into a huddle over the possible existence of a Danish text, which the rich nations may wield at the climate change talks.Source: Business Standard | Front Page Headlines | 15 Dec 2009 | 12:06 pm Hospira buys Orchid unit for $400 mnCos sign pact for supply of pharma ingredients.Source: Business Standard | Front Page Headlines | 15 Dec 2009 | 12:05 pm RCom needs to raise fundsReliance Communications Ltd (RCom) has denied the news report that it is in talks to sell its undersea fibre optic network and US network businesses (FLAG) to raise funds. Analysts, too, are expressing surprise that FLAG could be on the block. Having said that, it does look like the company’s options for raising funds are limited. According to an analyst who did not want to be identified, the company’s plan to raise funds through a qualified institutional placement hasn’t worked out, and it may not be interested in issuing shares at current prices since that would involve relatively high dilution. The company’s shares have fallen by about 42% in the past three months on concerns about the intense tariff war in the industry. Also Read | Lost Connection (Graphics) Meanwhile, the company is already loaded with debt. It reported a gross debt of Rs25,467 crore for September and cash and cash equivalents of Rs4,387 crore. But some analysts point out this may not be the total debt burden, since the balance sheet also reflects unusually high current liabilities of Rs22,421 crore. Over time, the current liabilities could become real debt. These high liabilities would constrain the company’s ability to raise fresh loans. And the current cash equivalents may not be sufficient to take care of the capital expenditure related to its existing services as well as bid for 3G licences. One is tempted to believe that there may be some truth in the rumour about the FLAG sale. But as one analyst points out, it would be difficult to be buyers for a minority stake. There would certainly be takers for a controlling stake, but then such a move would be seen as a desperate measure, especially since the company has been rather bullish about the prospects of the global business. What makes things worse for the company is that while its financing position continues to be tight, business fundamentals have become much worse with the increasing intensification of the tariff war. The price competition in the voice segment has extended to the roaming space as well as short messaging service. This will put free cash flow generation under immense pressure for RCom, which is a relatively new entrant in the GSM space. The firm may well have to resort to a drastic measure such as selling a large part of its business to strengthen its financial position. Write to us at marktomarket@livemint.com Source: Home - Livemint.com | 15 Dec 2009 | 12:05 pm Power is the new dotcomWhat do Era Financial Services, Apcotex Industries, Octant Interactive Technologies and Navabharat Ventures have in common? They all want to get into the power business.Source: Business Standard | Front Page Headlines | 15 Dec 2009 | 12:03 pm Sona BLW’s European unit to turn profitable in 3 yrsMumbai: Two years after Sona Okegawa Precisions Forgings Ltd acquired the loss-making German precision forging company ThyssenKrupp Präzisionsschmiede GmBH, Sona Group chairman Surinder Kapur said the European unit is on track to turn profitable in two years. “The European operations will stop bleeding, we will make profit by 2012,” Kapur said, adding that restructuring and cost-saving measures have helped US operations of Sona BLW Präzisionsschmiede GmBH, as the firm has been renamed, break even over the past three months. Sona BLW has operations in India apart from the US and Germany. Sona Okegawa, a 75:25 joint venture between Sona Holding and Mitsubishi Materials Corp., is part of the Rs3,500 crore auto component-making Sona Group that comprises six firms, of which only the flagship Sona Koyo Steering Systems Ltd is listed. The group does not declare consolidated earnings.  Seeking revival: A file photo of a Sona Group plant in Gurgaon. The group’s chairman says restructuring and cost-saving steps have helped Sona BLW’s US operations break even over the past three months. In that period, other Indian firms such as Bharat Forge Ltd, Amtek Auto Ltd and Mahindra Systech also adopted similar growth plans as India became an auto component manufacturing hub as well as a fast growing market for passenger vehicles as economic growth accelerated. Demand for trucks and construction equipment collapsed globally during the financial crisis that began last year, cutting Sona BLW’s European revenue to €16 million (Rs109 crore today) in November from €29 million a year earlier, and halving revenue to €170 million in the first 11 months of calendar 2009 from all of last year. “Even at this level, we have done enough cost saving and internal restructuring and managed to break even in the last three months” in the US division, Kapur said, adding that “financially, the company is out of the woods” and that demand should start picking up in February. Sona BLW, which has six plants in Germany, has cut its workforce in that country by a third—to 1,000 from 1,500. With no expansion plans for Europe, new product technology expansion will take place in India and the US, he said. Sona BLW has 60 cost-cutting projects under way, overseen by a steering committee with members from the supervisory board and the workforce, with a view to cutting fixed costs that eat into at least two-thirds of sales. With manpower forming the bulk of such fixed costs in Europe, Kapur opted for a mix of paring salaries and reducing employees—while some agreed to forego their annual Christmas bonus in 2008, the contracts of others were not renewed. Analysts are sceptical about whether the revival can be sustained, saying the spurt in European car sales has largely been the function of a now-discontinued scrappage incentive on cars. “The scheme has a multiplier effect, hence even if Sona BLW doesn’t supply to small car makers, it will be adversely impacted with sales slowing,” said Mahantesh Sabarad, an analyst at Centrum Broking Ltd. Profitability will also be determined by the ability to gain new customers, he said. At home, the flagship company Sona Koyo Steering is focusing on localizing electrical power steering production from current levels of 55% to at least 70% by January. A company executive said this would be achievable quickly because the process calls for a quantum jump instead of gradual increases. In a 13 November report, Viren Bajalia and Pooja M. Sharma, analysts at IDBI Capital, wrote that the performance of Sona Koyo during the last fiscal was hit by lower volume growth in the domestic market and unfavourable conditions across all cost elements. However, a revival is expected in the current fiscal ending March on the back of strong sales by Maruti Suzuki India Ltd, Hyundai Motor India Ltd and Mahindra and Mahindra Ltd—who together contribute 80% of Sona Koyo’s revenue, they said in the report. In the three months to 30 September, the surge in car sales has allowed Sona Koyo to swing to a Rs3.71 crore profit from a loss of Rs7 crore in the year earlier. However, it still has debt of Rs850 crore, a number Kapur says he wants to bring down. Kapur plans to cut the debt-equity ratio from 1.43 to 1.2 in two years. He didn’t share details of the plan. However, currency appreciation and raw material price fluctuations could narrow margins, IDBI Capital’s Bajalia and Sharma wrote. High import content, currency fluctuation and metal prices—steel surged 75% to $750 (Rs34,950) a tonne from a year ago—sent Sona Koyo from a Rs25.2 crore profit in fiscal 2008 to a loss of Rs31 crore in the year to March 2009. Source: Home - Livemint.com | 15 Dec 2009 | 11:57 am Moody s ups Govt rupee bond ratings to positiveInvestors in the rupee-denominated Government of India bonds can be more confident of their investments as Moody's has upgraded its outlook on these instruments from stable to positive on the back of strong economic recovery. Source: HindustanTimes.com - Top Business News Headlines | 15 Dec 2009 | 9:03 am ADB ups GDP forecast to 7 pc for 09The Asian Development Bank (ADB) on Tuesday raised its growth outlook for India to seven per cent from its earlier six per cent for calendar year 2009Source: HindustanTimes.com - Top Business News Headlines | 15 Dec 2009 | 8:50 am Gas supply pact not in consonance with family agreement RNRLAnil Ambani-led RNRL on Tuesday accused RIL in the Supreme Court of unilaterally inserting provisions in the agreement for gas supply, saying it went against the family MoU of 2005 providing for fixed quantity of gas from the KG Basin. Source: HindustanTimes.com - Top Business News Headlines | 15 Dec 2009 | 8:46 am Punjab amp Sind Bank IPO expected next fiscal yearThe long awaited initial public offer (IPO) of 100 per cent-government owned Punjab and Sind Bank is now expected only in the next fiscal year, while United Bank of India, another wholly owned state entity might go the market as early as February 2010 as it has received the required government approvals, industry officials said.Source: HindustanTimes.com - Top Business News Headlines | 15 Dec 2009 | 8:40 am AI slashes fuel use in green pushIn its journey towards becoming a green airline state-run carrier Air India has reduced its fuel consumption by 12.5 per cent in 2008-09 to 57.38 million from 18.1 million kg a year ago.Source: HindustanTimes.com - Top Business News Headlines | 15 Dec 2009 | 8:39 am Sensex loses 220 points, closes below 17000The Sensex erased the early gains and fell for the second straight day on Tuesday to close below the psychological 17,000-mark, shedding over 220 points, as rising inflation triggered concerns that the RBI may start tightening liquidity soon.Source: India Business News | Business News - Times of India | 15 Dec 2009 | 4:24 am Airline sector to lose $5.6 bn in 2010: IataGeneva: The world’s airlines are set to lose $5.6 billion next year, more than previously estimated, with rising fuel costs offsetting a rebound in both passenger and air cargo, the industry group Iata said on Tuesday. In its latest outlook, the International Air Transport Association (Iata) reaffirmed its projection of a $11 billion loss in 2009 - a year its chief Giovanni Bisignani called “an Annus Horribilis” for the highly cyclical sector. “The worst is likely behind us,” Bisignani said. “For 2010, some key statistics are moving in the right direction.” Iata, whose 230 members include Cathay Pacific, Lufthansa, United Airlines and Emirates, had previously said the global airline industry would lose $3.8 billion next year. Renewed consumer confidence should increase the number of people travelling by air next year back to the 2007 peak, Bisignani said. Iata also suggested air cargo volumes would rise quickly in 2010 as businesses rush to replenish their stocks. “Cargo demand is rising faster than world trade as depleted inventories are rebuilt,” it said in a statement. “Once the inventory cycle completes, growth is expected to fall back in line with world trade.” Crude oil prices should reach an average of $75 per barrel in 2010, up from the $61.80 average for 2009, Iata said. “As a percentage of operating costs, fuel will be 26% in 2010. This is considerably lower than the 32% of operating costs that fuel comprised in 2008, but twice the 13% of operating costs that fuel represented in 2001-2002.” European carriers are on track to generate the largest losses of any region, $2.5 billion, while Asian-Pacific carriers are due to show the most dramatic improvement with losses of $700 million, according to the Geneva-based body. North American airlines will see their losses shrink to $2 billion, with Latin American carriers the only profitable regional grouping, it said. Earlier this month Iata said that 75 major airlines reported a combined net profit of $700 million in the third quarter, up from a $3.4 billion loss in that period in 2008. The darkened Iata outlook for 2010 reflects the experiences of leading carriers and airport operators who have said they are seeing signs the worst may have passed for the global economy, though recovery could come slowly. Air France-KLM this month said a “more dynamic” cargo sector supported signs of a slow recovery and Deutsche Lufthansa said air freight volumes were continuing to improve. Passenger numbers at Frankfurt Airport have also risen as a result of higher demand on routes to America and Asia, the operator Fraport said. Source: World Business - Livemint.com | 15 Dec 2009 | 3:49 am Indian companies advised to localise in China to improve export basketIndian companies must learn to localize in China and try to be a little more creative in their operations in this country if they wish to correct the flaws in Indias trade basket.Source: India Business News | Business News - Times of India | 15 Dec 2009 | 3:20 am India urges US regulator to waive off fine on SatyamIndia has urged the US Securities Exchange Commission (SEC) not to impose fine on Satyam, now Mahindra Satyam, in view of irregularities as the company was also listed at the US regulator.Source: India Business News | Business News - Times of India | 15 Dec 2009 | 1:45 am
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