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How will FMCG, IT biz perform in 2010?In an interview with CNBCTV18, Harish Manwani, Chairman of Unilever (HUL) and Mark Foster, Group Chief Executive of Accenture, give a pan industry view of how business is planning in these uncertain times.Source: Moneycontrol Top Headlines | 30 Jan 2010 | 7:00 am Miramax Films shut down by Disney!Miramax Films, the art-house production company that produced Oscar winners such as "Shakespeare in Love", "The Piano" and "Chicago", has been closed down by the Walt Disney Company, the Los Angeles Times reported Friday.Source: Zee News : Business | 30 Jan 2010 | 5:57 am US stocks decline as tech sector overshadows positive GDP report!US stocks fell Friday, capping the Dow Jones Industrial Average`s worst month in nearly a year, despite government figures showing the economy grew at its fastest pace in six years last quarter.Source: Zee News : Business | 30 Jan 2010 | 5:57 am Honda recalls 646,000 Jazz/Fit, City cars globally !Honda Motor Co said on Friday it would recall a total 646,000 units of the Fit/Jazz and City models globally, including 140,000 in the US.Source: Zee News : Business | 30 Jan 2010 | 5:57 am ONGC bids for Venezuela oil block!Oil and Natural Gas Corp (ONGC) has bid for Venezuela`s Carabobo oil auction along with Spain`s Repsol YPF SA and Petroliam Nasional Bhd of Malaysia.Source: Zee News : Business | 30 Jan 2010 | 5:57 am US eco grows fastest in 6 yrs, Obama unveils jobs package !President Barack Obama unveiled a $33 billion package of tax cuts to coax small businesses into hiring workers as he underscored his commitment to pushing job creation to the top of his agenda.Source: Zee News : Business | 30 Jan 2010 | 5:57 am Apollo Tyres to hike prices in March quarterApollo Tyres plans to raise tyre prices in the March quarter to maintain profit margins as raw material costs rise, a top official said on Friday.Source: Moneycontrol Top Headlines | 30 Jan 2010 | 4:44 am GMR Infra to bring all road units under one umbrellaGMR Infrastructure plans to consolidate its various units for roads business under a separate holding company to help raise funds for projects, the company said on Friday.Source: Moneycontrol Top Headlines | 30 Jan 2010 | 4:00 am Tata Motors turns corner with Rs 400 crore profit - mydigitalfc.com
Source: Business - Google News | 30 Jan 2010 | 2:51 am Sensex tumbles by another 3 per cent during the weekIn high volatility, the Bombay Stock Exchange benchmark Sensex tumbled by 502 points, or 3 per cent, this week on heavy selling after fears of tightening of monetary policy and regulations for US banks to invest in equities.Source: HindustanTimes.com - Top Business News Headlines | 30 Jan 2010 | 2:48 am Impact of CRR hike on lending rates Experts discuss - Moneycontrol.com
Source: Business - Google News | 30 Jan 2010 | 2:26 am Honda to recall over 8,000 units of sedan City in IndiaHonda Siel Cars India on Saturday said it will recall over 8,000 units of sedan 'City' in the country due to defective power window switches as part of a global recall.Source: India Business News | Business News - Times of India | 30 Jan 2010 | 2:20 am Sensex tumbles by another 3% during the weekSensex tumbled by 502 points, or 3%, this week on heavy selling after fears of tightening of monetary policy and regulations for US banks to invest in equities.Source: India Business News | Business News - Times of India | 30 Jan 2010 | 2:18 am JK Bank Q3 net rises 19% to Rs 139 cr - Economic Times
Source: Business - Google News | 30 Jan 2010 | 2:02 am 9 stocks that buzzed this week, how to trade them ahead - Moneycontrol.com
Source: Business - Google News | 30 Jan 2010 | 1:50 am 3G auction unlikely this fiscalThe Government is set to lose Rs 35,000 crore this fiscal as the auction for 3G spectrum is likely to be postponed to the next financialSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am RBI raises cash reserve ratio to curb inflationThe Reserve Bank of India on Friday expedited reversing its crisis-driven accommodative monetary stance over concerns that the rapidly rising food inflation may start to affect other commodities andSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am Tata Chem investing Rs 3,500 cr to double urea capacityTata Chemicals will invest Rs 3,500 crore to double its urea production capacity to 2.4 million tonnes at Babrala, UttarSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am This hike is best, says SubbaraoThe Reserve Bank of India Governor, Dr D. Subbarao, defended the move to go in for 75 basis points hike in cash reserve ratio (CRR), stating that this quantum was the best at the current point ofSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am More than expected, less than neededIf one may misquote Winston Churchill, where India's Monetary Policy is concerned, never have so few been told by so many what to do. Little wonder that in trying to please everyone, the Reserve Bank of India (RBI) has fallen a bit short of whatSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am It is flight to safety for airline companiesThe third quarter numbers published by airlines have revived hopes that these companies aren't too far from a financialSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am Bankers to hold interest rates for next six monthsBankers said they will not hike interest rates for six months despite the hike in the Cash ReserveSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am CSO works out 2008-09 GDP growth as 6.7%Indian economy grew 6.7 per cent in 2008-09, the Central Statistical Organisation (CSO) said in its latest update on GDPSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am Blockbuster third quarter for multiplexesThe smiles are back on the faces of multiplex operators thanks to a buoyant third quarter. This has largely been propelled by a good line-up of movies and higher ticketSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am Markets this weekBourses plunges further on Monday as auto major, Mahindra & Mahindra posted lower than expected profit, thus underscoring the valuations. It was followed by ICICI Bank on concerns over tightening of monetary policy by RBI later this week. TheSource: Business Line - Home Page | 30 Jan 2010 | 12:00 am Want news about Apollo Tyres to land in your mailbox? - Moneycontrol.com
Source: Business - Google News | 29 Jan 2010 | 11:50 pm GMR Infra to bring all road units under one umbrella - Moneycontrol.com
Source: Business - Google News | 29 Jan 2010 | 11:40 pm Mercedes S 500L: The Beautiful Beast in IndiaA car that reads speed limit signs, one that lets you adjust the suspension's ride height to the road - this is not sci-fi but the new Merc S-class and it's made in India ...Source: India Business News | Business News - Times of India | 29 Jan 2010 | 11:31 pm India 3G auction likely to get delayed by 6 months - Reuters India
Source: Business - Google News | 29 Jan 2010 | 10:24 pm Toyota chief apologises for massive vehicle recallToyota's president has apologised for the recall of millions of cars around the world due to faulty accelerator pedals, in a setback that has tarnished the Japanese giant's reputation for quality.Source: HindustanTimes.com - Top Business News Headlines | 29 Jan 2010 | 10:12 pm Tata Motors delivers over 17,000 units of NanoTata Motors has delivered over 17,000 units of Nano till December 31, a top company official said today.Source: India Business News | Business News - Times of India | 29 Jan 2010 | 10:02 pm Toyota head apologises for huge recall - Japan's NHKTOKYO (Reuters) - Toyota Motor Corp's president, Akio Toyoda, has apologised for a recall of millions of the top automaker's vehicles around the world, Japanese broadcaster NHK said on Saturday.Source: Reuters: Money News | 29 Jan 2010 | 8:05 pm FACTBOX - Toyota case among largest U.S. recallsWASHINGTON (Reuters) - Toyota Motor Corp has issued a string of recalls in the U.S. covering 5.6 million Toyota and Lexus vehicles for problems linked to sudden acceleration.Source: Reuters: Money News | 29 Jan 2010 | 6:49 pm Toyota may resume U.S. sales in three weeks -sourcesDETROIT (Reuters) - Toyota Motor Corp plans to resume sales of eight recalled models including the top-selling Camry as soon as the third week of February, said three sources briefed on plans by the world's largest automaker.Source: Reuters: Money News | 29 Jan 2010 | 6:47 pm Rivals take aim at Toyota customers amid recallDETROIT/FRANKFURT (Reuters) - Toyota Motor Corp's largest rivals are declaring open season on the automaker at a time when the industry leader is seen as most vulnerable in its largest market.Source: Reuters: Money News | 29 Jan 2010 | 6:46 pm PM to ink 9 pacts in Riyadh visit - Times of India
Source: Business - Google News | 29 Jan 2010 | 3:23 pm U.S. Q4 economic growth fastest in six yearsWASHINGTON (Reuters) - The U.S. economy grew at its fastest pace in more than six years in the fourth quarter, surprising economists, as businesses curbed their aggressive cut in stocks and stepped up spending.Source: Reuters: Money News | 29 Jan 2010 | 3:05 pm Accelerator pedals supplier fixes faulty pedal - Economic Times
Source: Business - Google News | 29 Jan 2010 | 2:38 pm Toyota recall remedy 'very soon', second hearing setWASHINGTON (Reuters) - Toyota Motor Corp is close to announcing a remedy for accelerator-related problems that have triggered massive recalls, halted production and sales, and triggered two congressional investigations.Source: Reuters: Money News | 29 Jan 2010 | 2:34 pm Blackstone CEO says likes India a lot - CNBC* CEO says amount of money available to borrow for private equity deals has doubled from year ago - CNBCSource: Reuters: Money News | 29 Jan 2010 | 2:24 pm DoT postpones 3G auction to 2010-11The telecom ministry postponed the auction of 3G spectrumm to the next financial year (2010-11), which was expected to generate Rs 35,000 crore for the exchequer.Source: India Business News | Business News - Times of India | 29 Jan 2010 | 1:25 pm Growth at 7.5%, inflation 8.5%: RBIThere is a shift in RBI's monetary policy stance to managing the revival of the economy from managing the crisis. In its review on Friday, the central bank accepted a 7.5% growth with 8.5% inflation.Source: India Business News | Business News - Times of India | 29 Jan 2010 | 1:23 pm Results | Deccan Chronicle net up threefold at Rs77.7 crNew Delhi: Riding on the back of lower operating costs as well as rationalization of newsprint prices during the quarter, Hyderabad based Deccan Chronicle Holdings Ltd has reported a threefold increase in its net profit for the quarter ended 31 December at Rs77.67 crore from Rs25.67 crore a year ago. Net sales rose 8.71% to Rs233.37 crore, compared with Rs214.70 crore in the year-ago period. Operating profits stood at Rs112.67 crore, up by 174.14% from Rs41.10 crore in the same quarter last year. —Ishita Russell ********* PVR’s profit surges 64% to Rs7.37 cr New Delhi: Buoyed by successful movie releases during the quarter, movie cinema chain PVR Ltd announced a 64% rise in its net profit for the quarter ended 31 December at Rs7.37 crore, up from Rs4.5 crore in the year-ago period. The increase in average ticket price from Rs145 in the previous quarter to Rs159 helped the company record a 27% increase in its net revenues to stand at Rs114.28 crore as compared to Rs89.65 crore in the same quarter last fiscal. —Ishita Russell ********* Omaxe profit jumps 383% to Rs28.46 cr New Delhi: Delhi-based real estate developer Omaxe Ltd on Friday reported a 383% increase in its net profit for the third quarter ended December at Rs28.46 crore, compared with Rs5.88 crore during the year-ago quarter. The company’s revenue during the period increased 55% to Rs280.20 crore, compared to Rs180.42 crore during the same quarter last fiscal. —Shabana Hussain ********* Reliance Power’s profit rises 26.5% to Rs133.7 cr Mumbai: Reliance Power Ltd on Friday reported profit of Rs133.65 crore and total income of Rs179.16 crore for the quarter ended December 2009. The earnings were derived entirely from so-called ‘other income’ as the company has not yet commissioned its first power plant in Dadri. ‘Other income’ refers to income from sources that are not part of a firm’s core business. The profit was a 26.47% increase from Rs105.68 crore in the corresponding period last fiscal. Total income grew 36.4% from Rs131.31 crore in 2008, driven by other incomes such as interest received on investments and deposits. Meanwhile, Reliance Natural Resources Ltd announced a nearly flat profit of Rs25 crore on revenues of Rs82.29 crore, again buoyed by ‘other income’. —Bhuma Shrivastava ********* Aditya Birla Nuvo posts profit of Rs8.2 cr Mumbai: Aditya Birla Nuvo Ltd, the holding company of the financial services, fertilizers, garments, telecom and business process outsourcing operations of the Aditya Birla Group on Friday reported a profit of Rs8.2 crore in the quarter ending December 2009. It had a loss of Rs156.4 crore in the corresponding period last fiscal. —Joel Rebello Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 1:23 pm Markets recover on 7.5% GDP outlookInitially spooked by a 75 basis points hike in CRR, the stock markets recovered smartly in afternoon trade as it became clear that the hike was unlikely to lead to any increase in rates.Source: India Business News | Business News - Times of India | 29 Jan 2010 | 1:21 pm 'No worry, stick to investment plans'RBI's liquidity tightening measure of hiking CRR, or percentage of deposits banks have to keep in cash, doesn't warrant any immediate change in their investment strategy be it in debt or equity.Source: India Business News | Business News - Times of India | 29 Jan 2010 | 1:20 pm Tata Motors back in blackTata Motors reported a net profit of Rs 400 crore in the third quarter ending December 2009 as against a loss of Rs 263 crore in the corresponding period last year.Source: India Business News | Business News - Times of India | 29 Jan 2010 | 1:17 pm Wipro ups salary, booster for ITWipro has just handed out salary increments to all its employees. With effect from February 1, employees will get a pay hike in the 8% to 12% range with some even getting a 15% increase.Source: India Business News | Business News - Times of India | 29 Jan 2010 | 1:16 pm Markets | Aqua Logistics extends IPO offer period to 2 FebMumbai: Aqua Logistics Ltd extended the offer period for its initial public offering (IPO) to 2 February and lowered the price band for the shares to Rs200-225, according to a statement on the National Stock Exchange. The firm had initially proposed to end the IPO offer period on Thursday, and had offered the shares for Rs220-230 each. —Bloomberg ********* New currency futures pairs from 1 Feb Mumbai: Beginning Monday, the National Stock Exchange and MCX Stock Exchange will launch futures trading in three new currency pairs: euro-rupee, pound sterling-rupee, and Japanese yen-rupee. Currency futures have until recently been available in dollar-rupee. The Reserve Bank of India and Securities and Exchange Board of India on 19 January allowed trading in the new currency pairs. —Anirudh Laskar Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 1:14 pm More equity infusion for Air India soonNew Delhi: After the initial Rs800 crore bailout for Air India, civil aviation minister Praful Patel on Friday said the government would infuse more equity in the national carrier in the near future. “The government is committed to equity infusion in Air India. Rs800 crore has already been infused. More money will be coming in the near future,” Patel said. He said a group of ministers, headed by finance minister Pranab Mukherjee, would meet on 3 February to decide on further equity. “I can’t give any commitment until we have a decision,” he said. Patel dismissed as “completely baseless” the reports that the government was considering undoing the merger of Air India and erstwhile Indian Airlines. feedback@livemint.com Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 1:08 pm Prometric offers CAT retest on 30-31 JanuaryNew Delhi: Prometric Testing Pvt. Ltd has said it will offer a retest to 10,500 candidates on 30-31 January as part of phase II of Common Admission Test (CAT) 2009. These candidates include those who could not sit for the exam at all, those who got more than their fair share of time and those who had a less-than-satisfactory test experience.  Take two: Students at an online CAT exam centre. Bachchan Kumar / HT In an emailed reply to Mint, Prometric said 40% of the candidates being offered a retest had not been able to take the test during the 11-day testing window due to cancellation of the test. “Another 400 candidates, who experienced significant disruptions, had received more than 140 minutes. These candidates may have had an unfair advantage over other candidates, and their original results will be nullified. These candidates must appear for the second phase, in order to receive a valid score,” the company said. It said of the 216,000 candidates who successfully completed their test, 6,000 may have received a less than satisfactory testing experience. “The IIMs and Prometric agreed that these candidates be given the opportunity to retest in the interest of fairness,” the firm said. “For these candidates, the phase II retake is strictly optional.” aparna.k@livemint.com Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 1:03 pm 3G auction may be postponed to next fiscalNew Delhi: The government may postpone the auction of radio spectrum for third-generation (3G) telephony, expected to add Rs35,000 crore to the exchequer, to the fiscal year starting 1 April.  Waiting game: The auction may take place in Aug-Sep, around the same time the defence ministry had agreed to vacate spectrum. Hemant Mishra / Mint Telecom minister A. Raja could not be contacted immediately for his comments. Officials, however, said that the auction was expected to take place in August-September. It is pertinent to mention that the ministry of defence had agreed to vacate the spectrum only during the middle of 2010. The eGoM, headed by finance minister Pranab Mukherjee, had decided to allow four private telecom firms for 3G services and had made a provision for garnering up to Rs35,000 crore from the sale of airwaves in the current fiscal. The postponement of 3G spectrum auction to 2010-11 is likely to have some adverse impact on the government’s finances and fiscal deficit, which is pegged at 6.8% of the gross domestic product. feedback@livemint.com Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 12:52 pm Interest rates to stay putBorrowers can breathe easy. Loans are unlikely to get costlier, at least in the next three months. The Reserve Bank of India on Friday kept interest rates on hold, but announced measures to draw off excess money from the system to tame prices.Source: HindustanTimes.com - Top Business News Headlines | 29 Jan 2010 | 12:48 pm Lounge podcast | Of literature, luge and rustic noir Hi, welcome to the twelfth edition of the Lounge podcast. We really can’t start on an upbeat mood today because the author J.D Salinger, creator of the unforgettable “Holden” character, died last night. The famously reclusive author was 91 years old and he died of natural causes but it’s still such depressing news. I’ve rounded up a few of my favourites amongst the obituaries and tribute pieces floating all over the internet: 1. You have to read the interview with American publisher Robert Giroux in Paris Review. Giroux famously quit Harcourt after his bosses refused to publish Salinger’s Catcher in the Rye ( Yes they had it first!) 2. While the New York Times obituary itself is a good read, the Times also have a very endearing feature titled Of Teen Angst and an Author’s Alienation. 3. Of course, you have to read this short piece in The Onion. Moving on, for more on the literary side of things, we have our book critic Chandrahas Choudhury give us a wrap up of the Jaipur Literature Festival that concluded earlier this week. Film critic Anupama Chopra joins as a guest on the Lounge podcast to give us her take on the latest from Vishal Bharadwaj’s stable—Ishqiya. And finally, to round up, Seema Chowdhry who is the author of this week’s cover story on the Winter Olympics, interviews India’s luge champion—Shiva Keshavan. Seema writes of the three Indian entries to the Winter Olympics—Slalom, cross-country skiing and luge. We focus on luge as we have the luge champ Shiva Keshavan join us in our studio. He holds the world record for being the youngest luge participant: He was 16 when he started! This is the fourth time that he will take part in the Winter Olympics. Listen on as he talks about his experiences at past events and what keeps him going. We love to hear from you so do write to us at feedback@livemint.com Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 12:45 pm The trouble with the must-read book Like so many others, I dutifully buy the must-read novel or non-fiction best-seller of the moment and bring it home. The hapless book usually spends the first few weeks on my bedside table, bearing silent testimony to my shameful lack of interest, until condemned to obscurity on an overcrowded shelf. There it remains gathering dust, unless briefly rescued in a fit of boredom or guilt, only to be returned unread to its original state of neglect. There are books we love or loathe, and those we just can’t “get into”. A book’s literary merit is often a matter of lively debate, but can usually be settled by appealing to a set of shared, if not objective, standards. Most of us can agree on what constitutes good writing most of the time. “Readability”, however, is entirely subjective, as the far-too-many orphans on my bookshelf reveal. Here are some of the reasons why I have thus far failed to read some (okay, far too many) of the books that I own despite my best intentions and efforts.  Unputdownable? Márquez. Read the wrong review: I don’t much agree with Thomas Friedman’s world view, but picked up The Earth is Flat in a fit of journalistic duty, which dissipated the moment I read Matt Taibbi’s hilariously scathing review in The New York Observer. Describing the book as “the worst, most boring kind of middlebrow horseshit”, Taibbi concluded, “Four hundred and 73 pages of this, folks. Is there no God?” I never got around to reading the book. Dead children: My greatest guilty pleasure is a well-written crime novel with a clever plot and plenty of blood and gore. I couldn’t wait to devour Child 44 by Tom Rob Smith, described by a The Times of London blurb as a “stylish, intelligent and gripping Cold War thriller” shortlisted for the Man Booker prize. Seventeen pages and one dead child later, I made the embarrassing discovery that motherhood has rendered me incapable of reading anything that involves children being killed, raped or abused. This is silly, irrational and thus far irremediable. Seen the movie: Watching a movie based on a favourite novel can be hazardous business, but I’m inevitably seduced by the prospect of seeing imaginary characters and locales come to life. I seem oddly incapable, however, of doing it the other way around. The Hours (Michael Cunningham) and The Namesake (Jhumpa Lahiri) were excellent movies, but I regret not having read the books first. Each time I pick up either, my inner child whines, “But I already know how it ends.” Then there are the many books by authors I usually enjoy or those recommended by friends that remain unread for reasons that defy explanation: Quicksilver, Neal Stephenson; Middlesex, Jeffrey Euginedes;Persepolis, Marjane Satrapi; Death of Vishnu, Manil Suri; Memories of My Melancholy Whores, Gabriel García Márquez, among others. I may never do right by them, but their presence serves as a useful reminder of the idiosyncratic, mysterious, yet unreliable connection between us and the written word. Critics, awards, best-seller lists be damned, we read what we read. Write to Lakshmi at postscript@livemint.com Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 12:45 pm Snake charmers and cinemascopeThis is a book for scholars, cinephiles, Indophiles and travellers. Over 250 pages of annotated text—essays that belong to discerning film journals—are dressed with rare film stills, screen grabs and tear-sheet film posters. In Outsider Films on India 1950-1990, a book that hovers precariously between a pocket art book and a coffee-table treatise, 11 essays discuss films ranging from Jean Renoir’s The River (1951) to Fritz Lang’s commercial opus, Journey to the Lost City (1959). The vision of global film-makers such as Louis Malle, Pier Paolo Pasolini, Marguerite Duras and Roberto Rossellini, who filmed in India in the mid-20th century, are carefully deconstructed.  Outsider Films on India (1950-1990): The Shoestring Publisher, 264 pages, Rs1,000. The book’s contributors range from academics and programmers to critics and artists who discuss the recurring motifs that defined the Western gaze on India. They cut open Orientalist narratives woven with snake charmers, exotic dancers, maharajas and elephants. In its concept and execution, the book is a unique effort by 24-year-old Shanay Jhaveri, who started work on it in the summer of 2007, right after he graduated from Brown University in the US. A student of art semiotics and history, he is currently a research fellow at the Royal College of Art in London. Outsider Films leaves out predictable colonial and national themes: Richard Attenborough’s epic Gandhi, for instance, finds no place. Eschewing these was a conscious decision. As Jhaveri writes in his introductory essay “Wanting to be a Rememberer”, the essays are meant to be divergent and antithetical, not exhaustive. So several films you may never have heard of, such as Alain Corneau’s French film Nocturne Indien, are discussed. It is not ironic that the compilation starts with Renoir’s The River—the film that enthused Satyajit Ray to start making movies when he met Renoir on his location-scouting trip to Bengal. Indeed, for Indian art house, everything started with The River.  Unique effort: The book’s tear-sheet postcards are meant to be used. The more difficult part, apparently, was sourcing images. It involved contacting film archives, image banks from across the world and the foundations of individual directors. The laborious effort seems to have paid off. In the book, text and image come together in an innovative linkage system that requires the reader to engage with the book, cross-reference and tear off the film postcards that can be used. The last essay in the book has decidedly nothing to do with India. “The extent of my ignorance so far” is written by Leslie Ann Thornton, a painter-turned-film-maker who teaches at Brown. According to Jhaveri, the essay’s inclusion is an indication of the book’s commitment to dissensus—the opposite of consensus, the inability of a group to reach unanimity. He felt it necessary to include a wholly subjective point of view, an artist’s response. “It is an attempt to introduce variation, promoting the notion of eclectic formats and discourse,” says Jhaveri, commenting on the essay but, in essence, summing up the entire book. anindita.g@livemint.com Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 12:45 pm DIY guide to simple skills 101 Things to Do Before You Grow Up: Hinkler Books, 183 pages, Rs499. There are exactly 100 other things (as the title proclaims) that lie within the covers of this book. Broadly, the book is divided into six sections—Survival, Gadgets, Construction, Entertainment, Trickery and Science. Boys, girls, teenagers and even their parents will find this a fascinatingly useful book. It has simple pranks and elaborate experiments. 101 Things to Do has a bit of something for everyone. Apart from the usual old things that you knew—and did when you were young—there are a host of other tricks that your child can pick up. Take the “Survival” section. A highly unusual situation to be in, but if it ever happens and you get lost in a desert without water, you would be glad you had access to this book. How to find water in the desert has some very useful tips. It also comes with a warning: Be suspicious of water found with no plants growing near it or where there are strange mineral deposits.  “Trickery” has tips on sending messages in invisible ink, hypnotizing someone, and card tricks. Most of the things in this section are quite simple, however. Do you know what aerogami is? The first thing to do in the “Construction” section is aerogami (it’s the art of making a paper plane, by the way). Making an ant colony and a wormery are other unusual activities dealt with by the authors (Sofija Stefanovic, George Ivanoff and Peter Taylor). Girls will like building a doll’s house (not that they would mind building a wormery), or how to win an argument (just joking, the boys would like this equally well). But it falls short on ideas for girls, or what one assumes girls like to do. The “Entertainment” section has stuff such as Offering Intelligent Insults, Playing the Harmonica, Making a Printing Press and Selling Stuff. The “Science” section has stuff on Charm Worms (how fast you can charm a worm out of the ground), Making a Volcano and Sucking an Egg into a Bottle and Making Long-life Soap Bubbles.  Fun facts: Learn how to bend water using a comb. The “Gadgets” section has a chapter on how to Keep Time on a Lemon-powered Clock, Making an Animated Movie Wheel and how to Communicate through Coffee Tin Walkie-talkies. The tips and warnings that accompany slightly tricky experiments make this book safe to use. Make this book a constant companion. You might like referring to it every now and then. My favourite things to do were: Build an Air Cannon, Get Messy with a DIY Paintball, Bend Water and Blast Off with your Own Rocket. 101 Things to Do works on the premise that grown-ups are really big children. And it succeeds quite well. There won’t be a boring moment—whether it’s a child or a parent who has picked up the book. The writer is the editor of Heek, a children’s magazine. Available at Eureka Books, DLF Place mall, Saket, New Delhi; Crossword, Kemps Corner, Mumbai; order the book at Landmark, Forum mall, Koramangala, Bangalore. Write to lounge@livemint.com Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 12:45 pm Quick Edit | Over to New Delhi The Reserve Bank of India (RBI) has quite correctly unveiled a hawkish monetary policy, given the strong rebound in the economy and the resurgence of inflation. The government now has to make the next move in the Union Budget that is due to be announced by finance minister Pranab Mukherjeeon 26 February. The central bank and the finance ministry had worked together in 2008 and 2009 to support domestic demand in the midst of the worst global downturn in more than seven decades. It is time to roll back the stimulus, something that most economists and policymakers agree with. RBI governor D. Subbarao was quite candid about this in in his Friday statement, when he said: “The reversal of monetary accommodation cannot be effective unless there is also a rollback of government borrowing.” Maintaining the Indian economy on a stable growth path requires a reduction in the fiscal deficit. A failure to do so will add to inflationary pressures and crowd out private investment. All eyes will now be on the FM. Source: Home - Livemint.com | 29 Jan 2010 | 12:38 pm As music channels switch to reality shows, Indie bands take videos onlineNew Delhi: In the beginning, there were Bunty and Bubbly, a contented couple that rode around on Bunty’s motorcycle and occasionally engaged in lascivious behaviour. Then Bunty met Mallika Sherawat, fell in lust, and bumped Bubbly off—only to repeat that callous process when he met (and apparently married) a man named Saif. End of story.  Effective medium: Pop-rock bank Them Clones’ drummer Surojit Dev (far right) says TV and online promotions should go hand in hand. Pradeep Gaur / Mint By then, however, the video had already gone viral—5,000 views in the first two days, and 10,000-odd in a week. “In our first live concert, just a few weeks after the video went online, everybody was asking us to play Bunty aur Mallika Sherawat. The audience even knew all the lyrics,” Riju Dasgupta, Workshop’s bass player, says with satisfaction. “It was the best first show anybody could have.” In an earlier era, a decade or more ago, Workshop would first have submitted its video—although perhaps not this particular video—to Channel V or MTV, the country’s leading music channels. Now, however, both channels have severely cut back on music programming, in favour of reality shows or game shows; they play roughly 40-50% less music than they did in 2000, and nearly all of what they play is extracted from Bollywood films. “We have to look at it from the channels’ perspective— that they can’t play Indie videos anymore,” Dasgupta says understandingly, possibly because he works at Channel V. So, over the last two years, musicians such as Dasgupta have taken their videos online, primarily to YouTube—with mixed results. “YouTube per se is very potent, but you still need the traditional medium. Online is nothing compared with being on air and having people from Himachal Pradesh say: ‘We saw you on TV.’” The shift in the programming mix of music channels started around 2000-01, reckons Prem Kamath, head of Channel V, and it culminated in a recent Channel V decision to play no more English music. “The early 2000s coincided with Bollywood waking up to the fact that the music video is the best way to market a movie,” Kamath says. “And we’ve always maintained that we’re faithful to the audience and not to the genre. So yes, V was launched as a pure music channel, but audience tastes have shifted in a certain manner, and we’ve followed that shift.” But in the 1990s, when satellite television was still finding its feet in India, it was more open to experimentation; the less gracious version has it that the channels were hungry for any original content at all, even Indie videos. “Music channels back then wanted to know what people liked,” remembers Arjun Ravi, editor of Indiecision, a webzine devoted to independent music in India. “Once they found out what was profitable, it was a simple business decision.” That interim process of trial and error, however, accorded many fledgling rock and Indipop musicians an unexpectedly bright spotlight. Ravi particularly recalls Top of the Rock, an Indus Creed single that was heavily played on MTV when the channel launched in India; the generous airtime would help earn the band an MTV Asia Video Music Award. Shooting such videos was far more expensive then, says Uday Benegal, Indus Creed’s lead singer. “Even after pulling in favours, we spent Rs3 lakh on a video, whereas you can do it so much cheaper now,” he points out. “But there was no question—the exposure we got was absolutely fantastic. Not being on television definitely constricts the reach of a band today.” The other genre popular on television at the time, Indipop, “basically shot itself in both its feet, hands and various other parts of the body”, Benegal remarks. “It was pervaded by people who wanted to be famous, not people who enjoyed what they were doing. There were only a couple of good musicians: Lucky Ali was there, and Suneeta Rao.” Rao, whose videos for her songs Pari Hoon Main and Kesariya remained on MTV and Channel V for many consecutive weeks in the mid-1990s, continues to make videos for her music, releasing them on television as well as online. One of her recent videos, Sun Zara, “got barely two weeks on television”, Rao says. “Often, your video doesn’t get on the air for weeks. People seem to be interested only in seeing some poor creature get miserable on some reality show. In such a situation, YouTube isn’t an alternative—it’s the only way left.” As bleak as Rao’s assessment is, there is a matching vein of optimism within the industry. Samira Kanwar, owner of Babble Fish Productions, has made videos for Pentagram, the Raghu Dixit Project and Them Clones, among others, and she exults in the feedback her videos receive online, as well as the lower cost—often as low as Rs50,000—for which a video can be made. “After all, it’s nearly twice as hard now to get a video onto television, as compared to 10 years ago,” she says. “And the low budgets for online videos are a huge advantage for upcoming independent bands.” Indiecision’s Ravi even conjectures that television may now have lost its relevance, and that the real audiences of Indie bands, in any case, spend more time online than on MTV; as proof, he points to Them Clones’ video for its track My Life, an animated film that he suspects got greater traction online than on VH1. But the 12,500 views on YouTube notwithstanding, Them Clones itself isn’t convinced. “There’s a lot of hoopla about online promotions being effective even if it isn’t supported by television, but it isn’t true,” Surojit Dev, the band’s drummer, says. “For instance, I discovered a band called Kings of Leon only because I saw their video on VH1, and that prompted me to go online and search for them. So, it has to go hand in hand.” Them Clones was founded in 2000, so Dev remembers well the fallow period in the early years of this decade when music channels had already started to spurn Indian bands and when YouTube and Facebook had not yet hit a critical mass in India. Dev is alive to the deficiencies of the Internet as a “pull” medium, in which people will be drawn largely to content within their comfort zone, and in which a YouTube video still has to be promoted through Facebook and email. “Not to say that it was all easy 13 or 14 years ago,” he adds with a laugh. “Bands competed with bhangra then, and they compete with reality shows now.” The battle has changed and grown more heated; it’s just that, in the Internet, the bands at last have found an exit strategy. samanth.s@livemint.com Source: Home - Livemint.com | 29 Jan 2010 | 12:24 pm Aditya Birla Group to re-enter powerMumbai: The $29.2 billion (Rs1.4 trillion) Aditya Birla Group has decided to re-enter the power sector by purchasing an existing project, two people familiar with the development said. A strategic team appointed by Aditya Birla Management Corp. Pvt. Ltd is working on the plan, one of these persons, who is part of the group’s strategy team, told Mint.  Strategic move: A file photo of Aditya Birla Group chairman Kumar Mangalam Birla. Abhijit Bhatlekar / Mint Unlike earlier attempts to build power plants from scratch, the group will now acquire projects that already have land and environmental approvals, and just need to be built. The second-stage entry will also enable the group to start producing power, the third and final stage in the generation process, more quickly. “To begin with, we have plans to acquire a controlling stake from existing promoters that own a 1,000MW power plant with enough land, coal mines and environmental clearance, preferably in Chhattisgarh,” the second person with knowledge of the move had told Mint earlier this week. A spokesperson for the Aditya Birla Group did not respond to queries on the group’s plans to re-enter the power sector. In 2006, the group sold its 1,000MW Rosa Power Supply Co. Ltd in Uttar Pradesh to Reliance Energy Ltd, owned by the Reliance-Anil Dhirubhai Ambani Group. The next year, it sold Bina Power Supply Co. Ltd in Madhya Pradesh to Jaiprakash Associates Ltd. The third power plant near Ennore in Chennai, which would have used imported liquified natural gas from Qatar, was wound up in 2006 after delays in state government clearances. Grasim Industries Ltd, the group’s flagship company, and Indo Gulf Fertilisers Ltd (now under Aditya Birla Nuvo Ltd) were the main promoters of the earlier projects. The group has experience in power generation—it manages 10 coal-based captive power plants that feed 742MW to its aluminium smelter at Renukoot in Uttar Pradesh. Purchasing a project in Chhattisgarh will also enable the plant to easily access coal mines and reduce transportation costs. Analysts tracking the sector say the group should also have an integrated plan with both generation and distribution of power for faster returns. “It makes sense if they have future plans to go beyond generation to other segments of power like distribution as a stand-alone investment in generation will end up being an expensive buy,” said Arun Kumar, research head (infrastructure group) at Brics Securities Ltd, a Mumbai-based brokerage. Distribution is the key component in the power business, which is a volume business instead of being margins driven, he added. Kaustav Mukherjee, partner at global consulting firm AT Kearney, said it may be overly optimistic for promoters to build power plants based on current financials, predicting a fall in merchant power rates in three-four years, which would trigger consolidation in the sector. “Aditya Birla Group’s strategy to purchase power plants is an option in the overall strategy of entering the power business, but the margins and profitability will depend on technology used and operational efficiencies,” he said. The key attraction for promoters building power plants currently is the high return from the merchant sale of electricity to industrial units. The sale of power for commercial or industrial use is unregulated, while that to electricity boards is governed by state regulators. “Most of the valuers of generation assets are likely to factor in a higher price for merchant power,” said Kumar, who headed a team at credit rating agency Standard and Poor’s that worked on a project in 2006 for the Union power ministry and Power Finance Corp. Ltd to devise ways to bring down transmission and commercial losses in urban areas to below 15%. Returns from the power business, currently at 15.5%, are expected to decline in three years after NTPC Ltd, the country’s largest power company, starts selling 10% of its electricity to industrial units and also as more merchant power capacity comes online, Kumar said. NTPC, which is planning to raise money through a second public offer of equity, plans to build plants of 3,400MW capacity by 2012. In the private sector, Adani Power Ltd, Indiabulls Power Ltd, JSW Energy Ltd and Jindal Steel and Power Ltd are among the large firms building power plants for merchant sales. The country, which was producing 154,000GW (1,000MW) of power until September 2009, plans to raise its capacity to 190,000GW by 2012, 285,000GW by 2017 and 800,000GW by 2032, according to the Planning Commission. baiju.k@livemint.com Source: Home - Livemint.com | 29 Jan 2010 | 12:05 pm Tata Steel to invest Rs 5,700 crore in expansion projectsTata Steel, Indias largest steel producer, will spend Rs 5,700 crore on expansion projects in the next financial year. Around 70 per cent of the money (Rs 3,700 crore) will be earmarked for domestic expansion.Source: Business Standard | Front Page Headlines | 29 Jan 2010 | 12:03 pm Pvt metro link to get Central nod soon - Times of India
Source: Business - Google News | 29 Jan 2010 | 12:03 pm Pollution board mulls 'noise governors'Bursting crackers or dancing to the tunes of a disc jockey (DJ) will not be the same in times to come with the Central Pollution Control Board (CPCB) planning to install noise governors on instruments that multiply sound. These noise governors are on the same lines as speed governors in vehicles and will shut off the noise-causing instrument like sound boxes or DJ systems, the moment noise crosses the prescribed limits.Source: Business Standard | Front Page Headlines | 29 Jan 2010 | 12:03 pm Former civil aviation minister Rudy joins IndiGo as co-pilotFormer Civil Aviation Minister and Bharatiya Janata Party (BJP) national spokesman Rajiv Pratap Rudy has been hired as a co-pilot with Delhi-based private airline IndiGo Airlines on an honorary basis.Source: Business Standard | Front Page Headlines | 29 Jan 2010 | 12:01 pm India hikes CRR 75 bps, joins China In two phases spread over February, this will drain out Rs36,000 crore from the financial system and guard against excess liquidity feeding into inflation in the world’s second fastest growing economy. Also Read Tamal Bandyopadhyay’s earlier columns In mid-January, China raised banks’ CRR to cool the world’s fastest growing major economy as a credit boom threatens to stoke inflation and create asset bubbles. In India, the credit offtake is still tardy, but the inflation has been rising and RBI fears that pickup in demand could exacerbate inflationary pressures. It has raised its fiscal year-end inflation estimate from 6.5% to 8.5% and growth in India’s gross domestic product from 6% to 7.5%. Still, the central bank refrained from any rate hike as it has found that the economic recovery is “unbalanced” and yet to become “sufficiently broad-based”. The yield on the benchmark 10-year bond rose by 5 basis points (bps) immediately after RBI put up the policy document on its website and television channels flashed the news, but by the end of the day, there was hardly any change in yield from the previous day’s close. The knee-jerk reaction was seen in equity markets too. The Bombay Stock Exchange’s benchmark index, Sensex, plunged 318 points or 2% immediately, but recovered as the day progressed to end in the green, up 0.31%. The exchange’s banking sector index rose by 3%. Along with banks, the indices of real estate and auto stocks, extremely sensitive to interest rates, rose by 2.6% and 0.37%, respectively. In a rising interest rate scenario, banks’ profitability is hit as the value of their bond portfolio depreciates and they need to set aside a portion of their profits to provide for it. Similarly, demand for real estate and automobiles goes down as their cost goes up for consumers who take loans to buy such products. More potent tool Indeed, both the bond and equity markets heaved a sigh of relief in the absence of any rate hike, but this may not last for long. As a policy measure, a 75 bps hike in CRR is a more potent tool than a combination of a 50 bps hike in CRR and a 25 bps hike in policy rate, which has remained unchanged at 3.25% since April 2009. One basis point is one- hundredth of a percentage point. At this juncture, more than the policy rate, liquidity is playing a critical role as it is driving the markets. The CRR hike will suck out Rs36,000 crore, roughly 50% of the excess liquidity that is sloshing the system. In the second half of March, there won’t be much of money left on account of advance tax outflow. Indian firms pay corporate tax every quarter-end on their estimated profits. So, if banks’ loan growth gathers pace, the system will run dry in March and banks will have to borrow from RBI’s repo window, paying 4.75%. Currently, banks are parking excess money at RBI’s reverse repo window and earning 3.25%. In a liquidity-starved situation, the repo rate, or the rate at which RBI gives money to banks, becomes the policy rate, but in a liquidity-surplus situation that we have been witnessing for sometime, the reverse repo rate, or the rate at which the central bank sucks out liquidity, is the policy rate.  Graphics: Ahmed Raza Khan / Mint Companies and individual borrowers will not be affected immediately as banks are unlikely to raise their lending rates for the time being. However, they will stop competing with each other to bring down the mortgage and auto loan rates. The last time CRR was in this range was in November 2008. The repo rate at that time was 7.5% and the reverse repo rate 5%. RBI is likely to follow up its Friday action by a hike in policy rate in April, when it announces its annual monetary policy for fiscal 2011 after the Union Budget is presented in end-February and more hikes in both policy rates as well as CRR through the year. Indeed, the fiscal policy of the government will play a very critical role in shaping RBI’s monetary policy in next fiscal. The policy statement explicitly said, “The reversal of monetary accommodation cannot be effective unless there is also a roll back of government borrowing”. The government is borrowing a record Rs4.5 trillion from the market to bridge its estimated 6.8% fiscal deficit in the current fiscal. “It could be managed through a host of measures that bolstered liquidity”, but those options will not be available to the same extent next year, RBI said. On top of that, the inflation pressures will rise and credit demand from the private sector will strengthen as growth momentum in the economy gathers steam. RBI infused Rs1.6 trillion into the system by cutting banks’ CRR by four percentage points, from 9% to 5%, in the wake of the credit crisis following the collapse of US investment bank Lehman Brothers Holdings Inc. in September 2008. The government, too, has infused Rs2.8 trillion via three stimulus packages to prop up a slowing economy. RBI signalled an exit from its expansionary monetary policy in October 2009 as it shifted its stance from “managing the crisis” to “managing the recovery”. It shut all refinance windows and the floor for banks’ holding of government bonds was also raised from 24% to 25% of their deposits, but many of its actions at that time were academic in nature. For instance, a one percentage point hike in government bond holdings means withdrawal of liquidity from the system and less money in the banks’ kitty for giving loans, but because banks had already invested about 28% of their deposits in government bonds, the increase did not have any impact on liquidity. Similarly, the withdrawal of refinance facilities for non-banking financial companies, housing finance firms, mutual funds and exporters, and the closure of the window for swapping banks’ foreign exchange liabilities hardly made any difference because those facilities were rarely used. This time around, RBI has carried forward the process of exit in a more meaningful way and it wants the government to return to a path of fiscal consolidation as well. Despite issuing a hawkish statement, RBI has refrained from any rate hike as yet for two reasons. One, a strong anti-inflationary measure such as a rate hike may deal a blow to the economic recovery by affecting private investment and consumer spending. And, two, it wants to wait and watch for the government’s stance in the forthcoming Budget. If the government chooses growth over fiscal prudence and continues to borrow massive amounts from the market to bridge the widening fiscal deficit, then RBI will find it difficult to aggressively tighten its policy. After all, it takes two to tango. Tamal Bandyopadhyay keeps a close eye on all things banking from his perch as Mint’s deputy managing editor in Mumbai. Your comments are welcome at bankerstrust@livemint.com Source: Home - Livemint.com | 29 Jan 2010 | 11:55 am Reliance Power net up by 26 in Q3Reliance Power Ltd, the ADAG company that is yet to get any income from power generation activity has reported a net profit of Rs 133.7 crore for the third quarter ended December 31, 2009 as compared to Rs 105.7 crore for the same period of the previous year, an increase of 26 per cent.Source: HindustanTimes.com - Top Business News Headlines | 29 Jan 2010 | 11:07 am AAI to lease out land for fundsUnder pressure to generate funds for its on-going Rs 7,750-crore infrastructure projects at 37 airports in the country, the AAI has chalked out a plan to add to its revenue base by leasing out around 300 acres on the city side of 10 airports, report Manish Tiwari and Samiran Saha.Source: HindustanTimes.com - Top Business News Headlines | 29 Jan 2010 | 11:05 am NTPC net up kicks off FPONational Thermal Power Corporation Ltd (NTPC) on Friday reported a slim five per cent growth in net profit at Rs 2,364.9 crore for the third quarter ended December 31, 2009, over the same period last year.Source: HindustanTimes.com - Top Business News Headlines | 29 Jan 2010 | 11:03 am IOC Q3 profit plunges 76 per cent to Rs 696 crState-owned oil refining and marketing major Indian Oil Corporation (IOC) on Friday reported a drop of 76.45 per cent in net profit at Rs 696.59 crore for the third quarter ended December 31.Source: HindustanTimes.com - Top Business News Headlines | 29 Jan 2010 | 11:01 am It s official no 3G spectrum this fiscalThere will be no 3G spectrum auction in this fiscal year. Sources in the department of telecommunications (DoT) said Law Minister Veerappa Moily, who is member of the empowered group of ministers (EGoM), has said the auction should be held only when the spectrum becomes available.Source: HindustanTimes.com - Top Business News Headlines | 29 Jan 2010 | 10:59 am Hot air in Davos on climate change but no consensusFighting global warming and protecting the environment dominated the discussions Friday at the World Economic Forum, a month after UN climate change talks ended without a binding deal on curbing greenhouse gas emissions.Source: HindustanTimes.com - Top Business News Headlines | 29 Jan 2010 | 10:57 am New Russian stealth fighter makes test flight Moscow: Russia test-flew a long-awaited new fighter plane on Friday, determined to challenge the US for technical superiority in the skies and impress weapons buyers around the globe.  Taking wing: Sukhoi’s T-50 prototype fighter jet at a test airfield in Russia. AP The stealth fighter—Russia’s first all-new warplane since the Soviet collapse plunged the defence industry into poverty and disarray—flew for 47 minutes, plane maker Sukhoi Co. (JSC) said. “The plane performed very well. All our expectations for this first flight were met,” Sukhoi spokeswoman Olga Kayukova said on Rossiya 24 television. “The premiere was a success.” Russia’s main networks led news programmes with reports of the flight and showed footage of the needle-nosed, camouflage-painted jet taking off from a snow-lined airstrip at a Sukhoi factory in Komsomolsk-on-Amur, in Russia’s far-east. These jets are invisible to radar, have advanced flight and weapons control systems, and can cruise at supersonic speeds. The new jet is Moscow’s answer to the US-built F-22 Raptor stealth fighter—the world’s only other such fighter yet in service—which first flew in 1997. Analysts have said it would probably be five-seven years before Russia’s military gets to fly the new fighter. The Interfax news agency cited an unnamed source as saying the first deliveries to Russia’s air force were likely in 2015. Successful development of the fighter, which Rossiya 24 said has been tentatively dubbed the T-50, is crucial to showing that Russia can challenge US technology. The 1991 Soviet collapse ushered in a cash-strapped time of troubles for Russia’s military. Its aircraft makers have been building warplanes based on updated Soviet-era designs. Defence spending increased in the oil-fuelled period of economic growth during the 2000-08 presidency of Vladimir Putin, who has encouraged pride in Russia’s military might. But the military has continued to suffer embarrassing and sometimes deadly setbacks since the nuclear submarine Kursk sank in 2000, killing all 118 seamen aboard. Interfax cited its source as saying that the new Russian plane had lowered and raised its landing gear twice during the flight and added that “the American F-35 fifth-generation jet couldn’t do that (on its test flight)”. The new plane is important for future Russian arms sales. Sukhoi is Russia’s largest exporter of military planes and accounts for about a quarter of the country’s annual arms sales, which reached $7.4 billion (around Rs34,340 crore today) last year. Along with giants India and China, existing clients for Russia’s weapons include US foes such as Iran, Syria and Venezuela, and their purchase of an advanced new fighter could cause concern in the US and its allies. Source: LatestNews-Home - Livemint.com | 29 Jan 2010 | 10:48 am No Jazz recall in India says HondaHonda Siel Cars India said on Friday that India will not be a part of the global vehicle recall, announced by its parent Honda, following reports of defects in some of its models.Source: HindustanTimes.com - Top Business News Headlines | 29 Jan 2010 | 10:39 am Honda sets own recall as Toyota details actionTOKYO/PARIS (Reuters) - Toyota said its global safety withdrawal would take upto 1.8 million vehicles off Europe's roads and rival Honda announced its own recall, placing the vaunted pedigree of Japan's carmakers under fresh scrutiny.Source: Reuters: Money News | 29 Jan 2010 | 10:17 am Lupin, Glenmark, Sun report growth in double digitsMumbai: Three of India’s largest drug makers—Glenmark Pharmaceuticals Ltd, Lupin Ltd, and Sun Pharmaceuticals Ltd—on Friday reported double-digit growth in revenue for the quarter ended December 2009, with one reporting a decline in profit due to one-time expenses. With 44% growth in sales from the US and European markets, including sales from the recently-acquired US cardiovascular drug Antara, Lupin led the pack with a 31% growth in revenue to Rs1,255.40 crore, and 38% growth in profit to Rs160 crore for the December quarter, over the corresponding period last fiscal. Glenmark posted a 15.5% rise in profit to Rs94.07 crore, with a 10% growth in revenue to Rs649.65 crore. Sun Pharma, which has been locked in a takeover battle with Israeli drugmaker Taro Pharmaceutical Industries Ltd for the past three years, posted a 17% drop in profit to Rs339 crore on sales of Rs1,021 crore, an 11% increase, due to non-recurring costs. A Mint poll of four brokerages had shown profit growth for the sector at 13-31%. Foreign brokerage Nomura Financials Advisory and Securities (India) Pvt. Ltd had projected a 38% growth in Lupin’s profit. Sun Pharma, Glenmark and Lupin have been trying to expand their presence in the global generic drugs market, a key strategy for which they have been filing abbreviated new drug applications, or ANDAs, in the US. However, each has also adopted other routes. Lupin and Glenmark have partnered with distribution companies in the US, while Sun Pharma acquired drugmaker Caraco Pharmaceutical Laboratories Ltd. Glenmark has acquired products and distribution channels in Central and Eastern Europe, and has focused on basic research and out-licensing technologies, and inventing new drug candidates for overseas drug makers. Lupin has been looking for partnerships and joint ventures. A consolidated portfolio including Antara contributed to its revenue boost, Lupin president and executive director Nilesh Gupta said on Friday. In September, it acquired Antara from the now-liquidated Oscient Pharmaceuticals Corp., resulting in a 78% increase in its branded drug business in the US. Glenmark improved its earnings on the back of a lower base in the year-ago quarter, as well as extraordinary income of $5 million from US-based Medicis Pharmaceutical Corp. for a research out-licensing deal. Business from Central and Eastern Europe grew 82%, a Glenmark spokesperson said. Sun Pharma had a setback after the US Food and Drug Administration banned production at its US subsidiary Caraco Pharma. Sun Pharma spokesperson Uday Baldota said the fall in profit was mainly due to the impact on sales from the FDA action, and some one-time expenses. Source: Home - Livemint.com | 29 Jan 2010 | 10:17 am From managing crisis to managing recoveryExpert View | Jahangir Aziz The great normalization programme begins  One can debate the tightening and RBI’s views on growth and inflation. But there is something to be said about this new approach of RBI: clarity and consistency. This is a good thing. There is a mistaken belief in India that for monetary policy to be effective it has to surprise. This view owes its genesis to a paper written by Bob Lucas way back in the late-1970s where he showed that only monetary surprises affect growth, anticipated changes do not. What is missed is its corollary: monetary changes always affect inflation. So to control inflation, monetary policy should be predictable. I am not talking about the efficiency of monetary policy in curbing inflation. The issue is about communication. The more transparent and clear monetary policy is, the easier it is to control inflation and any other nominal variable. So RBI needs to be congratulated for the increased clarity and transparency. And of course for brevity—the policy statement was just 10 pages! The policy, I thought, was a tad dovish. A 100 basis points hike in CRR is perhaps needed to return liquidity to normal and not 75 basis points. So one can expect another 25 basis points increase in CRR in the April policy review and a 25 basis points increase in policy rates to bring the system to normal. But I am perhaps splitting hairs. The economy has been turning hot for some time and core inflation has hardened sequentially. If the global recovery remains on track then 9-12 months ahead, growth in India will probably be running ahead of potential, exerting pressure on capacity and pushing up core inflation. Of course there are risks. On the downside, the global recovery might falter. But equally scary is the prospect of severe inflationary pressures in June. If that happened then RBI would be forced to move very aggressively from an easy stance. Moving quickly to normalize now is the safe strategy. From normal monetary conditions one can tighten if inflationary pressures emerge or ease if growth falters. After last week’s tightening in China, monetary policy in two of the largest economies in world has now shifted decisively towards a return to neutrality, signalling the start of the Great Normalization. Jahangir Aziz is India chief economist JPMorgan Chase The views expressed are personal. ********** Expert View | Tushar Poddar Central bank risks falling behind the curve  First, given the long transmission lags between policy rates and activity, there is merit in starting withdrawal of accommodation early in the cycle. During the previous rate-cutting cycle, policy rates took a long time to feed through to bank deposit and lending rates, and that too only partially; similarly on the way up, bank rates may take considerable time to react, and from rates to activity will take further time. Policy needs to be forward-looking and cognizant of these lags. Second is the importance of staying ahead of expectations. For market participants, the question was not if RBI needs to hike rates, but when, and if RBI waits till financial markets are imploring it to raise rates, it may fall behind the curve. Once dovish credentials are established, it will be difficult to shake them off. Third, the yield curve is amongst the steepest it has ever been. Short term real interest rates are negative, and one of the lowest among emerging markets. The short end needs to move up to normalize policy, which mere liquidity withdrawal may not be able to achieve. Our own analysis suggests that it would require short rates to move up by 300 basis points in order to move rates to neutral. Fourth, the independence of the central bank is in question. The constant stream of exhortations from the government not to hike rates has raised doubts about the central bank’s ability to take independent decisions. Since September 2008, fiscal and monetary policy had come together in the face of an unprecedented financial crisis, but as normality returns, it is essential they go back to fulfilling their respective roles. Growth has many fathers, but inflation is an orphan. Everyone wants to associate themselves with high growth—it is popular and it is easy. For the tough decisions against the problem child of inflation, the monetary authorities are the best placed. The relative success of inflation-targeting regimes bears out that central banks operate unhindered when inflation is the only objective. At headline inflation numbers of 8.5% relative to a medium term target of 4-4.5%, a “crisis-level” of interest rates is hard to defend. A well-communicated, timely, and gradual increase in interest rates should be started at the earliest in order for RBI to not fall behind the curve. Tushar Poddar is vice-president and chief economist, Goldman Sachs, India. ********* Expert View | Saumitra Chaudhuri RBI moves towards a neutral stance  Why, the reader may ask, was there a danger of doing too much? If after all, it is always possible to roll things back in short order. The problem is with the withdrawal symptoms. People get hooked on to easy money and fiscal concessions. The richer they are, the more they get hooked. Look at all the wailing that has been going on for the past many months. The arguments why RBI ought to leave the monetary stance unchanged; why government ought to leave the fiscal stimulus in place, aka lower excise and service tax rates unchanged. It is good that RBI has started to take away the comforter. Hopefully, government too will do the same. Having said this, one should point out that last year, RBI had cut its policy and reserve rates so fast, that the operating part of the interest rate corridor, i.e. the overnight money market rate, the shortest end of the yield curve, fell from double-digit levels to 3% in a matter of weeks. For argument’s sake let’s posit that a “neutral” monetary stance corresponds to 5% interest rate. With smooth transition, how long does it take to move from 3% to 5%? Quite some time, no? Even if we were to concede that this “neutral” rate is 4.25%—even then that is a 4x25 basis points increase, something that may be expected to take anything close to a year. But before that the excess liquidity has to be drained and CRR (cash reserve ratio) increased. That RBI did on Friday. Now, why does RBI have to move to a “neutral” stance? Because, there is every reason to believe that the Indian economy will quickly move to an 8.0% to 9.0% growth trajectory. And when it does, inflationary pressures are likely to develop along the many seams of the economy. We are, as RBI pertinently noted, a “supply constrained” economy. Monetary policy must be, at that time, in a position to act meaningfully—which it only can if it has come to a stance that is “normal”, i.e. the “neutral” stance. Saumitra Chaudhuri is member, Planning Commission. ********* Expert View | Rejeev Malik A handle-with-care monetary policy exit  The latest policy statement is the shortest one from RBI, and I am ecstatic that it has recognized that “less is more” in effective communication. It emphasized that the recovery has yet to fully take hold, and expects inflation to moderate from July onwards. My sense is that while food inflation will come down, non-food inflation will be a bigger issue owing to higher global commodity prices and improving demand. Further, supply side bottlenecks also complicate inflation dynamics, but there is little RBI can do about them. Hopefully, the government will rise to the occasion, finally. RBI has embarked on a handle-with-care monetary exit. As it stated in the policy review, it is shifting its stance from “managing the crisis” to “managing the recovery”. However, it understandably warned that even amid rising inflation, the recovery is yet to fully take hold, especially for investment spending. While inflation has become more important, RBI has not yet totally taken its eyes off growth. The next step will likely be on policy rates. The need for additional CRR hikes, if any, will be influenced by the effect of capital inflows and loan growth on money market liquidity. It is quite likely that the overnight rate move up towards the upper end of the LAF (liquidity adjustment facility) interest rate corridor before easing in the new fiscal year as government spending picks up. The policy details do not alter my expectation that the policy rate normalization cycle will commence from March/April onwards, after the Union Budget is announced on 26 February. Cumulatively, a 100-150 basis points increase in policy rates over the course of FY2011 is likely, but that won’t derail gross domestic product growth of around 8.0% for FY2011. Analysts going into a positive overdrive by only looking at elevated industrial production data are missing the important aspects that the recovery is not broadly based, has been supported by policy stimulus, and that the improvement in credit and investment is still weak. Further, those expecting a policy rate hike today were missing the point that it is far more effective to shrink excess liquidity before pushing up borrowing costs. A critical issue for lasting and effective inflation management is how quickly the supply constraints exaggerate the impact on inflation of improving demand dynamics. The government needs to work harder and faster to ease the supply bottlenecks, and also fix the politically motivated mess in agriculture sector. RBI does not have a magic wand for fixing the supply side problems. Rajeev Malik is head of India and Asean economics at Macquarie Capital Securities, Singapore. The views expressed are personal. ********* Expert View | A Prasanna CRR increase should be viewed as incomplete  The central bank also raised its end-March inflation estimate to 8.5%, admitted to some signs of demand side pressures and highlighted a rise in inflation expectations of households. The central bank also flagged off the risk posed by capital inflows in excess of the absorptive capacity of the economy. Reacting to these developments, it is logical to have expected the central bank to hike LAF rates to signal its discomfort with rising inflation expectations. While it can be argued that the central bank did not hike them because it is worried about the “unbalanced” nature of recovery, that doesn’t answer the question of preference for CRR over rates. One could understand the decision to hike only CRR if RBI envisaged a quick transition to the upper end of the LAF corridor in order to tighten monetary policy. However, in post-policy comments, the RBI governor appeared to rule out such a tactic when he suggested that liquidity will remain surplus in March even after advance tax outflows. In my estimate though, system liquidity is seen tipping into deficit mode in the second fortnight of March. Perhaps the central bank is trying to tighten by stealth, but such hypotheses are impossible to validate. Back in the real world, a likely explanation is that RBI is trying to sequence its exit steps and the evolution of inflation is forcing it to improvise. Further, modulating liquidity is a difficult task in the fiscal fourth quarter when government revenues as well as expenditure peak in seasonal terms. The central bank has thus chosen a tougher route to unwind its accommodative stance. On the one hand, we see no let up in the pressure exerted on policymakers by rising inflation, which could be exacerbated by a likely fuel price hike and a rollback of indirect tax cuts over the next few weeks. On the other hand, the likely swing in overnight rates between reverse repurchase and repurchase rates in March could infuse uncertainty into the domestic markets and raise questions about RBI’s motives. As a result, we view today’s policy action as incomplete and expect a hike of 50 basis points each in the reverse repo and repo rates by April. A. Prasanna is chief economist, ICICI Securities Primary Dealership Ltd. Source: Home - Livemint.com | 29 Jan 2010 | 10:15 am Rapid Fire | The healthiest thing for the markets will be a consolidation Indian stocks have been slipping for the past seven trading sessions, tracking global markets that fell on fears of a double-dip recession in major economies. Mint spoke to Jyotivardhan Jaipuria, managing director and head of research at Bank of America-Merrill Lynch, to find what investors should look out for. Edited excerpts:  Close watch: Headquarters of China’s central bank. The markets were taken by surprise when China tightened monetary policy late last year. Loic Hofstedt / Reuters Do you think we are at the start of a double-dip? How deep is the correction likely to be? If we just step back a bit, last year (our) markets gave the best returns since 1991. And after such a strong rally, what we are seeing is a small technical correction where investors are locking in a bit of profit. Let’s put this in context. We have a market which (has) more than doubled from the lows in March. To that extent, a 10% or 9% fall is not really anything to get concerned about. I think that the healthiest thing we could get in the markets this year is not another year of solid returns, but a year where the markets consolidate. It will probably give you a small positive return. But global markets are also falling… There is a fair bit of coordination in markets across the globe. We saw a fair bit of that last year and in the year before that. This correction has nothing much to do with India, but got triggered by a global correction led by the dollar strengthening. The dollar weakening was a trade which people played through last year. Another reason was that China tightened monetary policy. That was something which came as a bit of a surprise to the market. What cues should investors watch out for? There will be India factors and there will be global factors. The most important thing which is going to drive emerging markets is the Fed (the US Federal Reserve) and what they are going to do with their monetary policy. Because I think the worry for investors would be once the Fed decides to tighten monetary policy. We think this is not really going to happen till 2011. From our point of view, we think the Fed is going to be benign and that is going to be good for markets globally. The other thing to watch for is, of course, China and how significantly they would want to tighten monetary policy and at what pace. So that’s something people would want to have a track on globally. Within India, we will have the RBI (Reserve Bank of India) and their policy, and the Budget. In that sense, (we are looking) at the exit policy from the stimulus package of last year. That’s a key factor. I think the other thing to watch out for in India and in all other emerging markets is the supply of paper (or new share sales). The supply is going to be quite high. It probably will be 2-3% of market capitalization. That may keep the secondary markets in check. Which is likely to spook the market more—interest rate hikes or the fiscal stimulus exit? Again, these are short-term things. If we go back into history, markets do correct a bit when the first hikes happen, in India and across the world also. But after that markets actually rally. And they rally because the hike happens due to the economy doing well. So, markets start factoring in a great economy, and we have markets doing well right up to the fifth or sixth hike. That is something that investors should keep in mind. This Q&A took place ahead of Friday’s RBI policy announcement. Source: Home - Livemint.com | 29 Jan 2010 | 10:09 am Gains from spinning the news Solomon finds evidence that IR firms generate greater media coverage of their clients’ good news compared with their bad news. That is hardly surprising—after all, which company would pay IR firms to give more coverage to bad news. His second finding, which is much more interesting, is that public relations firms are able to spin non-earnings announcements more than earnings releases. That’s very plausible, because earnings announcements contain precise numbers that can be seen through by analysts, making them difficult to spin, though not for want of trying. The problem is the positive spin on news items leads to higher expectations by investors which, in turn, raises stock prices. Unfortunately, though, if the earnings do not measure up to these heightened expectations, investors are disappointed and the stock falls. Putting a positive spin on news is therefore a double-edged sword for companies. Says Solomon, “Earnings returns are significantly more negative if there were higher returns since the previous earnings announcement, and after greater media coverage of positive press releases.” Of course, not all IR firms can do the job—they need good contacts with journalists. More importantly, Solomon finds that “reporters and newspapers are not unbiased in their decisions of which stories to cover. Instead, they are susceptible to influence by IR firms, which are able to increase the chances of receiving coverage of particular stories. Moreover, this influence appears to operate through the channel of personal connections between reporters and IR firms.” He also points out that IR firms can spin the news more in newspapers that operate in the same region as the IR firm and company as well as in newspapers that are historically susceptible to IR firm influence.  Illustration: Jayachandran / Mint Which companies would like to use IR firms to affect their stock prices? The paper says that it depends on the incentives company managers get to manipulate stock prices. For instance, “A higher proportion of CEO pay in stock and option compensation predicts a higher probability of using an IR firm.” What’s more, Solomon also mentions that companies prefer to release positive news releases from Monday to Thursday, when investor attention is higher. Finally, is there any way savvy investors could use this research to their advantage? Solomon says there is and suggests a trading strategy around earnings announcements: Buy companies that do not use IR firms and short companies that use IR firms. The logic is simple—since earnings expectations have already been bid up by the IR firms, stock prices of the companies that use them are likely to fall after earnings are declared, while the ones that don’t use IR firms will not see any such impact. But perhaps the most important insight is that while positive spin may benefit a company’s stock, it will do so only till the next earnings announcement. As Solomon puts it, “The results in this paper suggest investors do not distinguish between media coverage arising from IR influence and media coverage from general newsworthiness, and are surprised when hard information turns out to be worse than expected. Investors, it appears, can be fooled, but not forever.” Source: Home - Livemint.com | 29 Jan 2010 | 9:57 am Aditya Birla Nuvo to invest Rs 8 bn in life insurance bizAditya Birla Nuvo plans to invest 8 billion rupees in its life insurance business over the next 15 months, it chief financial officer Sushil Agarwal said on Monday.Source: Moneycontrol Top Headlines | 29 Jan 2010 | 9:48 am Jindal Steel sees merchant power tariffs decliningJindal Steel and Power expects longterm average merchant power prices to come down to Rs 44.50 a unit, Director Sushil Maroo said on Friday.Source: Moneycontrol Top Headlines | 29 Jan 2010 | 9:21 am ACC buys stake in grinding unitACC said on Friday it had acquired the entire stake in Encore Cement Additives Pvt Ltd, which owns a 200,000 tonne slag grinding unit in south India.Source: Moneycontrol Top Headlines | 29 Jan 2010 | 9:21 am Punj Lloyd get USD 240 mn road contractIndian engineering and construction firm Punj Lloyd said on Friday it has secured an 11 billion rupees ($240 million) road construction contract from a unit of GMR Infrastructure.Source: Moneycontrol Top Headlines | 29 Jan 2010 | 9:21 am The Dalmia dream: The heirs and their billiondollar planThey are on a mission: to target USD 10 billion in sales by 2015. Inheritors of Dalmia Cement, Puneet Dalmia and Gautam Dalmia, have tripled the group since they took over a decade ago.Source: Moneycontrol Top Headlines | 29 Jan 2010 | 8:17 am India Asia Arab Art Fund: Cracks in the FrameworkNeville Tulis India Asia Arab Art Fund proved a nonstarter but has managed to land him in trouble with his investor, private equity firm Abraaj Capital.Source: Moneycontrol Top Headlines | 29 Jan 2010 | 8:05 am Osian Art Fund: The broken paddleFlamboyance and grandeur marked out Neville Tuli as Indias bestknown art messiah. Today the collapse of his fund has revealed he got it all wrongSource: Moneycontrol Top Headlines | 29 Jan 2010 | 8:05 am Tata Motors Q3 net at Rs400 croreMumbai: Tata Motors Ltd, India’s largest vehicle maker, on Friday posted its fourth straight quarterly profit from domestic operations, but lagged forecasts as a rise in sales was offset by an increase in input costs. Tata Motors, which owns British luxury brands Jaguar Land Rover and also makes the ultra cheap Nano car, posted a December-quarter net profit of Rs400 crore ($86.4 million), compared with a net loss of Rs263 crore in the prior-year quarter, when an economic slowdown had hit sales. Revenues surged 89% to Rs898 crore as sales of its cars, utility vehicles and trucks surged on customer demand and easy availability of credit. A Reuters poll of 13 brokerages forecast net profit of Rs442 crore on net sales of Rs8,346 crore. Automobile sales in India are getting a boost from a better economic climate and government stimulus packages that reduced factory-gate duties on vehicles. Shares in Tata Motors, valued at $8 billion, rose 34% in the December quarter, outperforming a 2% rise in the main index. Its shares rose nearly five times in 2009 while that of top carmaker Maruti Suzuki trebled. Source: Home - Livemint.com | 29 Jan 2010 | 6:46 am Indian banks see stable rates till June qtrMUMBAI (Reuters) - Indian banks do not see any upward pressure on lending rates in the next six months, after the Reserve Bank raised banks' reserve requirements on Friday, top bankers said.Source: Reuters: Money News | 29 Jan 2010 | 6:40 am Shares log worst monthly loss since October 2009Mumbai: Indian shares erased early losses and nudged 0.3% higher on Friday after the Reserve Bank of India kept key interest rates unchanged, but still posted their worst monthly loss in three months. The BSE 30-share index Sensex fell 6.3% in January, its biggest drop since a 7.2% slide in October 2009. For the week, it was down nearly 3% after losing 4% the previous week. Bank stocks led the pull back after the market fell as much as 2% at one stage. The Reserve Bank of India (RBI) kept short-term interest rates steady at its quarterly policy review on Friday but lifted banks’ cash reserve requirements by more than expected and warned of mounting inflation. “There were some expectations built that the RBI could hike rates at the policy, after we saw yesterday the food inflation data had accelerated,” said Rakesh Rawal, head of private wealth management at Anand Rathi Financial Services. “Since, that didn’t take place, the policy seems to be better than expectations,” he said. ICICI Bank gained 5.3%, its biggest one-day rise in more than 4-“ months, to Rs830.40. Bigger rival State Bank of India firmed 2.7%, while No. 3 lender HDFC Bank added 2.3%. The BSE barometer closed up 0.31%, or 51.09 points, at 16,357.96. Thirteen of its components gained. “The next key event to watch for is the budget. I am optimistic that overall 2010 should be good, on the back of economic growth and corporate earnings growth,” Rawal said. Export-driven outsourcers, which get around half of their revenue from the United States, dropped on continued concerns over the order flow from US banks. Infosys Technologies and Tata Consultancy Services (TCS) shed 0.7% each, while Wipro dropped 3.8%. Metal makers Sterlite Industries and Hindalco dropped 1.4% and 0.5% respectively, hurt by a sharp fall in base metal prices. A firm dollar and concern over the pace and scope of credit tightening in China drove Shanghai copper down nearly 4%, following a drop in London prices in the previous session. Tata Steel, the world’s eighth-largest steel maker by output, fell 2.8% to Rs569. It had rallied 4.8% on Thursday after forecast-beating third-quarter results. “Valuation looks expensive, coupled with structural demand concerns in the European market and poor returns on a long-term basis,” brokerage Prabhudas Lilladher said in a note. It maintained its “reduce” rating on the stock. In the broader market, 1,484 gainers led 1,370 losers on volume of 442 million shares, below last week’s daily average of 534.4 million shares. The NSE 50-share index Nifty closed 0.3% higher at 4,882.05. Source: Home - Livemint.com | 29 Jan 2010 | 6:37 am RBI lifts reserve ratio, rate rise seen nextMUMBAI (Reuters) - The Reserve Bank of India (RBI) surprised markets by raising banks' cash reserve requirements by more than expected on Friday and warned of mounting inflation, setting the stage for increasing interest rates in the coming months.Source: Reuters: Money News | 29 Jan 2010 | 6:22 am Toyota faces probe; Honda recalls models tooWashington/Tokyo: Toyota Motor Corp faced US Congress scrutiny over its biggest ever safety recall as rival Honda Motor Co, tipped to gain from Toyota’s woes, also said it would recall thousands of cars worldwide. Honda said it would recall a total of 646,000 units of its Fit/Jazz and City models, including 140,000 in the United States, because of a faulty window switch, after a child died when fire broke out in a car last year. The announcement came as investors, suppliers and consumers weighed the impact of an unprecedented halt in US production by Toyota, the world’s No.1 automaker. Honda’s move, as well as Toyota’s recall due to problems with unintended and dangerous acceleration, come at a bad time for the industry as it struggles to lure buyers back to showrooms after a sales slump that helped drag US rivals General Motors and Chrysler into bankruptcy. In an unusual move, House Energy and Commerce Committee chairman Henry Waxman said he would hold a hearing next month to consider how quickly and effectively Toyota responded to complaints about sticking pedals and slipping floormats. “Like many consumers, I am concerned by the seriousness and scope of Toyota’s recent recall announcements,” Waxman said in a statement. Knock-on effects Toyota this week suspended North American sales and production of eight models including its best-selling Camry after regulatory pressure, and widened the recall to China and Europe. A Toyota spokeswoman said the company was still checking on whether any vehicles are affected in Latin America, the Middle East and Africa. Japan’s largest company, studied for its devotion to quality, could recall about 8 million vehicles in total - more than the number of cars and trucks it sold worldwide in 2009. In Tokyo, some worried about the knock-on effects to Japan’s image and economy. “If Toyota has hard times, there’s a high probability that also Japan will,” said Takeo Namekata, a 62-year-old office worker. “Particularly, trade will suffer.” Honda’s recall added to concerns that the safety-conscious image of Japanese manufacturers would be threatened. “The Japanese have built their image on reliability, the fact that they make bullet-proof vehicles,” said IHS Global Insight analyst Carlos Da Silva. “It’s not that their vehicles are worse than the others, (the recalls are) just showing maybe that their vehicles are like the others. The race to cost cuts and the competition between all the brands is so fierce that even the mighty Japanese are doing things that are not as reliable as they were.” Suppliers were expected to see some fallout. “If Toyota gets the flu, its suppliers will also be sneezing,” said Kevin Chen, president of Gasgoo.com, a major Chinese auto parts trading platform, noting Toyota’s hand-picked suppliers depend on the automaker for a living. International supply companies were most at risk, said Tatsuya Mizuno, president of Mizuno Credit Advisory. “Of course, there will be negative implications. But if the company recognizes that this problem was caused because of international parts suppliers, then it’s conceivable that they could switch to Japanese parts-suppliers,” he told financial television service, Reuters Insider. India’s Amtek Auto, which supplies some parts to Toyota in the United States, did not expect a major impact. “Our exposure to the US has already come down by 50 to 60% in the last one year due to the slowdown and recession,” said Finance Director Santosh Singhi. Analysts have estimated the sales halt could cost Toyota at least ¥50 billion ($556 million) in operating profit a month, almost as much as it made in the September quarter. The impact will also depend on whether Toyota’s famously loyal customers begin to abandon the brand, an issue hotly debated on blogs and online forums. One reader of The Consumerist calling themselves theblackdog, wrote: “I don’t think I could trust buying a used Toyota that was manufactured in 2005 or later, so I guess I will be scratching Toyota off of my list to look at.” Safety reputation IHS Global Insight’s Da Silva argued Japanese carmakers would be able to salvage their reputation for safety as long as they moved quickly to show the recalls were isolated incidents. “If reliability becomes a permanent issue for Toyota and Honda that would negatively impact sales,” he said. Recalls can show companies care about the cars they build, and don’t simply wash their hands of them once they are driven away from the showroom, he added. “It should be an issue if they don’t take care of it and if it happens too often.” Toyota shares have dropped 17.6% since 21 January, when it said it would broaden its recalls by a further 2.3 million vehicles. Shares ended down 2% in Tokyo on Friday. Industry analysts and executives estimate it will cost some $250 million in warranty costs alone for Toyota to address the smaller of the two recalls underway in the United States. The automaker also faces the fallout from the larger recall that began last year and was broadened this week for vehicles at risk of having floormats that can jam under accelerator pedals. Then there are the still unknown costs of lost production, financial support to dealers and sales incentives the company has told its retailers it is considering. In addition, Toyota is certain to face lawsuits from people who claim injuries from the defects or class-action claims on behalf of consumers who will claim the crisis has damaged the value of their cars, analysts say. Source: World Business - Livemint.com | 29 Jan 2010 | 6:15 am
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