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What does 2010 hold for IT?In the first year after a global economic crisis, the IT sector delivered some exponential growth numbers. Most tech majors incurred handsome gains as overseas orders increased in number along with intumesced IT spends. However, as 2009 draws to a dramatic close, industry honchos divulge their opinion on how the New Year will transpire to be.Source: Moneycontrol Top Headlines | 30 Dec 2009 | 6:55 am Exports to contribute 2530% to revenues next yr: TinplateIn an interview with CNBCTV18, BL Raina, Director, Tinplate Company, spoke about the latest happenings in his company and sector.Source: Moneycontrol Top Headlines | 30 Dec 2009 | 5:58 am No plans to hive off Apollo Reach: Apollo HospitalsIn an interview with CNBCTV18, K Padmanabhan, Group President of Apollo Hospitals spoke about the latest happenings in his company and sector.Source: Moneycontrol Top Headlines | 30 Dec 2009 | 5:37 am Finance panel submits report on tax sharingA governmentappointed panel on Wednesday submitted a report to the president recommending the formula for sharing of tax revenues between the government and states in the fiveyear period ending March 2015.Source: Moneycontrol Top Headlines | 30 Dec 2009 | 5:32 am Expect 2010 to be a good year for IT industry: TCSIn an interview with CNBCTV18, N Chandrasekaran, Chief Operating Officer and Executive Director of Tata Consultancy Services spoke about the latest happenings in his company and sector.Source: Moneycontrol Top Headlines | 30 Dec 2009 | 5:19 am Essel Propack exits medical device biz to focus on core bizEssel Propack announced sale of its investments in the medical business and is trying to get back to its core business once again. In an interview with CNBCTV18, companys President Chandrashekhar Rajagopalan discusses it.Source: Moneycontrol Top Headlines | 30 Dec 2009 | 5:04 am Ratan Tata Ahead of his timesRatan Tata is no stranger to bad times. He simply dusts himself and carries onSource: Moneycontrol Top Headlines | 30 Dec 2009 | 5:00 am 5 jobs that didn\'t exist a year ago2009 may have killed quite a few jobs. But amidst the doom and gloom, some brand new opportunities surfaced.Source: Moneycontrol Top Headlines | 30 Dec 2009 | 5:00 am Business houses rethinking AP investment plans: YeddyurappaAndhra Pradesh Chief Minister BS Yeddyurappa said that several business houses were contemplating shifting out of the state, reports CNBCTV18.Source: Moneycontrol Top Headlines | 30 Dec 2009 | 4:28 am Cox and Kings unit buys TUI Travel unitA unit of Cox and Kings (India) Ltd has acquired Australiabased MyPlanet Australia Pty Ltd Bentours International Pty Ltd from a unit of TUI Travel Plc.Source: Moneycontrol Top Headlines | 30 Dec 2009 | 4:27 am Budget 2010 to reflect finance panel suggestions: Govt - Economic Times
Source: Business - Google News | 30 Dec 2009 | 3:11 am Sensex, Nifty set to snap winning run @ 15:25 hrs - Sify
Source: Business - Google News | 30 Dec 2009 | 3:09 am China vows to cut red tape for foreign investorsBEIJING (Reuters) - China will make it easier for foreign investors to start businesses in the country, especially in its western provinces, the government said in a statement on Wednesday.Source: Reuters: Money News | 30 Dec 2009 | 2:59 am Fortis Healthcare to manage hospital in HaryanaMUMBAI (Reuters) - Hospital chain Fortis Healthcare Ltd said on Wednesday it will manage a 175-bed hospital in Haryana, widening its presence in that part of the country.Source: Reuters: Money News | 30 Dec 2009 | 2:59 am Budget 2010 to reflect finance panel suggestions - finminNEW DELHI (Reuters) - India's 2010 budget will factor in suggestions made by a panel on various fiscal measures including sharing of tax revenues between the government and states in the five-year period ending March 2015.Source: Reuters: Money News | 30 Dec 2009 | 2:51 am Stocks surge washes out equity fund inflowsMUMBAI (Reuters) - Net inflows into Indian equity mutual funds are set to drop about 90 percent in 2009 from a year ago period as investors liquidate their fund portfolios, taking advantage of a sharp surge in domestic share market.Source: Reuters: Money News | 30 Dec 2009 | 2:49 am Stocks surge washes out equity fund inflowsMumbai: Net inflows into Indian equity mutual funds are set to drop about 90% in 2009 from a year ago period as investors liquidate their fund portfolios, taking advantage of a sharp surge in domestic share market. While many investors are booking profits after recovering their losses of 2008 when Indian shares had dropped by more than half, others are growing wary of market valuation and prospects of domestic shares in 2010. Investor appetite has also been hit by sulking distributors who are not enthusiastic to push funds to clients after India’s market regulator banned entry fee charged by funds from 1 August, cutting their fees. “The biggest problem is the investor mindset,” R.S. Srinivas Jain, chief marketing officer of SBI Funds Management, said. “They have not been comfortable with the sharp surge. The volatility has made them encash their returns.” Drop in equity fund inflows hurt money managers’ profits the most as they earn up to 100 basis points in management fees, the highest among all major fund categories. Stocks up, sparks caution India’s benchmark stock index has surged about 80% in 2009 and more than 110% from a low in March. This has helped equity funds generate average returns in line with the index with nearly half of them outperforming the main share index, according to data from global fund tracker Lipper. But the swift surge is also making investors nervous about the market valuation. “We have run ahead of fundamentals. Also, there are still concerns on the global economic recovery,” said Chintamani Dagade, a senior research analyst at Morningstar India. Net inflows into equity funds up to November 2009 was Rs34.35 billion, a near-90% drop from 2008 when they had collected a net Rs310.5 billion, data from the Association of Mutual Funds in India showed. These funds have seen cash leaking every month from August and executives say that though the outflows have slackenend in December, the trend has not changed. Between March and September, new investor folios created by equity-oriented funds have dropped, while relatively safer category of fixed income funds rose, indicating growing risk averseness among investors. Dagade said a ban on entry fees had worsened the situation with many distributors shying from recommending mutual funds. “One, they are not selling funds, and second, they might be pulling out investors’ money and asking them to put in other products,” Dagade said. The ban threatens the incomes of over 87,000 distributors, agents who sell funds for a fee and bring in more than 90% of the business to money managers. Beyond a handful of firms such as Reliance Capital Asset Management and UTI, Indian money managers have limited reach and rely heavily on distributors to build up their client base. Source: Home - Livemint.com | 30 Dec 2009 | 2:24 am India cautions against hasty withdrawal of stimulus packages - Business Standard
Source: Business - Google News | 30 Dec 2009 | 2:14 am JAL shares down 24 pct as bankruptcy worries mountTOKYO (Reuters) - Shares of Japan Airlines Corp tumbled as much as 32 percent to a record low on Wednesday on growing expectations the struggling carrier was headed for bankruptcy under a state restructuring plan.Source: Reuters: Money News | 30 Dec 2009 | 2:09 am Japan sets long-term economic goals, meets scepticismTOKYO (Reuters) - Japan's government said it aimed for economic growth of more than 2 percent over the next decade, but its long-term plan unveiled on Wednesday lacked detail needed to convince investors the goal is realistic.Source: Reuters: Money News | 30 Dec 2009 | 2:01 am England denies Commonwealth Games pullout plansLondon: Organisers of England’s participation in next year’s Commonwealth Games denied Wednesday a report that they are considering pulling out of the event in India due to security fears. The Daily Telegraph, quoting unnamed sources, said police and security advisers fear the England team will be targeted by Pakistani militants and feel the safety of athletes cannot currently be guaranteed. There is therefore “virtually no chance” of England sending a team, in what would be the first time that England has not competed in the 80-year history of the Games, to be held in New Delhi in October, said the paper. But Commonwealth Games England chief Ann Hogbin said: “That is definitely not the case. Our current and strong intention is to field a team for the Games in Delhi next year. “Of course, we have a duty of care to the athletes and other team members which we take very seriously. “Despite having been given extensive briefings from relevant authorities we have not received any indication that we should not participate in the Games and we will continue to work hard to put in place the best possible arrangements for our team.” Responding to the Telegraph report, the Foreign and Commonwealth Office (FCO) said it “has not advised any of the British teams” against competing in the Games. “We are aware that the Commonwealth Games Federation had some concerns about preparations for the Games,” it added in a statement. “We continue to work closely with the Indian authorities who are doing everything they can to ensure a safe and secure Games.” The report comes after the England badminton team pulled out of the world championships in India in August, saying security in the host city of Hyderabad was lax, and sparking criticism that they were overreacting. Paul Stephenson, the Metropolitan Police Commissioner, visited the Indian capital earlier this month to inspect the Games sites and was said to have voiced “serious concerns” about the security arrangements, the newspaper said. “If you are an English athlete there is no way you are going to want to risk your life competing at the Games,” a senior government source was quoted as saying. “We currently cannot see any way that England will be able to send a team to Delhi next year,” the source added. Concern of an attack on England’s athletes apparently stems from Britain’s role in the international conflict against the Taliban in Afghanistan. The perceived risk of foreign sports stars being targeted in South Asia has increased since gunmen attacked the Sri Lankan cricket team in Lahore, Pakistan, in March. Six policemen and two civilians were killed and seven Sri Lankan squad members were wounded in the assault as the team travelled to a Test match. Militant attacks in Mumbai last November that killed 166 people have also added to anxiety about teams travelling to India. Concerns are also mounting in India over delays on the construction of venues for the Games, which involve 6,000 international athletes competing in various sporting events. Source: LatestNews-Home - Livemint.com | 30 Dec 2009 | 2:01 am Infosys to invest Rs 300 cr at its second project in Orissa - Business Standard
Source: Business - Google News | 30 Dec 2009 | 1:58 am Infosys to invest Rs300 cr at its second project in OrissaBhubaneswar: IT major Infosys will soon set up its second project in Orissa at an investment of Rs300 crore, official sources said on Wednesday. Sources said Infosys human resource director T.V. Mohandas Pai conveyed the investment plans to chief minister Naveen Patnaik here at a meeting last evening. While as many as 3,000 IT professionals were busy working at the first Infosys project in the state, he said about 5,000 workers would get placed at its second project. The second project would come up at IT valley on the side of the National Highway no-5 between the state capital and Khurda town. Work at the second project would start soon, Pai said. The state government has agreed to provide required water and power to the second project. Infosys was at present exporting software products worth Rs850 crore per annum from its existing project in the state, he said. Pai and Patnaik also discussed on mid-day-meal (MDM) project of Akshya Patra, presently being given to 61,000 students in Puri and Nayagarh district. Source: LatestNews-Home - Livemint.com | 30 Dec 2009 | 1:43 am India finance panel submits report on tax sharingA government-appointed panel on Wednesday submitted a report to the Indian president recommending the formula for sharing of tax revenues between the federal government and states in a five-year period ending March 2015.Source: HindustanTimes.com - Top Business News Headlines | 30 Dec 2009 | 1:11 am Rupee little weaker; month-end demand, stocks hurtMumbai: The Indian rupee continued to trade marginally weaker in afternoon session on Wednesday tracking choppy local shares and weighed by some month-end demand for dollars from refiners and importers. At 1:25pm, the partially convertible rupee was at Rs46.71/72 per dollar, little weaker than its close of Rs46.66/67 on Tuesday. Oil is India’s biggest import and refiners are the largest buyers of dollars in the local currency market. Demand for dollars tends to peak at the end of each month, when importers are required to make payments for their imports. The dollar hit a two-month high against the yen on Wednesday, keeping the firmer tone it has developed recently on shifting sentiment about the outlook for US rates following improving economic data. Dealers said they were watching the sharemarket for clues on capital flows. Indian shares were choppy and regional peers were largely weak. One-month offshore non-deliverable forward contracts were quoted at Rs46.70/80, little weaker compared to the onshore spot rate. In the currency futures market, the most traded near-month contracts on the National Stock Exchange and MCX-SX were quoting at 46.8075 and 46.8050 respectively, with the total traded volume on the two exchanges at about $1.3 billion. Source: Home - Livemint.com | 30 Dec 2009 | 1:06 am 13th Finance Commission report to be reflected in Budget: FMFinance Minister Pranab Mukherjee on Wednesday said recommendations of the 13th Finance Commission, which submitted its report to President Pratibha Patil earlier in the day, will be reflected in the Budget 2010-11.Source: India Business News | Business News - Times of India | 30 Dec 2009 | 12:56 am Indian students to shun Australia due to attacksSydney: Australia’s international student sector, the third largest export earner, is forecast to see a 20% drop in Indian students in 2010, costing $69.7 million, after a series of attacks on Indians students in 2009. A study by The Tourism Forecasting Committee released on Wednesday found that while international tourism numbers were expected to grow by 4.3% in 2010, there would be a significant decline in international student arrivals. It forecast 4,000 fewer Indian students, a fall of 21% compared with a 35% rise in 2009. “The resultant loss in economic value to Australia could be as high as A$78 million in 2010 if these enrolments are not filled by other international students,” a statement by the Tourism Forecasting Committee said. The study attributed the fall in Indian student numbers to a spate of attacks on Indian students that cast a shadow over the Australian education industry in mid-2009. The attacks in Melbourne and Sydney, which police blamed on opportunistic criminals, escalated into a diplomatic issue between Australia and India after some Indian students and Indian media labelled the attacks as racist. Australia’s international student sector is the country’s third largest export earner, behind coal and iron ore, totalling A$13 billion ($10 billion) in 2007-08. In 2009, there were more than 70,000 Indians studying in Australia. Australia is a major destination for Indian students studying abroad, who recognize the cost competitiveness of Australian education services. Enrolments of Indian students in Australia had increased at an average annual rate of around 41% since 2002. “What we’re saying is that based on consideration of visa applications there’s a 20% hit,” chairman of The Tourism Forecasting Committee, Bernard Salt, told local radio. “This is a segment that has grown strongly throughout this decade but the downturn is expected in response to concerns that the Indian community have had about safety,” said Salt. “I suppose the query is whether in fact this is a structural issue that will be with us for some time, that is one fifth of the market has been evaporated, or whether in fact this is a knee-jerk, just a one-year reaction,” he said. The president of the Federation of Indian Students of Australia, Gautam Gupta, said the forecast drop in Indian students is not as bad as first predicted after the attacks. “We were predicting a drop of about 50%, so if the drop is about 20%, that’s significantly lower than what was the prediction about three months back,” he told radio. Gupta said Indian student numbers could rebound as early as 2011, if attacks continued to decline. The study said the negative impact from the attacks should not continue beyond 2010. Source: Home - Livemint.com | 30 Dec 2009 | 12:42 am Oil up above $79 on fuel stocks drop, economic recoverySingapore: Oil edged up above $79 on Wednesday, as falls in US fuel stocks during a cold winter and optimism over the global economy, countered a surprise rise in crude inventories and the firm dollar. Crude stocks in the world’s biggest oil consumer rose by 1.7 million barrels last week, against expectations of a 2.0 million-barrel drawdown, data from industry group American Petroleum Institute (API) showed. US crude for February delivery rose 24 cents to $79.11 a barrel by 0742 GMT in thin pre-holiday trade, after settling 10 cents up on Tuesday. London Brent crude for February rose 30 cents at $77.94. Oil has rallied 13% over the past two weeks and have gained more than $32 so far this year, or 70%, though still about 46% below record highs above $147 hit in July last year. “In anticipation of this week’s API and EIA data, investors were expecting some pretty substantial drawdowns, not just in oil products but also in crude as refiners increased their operations,” said Ben Westmore, commodities economist at National Australia Bank. “A very rosy outlook had been pictured in the expectations for a crude drawdown rather than an increase in crude stocks, and so you had this moderation in the oil price.” Still, the rise in the industry figures paled in contrast to the declines in crude stocks of 4.9 million barrels in the week before last, data from the government Energy Information Agency (EIA) showed. This followed slides of more than 3 million barrels in the previous two government reports. Gasoline stocks fell by an unexpected 1.4 million barrels, the API data showed, after a Reuters poll forecast a 500,000-barrel build. Distillate fuels fell by 3.5 million barrels as cold weather hit the US Northeast, the world’s biggest heating oil market. Heating oil stockpiles dropped by 2.6 million barrels. Temperatures in the US Northeast were seen average below normal on Wednesday and near to above normal on Thursday and Friday, while temperatures in Northwest Europe were forecast near to below normal with energy demand for heating near to above average much of the week and weekend. EIA’s weekly inventory data are due out at 10:30 am EST (1530 GMT) on Wednesday. “API data is generally just a lead to the EIA. That’s the one that really causes the market to move,” Westmore said. “We really need further drawdown of products and distillates stocks in order to see oil price move higher.” Strong dollar caps oil gains The rise in oil was curbed by the strong dollar, which posted gains against most major currencies, and climbed to a two-month peak versus the yen, boosted by a report showing a rise in US consumer confidence this month. Oil has often eased this year when the dollar firms, making crude more costly for holders of other currencies. But the positive US consumer confidence data for December, which hit a three-month high as job market pessimism eased and consumers’ expectations touched a two-year high also gave oil a lift. Asia’s two leading economies and energy consumers are also upbeat on the economy. Japan’s finance minister said on Wednesday he is convinced the economy will grow next year, dismissing fears about a double-dip recession, as the government announced a strategy aiming for real GDP growth averaging over 2% in the next decade by creating new demand in the environment, health and tourism sectors. In South Korea, the president said the economy will probably grow more than 5% next year, boosted by the government’s stimulus spending. Oil markets have looked to the wider economy this year for signs of strength that could boost flagging fuel demand. Source: Home - Livemint.com | 30 Dec 2009 | 12:37 am Asia stocks fade at year-end, dlr upTOKYO (Reuters) - Asian share markets fell on Wednesday as year-end trade dwindled, with profit-taking pulling down shares and bankruptcy worries about Japan Airlines weighing on the Nikkei, while the dollar rose broadly.Source: Reuters: Money News | 30 Dec 2009 | 12:21 am Asian shares wilt before year-end, dollar perkyTokyo: Asian share markets fell on Wednesday as year-end trade dwindled, with profit-taking pulling down shares and bankruptcy worries about Japan Airlines weighing on the Nikkei, while the dollar rose broadly. Shares of JAL tumbled to a record low on growing investor worries that the carrier will be restructured in a bankruptcy court as part of a state bailout. European shares were seen opening down, with Britain’s FTSE 100 expected to start as much as 0.2% lower, financial bookmakers said. “Overall, my impression is that there’s probably a bit of profit-taking going on ahead of the year-end, particularly with US indicators coming up next week,” said Hideyuki Ishiguro, a strategist at Okasan Securities in Tokyo. “Given recent gains, it’s not surprising for most markets to take a bit of a breather today.” On the final trading day of the year, Japan’s Nikkei average fell 0.9%, but gained 19% in 2009 after falling 42% in 2008, which was the biggest loss in its 58-year history. High-tech exporters led gains while banks lagged, hurt by fears about equity financing as well as JAL’s woes. The MSCI index of Asia Pacific stocks outside Japan fell 0.2%, edging further from its 2009 high set in November but still up nearly 66% on the year. Corporate debt problems also hit shares in South Korea, where the benchmark index initially fell, led down by companies in the Kumho Asiana Group following reports that flagship units of South Korea’s ninth-biggest business group could be put under creditor-led debt restructuring. Shares in Kumho Tire and Kumho Industrial both plunged by their daily limit of 15% but the benchmark edged up 0.6% to cap the year with gains of 50%. “Investors will take a very conservative approach on Kumho Asiana Group companies until some of the uncertainties are resolved,” said Yoon Jin-il, an analyst at IBK Securities. Many analysts expect stocks to rise further in 2010 as the global economy continues to mend, but gains are likely to be at a much slower pace. Australian stocks rose to their highest in nearly 10 weeks early in the day but quickly retreated to fall 0.2%, snapping a four-day rally, as energy and metals stocks fell in step with commodities prices. US stocks slipped overnight, breaking a six-day string of gains. Data showing a rise in consumer confidence was offset by a housing report pointing to more bumps in the road to a sustained economic recovery. Dollar gains The dollar hit a two-month high at ¥92.26, keeping the firmer tone it has developed recently on shifting sentiment about the outlook for US interest rates. It was later trading at 91.99, up 0.5%. The main question for the currency market going into 2010 is when the Federal Reserve will start to tighten policy. Improved US data in the past month has prompted many market watchers to review their forecasts for when rates might start to rise, lifting the dollar up from a 14-year low against the yen and reviving its fortunes against other major currencies. “The market is shifting its focus to the recently emerged theme of whether the Fed exit strategy will be sooner than expected. And it will closely scrutinise upcoming US economic data,” said Kazuyuki Takami, senior manager at the foreign exchange trading department at Bank of Tokyo-Mitsubishi UFJ. The euro fell 0.1% to $1.4344. Oil held steady below $80, weighed down by the dollar’s gains and doubts whether predictions for a weekly fall in government-monitored US crude stockpiles will come true, after a private-sector report showed an unexpected rise. US crude for February delivery stood just above $79 a barrel. Gold stood at $1,095.75 per ounce, after snapping a three-session winning streak the day before when the dollar’s rise curbed its appeal as a currency alternative. Spot gold had tumbled to a seven-week low of $1,074.10 an ounce last week before the holiday break. Source: Home - Livemint.com | 30 Dec 2009 | 12:17 am Four Soft wins deal from Canada's Sherritt - Economic Times
Source: Business - Google News | 30 Dec 2009 | 12:15 am Mukherjee: Need to balance growth, fiscal deficitNEW DELHI (Reuters) - India needs to strike a balance between economic growth and cutting fiscal deficit, Finance Minister Pranab Mukherjee said on Wednesday.Source: Reuters: Money News | 30 Dec 2009 | 12:08 am Most FIIs prefer qualified institutional placements over secondary marketInvestments by FIIs in 2009 may be set to match 2007's levels. However, what makes 2009 different from the previous bull market year of 2007 is that a good portion of the FII investments this year came in through subscription to qualifiedSource: Business Line - Home Page | 30 Dec 2009 | 12:00 am Pick-up in project insurance demandInsurance companies are seeing demand for project insurance picking up in the last fewSource: Business Line - Home Page | 30 Dec 2009 | 12:00 am Telecom sector rings out year of policy missed callsThe year 2009 was a damp squib as far as the telecom sector is concerned with most of the big ticket Government initiatives gettingSource: Business Line - Home Page | 30 Dec 2009 | 12:00 am DS Kulkarni Developers (Rs 69.1): BuyInvestors with a short-term trading perspective can buy D S Kulkarni Developers. This stock has been in a corrective mode since October 2009. This correction is, however, halting above the key support at Rs 65. The stock has bounced from thisSource: Business Line - Home Page | 30 Dec 2009 | 12:00 am Premium rates on project insurance cover rise 20%Rising demand for project insurance has exerted an upward pressure on premium rates in this segment. Premium rates have risen by 10-20 perSource: Business Line - Home Page | 30 Dec 2009 | 12:00 am Investor interest in commodities ‘positive'From the depressing scenario of the latter half of 2008, investor sentiment towards commodities has undergone a marked change to turn positive in the last two-threeSource: Business Line - Home Page | 30 Dec 2009 | 12:00 am India, Japan to deepen economic tiesDescribing the economic partnership as the "bedrock" of India-Japan relations, the Prime Minister, Dr. Manmohan Singh, on Tuesday said that the two countries have decided to expedite negotiations on the Comprehensive Economic Partnership AgreementSource: Business Line - Home Page | 30 Dec 2009 | 12:00 am IPO scam: Compensation soon for retail investorsRetail applicants who did not receive allotments in the scam-hit IPOs of 2003-2005 could yet stand to benefit, with the regulator proposing to initiate the distribution of illegal gains made by the scamSource: Business Line - Home Page | 30 Dec 2009 | 12:00 am GDP growth may be 7-7.5% this fiscal, says RangarajanDr C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister, on Tuesday forecast the GDP to grow at 7 to 7.5 per cent this fiscal, signalling an improvement in the domestic economicSource: Business Line - Home Page | 30 Dec 2009 | 12:00 am Jindal Power plans IPO to raise Rs 7,200 crJindal Power (JPL) filed its draft red herring prospectus on Tuesday for an initial public offering of Rs 7,200 crore, the largest since the Rs 11,500-crore IPO of Reliance Power in JanuarySource: Business Line - Home Page | 30 Dec 2009 | 12:00 am Aamir Khan’s new film brings year-end cheer to BollywoodMumbai: Aamir Khan’s new film has given Bollywood a boost after a disappointing year marked by a damaging strike, swine flu fears and a series of big budget flops. The romantic comedy 3 Idiots, which was released worldwide last Friday, Christmas Day, took more than Rs1 billion ($20 million) in its first four days, Reliance Big Pictures said in a statement on Monday night. Producer Vidhu Vinod Chopra described the opening weekend as “overwhelming” while Reliance Big Pictures chairman Amit Khanna said it was “phenomenal”. Indian newspaper reports said that the film’s initial box office takings even beat Khan’s Christmas 2008 offering Ghajini, which went on to become Bollywood’s biggest grossing film of all time. 3 Idiots is based on the best-selling debut novel by Indian author Chetan Bhagat--Five Point Someone--about three struggling students at a leading engineering college. Khan is known for making one big film per year in an industry where leading actors and actresses can be working on several movies at the same time. Industry analysts had expected 3 Idiots to do well, suggesting that other studios could follow Khan’s example and concentrate on the quality of scripts and production rather than quantity. The last 12 months have been disappointing for Bollywood, with revenues hit by a two-month boycott of multiplex cinemas led by producers over box office takings, then swine flu, which closed some cinemas on public health grounds. Both delayed the release of movies, causing a backlog, then a glut of new films opening at the same time, denting box-office earnings. Source: LatestNews-Home - Livemint.com | 29 Dec 2009 | 11:31 pm How much independence does RBI enjoy? - Moneycontrol.com
Source: Business - Google News | 29 Dec 2009 | 11:20 pm How much independence does RBI enjoy?New Delhi: The Reserve Bank of India (RBI) and the government now appear to be on the same page as they express concerns about inflation, which has been mainly driven by rising food prices. Monetary policy tightening is widely expected by the end of January, even as government officials and the central bank chief note that the supply-side constraints that have made food more expensive are generally outside the scope of monetary policy. Such apparent harmony is not always the case. In the weeks leading up to the last quarterly policy review in October, Reserve Bank of India governor Duvvuri Subbarao talked tough on inflation even as growth-focused government officials repeatedly urged the Reserve Bank to hold off on tightening until an economic recovery was more entrenched. The RBI ended up starting the process of unwinding ultra-loose policy by removing emergency liquidity support measures and taking other steps, but stopped short of raising rates or lifting cash reserve ratio (CRR) requirements for banks. Its next policy review is at the end of January, and economists widely expect the Reserve Bank of India (RBI) first to increase CRR and then raise rates in coming months as inflation is forecast by some to reach 8% by the end of the fiscal year in March and other indicators point to a strengthening economy. Here are some questions and answers about the independence of the Reserve Bank of India. How independent is the RBI on paper? The RBI is not constitutionally independent, as the 1934 act governing its operation gives the government power to direct it. As tends to be the case globally, the government appoints the central bank governor. It also appoints four deputy governors. “The central government may from time to time give such directions to the Bank as it may, after consultation with the governor of the bank, consider necessary in the public interest,” the act says. Technically, the government is also permitted by the act to supersede the central bank if it believes the RBI has failed to carry out its obligations. What happens in practice? Over the last quarter century, the RBI has been seen to be more independent as India’s economy has liberalised, although much consultation takes place between the central bank and the finance ministry, and the government has been known to exert its will, against the wishes of the central bank chief. “There is no legal act mandating autonomy of the RBI, but there is a growing convention that the RBI is allowed autonomy to do what it wants,” said Shankar Acharya, an economist with New Delhi-based think tank ICRIER and a former chief economic adviser to the government. Earlier this month, as speculation swirled over possible monetary tightening, Union finance minister Pranab Mukherjee and RBI governor Subbarao met to discuss the economy. Such consultations, which Acharya described as ”substantive,” are not unusual in India. Is ‘consult’ just a polite word for ‘government order’? Not necessarily. The RBI and government have clashed over monetary policy in the past, notably during the tenure of the previous RBI governor, Y V Reddy, and then-finance minister Palaniappan Chidambaram. In 2007, global interest rates were softening but the RBI under Reddy preferred to adopt a hawkish monetary policy, citing inflationary risks stemming from higher oil prices. But the government favoured lower interest rates to help sustain high growth and bring relief to borrowers. The RBI’s view prevailed and it hiked policy rates. In June of the following year, however, Reddy was prodded by the finance ministry to raise rates against his wishes, he revealed in an interview after he left office. So what governs the RBI’s independence? Personalities. Reddy, for example, was “fiercely independent”, according to Surjit Bhalla, head of Oxus Investments in New Delhi. Subbarao is seen as more open to consultations with the finance ministry, although he has demonstrated independence with criticism of the government’s fiscal deficit and early warnings on inflation. What other influence can the government have? Appointments. Chidambaram appointed Subbarao, who was the top bureaucrat in his ministry, as central bank governor, bypassing Reddy’s deputy Rakesh Mohan, who had been seen as a strong candidate. The government can also issue directives on non-monetary policy matters such as foreign investment rules in the banks. Who then should investors be watching? Both the government and the RBI. Top officials, including the finance minister, Prime Minister Manmohan Singh, and Planning Commission deputy chairman Montek Singh Ahluwalia speak frequently on matters of monetary policy, and their views influence policy decisions. It is Subbarao, however, who decides the timing, means, and degree of policy moves. “It’s kept grey,” said Acharya. “Fortunately, there is growing convention for autonomy. I don’t think the RBI is being dictated to.” Source: Home - Livemint.com | 29 Dec 2009 | 10:52 pm Sensex down 8 points in opening trade on weak Asian cuesThe Bombay Stock Exchange benchmark Sensex today fell marginally by over 8 points in early trade on fresh selling by funds influenced by weak trend in Asian markets.Source: HindustanTimes.com - Top Business News Headlines | 29 Dec 2009 | 10:47 pm India's decade could pave way for an Indian century: Wall Street Journal"This was the decade that defined India - and India defined. Think back to the mid-1990s, as software services entrepreneurs assure me, and Americans didn't know India at all," the Wall Street Journal said.Source: India Business News | Business News - Times of India | 29 Dec 2009 | 10:43 pm BHEL, China TBEA in talks for tie-up - Moneycontrol.com
Source: Business - Google News | 29 Dec 2009 | 10:35 pm Markets flat in early deals; IT, banks gainMumbai: Indian shares were flat on Wednesday morning, holding their ground despite a weak lead-in from Asian markets as the bullish sentiment that has lifted the market 80% this year remained intact. Software companies such as Infosys Technologies and Tata Consultancy Services were among the lead gainers, and were up 1% and 0.5% respectively. Infosys touched an all-time high of Rs2,609.90 earlier in the day. “We expect (software and IT services) companies to report strong December quarters in terms of quarter-on-quarter volume growth, as customers are spending on projects held back or cancelled in the past,” Nomura analysts said in a note. At 10:29am, the 30-share BSE Index was up 0.03% at 17,406.62, with 17 components gaining. On Tuesday, the index had posted its highest close in 19 months, and peaked just short of its intra-day high for the year. “It is a mood of good cheer. There is a situation where earnings momentum is gradually returning. Fund flows are good,” said Ved Praksh Chaturvedi, managing director of Tata Asset Management. “On the whole, it is a period where there is positive sentiment and that is getting reflected in the indices levels,” he said. Fuelled by strong fund flows, and the index is on track to post its biggest yearly gain in 18 years. “I think 2010 will be a year when growth will gradually return, earnings momentum will return,” Chaturvedi said. “Also, inflation will return as it is a natural corollary of economic growth,” he said, adding there could be some volatility if inflation rises. Banks extended their recent rise as investors were optimistic on the sector given strong growth prospects for the economy. Leading lenders ICICI Bank and State Bank of India rose 0.2% and 0.4% respectively. Telecom stocks such as Bharti Airtel and Reliance Communications extended gains and rose 0.7% and 0.3% respectively. The telecom pack has attracted buying interest after the recent meltdown in their stock prices, which was triggered by a price war and growing competition. Bharti and Reliance Communications are the worst performers in the main index this year, losing 9% and 23% respectively. In the broader market, gainers more than doubled the number of losers in a volume of 99 million shares. The 50-share NSE index was up 0.01% at 5,188.30. Source: Home - Livemint.com | 29 Dec 2009 | 10:34 pm Ranbaxy exits Chinese joint venture biz; stk down - Moneycontrol.com
Source: Business - Google News | 29 Dec 2009 | 10:30 pm Rupee falls by 10 paise against dollar in opening tradeThe rupee today depreciated by 10 paise to 46.77 a dollar in the opening trade largely in line with other Asian currencies which fell against the greenback.Source: HindustanTimes.com - Top Business News Headlines | 29 Dec 2009 | 10:28 pm Q+A - How much independence does RBI enjoy?NEW DELHI (Reuters) - The Reserve Bank of India and the government now appear to be on the same page as they express concerns about inflation, which has been mainly driven by rising food prices.Source: Reuters: Money News | 29 Dec 2009 | 10:23 pm Sensex down 8 points in opening trade on weak Asian cuesThe Sensex fell by 8.11 points to 17,393.45 points in the first five minutes of trading. The 30-share index had gained over 800 points in the previous four trading sessions.Source: India Business News | Business News - Times of India | 29 Dec 2009 | 10:18 pm 13th Finance Commission submits report to PresidentNew Delhi: The 13th Finance Commission on Wednesday submitted its report to President Pratibha Patil on devolution of central tax receipts between the Union and the state governments. The report of the Finance Commission, headed by former finance secretary Vijay Kelkar, assumes importance since reforms in the direct and indirect taxes areas are likely to be in place in the next couple of years in the form of Goods and Services Tax (GST) and Direct Taxes Code. Kelkar presented the report to Patil at the Rashtrapati Bhavan. The report will be given by the President to the finance ministry, which will take it up with the Cabinet. Cabinet will then adopt the report and is expected to table it in the Budget session of Parliament. The recommendations of the report, which covers the five-year period commencing 1 April 2010, may find place in the Union Budget for the next fiscal. Source: Home - Livemint.com | 29 Dec 2009 | 10:09 pm Rupee falls by 10 paise against dollarThe rupee on Wednesday depreciated by 10 paise to 46.77 a dollar in opening trade largely in line with other Asian currencies which fell against the greenback.Source: India Business News | Business News - Times of India | 29 Dec 2009 | 10:00 pm IPO scam: Compensation soon for retail investors - Moneycontrol.com
Source: Business - Google News | 29 Dec 2009 | 9:20 pm Wall Street slips in low volume trade; data mixedNew York: US stocks edged lower in a low-volume session on Tuesday, breaking a six-day string of gains as investors found little reason to push stocks higher as the year’s end approached. Data showing a rise in consumer confidence was offset by a housing report pointing to more bumps in the road. The day’s decline followed six days of gains. But the benchmark Standard & Poor’s 500 index is still up 25% for the year. Trading volume was the lowest for the year, according to Birinyi Associates, with many participants out before the New Year’s holiday on Friday. At the close, only 638 million shares had changed hands, compared with last year’s estimated daily average of 1.49 billion on the New York Stock Exchange. On the data front, the Conference Board’s index of consumer confidence rose more than expected in December to a reading of 52.9, a three-month high. In contrast, the S&P/Case-Shiller composite index of home prices in 20 metropolitan areas, meanwhile, was unchanged in October, falling short of expectations. “I don’t think anyone is expecting a major climb here out of this recession,” said Owen Fitzpatrick, head of the US equity group at Deutsche Bank Private Wealth Management in New York. The housing news drove the Dow Jones US Home Construction Index down 0.3%. The Dow Jones industrial average dipped 1.67 points, or 0.02%, to end at 10,545.41. The Standard & Poor’s 500 Index slipped 1.58 points, or 0.14%, to finish at 1,126.20. The Nasdaq Composite Index declined 2.68 points, or 0.12%, to close at 2,288.40. On the plus side, shares of consumer products giant Procter & Gamble Co, which makes Tide detergent and Crest toothpaste, rose 0.5% to $61.58 on the New York Stock Exchange. Weighing on the Nasdaq was iPod and iPhone maker Apple Inc, which slid 1.2% to $209.10 after hitting recent highs. The stock was pressured as Nokia Corp said it has filed a complaint against Apple with the International Trade Commission in a patent dispute. In corporate news, United Community Banks Inc fell 5% to $3.24 after the company temporarily suspended its stock dividend in a move to improve liquidity. On Friday, US financial markets will be closed for the New Year’s Day holiday. Source: Home - Livemint.com | 29 Dec 2009 | 9:16 pm Indra Nooyi faces flak for falling PepsiCo shares - Press Trust of India
Source: Business - Google News | 29 Dec 2009 | 8:03 pm Indian students to shun Australia due to attacksSYDNEY (Reuters) - Australia's international student sector, the third largest export earner, is forecast to see a 20 percent drop in Indian students in 2010, costing $69.7 million, after a series of attacks on Indians students in 2009.Source: Reuters: Money News | 29 Dec 2009 | 6:29 pm Indian auto industry in top gear despite global gloomEven as global auto majors went into reverse gear in 2009, the Indian industry largely bucked the trend, launching new models for the domestic market and registering significant growth in exports.Source: HindustanTimes.com - Top Business News Headlines | 29 Dec 2009 | 2:23 pm Ashapura set for a bauxite boosterSees FY10 revenues growing to Rs 500 cr after Gujarat allows exports.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 2:09 pm Competition heats up for Bajaj ricksTVS, Piaggio, Tata Motors line up a plethora of products.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 2:05 pm Airport services remain with airlinesMinistry Relief on ground handling applicable till December 31, 2010.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 1:57 pm Painkiller biz grows @20%, pharma industry @14%Non-steroidal anti-inflammatory drugs fly off shelves despite warnings of organ damage.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 1:55 pm Dollar or yen, carry on tradingWith consumption intact and equity returns robust, experts say FIIs cannot but invest.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 1:51 pm IT firms brace for $10bn GM contractsGeneral Motors' proposed IT restructuring is likely to throw up a $10 billion opportunity for Indian IT firms.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 1:51 pm The fine print!DNA speaks to media experts, who says it's not yet dooms day for the print media, at least in India.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 1:49 pm S&P ups IOC outlook to stableBut reaffirms junk rating on oil bonds overhang.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 1:47 pm PSL to commission 2 pipe mills by FebruaryPipe-maker PSL will commission an additional facility each in Chennai and Vizag in a couple of months, its managing director Ashok Punj said.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 1:20 pm Aviation to do its bit in fight against global warmingThe Directorate General of Civil Aviation (DGCA), India's civil aviation regulator, has asked all domestic airlines and airports to create Aviation Environment Cells to address aviation environmental issues.Source: HindustanTimes.com - Top Business News Headlines | 29 Dec 2009 | 1:11 pm No rate hike for six months: SBIIndia Inc can rejoice. State Bank of India chairman OP Bhatt on Tuesday indicated that there will be no increase in interest rates for next six months despite inflationary pressure.Source: India Business News | Business News - Times of India | 29 Dec 2009 | 1:06 pm Ranbaxy sells stake in China JV to HNGRanbaxy Laboratories on Tuesday said it has sold its entire stake in Chinese joint venture, Ranbaxy Ghuangzhou China, to HNG Chembio Pharmacy Co Ltd for an undisclosed amount.Source: India Business News | Business News - Times of India | 29 Dec 2009 | 1:02 pm Economy to grow 7.5%: RangarajanIndian economy will grow between 7% and 7.5% during the current financial year despite poor performance of the agriculture sector on account of drought and floods, said PMEAC chairman C Rangarajan.Source: India Business News | Business News - Times of India | 29 Dec 2009 | 1:00 pm 'IPO scam: Investors must get lost fund'If you had applied in 21 IPOs that opened between 2003 and 2005, and were not allotted even a single share, you could be in line for some windfall gains.Source: India Business News | Business News - Times of India | 29 Dec 2009 | 12:59 pm RIL ED R Ravimohan dies of heart attackR Ravimohan, the man whose name was synonymous with ratings in India, and who was also the face of Crisil till mid-2009, is no more.Source: India Business News | Business News - Times of India | 29 Dec 2009 | 12:58 pm Jindal Power files for IPO to raise Rs 7,200crNaveen Jindal-led Jindal Power on Tuesday said it has filed draft prospectus with market regulator Sebi to raise Rs 7,200 crore through its maiden public issue.Source: India Business News | Business News - Times of India | 29 Dec 2009 | 12:56 pm Plurilateralism and the new world orderLooking back at 2009, pessimistic political economists would probably describe it as the year of the recession while optimists would remember it as the year of the stimulus packages. Similarly, pessimistic strategists would probably describe this year—if not the decade—as a period of the demise of multilateralism and a new world disorder, while optimists would probably call it the time of the rise of plurilateralism and the tentative emergence of a new world order. The pessimists would probably describe it as an orchestra hopelessly out of tune in the absence of a conductor, while the optimists would call it an orchestra warming up and eagerly awaiting a new conductor to begin the recital. In either case, both would agree that this period of transition is neither predictable nor desirable, but will be critical in determining the evolving new world order. While the outcome of this transition still remains uncertain, several characteristics of this period are already evident. First, as one noted American strategist observed, in this period of flux there is also uncertainty about status quo itself. While the old status quo clearly no longer exists, the new order has yet to be established. Thus, as a corollary, countries and leaders can be divided into two categories: those who are desperately seeking to maintain the status quo that existed during the Cold War (particularly the traditionalists in the US and Russia and to a lesser degree the other three unelected members of the United Nations Security Council, or UNSC) and those that are trying to create a new status quo (particularly the pragmatists in countries such as Brazil, India, Indonesia, Mexico, South Africa and to a lesser degree Germany and Japan, all of whom can only be elected to the UNSC for a two-year term). Of course, this is complicated by the fact that both old and new status quo leaders exist, and compete, in almost every country. Second, in the past, the new order was often determined by a rising power challenging an established power through military means. However, the presence of nuclear weapons in the hands of all the established powers and some of the rising powers has rendered the redistribution of power through war almost obsolete. The only option for the challenger is to convince the status quoist to transfer or share power through peaceful means. Thus, China’s assertion that its rise will be peaceful is not a choice, it is the only option that Beijing can exercise. In this context, the India-US nuclear deal is probably the best example of the efforts and challenges in transferring power through peaceful and cooperative means. Also Read | W Pal Sidhu’s Earlier Columns Third, in the absence of war, power can also be sought to be redistributed through negotiated multilateral treaties. However, almost none of the existing multilateral treaties have been particularly effective or flexible in facilitating the peaceful accommodation of an aspirant power into the existing system. In fact, most of the multilateral agreements, such as the Nuclear Non-proliferation Treaty, have ended up reinforcing the old status quo. This is, perhaps, a reason why not a single new multilateral agreement has entered into force in the past decade. It is also unlikely to succeed in the future without the establishment of a new world order. Another alternative would have been to reform the existing institutions of global governance based around the UN system to accommodate the aspirant powers but, with the notable exceptions of the newly created UN Peacebuilding Commission and the Human Rights Commission, this has proved to be impossible. Finally, with multilateralism stymied, bilateral efforts providing mixed results at best and unilateral efforts and declarations challenged by the old status quoist powers, ad hoc plurilateral approaches—when select countries come together address a specific issue—have emerged as the only effective means to manage this period of transition and lay the foundation for a new world order. The best example of this approach is undoubtedly the Group of Twenty (G20) established to address global financial and economic challenges. Can the G20 provide the basis for the new world order? Clearly, the G20 is the most effective instrument of the moment to address the immediate financial and economic crisis. However, there are three serious drawbacks. First, the selection of countries in this grouping is exclusive rather than inclusive and goes against the principles of universality that countries like India have promoted. Second, the G20 is much too unwieldy to manage all global governance and peace and security issues that can only be effectively addressed by a much smaller and select group of no more than four-five countries. Third, while G20 countries are best suited to address the ongoing financial and economic crisis, they are not necessarily the right set of countries to address all other global challenges, such as climate change or cyber security. In fact, it is feasible to think of a set of 20 countries to specifically address each of these issues separately. Thus, an N-20 could address non-proliferation issues while a C-20 could include all the counties critical to tackle climate change and the IT-20 could work together ensure global cyber security. The attractiveness of the plurilateral 20 model is that this can only be temporary groupings to address immediate issues and form the basis for the establishment of the new world order. Eventually, the new world order would have to be underpinned by multilateral treaties and agreements that would have to be freely negotiated and universally binding. W. Pal Sidhu is vice-president of programmes at the EastWest Institute, New York. he writes on strategic affairs every fortnight. Your comments are welcome at borderline@livemint.com Source: LatestNews-Home - Livemint.com | 29 Dec 2009 | 12:45 pm Healthcare sites may see a funding boostMumbai: The nascent healthcare portals industry is up for a funding boost, given its attractiveness for private equity, or PE, and venture capital, or VC, investors, as well as the Unique Identification Number, or UID, project that will collate digital data on the nation’s population.  Web dose: Portals that maintain electronic health records could play a critical role as hospitals invest in improving data management. The Apollo Hospitals group has offered to manage health records through the Nandan Nilekani-led Unique Identification Authority of India. It has also invested in a company called Health Highway that, according to group executives, connects doctors, hospitals and pharmacies who would be able to communicate with each other and access health records. Sangita Reddy, executive director (operations) at Apollo Hospitals, cites the hypothetical case of a car accident victim being rushed to a hospital emergency room. “You could physically identify who that person is but you wouldn’t know his blood group, his allergies or anything about his health,” Reddy says. “Whereas, if his UID number was linked to a UHID (unique healthcare identification number), and there was something called emergency access, you could go into that and identify his complete record. So, there are all kinds of instances as to how we could use this to help save lives and improve quality of care and reduce cost.” Apollo Hospitals has written to the Unique Identification Authority and to the Knowledge Commission to link the Unique Identification Number with health profiles of those provided the ID number, and offered to manage the health records, Business Standard reported in August. Formed this year, the authority under Nilekani, co-founder of software services firm Infosys Technologies Ltd, is tasked with building a database of details on every Indian citizen. “A lot of hospitals are making a fair amount of investment in information technology for improving the efficiency of workflow management and data processing or management,” says Amit Chander, investment head (healthcare and education), Baring Private Equity Partners India Ltd. Healthcare portals that maintain electronic health records will thus play a critical role. The industry is divided into four broad categories: firms that maintain electronic health records such as Yoscare.in and Healthizen.com; those that provide diet, fitness and nutrition counselling such as NutritionVista.com; firms that are focussed on disease management such as Wellinformed.in; and online doctor-patient consultation firms such as Healthcare Magic and online health content firms such as WebMD in the US. Some VC firms that invested in such firms early on include Accel Partners, which put $2.5 million (Rs11.68 crore) in HealthcareMagic in February, and Seedfund, which wagered $1 million on Healthizen.com in January last year. The technology is already in use in Bangalore, where YosCare Technologies has launched smart cards that, when swiped at a hospital, fax the holder’s medical history to the hospital. “We are already in talks with the RTO (road transport organization) in Karnataka to issue Yos smart cards as driving licences,” said Vijaya Verma, founder of YosCare Technologies. Muralidharan Nair, partner (lifesciences practice), Ernst and Young Pvt. Ltd, said healthcare had caught the fancy of many investors given that healthcare reform is going to be big on state governments’ agendas. “Also, in terms of demand assessment there is a lack of credible health information, so to have comprehensive health information and records system would be sought after,” he said, but added that healthcare portals would be an area of interest more for venture capital firms than private equity. PE firms which provide growth capital are more likely to invest in hospitals or diagnostic centres, while VC firms are more likely to invest in technology-driven start-ups that they can associate with from the beginning. “Companies which embrace this model (of maintaining electronic health records) first will be able to build a big brand around it,” says Chander. “Not only will it reduce the problem of data storage but later on when it (the model) is fully developed they can run analytics on the data and use it for preventive measures.” Chander also points out that while the global marketplace is overcrowded, with US-based WebMd and Google Health being key players, India has the option of customizing content for local needs. However, a number of obstacles still remain. Kunal Sinha, founder of Healthcare Magic, which provides patients a 24/7 interface where they can chat live with a doctor, admits that starting off was not easy. “I had to convince doctors to work for a start-up rather than a hospital. They were on my (company’s) payroll. So, right from Day 1, it was capital intensive.” Market and consumer acceptance is another issue. “The need to maintain health records is not immediate and important for people as of now, so it is difficult to educate them and make them aware,” says Anand Anupam, founder of Healthizen, which maintains electronic health records that can be accessed anywhere. Tie-ups with insurance firms, such as the one that HealthCare Magic has with ICICI Lombard General Insurance Co. Ltd, are also critical, since this allows access to a much larger pool. Healthizen provides value-added services such as diet planning or skin care to holders of specific policies of ICICI Lombard and Royal Sundaram Alliance Insurance Co. Ltd. Low Internet penetration is another obstacle, but that is more easily overcome. Chander argues that the mobile phone is to India what the Internet is to the US, and that an application that can be accessed via mobile phones would enable these portals to increase their reach. Source: Home - Livemint.com | 29 Dec 2009 | 12:45 pm The Decade of the Big ILast decades unthinkables become this decades symbols.Source: Business Standard | Front Page Headlines | 29 Dec 2009 | 12:06 pm Policy on ground handling being deferred againMumbai: The civil aviation ministry is set to defer the implementation of a new ground handling policy for the third time in a row. The policy, which has been opposed by domestic private airlines, was to come into force from 1 January. Approved by Parliament on 1 February 2007, the policy seeks to bar private carriers such as Jet Airways (India) Ltd and Kingfisher Airlines Ltd from ground handling at the six metro airports. It envisages ground handling only by subsidiaries of Air India, airport operators and service providers, selected through competitive bidding at the airports of Mumbai, Delhi, Chennai, Bangalore, Hyderabad and Kolkata. “The implementation of the new ground-handling policy would be deferred for now. We will review the policy after inter-ministerial consultations shortly,” civil aviation minister Praful Patel told Mint on Monday. “Private airlines will continue to do self-handling at metro airports.” Loss-making Indian private airlines have been lobbying hard against the policy out of concern that at least 10,000 employees will become jobless and retrenching them would not be an easy option. They would also need to spend three times more if the government implements the policy. Dedicated ground-handling companies have been keenly waiting for the change in policy to grab the business, worth an annual Rs2,000 crore. Air India, one of the leading ground-handling companies in the country, is carrying out its ground operations through a subsidiary, Air Transport Services Ltd, and earns around Rs1,000 crore a year. Ground handling includes general administration, baggage, freight and mail handling, loading and unloading of aircraft and transport of crew, passengers and baggage, fuel and oil handling and catering services. The Federation of Indian Airlines, or FIA, has been fighting against the proposed new policy on behalf of Jet Airways, Kingfisher Airlines, SpiceJet Ltd, Go Airlines (India) Pvt. Ltd (GoAir), Paramount Airways Ltd and InterGlobe Aviation Ltd (IndiGo). “There is no change in our stance,” Jet Airways executive director Saroj K. Datta said. Samyukth Sridharan, chief commercial officer of SpiceJet, said: “Going by the indicative cost given by the ground handlers at metro airports, the cost for private airlines will be at least two to three times more.” “At international airports, the airlines are given the option to either self-handle or to outsource. This leads to competition and brings down the cost. Moreover, why this double standard by allowing only Air India to undertake ground handling?” Sridharan asked. According to a July 2009 report by consulting firm Centre for Asia Pacific Aviation, or Capa, many carriers have raised objections to the policy on grounds that they will lose control over service quality and cannot maintain on-time performance. FIA argued that the airlines should be given the option to carry out the operations themselves or outsource to a dedicated service provider. “If it’s commercially viable, an airline will opt for third party. Or it will handle on its own,” Sridharan said. A senior executive at a low-fare carrier, who did not want to be named, said that a third party was charging Rs3,500 for ground-handling services for landing of a 180-seat plane while self-handling costs Rs1,100. The services offered include ramp management and freight handling. “Whatever one is charging, it should reflect the real cost. We should not be taken for a ride,” the executive added. Not too many of the ground handlers were willing to comment on the policy. “We are here not to compete with airlines, but to cooperate with them. We get work through tenders floated by private and public airports. We can offer cost advantage and quality services with the same staff (as) deployed by the airlines at airports,” said a senior executive at Celebi Ground Handling Inc. of Turkey, which has a presence at the Delhi and Mumbai airports. The executive, who did not want to be identified as he is not authorized to speak to the media, said specialized ground-handling firms can offer better services because they have more advanced equipment and a trained workforce. “We are not averse to competition from airlines. If you look at the prices offered by us at Delhi and Mumbai airports, we are offering lower prices,” he added. According to the Capa report, the US does not have a separate ground-handling industry as airlines themselves take care of these services. In Europe, a European Commission directive says at least two airlines should be allowed to do self-handling at one airport. But there are many ground-handling operators and this competition brought charges down. “The number of (ground-handling) suppliers has increased along with the growth in air transport in general; the prices for ground-handling services have decreased and the quality of services has generally improved,” the report said. At Singapore’s Changi Airport, ground handlers were permitted to commence operations in March 2005, the report noted. Those eyeing the ground-handling business in India include Singapore Airport Terminal Services Ltd, Germany’s GlobeGround Deutschland GmbH, Services Portuguese de Handling, SA, Cambata Aviation Pvt. Ltd, Dubai’s Dnata Group, Menzies Aviation Plc, Jet Air Pvt. Ltd, Jeena and Co. Pvt. Ltd, Taneja Aerospace and Aviation Ltd and the Bird Group of Delhi. Source: LatestNews-Home - Livemint.com | 29 Dec 2009 | 11:48 am Greener fuels to cost moreState-run oil marketing companies (OMCs) say they have approached the government to increase the fuel prices. In April 2005, Delhi, Mumbai, Hyderabad, Kolkata, Chennai and Agra moved to Euro III at an additional cost of 30 paise per litre of petrol and 24 paise for diesel. Petrol currently costs Rs 44.63 a litre in Delhi and Rs 48.76 in Mumbai. Diesel costs Rs 32.87 in Delhi and Rs 36.07 in Mumbai.Source: Business Standard | Front Page Headlines | 29 Dec 2009 | 11:36 am Manappuram aims to raise Rs300 cr through QIP Kochi: Manappuram General Finance and Leasing Ltd, a non-banking financial company and the country’s only listed gold loan institution, will raise Rs300 crore over the next month through qualified institutional placements (QIPs), a senior executive said on Tuesday. At a Saturday meeting to look into fundraising options, the company board favoured the QIP route, chairman and managing director V.P. Nandakumar told Mint. The private placement of equity shares will be made to selected qualified institutional buyers in a month, he added. A QIP is a speedy method of raising capital in which a listed company issues shares, convertible debentures and other securities to qualified institutional buyers. It is being increasingly preferred by cash-strapped Indian companies as it precludes the need to submit any pre-issue filings to market regulators. In case the QIP fails to meet its target, Manappuram would consider a follow-on public issue or further private equity funding, Nandakumar said. Given a compounded annual growth rate (CAGR) of around 60% since fiscal 2007, the 60-year-old company needs funds to meet its capital needs. With a credit book of more than Rs2,300 crore, it has to maintain a capital base of at least 15%, he said. The company saw foreign direct investment of more than Rs170 crore during the last two years through private equity firms Sequoia Capital, India Equity Partners (Hudson Equity Holdings)and AlchemyAshmore, for a combined 35% stake. Manappuram, which went public in 1995 and last week got judicial approval for merging subsidiary Manappuram Finance Tamilnadu Pvt Ltdwith itself with retrospective effect from April 2008, recorded a net profit of Rs18.46 crore for the quarter ended September 2009. The firm, which currently holds 22 tonnes of gold as collateral pledged by borrowers, has targeted business of Rs2,500 crore for the financial year ending March. Source: LatestNews-Home - Livemint.com | 29 Dec 2009 | 11:33 am India, Japan look to ease visa rules to boost tradeNew Delhi: India and Japan agreed to ease visa rules in a year to boost trade between the two countries that are also trying to broaden cooperation in defence and nuclear energy.  Closer ties: Prime Minister Manmohan Singh (right) with his Japanese counterpart Yukio Hatoyama on Tuesday. Kamal Kishore / PTI Japan is among India’s biggest aid donors and bilateral trade has begun picking up in recent years with Tokyo easing sanctions it imposed after India tested a nuclear device in 1998. Both countries are working on a trade agreement but procedural issues such as restrictive visa rules have slowed progress, officials said. “I requested (Japanese) Prime Minister Hatoyama to ensure that Japanese visa system becomes more liberal to enable faster growth of trade, investment and people to people contact,” Prime Minister Manmohan Singh said. Japanese Prime Minister Yukio Hatoyama wrapped up his three-day visit to India on Tuesday. Singh said Hatoyama mentioned “restrictive features” in India’s visa system and he promised to look into it. The two nations have targeted $20 billion (Rs93,400 crore) in trade by next year from more than $12 billion in 2008-09. Hatoyama also offered to consider selling nuclear power technology to India, but called on India to sign the Comprehensive Test Ban Treaty. India has so far rejected the demand for signing CTBT, but a US nuclear accord with India last year reversed more than three decades of US policy barring the sale of nuclear fuel and technology to India since its first atomic test in 1974. Hatoyama said Japan would examine the matter following assurances by Singh that India would not divert any imports from Japan for weapons purposes or to third party countries. The two prime ministers also discussed cooperation in renewable energy, infrastructure projects, security and climate change. Japan and India already hold joint military exercises. The two nations also agreed to work out logistical and funding issues related to the western Dedicated Rail Freight Corridor, aiming to start implementing its first phase next year. The main loan needed for the 900km first phase between Rewari in Haryana and Vadodara in Gujarat is Rs17,700 crore, mainly from Japan. The two countries aim to conclude a deal for the main loan by March, they said in a joint statement. Reuters (‘AP’ and ‘PTI’ contributed to this story.) Source: LatestNews-Home - Livemint.com | 29 Dec 2009 | 11:30 am Andhra plans task force to protect industries from stirHyderabad: The Andhra Pradesh government is creating a dedicated task force to protect industries after business representatives raised concerns over the disruption to industrial production because of the agitations over carving out a separate Telangana state.  State of affairs: Osmania University students demanding the creation of Telangana clash with police in Hyderabad. Chief minister K. Rosaiah made the announcement after a meeting with representatives of industry lobby groups Confederation of Indian Industry (CII) and the Federation of Andhra Pradesh Chambers of Commerce and Industry. Citing examples of projects, orders and investments being cancelled across sectors in Andhra Pradesh on account of deteriorating law and order, Rosaiah said the state may suffer huge losses if the situation worsens. Allaying the apprehensions of CII representatives on organizing their annual partnership summit in Hyderabad in the third week of January, Rosaiah said the state would extend protection for the meet and urged them not to shift the venue to Chennai. He also urged home minister P. Chidambaram and commerce minister Anand Sharma to help protect the state’s industrial and investment atmosphere. Meanwhile, the students’ joint action committee at Osmania University has called for all hotels, restaurants and resorts in the region to cancel New Year celebrations. The all-party Telangana joint action committee had called for a shutdown in the 10 districts of the region on 30 December. Rosaiah postponed a Cabinet meeting that was scheduled for Wednesday on account of the call for the shutdown. Source: LatestNews-Home - Livemint.com | 29 Dec 2009 | 11:21 am Steep fall in retail space supply in 09The year 2009 witnessed a steep fall in fresh supply of retail space. Real estate consultants Cushman & Wakefield in its annual retail report said that supply of new retail space — malls — fell by 60 per cent from the projections made at the beginning of the year.Source: HindustanTimes.com - Top Business News Headlines | 29 Dec 2009 | 11:20 am Dissecting a decade of decouplingAs the decade winds to a close, it’s useful to look back upon it with a view to spot the long-term trends. The most striking thing about this kind of commentary is the sharp difference in tone between the commentators from the West and those from the emerging markets, including India. While the Western press is full of talk about a lost decade, there’s a sense in India that the good times have just begun. To some extent, that difference of perception is the result of the financial crisis, with the developed economies being affected far more than the emerging markets. Also See Varying Returns (Graphics) But that’s not the whole story. If we look back over the past 10 years, there are clear differences between the developed economies and emerging markets that explain the divergence in sentiment. Take the markets first. The chart shows the annualised historical returns, in dollar terms, for the MSCI country indices over the last 10 years. The MSCI G7 index has given an annualized return of -2.4% over the last 10 years. In contrast, the MSCI Emerging Markets index gave an annualised return of 7.55%. Putting your money on MSCI India would have given an annualised return of a very respectable 12.5% in the last decade. Compare that with a negative return—of -2.89% annually—for the MSCI US index. This talk of a lost decade depends very much on where you invested in the last 10 years. Also See Expanding Share (Graphics) Note that it’s not just a matter of geography. The MSCI Taiwan index, for example, gave an annualised return of -2.72%, despite Taiwan being right in the middle of one of the most dynamic regions of the world. Look also at the comparatively tepid return given by the MSCI Singapore index. The action has shifted from the high-growth economies of yesteryear to the new giants such as India, China, Brazil, Russia and Indonesia. It’s also not true that all the developed markets have done badly over the last decade. Look at MSCI Australia, which gave an annualised return of 8.15%, or MSCI Canada, which returned 7.12%. These resource-rich economies have benefited immensely from the growth of the emerging economies, which has fuelled demand for commodities. This decoupling of emerging markets from the developed ones is based on economic fundamentals. It’s not merely the result of a low interest rate environment in the West, which has funnelled money into emerging markets, leading to the formation of market bubbles there. That’s quite clear from the economic data. If we take the International Monetary Fund (IMF) numbers for the gross domestic product (GDP) of developing Asia at current prices and in dollars, the chart shows that it has steadily increased compared with GDP of the G7 advanced nations. The proportion of GDP of developing Asia to that of the G7 has risen from 10.4% in 1999 to an estimated 24.8% in 2009. In purchasing power parity terms, this proportion has risen from 29.8% in 1999 to 55% in 2009. In other words, the increasing returns from emerging markets are based on higher growth there. The rise in US dominance has been accompanied by a decline in the value of the dollar. The US dollar index, which tracks the dollar against a basket of six major currencies, is now at around 78, down from around 102 10 years ago. Interestingly, the fall has not been in a straight line—the dollar strengthened from the mid-1990s to the early 2000s as the Asian crisis led to repatriation of funds to the US. But after reaching a peak of around 120 in March 2002, the dollar fell to a low of around 72 in March 2008, before spiking up again temporarily. According to IMF estimates for 2009, China now accounts for 8.3% of global GDP in current dollars and India 2.2%. That’s a big change from 10 years ago, when China’s share of global GDP was 3.5% and India’s 1.4%. In short, the last decade has shown that emerging markets can grow much faster than the West. Much of the growth, though, has been due to the globalisation of production, services and finance. But the crisis has shown that countries such as India and China can continue to show good growth, except for the couple of quarters that followed the Lehman bust. While Chinese growth has been largely the result of a massive lending programme, decoupling is particularly evident for India, whose stimulus package has been minuscule. Graphics by Paras Jian/Mint Manas Chakravarty takes a weekly look at trends and issues in the financial markets. Your comments are welcome at capitalaccount@livemint.com Source: LatestNews-Home - Livemint.com | 29 Dec 2009 | 11:20 am McLeod’s Uganda deal hurt me: BirlaKolkata: Some three weeks ago, B.K. Birla, chairman of the eponymous business group based in Kolkata, told close friends that his Jay Shree Tea and Industries Ltd had reached an agreement to acquire six tea gardens in Uganda from the London-based Finlays Group. The tea industry was surprised when, on 23 December, the Khaitan family-owned McLeod Russel India Ltd trumped the BK Birla group with an announcement that it had concluded a deal to acquire James Finlay (Uganda) Ltd for $30 million (Rs140 crore). “It’s a coup of sorts,” said a tea industry official close to Birla on hearing the news. “The Khaitans swung the deal in their favour in the past 15 days,” he added, speaking on condition of anonymity. It was the first time that the B.K. Birla and Khaitan families, which run among the most respected tea businesses in India, had competed with each other in making an acquisition. They hadn’t done so in the past because McLeod Russel chairman B.M. Khaitan is a director of Jay Shree. The Uganda deal could be the start of more competition as both groups pursue tea assets in Africa. “Drafts of the legal agreement had been exchanged and Jay Shree had even made an advance payment for the gardens,” Birla said in an interview. At that point, McLeod Russel raised its bid and snapped up the gardens, according to Birla. “It hurt me,” Birla said. “But no one is at fault—strictly speaking, a deal isn’t closed unless it is signed.” James Finlay officials weren’t immediately available for comment. “B.M. Khaitan is an old friend—a very good friend; I know him for the last 50 years,” Birla said. “But business is business—such things happen in business.” B.M. Khaitan’s son and McLeod Russel’s managing director Aditya Khaitan said the Finlays Group wasn’t ever in a hurry to sell its tea estates in Uganda. “We have been working on this deal for the past 18 months… I think they had a figure in their mind, which we offered and they agreed to sell,” he said. The six tea estates have a combined production capacity of 15 million kg. This could be expanded to 20 million kg over the next five years, according to Khaitan. James Finlay (Uganda) has 3,500 ha under cultivation and five tea processing factories. “We’re a long-term player,” Aditya Khaitan said. “When valuing an asset we consider its strategic importance, and if we feel that we couldn’t afford to lose it, we pay a premium to make sure we get it.” With the acquisition in Uganda, McLeod Russel shored up its production capacity to 96 million kg a year. It was the company’s second acquisition in Africa—its first was in Rwanda, which it announced in August. Although the Rwandan government, which is divesting itself of tea garden assets, has since cancelled the sale to McLeod Russel, the tea industry in India expects Aditya Khaitan to “sort things out within a month or so”, according to the tea industry official cited earlier. The BK Birla group has interests in cement, textiles, chemicals, tyres and tea. It is one of the biggest industrial groups based in Kolkata. The BM Khaitan group’s interests include tea, engineering and batteries. Besides being the biggest producer of tea in the world, it is one of the biggest manufacturers of batteries; it owns the Eveready brand in India, which it acquired from Union Carbide Corp. All the group’s businesses were acquired. Birla expects more competition with McLeod Russel going forward. Both Jay Shree and McLeod are keen to expand in Africa, and “more assets are on the block”, particularly in countries such as Kenya and Uganda, he said. Competition does not, however, “make any difference to (his) friendship with B.M. Khaitan”, Birla added. “I have, however, told my people to be more careful from next time.” Source: LatestNews-Home - Livemint.com | 29 Dec 2009 | 11:20 am Zee nod for merger of ETC NetworksZee Entertainment Enterprises Ltd (ZEEL) has announced it will swap 10 of its shares for every 11 held in the ETC Network to merge the subsidiary with itself.Source: HindustanTimes.com - Top Business News Headlines | 29 Dec 2009 | 11:18 am Nokia charges Apple with patent infringementsThe seven Nokia patents in this complaint relate to Nokia's pioneering innovations that are now being used by Apple to create key features, the company said in a statement issued in Finland.Source: HindustanTimes.com - Top Business News Headlines | 29 Dec 2009 | 11:17 am Ranbaxy exits from China ventureRanbaxy Laboratories has sold its entire stake in Chinese joint venture — Ranbaxy Guangzhou China Ltd (RGCL) — to HNG Chembio Pharmacy Co Ltd for an undisclosed amount.Source: HindustanTimes.com - Top Business News Headlines | 29 Dec 2009 | 11:15 am RBI focus shifts from growth to inflation worriesA month before the scheduled policy review by the Reserve Bank of India, Deputy Governor Shyamala Gopinath said that the focus of the central bank is on managing the recovery and on containment of inflation rather than fostering growth.Source: HindustanTimes.com - Top Business News Headlines | 29 Dec 2009 | 11:07 am Sumitomo may return to India if Japanese firms increase presenceTokyo: Sumitomo Mitsui Financial Group will consider investing in financial firms across Asia, as it looks to double the proportion of gross profit generated overseas in the next few years, the head of Japan’s No. 3 bank said.  Asia focus: Sumitomo Mitsui’s Teisuke Kitayama says the bank wants to double the overseas proportion of its gross banking profit. Akio Kon/Bloomberg “Considering that Asia’s domestic demand is comparatively strong and that we are seeking that growth, we are organically investing our own assets and people there. However, it is necessary for us to consider inorganic investment as well,” Kitayama said. “Centring on Asia, we would like to boost the overseas proportion of our gross banking profit from about 15% now to 25-30% in the next three to five years.” Gross banking profit is the widest measure of earnings used by Japanese banks, before stripping out personnel costs, trading losses and bad loan costs. In the April-September first half, Sumitomo Mitsui’s gross banking profit totalled 719.3 billion yen (Rs36, 634 crore today), with the overseas business contributing just 84.2 billion yen, or 11.7%. Sumitomo Mitsui, which last year paid about $1 billion (Rs4,670 crore) for a 2% stake in Britain’s Barclays Plc, also holds a 15% stake in Vietnam’s Eximbank, which debuted on the Ho Chi Minh Stock Exchange in October. Elsewhere in Asia, it holds a small stake in South Korea’s KB Financial Group and has signed a strategic alliance agreement with Hong Kong’s Bank of East Asia Ltd. Sumitomo Mitsui could consider returning to India if more Japanese firms do business in that country. The bank all but closed its operation there in 2005, leaving a “Japan desk” in the New Delhi office of Standard Chartered Plc. “If Japanese companies advance more into India, it may be necessary to consider a return, with one or two branches,” he said. Critically, Kitayama said the bank has yet to make a decision about issuing more capital in the coming year. Analysts say that Sumitomo Mitsui and its larger rival, Mizuho Financial Group, are currently among the worst capitalized banks in Asia. Goldman Sachs has estimated that the two may need to raise a combined 2.7 trillion yen to meet new global regulatory standards scheduled to be announced next year. Mitsubishi UFJ Financial Group, Japan’s top bank, beat its rivals to the market by announcing a 1 trillion yen share sale earlier this year, in order to meet the stricter requirements. Japanese banks have taken a drubbing from investors this year, hit by concerns about fundraising. Shares of Sumitomo Mitsui are down 27.4% this year, compared with a 21% decline in Tokyo’s banking index. feedback@livemint.com Source: World Business - Livemint.com | 29 Dec 2009 | 10:03 am Great Eastern Shipping unit contracts to sell vesselsGreatship's fleet has 17 vessels, including two jack-up rigs, while it has a new building order book of 11 vessels, it said in the statement.Source: Daily News & Analysis: Money News | 29 Dec 2009 | 9:26 am Secret code used to protect most of the world’s cellphone calls is divulgedBerlin: A German computer engineer said on Monday that he had deciphered and published the secret code used to encrypt most of the world’s digital mobile phone calls, saying it was his attempt to expose weaknesses in the security of global wireless systems. The action by the encryption expert, Karsten Nohl, aimed to question the effectiveness of the 21-year-old GSM algorithm, a code developed in 1988 and still used to protect the privacy of 80% of mobile calls worldwide. (The abbreviation stands for global system for mobile communication.) “This shows that existing GSM security is inadequate,” Nohl, 28, told around 600 people attending the Chaos Communication Congress, a four-day conference of computer hackers that runs through Wednesday in Berlin. “We are trying to push operators to adopt better security measures for mobile phone calls.” The GSM association, the industry group based in London that devised the algorithm and represents wireless companies, called Nohl’s efforts illegal and said they overstated the security threat to wireless calls. “This is theoretically possible but practically unlikely,” said Claire Cranton, an association spokeswoman. She said no one else had broken the code since its adoption. “What he is doing would be illegal in Britain and the United States. To do this while supposedly being concerned about privacy is beyond me.”  Privacy concerns:People talking on cellphones in India. The GSM association, the industry group based in London that represents wireless firms, said the security threat to wireless calls has been overstated. Hemant Mishra / Mint Some security experts disagreed. While the disclosure does not by itself threaten the security of voice data, one analyst said companies and governmental organizations should take the same steps to ensure the security of their wireless conversations as they do with antivirus software for computer files. “Organizations must now take this threat seriously and assume that within six months their organizations will be at risk unless they have adequate measures in place to secure their mobile phone calls,” said Stan Schatt, a vice-president for healthcare and security at the technology market researcher ABI Research in New York. Nohl, who has a doctorate in computer engineering from the University of Virginia, is a widely consulted encryption expert who waged a similar campaign this year that prodded the DECT Forum, a standards group based in Bern, to upgrade the security algorithm for 800 million cordless home phones. Nohl has now set his sights on GSM, whose second generation digital technology is still the most widely-used wireless-communications standard in the world. Around 3.5 billion of the world’s 4.3 billion wireless connections use GSM; it is used by around 299 million consumers in North America. In August, at a hackers’ forum in Amsterdam, Nohl challenged other computer hackers to help him crack the GSM code. He said around 24 people, some members of the Chaos Computer Club, which is based in Berlin, worked independently to generate the necessary volume of random combinations until they reproduced the GSM algorithm’s code book—a vast log of binary codes that could theoretically be used to decipher GSM phone calls. During an interview, Nohl said he took precautions to remain within legal boundaries, emphasizing that his efforts to crack the GSM algorithm were purely academic, kept within the public domain, and that the information was not used to decipher a digital call. “We are not recommending people use this information to break the law,” Nohl said. “What we are doing is trying to goad the world’s wireless operators to use better security.” Nohl said the algorithm’s code book was available on the Internet through services such as BitTorrent, which some people use to download vast quantities of data like films and music. He declined to provide a Web link to the code book, for fear of the legal implications, but said its location had spread by word of mouth. The GSM algorithm, technically known as the A5/1 privacy algorithm, is a binary code—which is made exclusively of 0’s and 1’s—that has kept digital phone conversations private since the GSM standard was adopted in 1988. But the A5/1 algorithm is a 64-bit binary code, the modern standard at the time it was developed, but simpler than the 128-bit codes used today to encrypt calls on third-generation networks. The new codes have twice as many 0’s and 1’s. In 2007, the GSM association developed a 128-bit successor to the A5/1, called the A5/3 encryption algorithm, but most network operators have not yet invested to make the security upgrade. The encryption key itself does not enable surveillance of mobile calls, which must still be overheard and identified from the digital stream of thousands of calls transmitted through a single cellphone station. The undertaking is complex because a digital call typically hops among up to 60 different broadcast frequencies during a single conversation, as the mobile network operator maximizes the use of its available bandwidth. In a statement, the GSM association said efforts to crack the algorithm were more complex than critics have asserted, and that operators, by simply modifying the existing algorithm, could thwart any unintended surveillance. The group said that hackers intent on illegal eavesdropping would need a radio receiver system and signal processing software to process raw radio data, much of which is copyrighted. But Nohl, during a presentation on Sunday to attendees at the Berlin conference, said the hardware and software needed for digital surveillance were available free as an open-source product in which the coding is available for individuals to tailor to their needs. Simon Bransfield-Garth, the chief executive of Cellcrypt, a company based in London that sells software, said Nohl’s efforts could put sophisticated mobile interception technology—limited to governments and intelligence agencies—within the reach of “any reasonable well-funded criminal organization.” “This will reduce the time to break a GSM call from weeks to hours,” Bransfield-Garth said during an interview. “We expect as this further develops it will be reduced to minutes.” ©2009/The new york times feedback@livemint.com Source: Tech News - Livemint.com | 29 Dec 2009 | 8:59 am Audi plans $10.5 bn investments through 2012Frankfurt: Audi AG said Monday it plans to spend €7.3 billion ($10.51 billion) on plant upgrades, new products and technology research as it moves to expand its business worldwide and increase market share. Audi, based in Ingolstadt, and a unit of Volkswagen AG, said it plans to spend the amount from 2009 to 2012 and will increase the number of models from its current 34 to a planned 42 by 2015. Of that, around €5.9 billion will go toward new products and future technologies, or about 80% of its planned spending. “With our planned investments in new products and mobility concepts, for example electric propulsion, we are creating a basis for our company’s future growth,” said Axel Strotbek, who oversees finance and organization at the company. Investors agreed, pushing Audi shares up nearly 4.2% to €500 in Frankfurt trading. To that end, the company also wants to expand its model line, adding the A1, A7, A8 and R8 Spyder to its production portfolio in 2010, along with the Q5 Hybrid, slated to reach the market in the beginning of 2011. “We will be in a position to finance all our planned investments from our operative cash flow,” Strotbek said. The car maker plans to spend heavily at its German plants, parsing out €3.8 billion to its Ingolstadt and Neckarsulm plants from this year through 2012. Some €2.5 billion will be invested at Ingolstadt, including a new transmission and emission center, along with production of the A1. Another €1.3 billion will be spent at Neckarsulm for production of the A6, A7 and A8 models. Source: World Business - Livemint.com | 29 Dec 2009 | 4:56 am
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