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Pursued legal remedy as last resort: Anil Ambani to staffAnil Ambani, Chairman, Anil Dhirubhai Ambani Group, said Reliance Natural Resources (RNRL) pursued the legal remedy as the last resort, reports CNBCTV18, quoting excerpts from the letter to employees.Source: Moneycontrol Top Headlines | 10 May 2010 | 8:26 am April car sales rise 39.5%, best in decadeCar sales in India posted their strongest April in at least a decade, jumping an annual 39.5 %, showing consumer demand in one of the world\'s fastest growing markets remained robust despite a rise in pricesSource: Moneycontrol Top Headlines | 10 May 2010 | 8:09 am BP says oil spill costs $350m to dateOil major BP Plc said the oil spill in the Gulf of Mexico had cost it USD 350 million so far, suggesting a run rate of cash far higher than some analysts had predictedSource: Moneycontrol Top Headlines | 10 May 2010 | 8:09 am Greek crisis impact on India seen minimal: policymakersIndia sees minimal impact from the Greek debt contagion despite some likely capital outflows in the near term, top policymakers said on MondaySource: Moneycontrol Top Headlines | 10 May 2010 | 8:08 am Greek crisis may see some forex outflows from EMs: RBIThe Greek crisis may lead to some forex outflows from emerging markets in the nearterm, Subir Gokarn, a deputy governor of the Reserve Bank of India (RBI) said on MondaySource: Moneycontrol Top Headlines | 10 May 2010 | 6:52 am Electrotherm to acquire two Gujarat cosElectrotherm (India) Ltd said on Monday it will acquire Hans Ispat Ltd and Shree Hans Paper Ltd at an investment of up to Rs 60 croreSource: Moneycontrol Top Headlines | 10 May 2010 | 6:51 am Vedanta buys Anglo zinc assets for $1.3 bnIndiafocused mining group Vedanta Resources Plc bought Anglo American\'s zinc assets for USD 1.34 billion on Monday to boost its exposure to the metal.Source: Moneycontrol Top Headlines | 10 May 2010 | 6:50 am May look at price cuts to maintain volumes: MaricoMarico will focus on volume growth more than value growth going forward, Harsh Mariwala, its Chairman and Managing Director, said in an interview to CNBCTV18.Source: Moneycontrol Top Headlines | 10 May 2010 | 6:48 am Talwalkars surges 28% on debutShares of fitness chain Talwalkars Better Value Fitness Ltd listed at a premium on Monday as prospects of growth in India\'s huge and untapped fitness industry and strength in the broader market attracted investorsSource: Moneycontrol Top Headlines | 10 May 2010 | 6:08 am Sebi fines Motilal Oswal Rs 5 lakh for flouting KYC normsThe Securities and Exchange Board of India (SEBI) has passed the consent order application of domestic brokerage firm Motilal Oswal, reports CNBCTV18.Source: Moneycontrol Top Headlines | 10 May 2010 | 5:39 am Vodafone launches handset at Rs 809 in Delhi - Economic Times
Source: Business - Google News | 10 May 2010 | 3:52 am Car exports up 28 pc, bikes zoom 96 pc in April - Economic Times
Source: Business - Google News | 10 May 2010 | 3:52 am Sensex surges 450 points on funds buyingSensex on Monday surged over 450 points at mid-session on emergence of buying by funds in heavy-weight stocks.Source: India Business News | Business News - Times of India | 10 May 2010 | 3:44 am Euro rebounds to $1.3047 after rescue move - Economic Times
Source: Business - Google News | 10 May 2010 | 3:44 am China's Taobao and Yahoo! Japan form partnershipHANGZHOU, China (Reuters) - China's Taobao and Yahoo! Japan said on Monday they will cooperate and launch two online platforms to cross sell into each others' markets, a move that will boost the reach of Asia's two e-commerce giants.Source: Reuters: Money News | 10 May 2010 | 3:37 am Gold falls over 3 pc; triggers festival buying - Economic Times
Source: Business - Google News | 10 May 2010 | 3:34 am Talwalkars aims for Rs 130 cr revenue - Economic Times
Source: Business - Google News | 10 May 2010 | 3:34 am No end in sight to spill as BP costs mountROBERT, La. (Reuters) - BP Plc said on Monday it had incurred $350 million in costs so far from the huge oil spill in the Gulf of Mexico as fears mounted of a prolonged and growing environmental and economic disaster.Source: Reuters: Money News | 10 May 2010 | 3:24 am Apex court plays the balancing act - Financial Express
Source: Business - Google News | 10 May 2010 | 3:18 am Oil jumps above $78 on emergency rescue dealLONDON (Reuters) - U.S. oil prices rallied more than $3 per barrel to above $78 on Monday after policymakers agreed a rescue package worth around $1 trillion to stabilise world financial markets and resolve the Greek debt crisis.Source: Reuters: Money News | 10 May 2010 | 3:18 am Shares extend gains to 3%Mumbai: Indian shares extended gains to 3% by afternoon on Monday, helped by strong global stocks after a $1 trillion rescue package to contain the Greek crisis from spreading elsewhere. At 2:20 pm (0850 GMT), the 30-share BSE index .BSESN was up 3% at 17,272.93 points, with 28 stocks gaining. The 50-share NSE index .NSEI was up 3.2% at 5,177.55. Source: Home - Livemint.com | 10 May 2010 | 3:03 am Indian shares extend gains to 3 pct - Reuters
Source: Business - Google News | 10 May 2010 | 3:02 am Rupee extends gain on weak dollar, share gainsMUMBAI (Reuters) - The rupee extended early gains in afternoon trade on Monday amid weak dollar overseas and a positive local sharemarket.Source: Reuters: Money News | 10 May 2010 | 3:01 am April car sales rise 39.5%, best in decadeNew Delhi: Car sales in India posted their strongest April in at least a decade, jumping an annual 39.5%, showing consumer demand in one of the world’s fastest growing markets remained robust despite a rise in prices. Vishnu Mathur, newly appointed director general of the Society of Indian Automobile Manufacturers (SIAM), said sales were likely to be sustained in a rapidly growing economy with easy availability of finance and improved consumer sentiment. Buyers are usually subdued in April after bunched purchases at the close of the financial year in March to take advantage of tax breaks on depreciation. But concerns for the industry are rising costs of raw materials such as pig iron and steel, and price increases to account for new emission standards. In April, Maruti Suzuki, India’s largest car maker and a unit of Suzuki Motor Corp, and utility vehicle leader Mahindra & Mahindra raised prices, citing higher costs from Euro IV emission norms. “There is an upward pressure in the prices of commodities. We have to watch that very, very carefully,” Mathur told reporters. Strongest growth in over a Decade Domestic car sales were 143,976 in April, up from 103,227 in the same month last year, SIAM data showed, led by Maruti Suzuki which sold 80,034 units. It was the biggest rise in sales since April 1999 when they rose an annual 50.3%, Mathur said. Including exports, companies sold 181,455 passenger vehicles in April, up from 132,534 in the same month last year. Sales of trucks and buses, a barometer of economic activity, rose 64.5% in April to 49,086 units, SIAM said. Motorcycle sales rose 16.7% to 656,119. At 12.45 p.m., the sector index was up 2.4% in the firm market that was up 2.5%. Source: Home - Livemint.com | 10 May 2010 | 3:01 am BSE Sensex extends gains to 3 pctMUMBAI (Reuters) - The BSE Sensex extended gains to 3 percent by afternoon on Monday, helped by strong global stocks after a $1 trillion rescue package to contain the Greek crisis from spreading elsewhere.Source: Reuters: Money News | 10 May 2010 | 2:55 am Greek crisis impact on India seen minimal: PolicymakersFinance secretary Ashok Chawla said he expected the Greek sovereign debt crisis to have a minimal impact on India, while one of the deputy governors at the Reserve Bank of India.Source: Daily News & Analysis: Money News | 10 May 2010 | 2:55 am Nifty up 3 on strong European cues Metal index up 5 - Moneycontrol.com
Source: Business - Google News | 10 May 2010 | 2:54 am India gold falls over 3 pct; triggers festival buyingMUMBAI (Reuters) - India gold prices fell over 3 percent on Monday afternoon, tracking weak overseas markets, triggering physical demand ahead of a key festival next week, dealers said.Source: Reuters: Money News | 10 May 2010 | 2:54 am SJVN prices IPO at top end; Jaypee at bottomMUMBAI (Reuters) - Two companies priced their initial public offers on Monday at the opposite end of their indicated band, company and sources said, showing investors were reticent to back high-priced share sales.Source: Reuters: Money News | 10 May 2010 | 2:48 am Oil jumps above $78 on emergency rescue dealLondon: US oil prices rallied more than $3 per barrel to above $78 on Monday after policymakers agreed a rescue package worth around $1 trillion to stabilize world financial markets and resolve the Greek debt crisis. The size of the package surprised dealers and boosted confidence that oil demand will recover this year. The package consists of €440 billion in guarantees from euro area states, plus €60 billion in a European stabilization fund that could be disbursed to help euro zone states if needed. A further €250 billion would come from the International Monetary Fund (IMF). Global equities and the euro rebounded and the dollar index slipped as news of the rescue package helped calm risk aversion. Benchmark US light crude oil futures for June delivery were up $3.06 at $78.17 a barrel by 0853 GMT. ICE Brent crude for June also jumped $3.17 to $81.44. Opec Secretary-General Abdullah al-Badri said he expected the emergency package to boost oil prices back up above $80 a barrel, but warned of wild price swings as the global economy continued on its path to recovery. “I think the market will look positively at this development,” Badri told reporters on the sidelines of the Arab Energy Conference. “I assume prices would go back to normal, where it was ... back up to $80 plus.” “Opec Overproducing” Ben Westmore, a commodities analyst at National Australia Bank, said it would take some time for events in Europe to play out and uncertainty would remain in investors’ minds. “But the announcement of these packages allays some concerns because contagion can be contained in the short term,” he added. Edward Meir, analyst at brokers MF Global, agreed: “We expect that this will be enough to calm the frazzled markets for now,” Meir said. Crude prices fell more than $11 last week, the biggest weekly loss in almost a year and a half, on worries the euro zone’s debt crisis would derail the global economic recovery. Badri said on Sunday global oil markets were oversupplied, but it was too early to talk about the producer group taking action to halt the sharp price fall sparked by the euro zone debt crisis. “Opec is overproducing, there is no doubt about it,” he told reporters in Doha, urging greater compliance from Opec producers with deep curbs in production agreed in 2008. Price charts show US crude temporarily supported at $74.51 and expected to rebound to $78 as the drop last week was too sharp not to be followed by a powerful rebound. Saudi Arabia, the world’s top crude oil exporter, will maintain full volumes to its main Asian customers and keep supplies steady to at least one European major next month, suggesting it is content with oil prices. China imported 21.17 million tonnes of crude oil or 5.15 million barrels per day in April, a record high level on a daily basis, according to data released by the customs department. The import level was 31% higher than a year earlier, when imports were at 16.17 million tonnes. Source: Home - Livemint.com | 10 May 2010 | 2:46 am SC permits Reddy brothers to resume mining in AnantapurNew Delhi: The Supreme Court on Monday allowed Obulapuram Mining Company (OMC), belonging to the Reddy brothers, to resume mining in the undisputed region in the Anantapur district of Andhra Pradesh. A bench comprising Chief Justice K G Balakrishnan and Justices Deepak Verma and B S Chauhan allowed OMC to start mining operations within 150 meters of the Andhra border. The apex court, however, clarified that mining by OMC should be carried out only in the undisputed area of the lease granted by the Andhra Pradesh government. Meanwhile, the court also directed Reddy brothers to stop mining if the Survey of India asks them to temporarily discontinue operations while surveying the region for demarcation of boundary between the two states. “Whenever, the Survey of India would say to stop you (OMC) from mining, you would have to stop,” the court said. The bench also directed the Survey of India to complete the process of demarcating the border between the two sates—Karnataka and Andhra Pradesh—within two months. In its order, the court also directed the Karnataka government to appoint officials from the forest and mining departments to assist the committee appointed by it in demarcating the boundary between the two states. The apex court had on 22 March banned mining of iron ores by OMC and appointed a committee comprising officials of the Survey of India, the forest, irrigation and revenue departments of Andhra Pradesh, besides representatives of the Reddy brothers to look into allegations of illegal mining and violation of leased areas. The Reddy brothers, who own mining leases for over 136 hectares of land spread in Andhra Pradesh’s Anantapur district, are accused of encroaching on reserve forest lands. Source: Home - Livemint.com | 10 May 2010 | 2:37 am Delhi Metro to soon flag off AC feeder buses - NDTV.com
Source: Business - Google News | 10 May 2010 | 2:36 am US transport chief warns Toyota over safetyUS Transportation Secretary Ray LaHood warned Japanese auto giant Toyota on Monday that the US government "will not sleep" until it is sure the carmaker has made improvements in safety. Source: HindustanTimes.com - Top Business News Headlines | 10 May 2010 | 2:26 am BP says oil spill costs $350 million to dateFishermen's groups have lodged lawsuits for damages while others, including people in the tourism industry, have complained of losses due to the spill.Source: Daily News & Analysis: Money News | 10 May 2010 | 2:17 am EU creates $1 trillion package to save euroThe European Union spearheaded a $1 trillion plan on Monday to contain Europe's spreading debt crisis and keep it from tearing the euro currency apart and derailing the global economic recovery.Source: HindustanTimes.com - Top Business News Headlines | 10 May 2010 | 1:58 am Vedanta buys Anglo zinc assets for $1.3 billionVedanta will become the world's largest zinc producer, with 11% of the global market, after buying the assets, including the Skorpion mine in Namibia, lisheen in Ireland and Black Mountain in South Africa.Source: Daily News & Analysis: Money News | 10 May 2010 | 1:46 am April car sales rise 39.5 pct, best in decadeNEW DELHI (Reuters) - Car sales in India posted their strongest April in at least a decade, jumping an annual 39.5 percent, showing consumer demand in one of the world's fastest growing markets remained robust despite a rise in prices.Source: Reuters: Money News | 10 May 2010 | 1:45 am Greek crisis impact on India seen minimal - policymakersNEW DELHI/KOLKATA (Reuters) - India sees minimal impact from the Greek debt contagion despite some likely capital outflows in the near term, top policymakers said on Monday.Source: Reuters: Money News | 10 May 2010 | 1:41 am Greek crisis may see some forex outflows from EMs: RBI - Moneycontrol.com
Source: Business - Google News | 10 May 2010 | 1:35 am Greek crisis impact on India seen minimalNew Delhi/Kolkata: India sees minimal impact from the Greek debt contagion despite some likely capital outflows in the near term, top policy makers said on Monday. Finance secretary Ashok Chawla said he expected the Greek sovereign debt crisis to have a minimal impact on India, while one of the deputy governors at Reserve Bank of India, Subir Gokarn, said there may not be any impact in the long term. “There might be some nervousness among investors worldwide which might provoke capital outflows from emerging markets in the short run, so there is a risk of short-term vulnerability of capital outflows,” Gokarn said in a separate event in Kolkata. European Union finance ministers agreed an emergency loan package on Monday that with IMF support could reach €750 billion ($1 trillion) to prevent a sovereign debt crisis spreading through the euro zone. Separately, Chawla said India’s inflation was spreading to non-food items. High manufacturing inflation would be taken into account for policy making going forward as it was more worrisome than food prices, said Gokarn. FII Limit The government is looking at raising the foreign institutional investors (FII) investment limit in debt, said Chawla. “We are looking at that,” Chawla told reporters, when asked whether the government was planning to raise the FII investment cap in both government and corporate debt, currently at $5 billion and at $15 billion respectively. Chawla also said he did not expect any change in the government’s market borrowing plan in the first half of the current fiscal year that started on 1 April. The government is on track to borrow Rs2.87 trillion in the period through September. However, higher-than-expected proceeds from the third generation mobile spectrum auction has raised speculation that the government’s borrowing in the first half of 2010-11 could be lower. Source: Home - Livemint.com | 10 May 2010 | 1:33 am Sony hikes '09/10 ops estimate to profit from lossSony Corp said it likely swung to an annual profit in the last financial year, rather than its previous forecast of an operating loss, helped by cost cuts and milder price falls than expected, beating market expectations.Source: HindustanTimes.com - Top Business News Headlines | 10 May 2010 | 1:29 am Euro jumps, stocks boosted by EU crisis planHong Kong: The euro rebounded from 14-month lows and Asian stocks jumped on Monday after the European Union and IMF carved out an emergency rescue package of up to €750 billion ($1 trillion) to keep Greece’s debt crisis from spreading through the euro zone. The size of the package and an unexpected pledge by the European Central Bank to buy euro zone bonds if needed gave investors some confidence to return to riskier assets such as stocks, though questions remained about how the scheme would work. Major global central banks moved swiftly to support Europe, re-establishing dollar swap facilities used during the 2007-2008 financial crisis to help ease strains and ensure there was enough liquidity to keep global credit markets from seizing up again. “These measures are a game changer in the near to medium term,” said Dariusz Kowalczyk, chief investment strategist for SJS Markets, adding the aid package was big enough to deter speculation in the short term about a Greek debt default. Others agreed the move had at least bought Europe some time as it tries to calm markets, but High Frequency Economics said in a research note that the package was “still too vague to understand”. The euro rose to as high as $1.2982 by mid-afternoon, up around 1.7% and pulling away from a 14-month low of $1.2510 hit on trading platform EBS last week. European and US stocks were also seen opening higher. Britain’s FTSE 100, Germany’s DAX and France’s CAC 40 was seen up as much as 2.8%, according to financial bookmakers. S&P futures rose nearly 3%. But gains in Asia were tempered by caution about how the emergency package will be funded and concerns about longer term structural problems in the euro zone. The MSCI ex-Japan index rose 3.1%, while Japan’s Nikkei ended up 1.6% but off the day’s high. The MSCI Asia ex-Japan index fell for five straight days last week for a loss of 8.4%, wiping out its gains so far this year and its highest percentage weekly loss since November 2008. “Investors now want to see how European and US stocks perform overnight. Caution also remains as reasons behind the abnormal slide in US stocks last week still haven’t been identified,” said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets. The Dow Jones Industrial Average suffered a so far unexplained plunge of nearly 1,000 points at one point on Thursday as Greece’s debt problems intensified. Though Wall Street later recouped most of the sharp losses, with traders initially suspecting a technical glitch, investors’ nerves remain frayed by the extreme volatility in recent days. Kowalczyk said global risky assets — equities, commodities and emerging market assets — would be boosted by the latest EU support measures but added the euro will soon slip again because of the liquidity boost provided by ECB. The ECB surprised analysts by saying it will buy euro zone government bonds to help support fractured markets, abandoning its resistance to full-scale asset purchases. While some analysts had urged the central bank to push such a financial “nuclear button” to defuse the escalating debt crisis, others said buying bonds could be tantamount to printing money to finance Greece’s fiscal deficit. Before the European announcement, data from the Commodity Futures Trading Commission showed euro sceptics’ bets against the common currency hit a record high in the week ending 4 May. Financial markets have been punishing heavily indebted euro zone members, threatening to plunge them into the same sort of crisis as Greece, which could derail the global economic recovery. The new safety net was meant to protect other countries with bloated budgets, such as Portugal, Spain and Ireland. As jitters over euro zone finances battered global markets, investors have dumped riskier assets for safer ones such as the US dollar, creating fears of dollar shortages in some countries and driving up dollar funding costs. “While the ECB’s intervention (in bond markets) might attract bad press regarding its mandate and independence, we believe that this was necessary to short circuit the negative feedback loop which was getting more and more threatening for the global economy,” the Royal Bank of Scotland said in a research note. “Sceptics will probably argue that this does not solve the medium term debt overhang issues plaguing the periphery (other weak euro zone countries). However they won’t deny that this will give them a chance to implement some fiscal consolidation plans to restore market confidence in the sustainability of public finances in the euro area.” Oil rose 3% to above $77 a barrel on hopes that the EU deal will prevent broader damage to Europe’s economy which would have dampened energy demand. Gold tumbled as much as 1.5% to $1,195.20 an aounce, down from a near record-high of $1,213.35 hit Friday. The US dollar was firmer against the yen at 92.64 and well off Friday’s five-month lows of 88.00. It was down 1% against a basket of major world currencies. US Treasuries were broadly weaker amid optimism about the plan, adding to Friday’s losses after the US Labor Dept reported larger-than-expected employment gains in April, suggesting the economic recovery was well underway. Source: Home - Livemint.com | 10 May 2010 | 1:18 am Sony hikes 2009-10 oper estimate to profit from lossThe maker of Bravia flat TVs and Cyber-shot digital cameras raised its operating estimate to a profit of 32 billion yen from a 30 billion yen loss for the year ended March 31.Source: Daily News & Analysis: Money News | 10 May 2010 | 1:11 am Indian shares extend gains to more than 2%At 11.47am, the 30-share BSE index was up 2.1% at 17,113.60 points, with 28 stocks gaining. The 50-share NSE index was up 2.2% at 5,128.50.Source: Daily News & Analysis: Money News | 10 May 2010 | 1:10 am Suzuki sees profits tad up, India bottleneck easesTokyo: Suzuki Motor Corp forecast on Monday a tiny rise in annual operating profit as a supply bottleneck in India eases despite stiffer competition and higher input costs in its single-biggest market. The maker of the Swift, Alto and other tiny hatchbacks has outperformed the industry in the past few years thanks to consumers’ shift to smaller, more fuel-efficient cars around the world. Analysts said Suzuki would also benefit from recently expanded capacity in India — at 1 million units a year as of March — before it adds another 250,000 units from April 2012 to cement its dominance in the fast-growing Indian market. For the year to 31 March 2011, Suzuki, Japan’s fourth-biggest automaker, forecast an operating profit of ¥80 billion ($874 million), 0.8% up from the ¥79.36 billion it made last year. It expects net profit to grow 3.8% to ¥30 billion. A survey of 18 brokerages by Thomson Reuters I/B/E/S showed that on average they expect operating profit of ¥88 billion for 2010-11. Operating profit in the final, January-March quarter was ¥29.5 billion, compared with a profit of ¥10.45 billion a year earlier. The result was better than the ¥19.2 billion average estimate in the poll of brokerages. Fourth-quarter net profit came to ¥13.4 billion versus a profit of ¥5.8 billion a year ago. Last month, Indian unit Maruti Suzuki India Ltd missed forecasts for fourth-quarter net profit and warned of margin pressure and slower sales growth as global automakers pile into the competitive compact car market. Suzuki must also repair its ailing motorcycle business, which unlike Honda Motor Co’s successful operations, has yet to recover from a sales slump as consumers stay away from leisure products. Further out, analysts are looking for Suzuki to realise synergies from its tie-up with Volkswagen AG, which now owns 19.9% of Suzuki. Suzuki’s shares have fallen 18% in the year to date, underperforming a 6% rise in Tokyo’s transport equipment subindex. Before the announcement, Suzuki’s shares closed up 1.5% at ¥1,858. Source: LatestNews-Home - Livemint.com | 10 May 2010 | 12:43 am Suzuki sees profits tad up, India bottleneck easesTokyo: Suzuki Motor Corp forecast on Monday a tiny rise in annual operating profit as a supply bottleneck in India eases despite stiffer competition and higher input costs in its single-biggest market. The maker of the Swift, Alto and other tiny hatchbacks has outperformed the industry in the past few years thanks to consumers’ shift to smaller, more fuel-efficient cars around the world. Analysts said Suzuki would also benefit from recently expanded capacity in India — at 1 million units a year as of March — before it adds another 250,000 units from April 2012 to cement its dominance in the fast-growing Indian market. For the year to 31 March 2011, Suzuki, Japan’s fourth-biggest automaker, forecast an operating profit of ¥80 billion ($874 million), 0.8% up from the ¥79.36 billion it made last year. It expects net profit to grow 3.8% to ¥30 billion. A survey of 18 brokerages by Thomson Reuters I/B/E/S showed that on average they expect operating profit of ¥88 billion for 2010-11. Operating profit in the final, January-March quarter was ¥29.5 billion, compared with a profit of ¥10.45 billion a year earlier. The result was better than the ¥19.2 billion average estimate in the poll of brokerages. Fourth-quarter net profit came to ¥13.4 billion versus a profit of ¥5.8 billion a year ago. Last month, Indian unit Maruti Suzuki India Ltd missed forecasts for fourth-quarter net profit and warned of margin pressure and slower sales growth as global automakers pile into the competitive compact car market. Suzuki must also repair its ailing motorcycle business, which unlike Honda Motor Co’s successful operations, has yet to recover from a sales slump as consumers stay away from leisure products. Further out, analysts are looking for Suzuki to realise synergies from its tie-up with Volkswagen AG, which now owns 19.9% of Suzuki. Suzuki’s shares have fallen 18% in the year to date, underperforming a 6% rise in Tokyo’s transport equipment subindex. Before the announcement, Suzuki’s shares closed up 1.5% at ¥1,858. Source: World Business - Livemint.com | 10 May 2010 | 12:43 am Suzuki sees profits tad up, India bottleneck easesTOKYO (Reuters) - Suzuki Motor Corp forecast on Monday a tiny rise in annual operating profit as a supply bottleneck in India eases despite stiffer competition and higher input costs in its single-biggest market.Source: Reuters: Money News | 10 May 2010 | 12:38 am Jaypee Infratech sets IPO price at lower end: SourcesAn IPO by Indian road-builder Jaypee Infratech, a unit of construction firm Jaiprakash Associates, raised about $502 million after the deal was priced at the bottom of its indicated range.Source: Daily News & Analysis: Money News | 10 May 2010 | 12:27 am Tata Motors to sell 1 bln rupees of bonds: sourcesTata Motors will sell 1 billion rupees of bonds this week, two sources with knowledge of the matter said on Monday. The 10-year bonds carry a coupon rate of 9.75 per cent and are rated 'AA-minus' by CARE and 'A-plus' by ICRA, they added.Source: HindustanTimes.com - Top Business News Headlines | 10 May 2010 | 12:20 am Goldman Sachs set to finance an Extended Stay bid: ReportGoldman Sachs Group Inc. is close to a deal to provide financing of $2.2 billion to one of the groups bidding for mid-priced US hotel chain Extended Stay, the Wall Street Journal reported on Sunday.Source: Daily News & Analysis: Money News | 10 May 2010 | 12:19 am RNRL shares plunge 9.47 pc to one-year lowReliance Natural Resources Ltd (RNRL) today continued to slide, falling 9.47 per cent to touch a one year-low of Rs 47.75 on the BSE, after the Supreme Court ruled against the company in a gas dispute with Reliance Industries.Source: HindustanTimes.com - Top Business News Headlines | 10 May 2010 | 12:11 am Gold eases after EU debt containment planSingapore: Gold fell more than half a percent on Monday, trading just above $1,200 an ounce, as investors weighed whether a half a trillion euro plan could safeguard euro zone sovereign debt from default. European Union finance ministers agreed on Monday on emergency measures worth €500 billion ($670 billion) to prevent Greece’s debt crisis causing turmoil in other euro zone countries. The measures are worth much more than any previous attempts by the 27-country EU or the 16-state single-currency group to calm what one minister described as the “wolfpack” of the financial markets. That sent the dollar down 1% against a basket of currencies as the euro rallied, but it was not enough to completely put investor worries to rest. “Equities markets have gone crazy. We are up 2% in Australia with this collective sigh of relief about the EU plan. But we are still digesting,” said Jonathan Barratt, managing director of Commodity Broking Services in Sydney. “The risk remains of contagion, but I think once Europe opens we’ll see gold get smacked. The EU has finally gotten ahead of the market and done something. They realise contagion would be catastrosphic and €500 billion is a start.” From a technical perspective, spot gold could retrace towards $1,185.28 or $1,178.65 — the 50 and 61.8% Fibonacci retracement levels of the move from $1,157.20 to $1,213.35. Spot gold tumbled more than $18 to a low of $1,195.20 an ounce from Friday’s five month high of $1,213.35, according to Reuters data. At 0450 GMT, gold was quoted at $1,200.50 an ounce. US June gold futures on the COMEX division of the NYMEX stood at $1,201.5 an ounce versus Friday’s settlement of $1,210.40 an ounce. “The market has been focused on euro zone plans for Greece and the early reaction was positive for riskier assets. This will mean a slowing in the surge in gold,” Barclays Capital analyst Yingxi Yu said. But she added the market still wanted more clarity on the plans and beyond the short term, gold was likely to remain well supported. The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at a record high of 1,188.498 tonnes as of 7 May, from 1,185.787 tonnes in the previous business day. Platinum rose more than 1%, following last week’s fall of of 4.8% while palladium jumped more than 2% to touch an intra-day high of $521.75 after sliding 7.5% last week. “Platinum remains one of our favoured markets within commodities,” Yu said. Source: Home - Livemint.com | 10 May 2010 | 12:03 am RNRL shares plunge 9.47% to one-year lowShares of the Anil Ambani-led RNRL touched a one-year low of Rs 47.75 on the BSE on Monday after the Supreme Court ruled against the company in a gas dispute with Reliance Industries.Source: India Business News | Business News - Times of India | 10 May 2010 | 12:02 am Outlook appears negative for Reliance CapitalI bought Reliance Capital May futures at Rs 680. What should the stop-loss and target be? – S. Bhuvaneswari,Source: Business Line - Home Page | 10 May 2010 | 12:00 am IT companies may report lower profit growth this fiscalInfosys has guided for only 2.1 per cent profit growth in FY11. The situation may not be too different for other ITSource: Business Line - Home Page | 10 May 2010 | 12:00 am Day Trading GuideInitiate fresh short position if the stock dives below Rs 281 with rigidSource: Business Line - Home Page | 10 May 2010 | 12:00 am Outswing vs inswing – making sense of capital flowsIndia needs to stay alert about the possible “outswing” – outflow of capital – even as it can celebrate the sharp increase in capital inflows into the country on the back of some fiscal worries in many industrialisedSource: Business Line - Home Page | 10 May 2010 | 12:00 am TCS to be tech ally for Swiss cycling teamSwitzerland-headquartered professional cycling team, Cervélo Test Team (CTT), has selected Tata Consultancy Services as its official technology partner for the next twoSource: Business Line - Home Page | 10 May 2010 | 12:00 am Hindustan Construction Company: SellInvestors with medium-term perspective can consider selling the stock of Hindustan Construction Company (Rs 119.1). The stock had been in an intermediate-term uptrend from its March 2009 low of Rs 29 levels until it encountered significantSource: Business Line - Home Page | 10 May 2010 | 12:00 am Air India told to cut cost on new acquisitionsThe newly-appointed audit committee, headed by Mr Harsh Neotia, Chairman, Ambuja Realty, has asked Air India to look at ways of bringing down its annual interest burden and repayment costs on the acquisition of new aircraft. In 2006, the airlineSource: Business Line - Home Page | 10 May 2010 | 12:00 am `Verdict has strengthened Reliance Natural's position'The Supreme Court verdict in the RIL-RNRL case will not change the business model of Reliance Natural Resources Ltd which will not be reduced to a shell company as is being predicted by many analysts, said Mr J.P. Chalasani, CEO, RelianceSource: Business Line - Home Page | 10 May 2010 | 12:00 am Gold breaches $1,200/oz on safe haven buyingWhat a week it was that went by! Commodity prices came under intense downward pressure. Almost all risky assets posted heavy losses in the wake of continuing concerns over the far-from-resolved European debt crisis. Equity markets were not sparedSource: Business Line - Home Page | 10 May 2010 | 12:00 am Gold to test resistance, dropComex gold futures rose to record highs on Friday as volatile equities and currencies prompted nervous anxious investors to buy gold. Investors piled into gold exchange traded funds and coins and bars, with bullion holdings in the biggestSource: Business Line - Home Page | 10 May 2010 | 12:00 am Reliance Natural shares fall 9.5%At 9.31am (0401 GMT), Reliance Natural Resources was down 8.2% at Rs48.40, while main stock index rose4 1.4%.Source: Daily News & Analysis: Money News | 9 May 2010 | 11:33 pm IMF chief welcomes EU fund, pledges supportDominique Strauss-Kahn said the new 500 billion ($670 billion) European Stabilisation Mechanism would help stabilise the global financial system and preserve the economic recovery underway.Source: Daily News & Analysis: Money News | 9 May 2010 | 11:32 pm April local car sales up 39.5%: IndustryDomestic firms sold 143,976 cars in the month, compared with 103,227 units a year ago, data from the Society of Indian Automobile Manufacturers (SIAM) showed.Source: Daily News & Analysis: Money News | 9 May 2010 | 11:14 pm Domestic car sales jump 39 pc, bikes 17 pc in AprilDomestic passenger car sales jumped by 39.48 per cent to 1,43,976 units in April. The figure for the corresponding month of the last year was 1,03,227 units.Source: India Business News | Business News - Times of India | 9 May 2010 | 11:01 pm Rupee rises 40 paise against dollar in early tradeThe rupee appreciated sharply by 40 paise against the dollar in early trade today largely on the back of fresh capital inflows by foreign funds into equities.Source: India Business News | Business News - Times of India | 9 May 2010 | 10:51 pm Sensex up 260 points on Asian cuesSensex recovered by over 260 points in opening trade on Monday, snapping its week-long losing streak on emergence of buying by foreign funds, driven by a firming trend in Asian markets.Source: India Business News | Business News - Times of India | 9 May 2010 | 10:20 pm RNRL shares fall 9.5%Mumbai: Shares in India’s Reliance Natural Resources fell as much as 9.5% on Monday morning, extending Friday’s 23% tumble after the Supreme Court delivered a verdict against the company in a gas dispute with Reliance Industries. The Supreme Court on Friday ordered the two companes to renegotiate within six weeks a private natural gas supply contract between Mukesh Ambani’s Reliance Industries and the younger Anil’s Reliance Natural Resources. At 9:31 am (0401 GMT), Reliance Natural Resources was down 8.2% at Rs48.40. Source: Home - Livemint.com | 9 May 2010 | 10:12 pm Sensex recovers 260 pts in opening trade on Asian cuesThe Bombay Stock Exchange benchmark Sensex recovered by over 260 points in opening trade today, snapping its week-long losing streak on emergence of buying by foreign funds, driven by a firming trend in Asian markets. Source: HindustanTimes.com - Top Business News Headlines | 9 May 2010 | 9:42 pm IMF approves 30-billion-euro loan to GreeceThe International Monetary Fund (IMF) on Sunday approved a three-year, 30-billion-euro ($38-billion) loan to Greece, the IMF said at its headquarters in Washington.Source: HindustanTimes.com - Top Business News Headlines | 9 May 2010 | 8:00 pm RIL holds the upper hand in negotiationsMumbai: The habitual reticence of executives belonging to Reliance Industries Ltd (RIL), India’s most valuable company, was laced with relief over the weekend, even as their counterparts in the Reliance-Anil Dhirubhai Ambani Group (R-Adag) held hectic parleys internally and briefed reporters extensively. That’s largely the frame of mind in which the Mukesh Ambani-owned RIL is going to initiate renegotiations, as it sends out a formal note outlining terms to Reliance Natural Resources Ltd (RNRL), the fuel-trading firm owned by estranged younger brother Anil Ambani. With a clear upper hand at the bargaining table over the next six weeks, “it is impossible to envisage a scenario where gas could go for anything lesser than $4.2” per million British thermal unit (mmBtu) in the negotiation process, said a Mumbai-based analyst with a domestic brokerage. RIL did not respond to Mint queries on how it intends to take the gas supply discussions forward. RNRL wanted 28 million standard cu. m of gas a day (mscmd) for 17 years at $2.34 per mmBtu or 44% cheaper than the government’s $4.2 per mmBtu price tag, basing its claims on a 2005 family division pact. All of that is now up for discussion, except perhaps for the price. RIL’s executive director P.M.S. Prasad said in television interviews right after the court verdict—and before his trip to Tirupati—that the company too wanted an expeditious resolution on this with RNRL, but added categorically that it would be in keeping with government’s pricing and allocation policies. A battle-weary executive with the oil-to-yarn conglomerate who did not want to be named, said he wasn’t sure his first reaction after watching the verdict on television was “relief, happiness or fatigue...” An RIL lawyer told Mint on condition of anonymity that Atul Dayal, founding partner of law firm AS Dayal and Associates would head its negotiating team while an RNRL lawyer confirmed that J.P. Chalasani, chief executive officer of Reliance Power Ltd (RPL) would lead its team during the negotiations. The apex court in its judgement on 7 May had given directions to both RIL and RNRL to renegotiate the gas supply master agreement (GSMA) in accordance with government policy. AS Dayal and Associates specialises in advising RIL companies and the firm had fought its case in the Bombay high court. Both parties are studying the judgement and negotiations are likely to start in four-five days in Mumbai, the lawyers said. Mint could not independently verify the information. R-Adag executives know RIL is holding the whip hand as they go back to the drawing board and rework their options. Utility firm Reliance Infrastructure Ltd’s chief executive Lalit Jalan said that R-Adag was “open to other suppliers of gas as well as liquified natural gas” to provide feedstock for its 7,480MW Dadri power project. Edelweiss Securities Ltd analysts Niraj Mansingka and Ruchi Vora wrote in a 7 May note to their clients that RNRL may have no option on price. “We always understood that the PSC (production sharing contract) provided marketing freedom for hydrocarbons,” they wrote. “But the court directive indicates marketing freedom subject to government...approval. This may leave little room for flexibility on pricing. Hence, it is likely that RNRL may contract gas at $4.2/mmBtu.” Edelweiss upgraded RIL “stock to a ‘BUY’, as overhang may be over and on positive E&P (exploration and production)/refining outlook”. RIL’s shares had underperformed the benchmark equity index, the Sensex, by 22% in 2009-10—the first dip in five years and the largest in this decade—and the gas dispute was cited as one of the reasons by Anil Sharma and Ravikumar Adukia, analysts with Nomura Financial Advisory and Securities (India) Pvt. Ltd in a 5 April note. The decline was “after four straight years of outperformance ranging from 8% to 49% (an average of 26% for the last four years)”, they had written at the time. The family memorandum of understanding (MoU), which the Supreme Court has said is subservient to government regulations, however, has certain other clauses regarding gas assets which aren’t clear. Besides the Krishna-Godavari (KG) basin, D6 gas, Anil Ambani has right of first refusal on 40% of all future gas finds by RIL at market rates. It is not clear if this condition still applies after the court ruling. RIL, in a late Friday statement, said the court has held that “MoU amongst the family of the promoters does not bind the corporate entity RIL,” while Anil Ambani told reporters the same day that the MoU which “is the guiding force and the basis of the scheme of arrangements for business reorganization of RIL”, would be the basis of the negotiations. If RNRL doesn’t get the gas, then its entire business plan will have to be reviewed, predicated as it was on this source. On the other hand, if it does get the fuel, it may disrupt the plans of three dozen hand-picked, fertilizer and power users that were nominated by the government for the same gas. Edelweiss analysts estimate that if 40 mscmd gas is supplied to RNRL and state-owned power utility NTPC Ltd (fighting another lawsuit for cheaper gas from RIL), there will be a shortage of the fuel and an increase in demand for liquefied natural gas, especially from Petronet LNG. Much therefore hangs in balance as the two companies thrash out a solution over the next month and half. bhuma.s@livemint.com Manish Ranjan contributed to this story. Source: LatestNews-Home - Livemint.com | 9 May 2010 | 1:51 pm Insurance industry back on track; LIC leads the packAfter two months of muted growth, the insurance industry’s March weighted new received premium (WNRP) grew 1.5 times sequentially to Rs12,640 crore, assisted by a strong 1.8 times sequential increase to Rs6,920 crore for Life Insurance Corp. of India (LIC). For private firms, March WNRP grew 1.2 times to Rs5,720 crore sequentially. Also See Insuring Life (Graphic) On a favourable base, on a year-on-year (y-o-y) basis, WNRP grew by approximately 42% to Rs12,640 crore. LIC reported WNRP growth of 55% and private companies reported WNRP growth of 28% y-o-y. In FY10, the industry WNRP grew 18% y-o-y to Rs57,800 crore led by 31% y-o-y growth of LIC to Rs28,300 crore. In March, private insurers reported strong WNRP growth on a y-o-y and sequential basis led by strong growth by large insurers, such as ICICI Prudential Life Insurance Co. Ltd, SBI Life Insurance Co. Ltd, Reliance Life Insurance Co. Ltd and HDFC Standard Life Insurance Co. Ltd. In FY10, WNRP for SBI Life Insurance grew significantly (approximately 37%) against private companies’ growth of approximately 8%. Reliance Life Insurance grew in line with private insurers. HDFC Standard Life grew marginally higher than private firms. Other large private companies’ growth was flat to negative at 20%. Due to a strong growth by LIC, private insurers’ market share declined to 51% from 56% a year ago. In FY10, ICICI Prudential Life Insurance’s market share declined to 17.7% (19.3%), Bajaj Allianz’s market share declined to 11.1% (13.9%) and Birla Sun Life Insurance Co. Ltd’s share declined to 7.8% (9%). SBI Life Insurance increased its share to 14.4%. Reliance Life Insurance and HDFC Standard Life improved their market shares marginally to 10.9% and 8.7%, respectively. Private insurers’ FY10 WNRP growth of 7.8% was marginally higher than our estimates of 5%. We continue to maintain our estimate of 15% y-o-y WNRP growth for private firms in FY11 and FY12. We value life insurance companies by ascribing a 15 times multiple estimated FY12 new business achieved profit. The life insurance business’s valuation contributes 5-10% of sum-of-the-parts values for companies under our coverage. Graphic by Paras Jain/Mint feedback@livemint.com Source: LatestNews-Home - Livemint.com | 9 May 2010 | 1:45 pm How not to get a mediclaim shock on your hospital bedHave you ever been in a situation when a policy that covers a few lakhs of hospital costs did not even cover claims worth Rs10,000? While it is easy to push the blame on companies that cheat, it is most often incorrect understanding of the health insurance policy that is at fault. Though reading of the complicated policy document looks difficult, it makes sense to understand a few key terms to ensure a better medical experience.  Illustration: Jayachandran / Mint Hospitalization cover The biggest part of your policy, this covers expenses such as room rent, surgical procedures, nursing expenses, doctor’s fees, cost of medicines and diagnostic tests. However, most policies specify the extent to which they will pay for certain services, such as ambulance charges, room rent and day care treatment. What you need to check urgently is the day-care coverage. Procedures, such as cataract and tonsillectomy, don’t need an overnight hospital stay. Check if your policy will cover (and to what extent) an under 24-hour stay. Says Shreeraj Deshpande, head (health Insurance), Future Generali Insurance Co. Ltd: “There are about 130 day-care procedures as a result of advanced medical technology and are covered. The customer should go through the list to know what is covered.” Also, check what your sub-limits are. A sub-limit breaks the sum insured into smaller fractions. For instance, in some policies, there is a cap on the room rent that the insurer will pay. Anything over that will have to be borne by you. These sub-limits may also be applicable to certain diseases. Pre & post hospitalization A basic health insurance policy usually covers doctor’s fees, expenses on medicines and diagnostic tests that one, typically, incurs before planned hospitalization and for three months after hospitalization. But you need to check the limit on this expenditure as it differs from policy to policy. Pre-existing These are diseases or symptoms of diseases that exist at the time of taking a new health insurance policy and are excluded from policy cover. Earlier, there was a lot of disparity among insurers in describing these pre-existing diseases and, subsequently, specifying a time period after which these diseases can be covered. The Insurance Regulatory and Development Authority stepped in last year and issued a uniform definition of a pre-existing disease. Pre-existing disease now means any condition, ailment or injury for which the insured person had symptoms and was diagnosed or had received medical treatment within four years before buying the policy. After a waiting period of four years, these pre-existing diseases would be covered. Waiting period When you buy a health insurance policy, your cover doesn’t kick in immediately. Insurers, typically, wait for a month to three months to activate your cover. During the waiting period, the insurer only covers treatment arising due to an accident, but excludes any ailment- or disease-related treatment. Policy exclusion An important text of the policy document, largely exclusions specify the diseases, conditions and medical services that your health policy doesn’t cover, besides the waiting period on certain diseases. For instance, any internal congenital disease is excluded permanently. Add to the list: cosmetic surgeries, dental treatment and medical consultation. Adds Deshpande: “Cosmetic surgeries that are done for aesthetical purpose are excluded. Even treatment like weight loss and alcohol abuse is excluded.” Some other diseases, such as cataract, piles, hernia and removal of gallstones, come with a waiting period of one to two years. Some insurers may specify a sub-limit on these ailments. Co-payment This feature exists mostly in health insurance plans for senior citizens. As the name suggests, the insurer expects the policyholder to pay a part of the claim amount. For instance, if you have medical insurance for Rs2 lakh and hospitalization costs Rs50,000, your policy will only pay Rs45,000, if there is a 10% co-payment clause. Co-payment could also be on certain specified ailments. Some insurers may ask you to pay extra to waive off the co-payment clause. Deductible Often confused with co-payment, the deductible is the limit till which the insurer will not pay; it will pay only if the claim crosses a certain limit. For instance, Health Super Surplus policy of Star Health and Allied Insurance Co. Ltd, offers a sum insured of up to Rs10 lakh, but there is no cover for any claim up to Rs3 lakh. the insurer pays for claims exceeding Rs3 lakh. Says Deepak Mendiratta, managing director, Health and Insurance Integrated, a health insurance consulting firm: “These are, typically, top-up policies. Since they pay for claims above a certain limit and the insurer doesn’t have to entertain small claims, they are cheaper.” Maximum renewal age People mistake the maximum renewal age to be the maximum age at entry and assume that once a health insurance policy is bought it can be renewed for lifetime. However, insurers define the maximum age up to which they will renew your policy. Once you cross that age, the policy ceases to exist. Some insurers, such as Apollo Munich Health Insurance Co. Ltd and Max Bupa Health Insurance Co. Ltd renew for lifetime. Cashless and reimbursement policies Most policies are cashless, wherein the hospital gets in touch directly with the insurer for settlement of bills. You walk out of the hospital treated without paying anything. But most policies go cashless only if the hospital is empanelled with the insurer. If you go outside the network, you will have to pay for the treatment and get the bills reimbursed later. Third-party administrator (TPA) This is the entity who mediates between you, the hospital and the insurer to get your claim processed. His details are mentioned in the medical card that you get. Your hospital needs to get in touch with your TPA in order to get your claims rolling. Store the number of your TPA, who will also help you find a hospital empanelled with the insurer. Also, if you don’t get treated from network hospitals, you will have to follow up with the TPA for reimbursements. deepti.bh@livemint.com Source: Home - Livemint.com | 9 May 2010 | 1:45 pm Real estate firms returning to high-price, high-volume modelBangalore: In February, DLF Ltd launched 150 high-end apartments in the third phase of Capital Greens, a residential project in West Delhi, at Rs10,000 per sq. ft. About 70% was sold within weeks. Just six months earlier, DLF had sold apartments in the first phase of the same project at Rs4,500 per sq. ft. Also See Project Pipeline (PDF) India’s largest real estate developer is set to launch at least 20 million sq. ft of space in 2010-11, spending around Rs2,000 crore in construction. Its product mix for the year is 26% high-end residential projects, 38% commercial or office space, and the rest, mid-income or value housing. DLF and other large realty firms are returning to the high-price, high-volume model of their best years, now that their debts are lower and cash flows improving. DLF, Unitech Ltd and Housing Development and Infrastructure Ltd (HDIL), the country’s top three realty firms by market value, have set an aggressive pipeline of projects, but analysts warn that over-pricing of properties could dampen sales again. In 2009-10, DLF sold 12 million sq. ft of space, of which 65-70% was residential real estate mainly targeted at middle-income buyers. Another 20-25% of the mix was for commercial projects and the rest for hospitality and retail developments. Realty was among the sectors worst hit by the economic downturn. Developers were saddled with huge debt and property prices declined steeply. Developers quickly turned their focus from high-end to less pricey projects. “The past is clearly behind them. Most firms sold a lot of stock, even through pre-sales, in the past four-six months. But now they need to focus on execution and delivery,” said Ramnath S., director (research), IDFC-SSKI Securities Ltd. “Once delivery of projects picks up in the next six-eight months, it will put back confidence in buyers.” Revival signs Some of that confidence is already returning because of good pre-sales in recent projects, which has boosted cash flows. DLF executive director Rajeev Talwar said the sales outlook for the firm is good and there are revival signs in the commercial sector as well. Even firms such as Unitech, which had sacrificed margins for sales during the downturn, are trying to regain their high-margin status by increasing prices. Around 15-17% of the developer’s proposed portfolio is in the high-end residential segment in cities such as Mumbai and the National Capital Region (NCR) centred on New Delhi. Brokerage Prabhudas Lilladher Pvt. Ltd said in a 27 April report that Unitech still has around Rs2,200 crore of debt to repay in fiscal 2011, but that’s not a worry as high-value sales and warrant conversion would help meet its operational cash flow and debt retirement. Unitech didn’t respond to Mint’s queries as it is in a silent period ahead of its quarterly results. HDIL, which has repaid around Rs1,250 crore of debt and expects a healthy cash flow of Rs3,200 crore over the next two years, aims to launch about 6 million sq. ft of space every year, IDFC-SSKI said in an April report. Lingering worries Property prices are also rising. Mumbai leads the pack with the rates going up by 30-40% in the past six months, followed by NCR and cities such as Bangalore, where prices have gone up by 15-20%. NCR, in fact, saw 35 million sq. ft sold in the past year, along with a sharp recovery in high-end residences, Bank of America Merrill Lynch Research said in a 15 April report. The initial euphoria from high residential sales in the second and third quarters of fiscal 2010 dropped in January and February. The developers blame that on a post-festive season lull, but property consultants say the drop in sales early in 2010 was because of the sharp rice in prices, particularly in Mumbai and Gurgaon. In fact, Goldman Sachs Research, in a 16 April analysis, indicated a slowdown again for the sector. According to it, Gurgaon saw monthly home sales fall to around 1,600 units in January-February from around 2,400 units in the fourth quarter of 2009. In Mumbai, monthly home sales fell to 4,100 units in the January-March quarter from around 5,700 units in the preceding three months. “Volume game is what everyone needs today and so, even if we get to sell our stock a little cheaper, we should try and get it out,” said Sarang Wadhawan, managing director, HDIL. “If developers take the positive market symptoms wrongly and take risk in expensive land exposure, they would struggle later,” said Sanjay Dutt, chief executive (business), Jones Lang LaSalle Meghraj, a property advisory. Another property analyst, who didn’t want to be named, said execution is a key worry because in much of the project pipeline, developers have begun pre-sales, but completion would take a while. Photo by Rajkumar/Mint madhurima.n@livemint.com Source: LatestNews-Home - Livemint.com | 9 May 2010 | 1:22 pm M&As Spur Exec Movement At I-BanksInvestment banking is back to being the hunting ground of opportunities. The profession may have lost favour in recent times but with M&A deals and business opportunities sprouting again, theres enough reason for hi-profile executive movement.Source: India Business News | Business News - Times of India | 9 May 2010 | 1:03 pm Corus hires Citi to sell TeessideCorus has hired Citigroup, the American investment bank, to sell its mothballed steel mill on Teesside, raising hopes that more than 2,000 jobs can be saved.Source: India Business News | Business News - Times of India | 9 May 2010 | 1:01 pm India may gain from crisis in Europe: BasuChief economic advisor Kaushik Basu has said the ongoing sovereign debt crisis in Europe may, in fact, turn advantageous for the country's capital markets if it is contained at the present level.Source: India Business News | Business News - Times of India | 9 May 2010 | 1:01 pm Aditya groomed to lead ArcelorMittal empireNRI billionaire Lakshmi Nivas Mittal, a month away from his 60th birthday, cherishes a dream about his Wharton-educated son Aditya Mittal taking over the reins of ArcelorMittal, the world's largest steel company spread across 60 countries.Source: India Business News | Business News - Times of India | 9 May 2010 | 12:59 pm R-Adag swings into damage control modeMumbai/New Delhi: The Supreme Court decision on gas pricing could not have been timed any worse for Anil Ambani, who needs to fund a range of ambitious projects estimated to cost about Rs1 trillion in sectors ranging from power to telecom to finance. Click here to view a slideshow of snapshots from the Ambani album before the brothers drifted apart That’s one reason why officials belonging to the Reliance-Anil Dhirubhai Ambani Group (R-Adag) swung into damage-control mode on Sunday, concerned by the adverse reaction to the judgement in the markets and the media.  “RNRL has become a much stronger company after this judgement,” Chalasani said in an interview at Reliance Centre, the group’s headquarters at Ballard Estate in downtown Mumbai. Referring to the other RNRL businesses, such as the four coal-bed methane blocks, a gas exploration block, coal procurement and shipping logistics, Chalasani argued: “The verdict doesn’t change or impact our business model. It will only impact power tariffs.” The comments come as the analyst community reacts adversely to the judgement and begins to re-rate stock of R-Adag companies. The younger brother’s situation contrasts with that of his brother, analysts say. Mukesh Ambani, chairman and managing director of Reliance Industries Ltd, is in a sweet spot, having completed a capital expenditure cycle, and seeding next-generation businesses. Also See Ruling Supreme (Graphic) “Assuming the (Supreme Court) decision is final and (R-Adag’s) Dadri power plant is not expected to come up, the valuation of Reliance Power would be lower by Rs40 a share,” wrote Shankar K. and Shubhadip Mitra, analysts at Edelweiss Securities Ltd in a note issued immediately after the court order on Friday. “This translates into an impact of Rs170 a share for SOTP (sum of the parts) of Reliance Infrastructure Ltd,” the group’s flagship company. Also See What Investors Say (Graphic) Lalit Jalan, chief executive officer of Reliance Infrastructure, countered this in an interview over the phone to Mint. “EPC (engineering, procurement and construction) contracts are given out through competitive bidding by R-Power and we have got some such as Butibori I and II, Sasan I, but lost some such as Rosa I,” Jalan said. “So it was not cut and dried that Dadri EPC would come to us only.” Analysts have other concerns as well. None of R-Adag’s group companies have “strong cash flows,” said S.P. Tulsiyan, an investment analyst who tracks both groups closely. A strong cash flow from group companies would have eased the burden of funding the projects that are slated to come up for commissioning in the next couple of years. To be sure, Reliance Infrastructure is sitting on Rs9,000 crore of cash and the initial public offering of RPL in early 2008 raised close to Rs11,563 crore. But that may not be enough. “He (Anil Ambani) will have to come forward and dilute his holding in group companies by raising funds from the equity markets,” said Tulsiyan, who has calculated the funds that need to be raised at Rs32,000 crore. Going forward, rasing the money from the equity markets will be a challenging proposition, he said. Compounding the group’s woes is the erosion of market capitalization of firms such as RPL, RNRL and Reliance Communications Ltd. “The old days are gone, when capital raising could be accomplished by proposed projects,” the analyst said. Other analysts have calculated that the group needs to mobilize at least Rs35,000 to Rs40,000 crore to fund all its plans. The focus of the group should shift to RPL, which has a total capacity of 35,000MW in its portfolio, though only projects totalling 941MW have been commissioned thus far. “Apart from an indefinite delay in the Dadri power project whose economics now change for the worse, the group now faces an issue of having to prove its credentials outside the finance and telecom space,” said R. Balakrishnan, a Chennai-based investment adviser. Other challenges relate mostly to project implementation, with the group having bid for a vast range of projects that include power, roads, metro systems and a sea link. Chalasani defended its record on implementation. The Rosa phase I, Yamuna Nagar and Hissar power projects were completed well before schedule by Reliance Infrastructure, he said. Jalan and Chalasani said there is enough gas available in India, but analysts say the judgement will have an adverse impact on the group’s plans as the government has to sign off on allocation of the fuel. The court has asked the two firms renegotiate their agreement over the supply of gas. However, the fuel is allotted to customers by the government in keeping with the gas utilization policy that prioritizes users: existing fertilizer units rank first, followed by existing power, petrochemical and city gas projects. New projects aren’t high up on the list. “If the allocations made by the government thus far are any indication, a large quantum of gas now getting allocated to new power plant seems difficult, unless large new gas (finds) come up for commercialization in the near future,” said Deepak Mahurkar, associate director, oil and gas industry practice, at PricewaterhouseCoopers. While RNRL wants 28 million standard cu. m of gas a day (mscmd) for 17 years, RIL is currently producing 62 mscmd of gas in its D6 block in the Krishna-Godavari (KG) basin off India’s east coast. The allocation commitment has already been made for 80 mscmd of gas. “RPL’s primary concern should be to secure long-term supply and to get the quantum right,” said a New Delhi-based power sector expert who did not want to be identified due to commercial considerations. “They would not be able to do it if they are lower down in the pecking order. There will be an impact on fund-raising as no one will put money (up) for gas-based capacity as everyone will wait for things to settle down and for clarity to emerge,” he said. In telecom, the group will need to pay for any third-generation mobile phone licences that it wins in the ongoing auction. Tulsiyan said one of the options would be to divest telecom, and stay focused on power, a move that will solve the group’s need for cash to fund projects. Ruling Supreme Graphic by Naveen Kumar Saini/Mint and What Investors Say Graphic by Yogesh Kumar/Mint satish.j@livemint.com Anushree Chandran and Shauvik Ghosh contributed to this story. Source: Home - Livemint.com | 9 May 2010 | 12:59 pm Want a bank loan? Check credit score first How could this have happened, particularly when he took the auto loan from his own bank and a fixed sum was deducted every month from his salary for five years to clear the loan? No argument cut ice with the private bank because data at a credit information bureau showed that he was indeed a defaulter. He was told to approach his own bank and correct the data sent to the credit bureau. Also Read Tamal Bandyopadhyay’s earlier columns A credit bureau collects, maintains and sells information about consumers’ credit history. It gathers information about consumers’ payment habits from credit granters such as banks, non-banking finance companies and mortgage firms, stores this information in a computer database and sells credit reports after assigning scores to the borrowers, based on their payment history. These reports help banks and other loan givers to take a call on the creditworthiness of a loan seeker and decide the interest rate. The gentleman mentioned at the beginning of this column now wants to take the home loan from his own bank and hopes this time around he will not be denied because the bank will definitely make an effort to correct its database once the credit bureau says he has a loan default history. I have come across at least four instances of consumers with impeccable credit records being branded defaulters and denied loans in the recent past. Is there something seriously wrong in the way data is collected? Who is to be blamed for this—the bank that sends the data or the credit bureau that collates the data? Arun Thukral, managing director of Credit Information Bureau (India) Ltd, or Cibil, India’s oldest and largest credit information bureau with records of around 157 million individual borrowers, says a bureau is a custodian of data that comes from loan givers and it cannot alter the data. According to him, there could be instances—rare though—where the credit history of an individual is not captured properly. For instance, when a bank gets into compromise settlements with credit card defaulters, part of the sum due is often waived, but the data can still show the waived amount as due. If that happens, the borrower will continue to be shown as a defaulter, despite the settlement. While borrowers with a good track record of servicing their loans can get new loans at a relatively cheaper rate, those with a history of loan defaults need to pay more and can even be denied bank credit. Such bureaus deal with only loan records or focus on the assets of lenders and capture the relevant data, but do not deal with savings instruments or banks’ liabilities as that would amount to infringing on customers’ privacy. Cibil has been around since 2004 and at least a dozen more firms want to set up credit information bureaus as more and more customers seek loans to buy cars and homes in the world’s second fastest growing major economy. Last year, the Indian banking regulator allowed three of them to set up shop. They are Experian Credit Information Co. of India Pvt. Ltd, Equifax Credit Information Services Pvt. Ltd and High Mark Credit Information Services Pvt. Ltd. Information about a customer’s credit behaviour is always available with banks, but the industry cannot use it because banks do not share such data with each other. A customer can maintain a good record with a particular bank but default on payments to another bank. Since credit scores are not available with all lenders, they normally charge all customers a uniform loan rate. In other words, good borrowers subsidize bad borrowers. Cibil offers credit scores on every loan, including personal loans. It also has a mortgage depository and a fraud depository. Such information can eliminate fraudulent loans taken by customers pledging the same mortgage documents with different lenders. It is also partnering with leading microfinance institutions for a microfinance credit information bureau. This is critical for the business of tiny loans in India where, many believe, that in their aggressiveness to build loan books lenders are exposing themselves to credit risks as borrowers in some pockets raise multiple loans. Credit information will help promote responsible lending as microfinance institutions will be able to check the creditworthiness and exposure levels of borrowers. But the system will work only when the credit granters ensure that all data sent to credit bureaus is correct. Indeed, any loan seeker can now access one’s own credit history by paying Rs142 to Cibil, but correcting the data (in case there is an error) is not easy as credit granters are not always ready to accept that they can make mistakes. One way of dealing with this could be to access the data directly from banks on a real time basis, eliminating the process of aggregation at the bank level. The Reserve Bank of India (RBI) has recently set up a working group consisting of officials from the Indian Banks’ Association, the Institute for Development and Research in Banking Technology and RBI itself to look into this. The group will prepare an approach paper on automated data flow from banks—a straight-through process from the technology platform of banks to RBI. The quality as well as the timely flow of data are as critical to the banking regulator for making policy decisions as it is to consumers for accessing credit. Tamal Bandyopadhyay keeps a close eye on all things banking from his perch as Mint’s deputy managing editor in Mumbai. Comment at bankerstrust@livemint.com Source: LatestNews-Home - Livemint.com | 9 May 2010 | 12:54 pm Cost of power will be similar to othersA day after the Supreme Court verdict on the gas dispute, the Anil Dhirubhai Ambani Group brass has gone through the 120-page judgment document and feels there is nothing to be alarmed about.Source: India Business News | Business News - Times of India | 9 May 2010 | 12:53 pm Modi confident to face BCCI bouncersMonday is going to be a hectic day for Lalit Modi, the suspended chairman and commissioner of the Indian Premier League, as he would have to reply to several charges levelled against him by the Board of Control for Cricket in India (BCCI).Source: Business Standard | Front Page Headlines | 9 May 2010 | 12:52 pm Future of trading in carbon emission reductions uncertainNew Delhi: Three companies had promised Rajeev Sadanand that they would invest in a scheme to replace old light bulbs with new energy-efficient bulbs across Kerala. But that was before December. All three firms backed out of the project—which was depending on the sale of carbon credits to be viable—when developed nations failed to commit themselves to future carbon emission reductions at the global climate summit in Copenhagen. “It was a big shock for us,” said Sadanand, chairman of the Kerala State Electricity Board (KSEB). “We expected a lot.” He was eventually bailed out by state government-owned Energy Management Centre. But with few projects having such a backup, carbon consultancy, or the business of advising companies on the sale of carbon credits to developed nations, is floundering in India in the aftermath of the Copenhagen talks. More and more carbon consultancies are planning to diversify into related areas such as advising companies on energy-efficient technologies, managing emissions and investing in renewable energy resources. Under the United Nations’ clean development mechanism, or CDM, developed countries buy carbon credits—generic units to measure carbon emission reduction—from projects and companies in developing countries. India has been second only to China in sale of carbon credits (19.24% of the global total) and the number of projects that have sold credits (23.07%). This scheme depends on developed countries’ commitment to reduce carbon dioxide emission and other so-called greenhouse gases, which scientists say are responsible for climate change worldwide. But developed nations have made these commitments only until 2012. As climate talks remain stalled, the future of trading in carbon emission reductions is uncertain. “In Copenhagen, nothing headed towards closure. The first commitment period on emission reductions is only till 2012. Business-wise, most firms are looking at diversifying,” said Biswajit Pradhan, vice-president, Verve Consulting, a carbon consultancy. Pradhan’s firm is now planning to offer technical advice to companies in various sectors on energy efficiency measures. “We can make synergy with foreign companies for Indian companies. It would not necessarily be in track with carbon credits. Currently, there is a lot of work and scope within India. We are looking at more policy and regulation focus,” said Pradhan. Shivani Maudgal Datta, senior consultant at Deloitte Touche Tohmatsu India Pvt. Ltd, is a touch more optimistic. “The market is uncertain. However, I believe till 2020, domestic markets in the EU (European Union), the US, Japan and Russia might keep CDM alive. However, definitely diversification is (the) key. We are all trying to do so.” Domestic action on climate change, particularly on improving energy efficiency, driven by the National Action Plan on Climate Change (NAPCC), is also spurring this diversification. “There has also been a sea change in (the government’s) attitude. It is starting to make business sense,” said Datta. “The NAPCC also is a reference to companies that GoI (the government of India) is becoming proactive and we need to start moving forward as regulations will come.” The energy efficiency mission under NAPCC plans to start a “perform-achieve trade”, similar to CDM, by April. Nine sectors will need to achieve efficiency targets; they can then trade in extra credits. Both Pradhan and Datta said this has galvanized action. Deloitte calls its carbon consultancy department carbon advisory and sustainability services. “The idea is that we will diversify (into) new concepts like carbon management, carbon footprinting,” Datta said, referring to companies’ interest in measuring and managing their own emissions. Ashutosh Pandey, chief executive, advisory, Emergent Ventures India, one of the country’s largest consultancies, said his firm is also looking at these areas for diversification. “Companies see sustainability as (a) core issue now, and not just CSR (corporate social responsibility). We are helping many formulate strategies around this. We are also investing in renewable energy within India, which is easily one of the most attractive markets today,” said Pandey. “Even events want to go carbon-neutral by offsetting their emissions.” padmaparna.g@livemint.com Source: LatestNews-Home - Livemint.com | 9 May 2010 | 12:51 pm Analjit Singh in talks with foreign varsities to set up medical collegeMax India founder and chairman Analjit Singh is in talks with four foreign universities to set up a medical college in the country.Source: Business Standard | Front Page Headlines | 9 May 2010 | 12:41 pm New FDI norms for 'Indian' firms likelyFIPB may be asked to vet downstream projects.Source: Business Standard | Front Page Headlines | 9 May 2010 | 12:38 pm Quick Edit | Counting caste in censusWhen the census stopped recording caste details after 1931, the reason was the tendency among the underprivileged to register themselves as members of higher social orders. Caste detailing may reappear in the current census, but the concern this time is quite the opposite—in a country replete with reservations for backward castes, there are strong incentives for people to register themselves as members of such categories. All this is well known to our policymakers. Nonetheless, the inherent political capital in caste-based politics means the government has enough motive to accede to the demand for caste details. However, there could be unintended consequences implied in such a move. The census is primarily an enumerator—an objective chronicler of Indian life. With a caste element added, it may well become a political tool for redistributive policies in a country that is already burdened by them, not to mention the misguided social and political mobilization that distorted data on castes could give rise to. Source: LatestNews-Home - Livemint.com | 9 May 2010 | 12:28 pm Speculators may be poised for return to art marketNew Delhi: A rebound in valuations in the modern Indian art market appears to have brought speculators back into the fray. According to the latest report by London-based art market research firm ArtTactic Ltd, which surveys 96 key players in the Indian art market every six months, the perception of speculation is on the rise after a significant drop in May 2009, when the Indian art market was at an all-time low. Also See Changing Hues (Graphic) The ArtTactic Speculation Barometer for Modern Indian Art shows a 28% increase since October 2009, and is now at 6.3, up from 4.9. This is the highest reading since ArtTactic started its survey in May 2007. The speculation barometer is measured on a scale of 1 to 10, where 1 represents a very low level of speculation and 10 very high. The barometer indicates how respondents view the level of speculation in the art market. The report mentions that respondents are concerned that if the market rebounds too quickly, fuelled by speculative buying, it risks entering another bubble. Arvind Vijaymohan, who heads Indian arts advisory Japa Arts Pvt. Ltd, says it would be fair to assume that in a young market such as India, where appreciation for art is not engrained at a formative level, speculation is bound to be a key driver. “In my reading of the Indian context, most collectors who entered the market over the last five-seven years were keen speculators.” Commenting on the ArtTactic report, Vijaymohan says that in the current situation, there exists a section of speculators who consider this the perfect time to enter the market, and acquire works of modern Indian art at low values. “Some prominent players are on standby to acquire.” Liquidity surge Liquidity in the Indian art auction market has increased since it hit bottom in March 2009. The combined auction sales for Indian art in March 2010 raised a total of $15.2 million (Rs69.3 crore). Leading auction house Sotheby’s sales illustrate this: Its March 2010 auction of Indian and Southeast Asian art in New York fetched $8.2 million. Its March and September 2009 auctions realized $3.32 million and $3.75 million, respectively. The overall Indian Art Market Confidence Indicator (including both modern and contemporary art) has risen 26% from 49 in October 2009 to 62 now, implying that for the first time since October 2008, there is more positive than negative sentiment in the market for Indian art. The 50 mark indicates that there are an equal number of positive and negative responses on the outlook for the art market in the short term. An interesting highlight of the report is that the gap in confidence between the modern and contemporary Indian art market is widening. The Modern Indian Confidence Indicator is 51% higher than the equivalent confidence indicator for contemporary art. The report reasons that the established nature of the modern Indian market has created a sense of “safe haven” for many art buyers, a fact that is leading to its expansion. At the outbreak of the global art market downturn in late 2008, the modern Indian art market saw a significant drop in confidence. However, compared with many of the other emerging markets, the decline was relatively modest. This survey shows that 72% of the respondents believe that prices have now stopped falling in the modern Indian art market. This is a positive turn in sentiment from the last reading in October 2009, when 61% of respondents believed the modern Indian art market would face further downward pressure on prices. In October, 68% of respondents had estimated a rebound in the Indian modern art market in one-two years. The recent reading indicates that 51% of respondents feel the market has already recovered, and 37% say the market will bounce back within a year. For Anders Petterson, managing director of ArtTactic, the most revealing aspect of the report is the speed of the recovery in the modern art market even though it raises the threat of speculative buying. According to Petterson, ArtTactic has seen a significant pick-up in subscribers during the last 12 months. “The downturn and the uncertainty around valuations has increased the demand and interest in independent research.” Graphic by Yogesh Kumar/Mint anindita.g@livemint.com Source: LatestNews-Home - Livemint.com | 9 May 2010 | 12:21 pm India to be among three top economies by 2030': Anand SharmaThe consistent foreign policy of the Congress has made India expand and diversify its commerce and business base and the country is poised to figure among three top economies of the world by 2030, Union Commerce and Industries Minister Anand Sharma said today.Source: HindustanTimes.com - Top Business News Headlines | 9 May 2010 | 12:06 pm In Greek crisis, worries of pain felt worldwideThe fear that began in Athens, raced through Europe, and finally shook the stock market in the US is now affecting the broader global economy, from the ability of Asian corporations to raise money to the outlook for money-market funds where American savers park their cash. What was once a local worry about the debt burden of one of Europe’s smallest economies has quickly gone global. Already, jittery investors have forced Brazil to scale back bond sales as interest rates soared and caused currencies in Asia such as the Korean won to decrease. Ten firms around the world that had planned to issue stock delayed their offerings, the most in a single week since October 2008.  Alarm bells: Protesters in Thessaloniki bang pots and pans on Saturday in response to the Greek government’s austerity measures. What was once a local worry about the debt burden of Greece has quickly gone global. AP "It's not just a European problem, it's the US, Japan, and the UK right now," said Ian Kelson, a bond fund manager in London with T. Rowe Price. "It's across the board." A decade ago, it took more than a year for the chain reaction that began with the devaluation of the Thai currency to spread beyond Asia to Russia, which defaulted on its debt, and eventually triggered the near-collapse of a giant American hedge fund, Long-Term Capital Management. This crisis, by contrast, seemed to ricochet from country to country in seconds, as traders simultaneously abandoned everything from Portuguese bonds to American blue chips. On Wall Street Thursday afternoon, televised images of rioting in Athens to protest austerity measures only amplified the anxiety as the stock marked briefly plunged nearly 1,000 points. "Up until last week there was this confidence that nothing could upset the apple cart as long as the economy and jobs growth was positive," said William Gross, managing director of the Pimco Group, the bond manager. "Now, fear is back in play." While the immediate causes for worry are Greece's ballooning budget deficit and the risk that other fragile countries like Spain and Portugal might default, the turmoil also exposed deeper fears that government borrowing in bigger nations like Britain, Germany and even the US is unsustainable. "Greece may just be an early warning signal," said Byron Wien, a prominent Wall Street strategist who is vice chairman of Blackstone Advisory Partners. "The US is a long way from being where Greece is, but the developed world has been living beyond its means and is now being called to account." If the anxiety spreads, American banks could return to the posture they adopted following the collapse of Lehman Brothers in the fall of 2008, when they cut back sharply on mortgages, auto financing, credit card lending and small business loans. That could stymie job growth, and halt the broader economic recovery that is beginning to gain traction. Some American companies are facing higher costs to finance their debt, while big exporters are seeing their edge over European rivals shrink as the dollar strengthens. Riskier assets, like stocks, are suddenly out of favour, while cash has streamed into the safest of all investments, gold. Just as Greece is being forced to pay more to borrow, more risky American companies are being forced to pay up, too. Some issuers of new junk bonds in the consumer sector are likely to have to pay roughly 9% on new bonds, up from about 8.5% before this week's volatility, said Kevin Cassidy, senior credit officer with Moody's. To be sure, not all of the consequences are negative. Though the situation is perilous for Europe, the US economy does still enjoy some favourable tailwinds. Interest rates have dropped, benefiting homebuyers seeking mortgages and other borrowers. New data released Friday showed the economy added 290,000 new jobs in April, the best monthly showing in four years. Further, crude oil prices fell last week on fears of a slowdown, which should bring lower prices at the pump within weeks. Meanwhile, the dollar gained ground against the euro, reaching its highest level in 14 months. While that makes European vacations more affordable for American tourists and could improve the fortunes of European companies, it could hurt profits at their American rivals. A stronger dollar makes American goods less affordable for buyers overseas, a one-two punch for American exporters if Europe falls back into recession as a result of the crisis. Excluding oil, the 16 countries that make up the euro-zone buy about 14% of American exports. For the largest American companies, which have benefited from the weak dollar in recent years, the pain could be more acute. More than a quarter of the profits of companies in the Standard & Poor's 500 index come from abroad, with Europe forming the largest component, according to Tobias Levkovich, Citigroup's chief US equity strategist. All this could mean the difference between an economy that grows fast enough to bring down unemployment, and one that is more stagnant. The direct exposure of American banks to Greece is small, but below the surface, there are signs of other fissures. Even the strongest banks in Germany and France have heavy exposure to more troubled economies on the periphery of the continent, and these big banks in turn are closely intertwined with their American counterparts. Overall, American banks have $3.6 trillion in exposure to European banks, according to the Bank for International Settlements. That includes more than a trillion in loans to France and Germany, and nearly $200 billion to Spain. What's more, American money-market investors are already feeling nervous about hundreds of billions in short-term loans to big European banks and other financial institutions. These funds provide the lifeblood of the international banking system. If worries about the safety of European banks intensify, it could push up their borrowing costs and push down the value of more than $500 billion in short-term debt held by American money-market funds. Uncertainty about the stability of assets in money market funds marked a tipping point that helped accelerate the downward spiral of the credit crisis in 2008, and ultimately prompted banks to briefly halt lending to one other. Now, as Europe teeters, the dangers to the American economy—and the broader financial system—are becoming increasingly evident. "It seems like only yesterday that European policymakers were gleefully watching the US get its economic comeuppance, not appreciating the massive tidal wave coming at them across the Atlantic," said Kenneth Rogoff, a Harvard professor of international finance who also served as the chief economist of the International Monetary Fund. "We should not make the same mistake." ©2010/THE NEW YORK TIMES feedback@livemint.com Source: LatestNews-Home - Livemint.com | 9 May 2010 | 11:50 am Pull the land issue out from under the MaoistsIndia is girding for war against an internal enemy, the Maoist guerrillas known as Naxalites. This conflict will inevitably be bloody—in the last three years alone, around 2,500 people have died in Maoist violence, around one-third of them civilians. However, counterinsurgency operations are won not only on the battlefield, but also in the hearts and minds of the people. While the government beefs up the security forces, it shouldn’t neglect the main complaint of the population from which the Maoists recruit their fighters: a lack of land rights. The Maoists thrive mainly in forests amid tribal villagers whose right to land is poorly defined. The origin of the problem lies in colonial times, when forests were seen as royal estates, and the tribal people were at best tolerated, at worst seen as pests. There were no surveys to try to settle the land claims of indigenous populations who had lived there for longer than anyone could remember. After Independence, the Indian state recognized these people as citizens, but their right to the land was largely ignored. India’s Maoists capitalize on the anger and frustration of these marginalized groups by promising to protect their land. This highlights one of the greatest ironies of Indian democracy: The state, whose primary task is to protect the life, liberty and property of its citizens, is resented by a section of the tribal population. And the Maoists, who have no respect for individual life, liberty or property, pose as protectors. However, there is precedent for this. Land rights and property ownership have fuelled the drive towards political participation and democratic governance ever since the ancient cities of Greece discovered democracy. Sixty years ago, Mao Zedong successfully mobilized Chinese peasants by promising to give land to the tiller. Of course, after taking power Mao broke that promise and extinguished private property. His experiment in communal farming led to the starvation of tens of millions in the worst man-made tragedy in human history. The Indian government has been trying to bring economic development to the indigenous tribes, but it has been going about it the wrong way. In the past few years, it has invited companies to invest in large projects in some of these remote areas. Governments at the state and national levels believe that the projects will benefit the local population. But the projects may be making the situation worse because they involve forced land acquisitions. The tribal groups then protest against the projects, fearing displacement and loss of livelihood. Given the record of extremely tardy compensation and inadequate resettlement policies for such projects in the past, their suspicion is hardly unjustified. Consider that indigenous tribes constitute only around 9% of India’s population, but over the past few decades around 40% of land acquisitions have affected them. Coupled with lack of basic amenities, collapse of law and order, and appalling blindness to injustice, the alienation of the population from the state seems complete. Today, the Maoists are claiming to defend the land rights of the tribals for tactical reasons, just as they have tried to ride other popular movements that express resentment against some state policies in the hope of expanding their support base. For them, power only flows from the barrel of the gun. Indeed, the Maoists are profiting by extorting protection money from the companies, their agents and contractors operating in these areas, even while accusing them of land grabs. The government’s bleak record on land rights is beginning to change, however. After years of political struggle, the Forest Rights Act was passed in 2007, for the first time recognizing the land rights of the tribal people, despite opposition from various environmentalists. Under this law, every nuclear tribal family can claim up to 4ha if they were working that land prior to 2005. While the law has many shortcomings, it does have the potential to empower some of the most deprived sections of Indian society. If it improves the economic condition of these people, it would dramatically alter the political equation. The Maoists’ support base would be undercut. Unfortunately, the Indian state has been slow to appreciate the law’s importance, and little attention has been paid to its implementation. A few non-governmental organizations, such as ARCH Vahini in Gujarat, are using low-cost GPS devices to plot the land and then are transferring the coordinates to Google Maps. This is being done with active participation by local communities, which have shown great maturity in trying to resolve any disputes over boundaries of each other’s land. For the first time, they hope to secure a clear title over the small plots on which their ancestors have lived for centuries. These initiatives can and should be replicated across the country. If the state were to take its primary task of protecting property rights more seriously, the Maoist movement would be deprived of popular support. Empowered by property, poor Indians will be able to participate more actively as citizens and strengthen the country’s democratic foundations. Barun Mitra is director of the Liberty Institute, an independent think tank in New Delhi THE WALL STREET JOURNAL Edited excerpts. Comments are welcome at views@livemint.com Source: LatestNews-Home - Livemint.com | 9 May 2010 | 11:43 am Titan aims to raise market shareWatch maker Titan Industries has drawn out ambitious growth plans targeting to expand its market share to 75 per cent over the next five years. It currently holds 65 per cent share in the organised watch market of the country, reports Vivek Sinha.Source: HindustanTimes.com - Top Business News Headlines | 9 May 2010 | 11:22 am Is ‘Microkia’ the new Wintel?I don’t fancy the idea of dwelling on the same topic for two weeks in a row, but I have reasonable grounds this week. Thanks to a space crunch, last week, I could not make a prediction, but I am using this week to do so, reports N Madhavan.Source: HindustanTimes.com - Top Business News Headlines | 9 May 2010 | 11:14 am Prudential nears accord with FSA on AIA deal: sourcesLondon: Britiain’s Prudential has made progress in make-or-break talks with UK regulators over its acquisition of AIG’s Asian arm, and is close to announcing a deal, sources familiar with the matter said. The insurer’s proposed $35.5 billion acquisition of American International Assurance (AIA) hit an embarassing last-minute snag last week, when the UK blocked Prudential’s plans to publish details of a $21 billion cash call to finance the deal. Prudential and the Financial Services Authority (FSA) had found common ground in talks over the weekend, the sources said on Sunday, but further steps were needed to salvage the audacious takeover. “We’re working towards a solution,” one source familiar with the situation said. “It has to be put back to (the FSA), it’s an ongoing process .... There’s been progress made.” “The intention is to get the prospectus out as soon as possible,” another source familiar with the situation said. This source said further meetings would take place on Sunday. The rights issue prospectus and further details on the deal are expected within days, but the sources made it sound unlikely they could be published as early as Monday. Pru is facing an uphill struggle to salvage some credibility for its chief executive Tidjane Thiam, as it seeks the approval of cautious regulators against a background of jittery world markets and increasingly mutinous shareholders. The group needs 75% of shareholders to approve the deal, but several major investors have expressed concern and their skepticism has increased following the unprecedented eleventh-hour delay. Some investors could seek a reduction in the price of the deal in return for their support. Prudential and the FSA declined to comment on Sunday. Capital Worries The FSA’s worries have focused on capital, the insurer’s ability to withstand stress tests and the complexity of a deal that involves 22 jurisdictions. One source close to the matter said last week the FSA’s concerns were heightened because Asian regulators did not want Pru to take around £1 billion ($1.55 billion) a year out of AIA subsidiaries in the region. Prudential wanted to use cashflows from Asia to boost the group’s capital surplus under the Insurance Group Directive (IGD), a pot of extra cash the European Union tells insurers to hold for times of economic hardship, the source said. As an alternative, Prudential has proposed swapping some of the $5 billion of senior debt underwritten by Credit Suisse, HSBC and JP Morgan into subordinated or contingent capital, sources with direct knowledge of the deal said. Subordinated capital counts towards the IGD, while senior bank debt does not. The three underwriting banks have also agreed to provide another loan in case the IGD dropped to a level that made the FSA uncomfortable, one of the sources had said. If Pru’s deal efforts fail, its management team is widely expected to face calls to resign and the company itself could become a target for investors seeking to break up the business. The Sunday Express said US fund manager Franklin Templeton and Blackstone were among the groups eyeing Pru’s fund management arm, M&G. Source: World Business - Livemint.com | 9 May 2010 | 4:34 am Global biz focusing more on sustainable technologies: DeloitteNew Delhi: Faced with the menace of climate change, most of the corporate entities worldwide are turning towards business models based on sustainable and eco-friendly technologies, according to global consultancy Deloitte. Sustainable technologies are generally those which minimises the adverse environmental impact and helps in cutting down carbon dioxide emissions, among others. “This heightened awareness (about sustainability) is leading to significant shifts in business models and whole new segments are emerging — organic foods, organic cotton, sustainable products, green energy, energy labelling of white goods, environmentally friendly hotels...,” Deloitte’s Global Climate Change & Sustainability leader Nick Main told PTI. “I believe this is a dramatic and permanent shift and one that all organisations should be aware of,” he noted. According to him, “sustainability” has become a frequent topic of conversation in senior corporate leadership meetings. “Everywhere executives are working out what it means for business and how can they manage the risks and seize the opportunities from this fundamental change in business and society,” Main asserted. When asked about the funding issues faced by various countries in tackling climate change, he said problems related to funds could be more severe for developing countries including India. “Funding is a problem everywhere. The investments needed to make the transition to a low carbon economy are substantial... And for developing countries this issue can be particularly severe,” Main noted. However, he pointed out that cutting down on emissions could help businesses to save on costs. “The opportunity must be not to make investments in old technologies but more straight to the new,” he added. Last year’s Copenhagen summit on climate change had proposed to create an $100 billion global fund, to assist in tackling various issues related to this menace. Further, Main said that partnerships between governments and businesses would surely help in evolving better strategies to fight climate change. Source: Tech News - Livemint.com | 9 May 2010 | 2:57 am
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