Indian Business News – Selected Extracts (01/04/08)

1. April Fools Day. Greetings!
2. The financial year 2008-09 ends (31/03/08) with the Bombay Stock Exchange sensex crashing by 727 points and closed at 15,644 points. Almost all sectors were down by about 4 to 6%. The market opened today with a positive note and then slowly started going down.
3. The stock market regulator, SEBI has proposed to ban brokers from recommending shares to investors as part of the exercise to guard against insider trading.
4. Gold, silver shine on global advices. Standard gold closed at Rs.12,125 per 10 gm and silver at Rs.23,625 per kg.
5. The Reserve Bank is likely to tighten money supply in its annual credit policy on April 29 to rein in a year high inflation of 6.68%. The government is also considering elimination of import duties on a host of items, mainly food products.
6. Lehman Bros sues Japanese trading house Marubeni Corp in the wake of a finance scam involving US$352 million.
7. Citigroup will set up an independent credit card unit and will also overhaul its consumer banking business.

Indian Business News – Selected Extracts (31/03/08)

1. The stock exchanges in Mumbai were trading low in the beginning of the trade on this last day of the financial year 2008-09. My choice of stock for the day is ITC.
2. US object to Indian Merger and Acquisitions (M&A) rules with respect to the requirement of getting the government’s approval even for the M & As taking place abroad. .
3. British Telecom announced the opening of its global operations centre at Gurgaon near Delhi. It will employ 300 people to provide the back-end support for its operations.
4. Domestic companies such as Cipla and Ranbaxy are dominating the show in the organized pharma market. The lone multi-national player in the top five is Glaxo-Smithkline (GSK).
5. Dena Bank to write off Rs.200 Cr as agriculture loan waiver.
6. HDFC to hire 2000 people for its BPO activity.
7. Nokia production reaches 125 million in over two years of operations at its manufacturing unit in Tamil Nadu.

Indian Business News – Selected Extracts (29/03/08)

1. The Bombay Stock Exchange sensex closed at 16,371, with a gain of 356 points. This is in spite of the reported 54-week high inflation of 6.7%. It was metals, capital goods and IT stocks which led the rally at Dalal Street.
2. Tata’s JLR deal may go beyond US$2.3 billion.
3. Promoter of the cult café brand Café Coffee Day (CCD) is set to brew a major equity deal, valued at $250 million with JP Morgan.
4. Stocks in beaten India markets are still expensive says a Dutch financial firm (Robeco Group), which manages about $200 billion in assets globally.
5. Indian government wants 3 players for 3G. Among 6 telecom majors only two qualify along with BSNL/MTNL.
6. Microsoft’s takeover attempt against Yahoo may encounter an unexpected hurdle in August from China, which has 40% stake in Alibaba.com, China’s largest e-commerce business.
7. The US’ presumptive Republican presidential nominee, Senator John McCain has strongly supported India’s entry into the elite G-8 to make it a club of leading market democracies.

Indian Business News – Selected Extracts (28/03/08)

1. BSC sensex remains week. The sensex closed at 16,016, just 71 points lower at the end of Thursday’s trading. Among the sectorial indices, realty and FMCG scripts were the top gainers, by over 2% each, while other indices closed relatively flat.
2. The New York Stock Exchange is keen to increase its holding in Indian exchanges if and when the Indian government relaxes the regulations says Duncan Niederaucer, CEO of NYSE Euronext.
3. The Indian national carrier, National Aviation Company of India (NACIL) is looking for governments equity support to tide over the challenges on the financial front. The company formed by the merger of Air India and Indian Airlines last August had losses of about Rs.700 crores last fiscal.
4. Maruti Suzuki India is waiting to see the response of the market to the Tata car Nano, when it is commercially launched later this year. Meanwhile, Maruti intends to focus on the bigger cars so as to cater to the growing upper middle class. The company rolled out the DZire in Kolkata on Thursday.
5. Union Bank of India has been awarded the prestigious Asian Banker IT implementation award 2007.
6. The Telecom Regulator, TRAI, is doing away with a levy called Access Deficit Charge (ADC). This may result in tele tariff to drop marginally.
7. Kingfisher to fly abroad in August. The low-cost flying Air Deccan is being grounded. Recently, the two airlines merged to form Kingfisher Airlines.

Indian Business News – Selected Extracts (27/03/08)

1. After Tetley & Corus, Tatas bag luxury auto brands, Jaguar and Land Rover, the icons of British luxury for US$ 2.3 billion. With $104 billion, India is now the second largest source of foreign investment in the UK. Ratan Tata is the descendant of Jamshetji Tata, who was the first Indian to own a car in the year 1901.
2. US gives more time to India on nuclear deal. The US legislative calendar can still accommodate the final vote on the deal in late summer.
3. Denmark’s example to reduce carbon emissions. Tax the industrial emissions of carbon and return the revenue to industry to subsidies for research and investment in alternative energy sources, cleaner burning fuel, carbon-capture technologies and other environmental innovations.
4. A California aerospace company plans to enter (by 2010) the space tourism industry with a two-seat rocket ship (Lynx) capable of suborbital flights to altitudes more than 59.5 km above the earth.
5. BSC sensex closed at 16087 points. The intraday high was 16294.
6. ONGC and Hindujas may ink multi-billion dollar pact for developing oil and gas fields in Iran.

Indian Business News – Selected Extracts (26/03/08)

1. Though, the undercurrent was cautious, at the close of trading, the sensex at Bombay Stock Exchange was up by 928 points, the second biggest single-day gain for the index. The sensex closed at 16,217 points. DLF, Reliance Energy and Infosys were the top gainers. The rise is mainly due to the favourable developments at US and bargain buying by FIIs.
2. Pranab Mukherjee tells Bush that the Indo-US nuclear deal will be through soon.
3. Reserve Bank of India sets stiff norms for loan recovery agents. The norms may include police verification of the agents.
4. Losses force Reliance Industries to shut 900 fuel outlets due to its inability to match the fuel price offered by the state-run retailers.
5. IIM-Bombay doubles the fees to 4 lakh / year for 2008-09. It will be raised to 5 lakh next year, it is reported.
6. Steel producers will exercise self-restraint on export of steel products with immediate effect to enhance domestic availability and to control the rising prices.
7. Per capita electricity consumption in India is 520.32 kWh, much less than the another Asian giant, China with 1886.74 kWh.
8. Indo-China bilateral trade to hit $100 billion by 2010? Chinese goods are already flooding the Indian markets.

Indian Business News – Selected Extracts (25/03/08)

1. Government staffers get 40-60% pay hike as per the Sixth Pay Commission’s Recommendations submitted to the government of India on Monday. This is a populist move in view of the forthcoming general elections. The hike will cost 12,561 crores in 2008-09 and the additional one-time burden will be Rs.18,060 crores by way of payment of arrears. The recommendations are to be implemented retrospectively with effect from 01/01/2006. The minimum basic pay would be Rs.6,660, besides HRA and other allowances and the highest pay is pegged at Rs.90,000 for a Cabinet Secretary and the Service Chiefs.

The applicable DA for this would be the percentage declared after 01/01/06. Annual increment would be 2.5% of the basic for all employees. City compensatory allowance will be merged with transport allowance and increased four times. Monthly education allowance to be Rs.1,000 per child, up from Rs.50.

Working mothers can have staggered working hours, child care leave and enhanced maternity leave of 180 days.

The Commission also recommended raising the gratuity limit from Rs.3.5 lakh to 10 lakh. People who take retirement after 20 years of service will also entitled to full pension. There will be only 3 national holidays and 8 restricted holidays. Pay panel recommends ex-gratia for families of defense personnel has been considerable raised.

2. After a four-day break, the sensex rose by 294 points on Monday to close above the 15,000 mark in Bombay Stock Exchange. Banking stocks were in demand.

3. The buy-back scheme for its shares offered at Rs,1600 by the Reliance Energy will begin on Tuesday.

4. The state-run India Assurance company is planning to introduce a loyalty discount for customers aged over 50 years who intend to renew their mediclaim policy.

5. India is the 2nd largest cell user (after China), over 250 million users as on February, 2008.

6. The Green Ventures Carbon Fund has tied up with a few major European financial and are looking for Indian partners for carbon credits or to jointly set up environment friendly projects.

Indian Business News – Selected Extracts (24/03/08)

1. Sharp cut in funding for India’s N-plan. Is the UPA government buckling under US pressure? Total budget (2008-09) allocation for the Department of Atomic Energy is over 20% less as compared to the allocation in 2007-08 budget. The cut in the funds may affect thorium plans.
2. Mittal sets sights on old coal mines of Coal India Limited, with new technology for redevelopment.
3. Poor off-take of credit by commercial banks during the current financial year signals slowing down of the economy. The main reason for this poor credit growth is reported to be the rise in the interest rate.
4. Pepsi is ahead of Coke in India.
5. The market players in the Bombay Stock Exchange expect a pull-back rally in the BSC sensex this week after it closed below 15,000 mark last week.
6. Real estate boom and soaring prices erode the cost advantage of BPOs in India. Many of the BPO companies are trying to establish their offices in smaller cities to cut costs.
7. There is good scope for firms / cooperatives which extend loans to small time truck operators and traders, to realize “inclusive growth” in the country. Generally, big banks do not give loan to support such small business in the absence of any assets to offer for mortgage. This relation-based concept of lending money should be promoted for the overall growth of the poor in the country.

Indian Business News – Selected Extracts (21/03/08)

1. 50% pay hike is recommended for Central government staff. Secretary-level officer could earn basic salary of Rs.80,000 a month.
2. Inflation flares as food prices soar. The inflation has mover up to 5.92%. The level is above the target of 5%, put up by the Reserve Bank of India for 2007-08.
3. An estimated 5.7 million Indian workers abroad sent home US$27 billion in 2007 to make India the top receiver of migrant remittances according to the latest World Bank data.
4. Essar Steel sets sights on ArcelorMittal’s US plant, Sparrows Point mill.
5. Lifestyle diseases offer big bucks for pharma. Diabetes and cardio-vascular together have shown 75% growth in 2007. Nearly 11% of India’s urban population and 3% of rural population above the age of 15 have diabetes.
6. Fearing adverse effect on the growth, steelmakers in India join hands against govt’s move to form regulatory body.

Indian Business News - Selected Extracts (20/03/08)

1. Japanese funds (from Japan Bank for International Cooperation) to speed up four proposed Metro lines in Mumbai.
2. The Bombay Stock Exchange sensex fails to hang on to the initial gains and closed at 14,995. The benchmark 30-share index shot up by 600 points after US Federal Reserve announced a 0.75 percentage cut in interest rates, but succumbs to profit-booking to close at 14,995 with a gain of only 161 points. IT stock were in demand.
3. There is s steep fall in the growth in almost all the core areas of infrastructure sectors (cement, oil, power, coal), almost by 50% as compared to the growth reported for the same month last year.
4. Understanding the health insurance will become easier after June 1, 2008. It will be made more customer-friendly and transparent.
5. Time Warner promoted AOL (America Online) is selling its call centre business in India to Aegis Communications (the BPO arm of Essar Group) in an all cash deal of around $100 million.
6. The Department of Telecommunications (DoT) is considering stiff network obligations for 3G mobile services.
7. The economic impact of Arctic melt: Sea routes for transportation are likely to be reduced by 20 to 40%, thus reducing the shipping freight rates.

Indian Business News – Selected Extracts (19/03/08)

1. The first sign of a meltdown in the realty market could be seen in the lack-luster auction of residential and commercial plots at Bandra-Kurla Complex (BKC), Mumbai. Some of the plots didn’t find any takers. Real estate analysts are shocked by the development.

2. Tata Consultancy Services (TCS) opens a 1,000-seat biggest delivery centre outside Cincinnati, US. The company is going to recruit the locals for the jobs.

3. The Information & Broadcasting Ministry is issuing a notification to all broadcasters amending a certain section of the Cable Television Network Rules to stop all forms of surrogate advertising (mainly for alcohol and cigarette brands) by March 17, 2008.

4. The Bombay Stock Exchange sensex loses early gains, but ends up at 14,833, a rise of 24 points. Realty and capital goods segment attracted good support while metal shares came under selling pressure. Gold closed at Rs.13,205/gm and silver at Rs.25,050/kg.

5. IT firms put campus recruits on hold.

6. Federal Reserve policymakers are meeting, which is expected to lead to the biggest one-cut in interest rates since 1982.

7. It is reported that Ford Motor Co is expected to announce the sale of its UK luxury brands Jaguar and Land Rover to Tata Motors. Citigroup and JP Morgan are to help to finance the potential purchase.

8. AT&T plans aggressive return to enter India’s mobile phone industry.

Indian Business News – Selected extracts (18/03/08)

1. Titles as appeared as headlines in one of the leading Indian news papers are: Sensex caught in US tailspin; Global Meltdown, and Global warming in the financial market intensify the slide on Indian bourses. The Bombay Stock Exchange sensex fell through 951 points to close at 14,805, a level where it was a year ago. The fall is largely on account of global cues, from US subprime crisis to rise in oil process. Realty, Banking and IT companies are the worst hit.

2. Only 31 out of the 113 new issues (IPOs) of 2007 are trading at levels higher than the issue price.

3. Gold and oil prices hit record levels as investors abandon stock markets and head for investment in gold and commodities. Gold is at 13,495 rupees per 10 grams and silver is 25,650 rupees per kg.

4. The Federal Reserve is urgently moving to contain a deepening credit crisis and restore confidence in financial markets.

5. US recession will impact Indian jobs, particularly in the IT sector.

6. GM looks to roll out $3.5K mini car in India. The car will be cheaper than Maruti 800 and dearer than Tata Nano.

7. RBI may raise interest rates again in April to contain inflation.

Indian Business News – Selected extracts (17/03/08)

1. Morgan Stanley tells investors to be prepared for further fall in the Sensex. A bear market could take the Bombay Stock Market sensex to around 11,000 from the present level of 15,800 points. May be it is a good time to get back into the stock market, as some of the blue-chips are available at good rates for the buyers.
2. Vijaya Mallya is all set to clinch two mega realty deals on the foothills of Himalayas, 1000 acres of land located between Rishikesh and Kedarnath at price close to around 300 crore.
3. Auto sales shine abroad. Exports grow 21% to 11.20 lakh units in first eleven months of the current financial year. Major contributor for this rise is from motorcycle sales.
4. Job market feels US credit crisis heat. Placement scenario in India and abroad could see a slowdown due to the US subprime crisis.
5. The Tata group’s retail venture, Infiniti Retail plans to invest around Rs.800 crores for its consumer electronics and durable stores “Croma” by 2010.

Indian Business News – Some extracts(14/3/08)

1. The Bombay Stock Exchange Sensex succumbs to global slowdown. Enen India is slowing down. Industrial growth in January 2008 dips by more than 50% to 5.3% as against 11.6% a year ago. The sensex came down to 15,357.35, lowest in the last six months. Reliance Energy lost nearly 10%.

2. Gold rates in India climbed to an all time high of Rs.12,965 per ten grams on the bullion market. Oil price is also flaring and is at $109 per barrel.

3. The Insurance Regulatory and Development Authority (IRDA) of India has recently directed public sector insurance companies to cap the premium loading on policy renewals at 75% of the previous year’s rates. However, the companies seem to be not following the directive thus causing avoidable apprehension to the senior citizens who are availing the medical insurances.

4. Glenmark Pharmaceuticals launches arthritis tablets in the US. It is reported that the Nabumetone tablets and Hydrazine Hydrochloride tablets are used in the treatment of arthritis and anxiety in US market.

Indian Business News – Some extracts

1. The owners of 2,150- MW Dabhol Power project, Ratnagiri Gas and Power is considering making an initial Public Offering of a quarter of its shares (Rs. 1000 Crores) by the end of this year. The Chairman, Ratnagi Gas said the offering will be followed by a Rs.500 Crore private placement of equity shares to be subscribed by institutional lenders. The Dabhol plant will be fully operational by next month and will be generating 1,700 MW power.
2. IT companies in Bangalore are getting paranoid of the recession at US and are taking all possible cost cutting measures such as reduced number of global jaunts, upcountry client visits by automobiles rather than by air route, taking pool cabs and hiring buses for internal travel, etc.
3. 54% of the Bombay Stock Exchange stocks below their 2006 price. Share market crash. The downward journey started from January 22, 2008. The sensex is down by another 5% today. Looks like a bottomless fall of share prices.
4. Reserve Bank of India is set to ban hiring of recovery agents by Banks. This is in view of the complaints of intimidation and harassment of all kinds by these recovery agents. This is line with the strictures passed by the High Court/Supreme Courts of India.
5. Fiat launches 1.3 litre diesel version of Palio Stile in India.
6. Hindujas have big plans for the health sector in Kolkata. The corporate giant is intending to set up a multi-speciality hospital in the city.

Lack of safety provisions in motorcycles - effect on insurance claims

There was a news item entitled “Senior citizen’s PIL gets positive Response” in the Indian Daily – The Times of India. In response to the Public Interest Litigation (PIL) pertaining to the violation of Motor Vehicle Act which is resulting in the death of motorcycle riders, the Bombay High Court has directed all the motorcycle manufacturers to ensure all the safety provisions in the vehicles as stipulated in the Act. Reputed manufacturers are involved in the litigation.

It was brought out in the litigation that the manufacturers were violating the rules on the provision of safety equipment in motorcycles, particularly with respect to the provision of permanent hand grip for the pillion rider and covering half of the rear wheel to prevent loose clothing such as saris and dhotis (sari guards) getting stuck to the moving wheel resulting in accidents and casualties. As per the report many motorcycles inspected were not having the hand grips or sari guards of stipulated dimensions.

It is a very good ruling by the court which will also help favorably the victims or their relatives in claims from the motorcycle insurance companies / the vehicle manufacturers the adequate compensation.

Dole out of taxpayer’s money

The Government of India, just for the sake of votes (keeping forthcoming elections in mind) has recommended writing-off bank loans to small and middle level farmers of over 60,000 rupees (1US$=40 rupees) in the national budget presentation on 29/02/08 for the year 2008-09. The loans were given by the banks, and nobody knows how the finance minister is going the compensate the banks. The banks though nationalized, is partially owned by the public.

The Taxpayers may not mind if the money really reaches the “Kisans” who work in the fields. May be, the so-called kisans are at the mercy of the middleman and the land owners. To begin with, the kisans would not have received the full loan amount at all. The loan amount sanctioned is reported to be distributed amongst the bank employees, the middleman who arranges for the loan, the land owner (generally politicians) and a small percentage is given to the kisan. By writing off the earlier loan, the kisan becomes eligible to get a small percentage (may be 10-20%) of one more fresh loan to be given by the nationalized banks in the rural areas. Generally, the banks will be pressurized to give such loans by the politicians to get the votes.

As soon as it was declared, the stocks of the banks fell down in the equity market of Stock Exchanges. The entire liability will finally be borne by the shareholders. Who cares? Nobody needs to return the loan amount any way. In the next budget it will again be waived off.