e-stocker

Banks, Internet companies team up to fight spam

2012-01-30T03:39:00.001-08:00

Some of the world's biggest Internet companies and financial services firms have developed a new approach to fighting email spam that they hope will reduce online scams.

Facebook, Google Inc (NasdaqGS:GOOG - NewsGOOG.O) andMicrosoft Corp (NasdaqGS:MSFT - NewsMSFT.O) have joined with financial firms Bank of America Corp (NYSE:BAC -NewsBAC.N), Fidelity Investments and eBay Inc's (NasdaqGS:EBAY - NewsEBAY.O) PayPal to create a set of industry standards for preventing criminals from sending out spam emails that appear to come from corporate email addresses.

Fraudsters often pose as banks and other trusted firms in attempts to persuade email recipients to provide payment card numbers, bank account information and other personal data or click on links that infect computers with malicious software.

The new approach calls for email providers and businesses to attack spammers by coordinating on a massive scale the use of two existing technologies for email authentication known by the acronyms SPF and DKIM, which have yet to be widely adopted.

PayPal is one company that currently uses SPF (Sender Policy Framework) and DKIM (DomainKeys Identified Mail) technology standards to fight email spoofing, but only through partnerships with Yahoo Inc (NasdaqGS:YHOO - NewsYHOO.O) and Google, said Brett McDowell, a security manager at PayPal who serves as chairman of the group that developed the new standard.

The group goes by the name DMARC.org, which stands for Domain-based Message Authentication, Reporting and Conformance.

If Yahoo or Google get an email claiming to come from PayPal that is not properly authenticated with SPF or DKIM, the email is not delivered, he said. But if fraudsters send spoofed PayPal email to other email providers, it might get through.

"What we need is an Internet standard that allows this level of protection to work at scale - without any discussion, without any partner agreements," McDowell said. "That is what DMARC does."

Other companies involved in the group include American Greetings Corp (NYSE:AM - NewsAM.N), LinkedIn Corp (NYSE:LNKD - NewsLNKD.N) and Yahoo as well as privately held Agari, Cloudmark, eCert, Return Path and the Trusted Domain Project.

IDC security analyst Michael Versace said that the approach recommended by the group appeared to be effective and inexpensive to implement.

Yet he said that the industry should keep developing new technologies to fight spammers because he expects that cyber criminals will eventually figure out how to circumvent the DMARC protections.

Pakistan grants India 'Most Favoured Nation' status

2011-11-02T23:40:00.000-07:00

Islamabad, Nov 2 (IANS) Pakistan Wednesday granted the status of 'Most Favoured Nation' to India and agreed to double bilateral trade from $2.5 billion to around $5 billion.

India had granted Pakistan the status in 1996 but Islamabad did not reciprocate. Ties between the two countries deteriorated after the Mumbai terror attack in 2008 for which Pakistan was blamed.

Wednesday's decision was taken at a cabinet meeting chaired by Prime Minister Yousuf Raza Gilani. It said the move would help expand bilateral trade relations, Xinhua reported.

Pakistan would now loosen import restrictions from India. At present, Islamabad allows import of only 1,946 items from New Delhi. India does not permit trade in 850 items with Pakistan.

Visa policies between the two countries would be made lenient, and both sides would also remove other restrictive practices, Xinhua said.

The Pakistan Readymade Garments Manufacturers and Exporters Association welcomed the decision, saying this would help Pakistan gain a foothold in one of the fastest growing markets in the world.

But the Pakistan Automotive Manufacturers Association said Pakistan should be cautious as both countries were rivals in the automobile industry.

Don't Be Pannic

2011-09-22T23:54:00.000-07:00

As the market drops gradually. It happens due to international impact as the indian economy is well settled. So we hope market gains rapidly up so keep investing.

For this time Spice Jet and IFCI is doing dood.

X-MAS bonenza

2010-12-01T04:12:00.000-08:00

Buy Orbit @ 90 SL 85 TGT 130
Buy SBI @ 3112 SL 3000 TGT 3500

India's IT aims to soften image as Obama visits

2010-10-27T06:18:00.000-07:00

U.S. President Barack Obama's visit to India puts the spotlight on its $60 billion IT sector, which argues it is a creator of jobs in the United States and should not be blamed for high unemployment.

An increase in U.S. visa fees, a ban on offshoring by the state of Ohio and the industry's portrayal in campaign ads as a drain of U.S. jobs has set a frosty tone ahead of Obama's visit to India in early November.

Obama is expected to visit Mumbai, India's financial hub and the centre of the 2008 militant attacks. U.S. officials say much of the trip's focus will be boosting trade that is expected to double in five years from the current level of $50 billion.

But it is a sign of the times that Obama is not expected to visit Bangalore, the country's technology hub. Nor is he expected to visit Hyderabad, another Indian IT hotbed, where his predecessor, George W. Bush, stopped in a 2006 visit.

"It is a worry, there's no question, but the worry is more about unemployment, not about the political rhetoric," said Pramod Bhasin, chief executive of outsourcer Genpact Ltd.

"We as an industry have to help create jobs in America and we have to communicate that much better than we've done in the past," said Bhasin, whose firm employs about 2,000 in the United States and expects to double or triple that over the next two to three years. Three-quarters of Genpact staff are in India.

Obama's fellow Democrats are expected to take a drubbing in the Nov. 2 balloting amid unemployment stuck near 10 percent.

In California, where the jobless rate tops 12 percent, Democratic Senator Barbara Boxer accuses her Republican rival Carly Fiorina of sending jobs abroad when she was chief of Hewlett-Packard.

Legislation that would end tax breaks for firms that create jobs and profits overseas was thwarted in the Senate, but a new rule raising the cost of certain visas to enter the United States, part of a border security bill, will cost Indian IT firms $200 million and sets an ominous precedent for the industry.

"It has nothing to do with immigration, but it has had an impact on the costs of IT services companies from India. That is the kind of legislation that worries us," said S Gopalakrishnan, CEO of sector bellwether Infosys Technologies Ltd. (INFOSYS.BO : 2984.25 -35.6)

SUCCESS VICTIM

India's IT services industry, which generates 70 percent of its revenue from the United States and accounts for 5 percent of India's economy, is a victim of its own success.

Before the global economic downturn, the sector was growing by roughly one-third per year as companies across industries shipped commoditised work to India and elsewhere to cut costs.

U.S. blue chips from Intel and Google to Cisco and Microsoft have substantial operations in India, which is increasingly a research hub for Silicon Valley. IBM alone is believed to employ more than 70,000 in India, although it would not confirm that figure.

While China's emergence as an industrial powerhouse has spawned U.S. backlash over lost manufacturing jobs and a weak currency that keeps exports cheap, India is associated with armies of young engineers and service staff working for one-fifth to one-third the wages of American white collar workers.

For India, the IT boom has created a world-leading industry that has been culturally transformative in a tradition-rich country, employing two million people working in modern offices and buying cars and apartments.

Outsourcers say they enable clients to innovate and compete, providing skills not readily available in the United States.

"There is a huge dearth of software engineers in the U.S., and a large part has been mitigated by offshore work," said Aparup Sengupta, managing director and global chief executive of Aegis Ltd, an IT services firm owned by the Essar conglomerate.

The perception within the United States is often less benign.

In an episode of "Outsourced," a new U.S. comedy TV show, bricks are thrown through the window of an American call center that has transferred its work to India.

JOB CREATION

Indian IT industry players say they are not to blame for U.S. job losses, and instead talk up creation of jobs both directly and indirectly in the United States.

"Job losses are not due to outsourcing. They're due to subprime, they're due to the financial mess, they're due to lots of other things," said Bhasin of Genpact, which this year bought an operation in Illinois from Walgreens as part of a deal to provide accounting services for the drugstore chain.

Outsourcing work to a lower-cost U.S. site can save roughly 20-25 percent, while moving work to India saves 70 to 80 percent.

Last year, Infosys announced a plan to hire 1,000 employees in the United States and said it has made nearly 300 job offers since then. Of 122,000 Infosys staff, over 2,000 are U.S.-based.

"We think there are perceptions and myths today, and these need to be corrected, because it's not about jobs moving to India, its about our creating jobs there," said Som Mittal, president of Nasscom, the trade body for the Indian tech sector.

Anti-outsourcing talk may cool after next week's elections but could reemerge with greater intensity in the run-up to 2012, when Obama will be up for re-election.

"In February, no one is going to be talking about India," said Derek Scissors, a research fellow in the Asian Studies Center at the Heritage Foundation, a conservative think tank in Washington. "But what about 2012? That's a different story.

Buy Call

2010-09-07T06:48:00.000-07:00

Two HOT scripts for this month. All Call for Future Only (SEPTEMBER)

Buy Fortis health at CMP 165 target id 173 in within 5 days .

Buy Orbit Corporation Limited at CMP 126 target is 150+ in this month.

Etisalat doesn't see a deal with Reliance Comm this year

2010-09-07T06:46:00.000-07:00

Emirates Telecommunication Corp, the Arab world's second-largest telecom operator by market value, does not expect a deal with India's Reliance Communications (RCOM.NS :163.15 +0.3) in 2010, its international chief said on Tuesday.

Jamal al-Jarwan told Reuters the company is considering different options in the Indian market and did not rule out an investment in telecoms firm Idea Cellular, and added that he remains keen on Morocco.

At 0843 GMT, shares in Idea were up 3.3 percent at 74.15 rupees in a Mumbai market that was up 0.3 percent. Reliance Comm shares were down 0.2 percent at 162.65 rupees.

Debt-laden Reliance Communications, controlled by billionaire Anil Ambani, said in early June it was looking to sell a 26 percent stake in the firm.

So far, only Abu Dhabi-based Etisalat has acknowledged that it is considering a deal with Reliance Comm, the only major local cellular carrier without a foreign strategic investor in the world's fastest-growing mobile market.

"I don't see any deal in the near future," Jarwan said. "Definitely not this year. We are taking our time."

Reliance Comm's plan to sell its telecoms tower business to GTL Infrastructure has fallen through, the companies said on Monday, dealing a blow to the efforts of India's No. 2 cellular carrier to nearly halve its debt.

Reliance said in a statement it is in talks with other strategic and financial investors to sell a stake in the telecoms tower business.

"Reliance Comm is still an attractive target. Its only problem is its debt. Otherwise, potential investors are getting a readymade product rather than having to spend money to develop their business in India from scratch," said Deven Choksey, chief executive of K.R. Choksey Shares and Securities.

Potential investors may be seeking more than a 26 percent stake in the company, and that may be why Reliance Comm is yet to find a partner, he said.

ETISALAT'S EXPANSION

Etisalat has been expanding aggressively overseas after losing its monopoly in its home market. It is present in 18 markets globally in Africa, the Middle East and Asia.

Jarwan also said the operator was still "very interested" in the Moroccan market.

"We hope we can move in the right direction with our friends in Morocco. We were very close at one point in time towards signing a deal and we are still waiting," he said, adding that progress had slowed during the summer months.

The operator failed last year in a bid to take a stake in Meditel, Morocco's second-largest telecommunications' firm.

DTC's wider tax slabs to benefit all

2010-08-27T08:08:00.000-07:00

In what could be a big relief to individual taxpayers, the government has proposed a widening of the three-tier slab structure, with the lowest rate of 10% for Rs 2-5 lakh taxable income, 20% for Rs 5-10 lakh and 30% for higher income.

The current slabs are Rs 1.6-5 lakh, Rs 5-8 lakh and above Rs 8 lakh respectively. Tax experts said this would bring significant benefits to taxpayers across the slabs.

The Direct Taxes Code (DTC) Bill cleared by Cabinet on Thursday also proposed a 30% corporate tax rate (for domestic companies) sans surcharge or cess. Though this falls short of the proposal in the DTC draft released earlier to bring down the rate to 25%, there would still be nearly a 4 percentage point difference from the current rate which is inclusive of surcharge and cess.

The DTC Bill will now be introduced in Parliament.

The effective tax rate (ETR) for most companies is in the range of 18-20% at present, thanks to depreciation and other forms of expenses allowed. According to Ajit Krishnan, partner, Ernst & Young, in the DTC regime, the ETR would not change substantially for most companies in the manufacturing industry, while some infrastructure companies could see their tax liability going up a bit on account of the removal of exemptions. But oil and gas companies have little to worry about as the government has committed to retain the capital subsidy scheme for them.

The DTC regime would, however, bring IT companies on par with other firms as the tax holiday for export income could go.

Current corporate tax rate is also 30%, but inclusive of a 10% surcharge and a 3% education cess, the tax rate works out to be 33.99%.

After the Cabinet meeting, finance minister Pranab Mukherjee said: "The whole objective (of DTC) is that a plethora of exemptions will be removed. (Income) tax slabs will be three. Rate of taxes will be taken in the schedule (of the bill) so that they need not be changed every year."

In June this year, the government brought out a revised discussion paper on DTC in which it addressed a lot of concerns raised by the original draft released last year.

For companies, the biggest relief was withdrawal of minimum alternate tax (MAT) based on gross assets and restoration of MAT regime linked to book profit. It was also clarified that savings in Public Provident Fund (PPF), other employee provident funds, New Pension Scheme and pure life insurance products and annuity schemes will not be subjected to tax at any stage.

The much-sought incentive for SEZ units was, however, not granted. Only limited relief was given in terms of grandfathering of profit-linked incentive for existing SEZ units which will be operational at the time of implementation of the code.

Govt says BlackBerry must give access or face ban

2010-08-27T07:58:00.000-07:00

India insisted on Friday it would block some BlackBerry services next week if the smartphone maker did not address security concerns, and government officials said they were hopeful for a solution soon.

Time is running out for Canada's Research In Motion to give India the means to track and read its secure email and instant messaging services that officials fear could be misused by militants and to create political instability.

(For Slideshow: Evolution of the BlackBerry, click http://in.reuters.com/news/pictures/slideshow?articleId=INRTR2H0RK)

Executives of the Canadian firm will meet Indian government officials for a second day on Friday in last-ditch negotiations aimed at finding a solution ahead of an Aug. 31 deadline. The government has said it will take a final decision on Monday.

"We will only accept a solution which will enable us lawful interception of BlackBerry services in the interest of national security," a government official close to the talks told Reuters.

"The solution, if they come up with it, will have to go through field trials and satisfy our technical experts," he said. "The government's position does not change ... We are hopeful they will come up with some solution."

BlackBerry's troubles in India, which could cut it out from one of the world's fastest growing mobile phone markets, are the latest in the firm's global headaches as governments worry its encrypted services could be used for activities from terrorism to peddling pornography.

For a graphics on Blackberry's global woes, click http://link.reuters.com/ryr37n

India is one of a number of countries putting pressure on RIM for the same reason its BlackBerry device is so popular with business professionals and politicians: confidentiality.

The governments of Saudi Arabia and other nations fear it could become a tool to plan militant attacks or for those breaking Islamic laws.

SECURITY CONCERNS

RIM has offered to lead an industry forum to look at India's need to have "lawful access" to its encrypted email and messenger in an effort to stave off the blocking of the popular services.

RIM said singling out BlackBerry for blocking would be counter-productive for India, as it would limit the efficiency and productivity of local firms.

But India says nothing short of a solution giving access to secure email would satisfy security agencies.

"I think these concerns have been addressed in other parts of the world. I see no reason why the Indian government and its agencies should take any risk at all as far as technology is concerned," junior telecoms minister Sachin Pilot said on Friday.

Pilot said he was hopeful the company would offer a solution.

A shutdown would affect about 1 million users in India out of a total 41 million BlackBerry users worldwide, allowing them to use the devices only for calls and Internet browsing.

RIM uses powerful codes to scramble, or encrypt, email messages as they travel between a BlackBerry device and a computer known as a BlackBerry Enterprise Server (BES) that is designed to secure those emails.

RIM has said BlackBerry security is based on a system where the customers create their own key and the company neither has a master key nor any "back door" to allow RIM or any third party to gain access to crucial corporate data.

Oil ministry has sought details on Vedanta-Cairn deal: Deora

2010-08-20T06:33:00.000-07:00

India's oil minister Murli Deora said his ministry has sought details on the proposed acquisition of majority stake by Vedanta in Cairn India, the local arm of of Britain's Cairn Energy.

"We have told Cairn to write to us then we will decide," Deora told reporters on Friday.

Vedanta, in its first move into the energy sector, is buying a controlling stake in India's No. 4 oil and gas company from Cairn Energy to capitalise on rising energy demand, economic growth and an expanding population.

Cairn Energy Chairman Bill Gammell arrived in New Delhi and had held talks with Indian officials on Tuesday to iron out the approval process for the acquisition.

The deal needs Indian government approval because Cairn India has production-sharing contracts (PSCs) with the government for oil and gas exploration blocks. According to the agreement, any ownership change will need federal approval.

Approval from state-run explorer ONGC (ONGC.NS : 1259.05 -7.65), which has a 30 percent stake in Cairn India's Rajasthan oil block called RJ-ON-90/1, is also crucial for any change of ownership.

For August

2010-08-13T23:38:00.002-07:00

Buy Deccan Chronical Holdings At CMP target is !50 Above

Buy Valecha Engineering Limited At CMP target is 200.

For August

2010-08-13T23:38:00.001-07:00

Montek sees inflation falling to 6%

2010-08-13T23:02:00.000-07:00

As the underlying inflationary pressure is easing off, wholesale price inflation could fall to 6% by December, Planning Commission deputy chairman Montek Singh Ahluwalia told FE in an interview. He added that it is this welcome sign reflected in the seasonally adjusted data that should influence policy-making at this juncture, rather than year-on-year figures impacted by the base level effect.

Inflation has been in double digits for five months in a row. It stood at 10.55% in June. Source said that the Planning Commission's internal research shows that inflation could even fall to 5.5% by December, even after the impact of fuel price increase, that will show up in July data, is factored in.

"Because inflation rose last year quite sharply, the year-on-year rate would remain high and would slowly start coming down (from August-September). The point is that the prices this year have not been rising the way they were last year,"Ahluwalia said, drawing attention to the relatively flat nature of the Wholesale Price Index (WPI) graph so far this fiscal.

It was not difficult to "kill" inflation provided "if you don't mind the collateral damage" to the economy, Ahluwalia said. Stating that the less than half way through the current fiscal, the economy's overall prospects looked "good,"he said the "continuing reasonable growth rate" in capital goods output suggested investments were well on track.

Even as overall industrial output expanded at a 13-month low of 7.1% in June, capital goods production grew at 9.7%. During April-June, the growth in capital goods production was an impressive 34%.

Given the global economic conditions, an 8.5% growth on an average inflation of 6% would represent extremely good macro-economic management, he claimed, adding that going ahead, "we ought to be aiming at somewhat higher growth and somewhat lower inflation."

Ahluwalia said his prediction on inflation was based on certain assumptions that have strong grounding. Inflation's underlying momentum is evidently relenting. There is a marked improvement in food availability thanks to good monsoon, adequate food stocks and the recent additional release of food grains. From 17-19% a few weeks ago, food inflation - which forms about 50% of the primary articles that have a 22% weight on WPI - came down to 9.5% for the week ended July 24. (It went up to 11.4% for the week-ended July 31 on predicted lines as food prices had declined in the same period last year).

The good monsoon and ample food stocks this fiscal are in sharp contrast to the grossly inadequate rains last year and continuous build-up of speculative pressure on prices. The easing of price pressures was evident in the entire primary products basket, and to a lesser extent, in the manufactured goods segment.

He added that he saw no huge pressure on prices globally this year-- either on fuel or other raw materials-- given the rather fragile nature of the global economic recovery. With huge excess capacities in products like steel, it was unlikely that their prices would go up.

"If you have failed to notice the base level effect, you would, in order to lower inflation, be wanting to (bring) prices down... ," Ahluwalia warned. He, however, refused to comment specifically on what the RBI's monetary policy trajectory should be. "I'm sure that the governor is aware that the monetary policy should be forward-looking," he said. When an inflationary upsurge occurs, the main policy imperative ought to be to effect a "soft landing," he said.

To curb inflation, RBI has raised policy rates four times by a total of 100-125 basis points since March and will review policy on September 16.

Ahluwalia said if inflation comes down to 6% by December as predicted, it can barely be attributed to the base effect. The decline would be because the underlying rate of inflation now is much lower than it was last year.

The present level of momentum, unless it is disturbed through some unexpected global developments, would ensure that the inflation would ease to 6% by December.

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Investors must follow bottom-up approach in stocks

2010-08-07T06:42:00.000-07:00

The Sensex (^BSESN : 18143.99 -28.84) is at 18,000-plus points, just 16% away from its all-time high. Despite concerns over the sustainability of global recovery, the Sensex has kept on rising. This comes from the smart recovery in Indian economy and a projected growth rate of 8.5%.

India has planned infrastructure spending over Rs 2lakh crore. This has helped the corporate sector perform better and resulted in rising valuations of large cap Sensex companies. These companies were hammered in the wake of the global economic slowdown after the Lehman Brothers bankruptcy.

Therefore, it is seen that in the rally from 8,000 to 18,000 points, Sensex stocks like Infosys (INFOSYS.BO : 2864.05 -9.35), Bhel (BHEL.NS :2507.6 -17.3), SBI (SBIN.NS : 2619.35 -26.35), RIL (RELIANCE.NS :1000.1 -6.95) etc were the outperformers, where retail investors had little exposure. In fact, retail investors continued to exit such shares with every rise on the premise that the rally would not sustain. Thus, one theory suggests that even though the Sensex is over 18,000 points, we are still at 10,000 points, except for a few stocks which are part of the Sensex. If this is to be believed, then there are more opportunities for making good investments out of the Sensex companies.

Investors need to apply themselves in picking the under-performers. In simple terms, even assuming that Sensex is range-bound between 17,000 and 19,000 points, Sensex stocks have limited space on the upside. I cannot see SBI or RIL outperforming the 30-share index, but at the same time, stocks which are under-performing could outperform as there is no correlation with the benchmark but direct relation with the infrastructure growth.

It is also to be understood that small investors are not safe enough in India. There are always chances of investors getting stuck in stocks run by fly-by night operators. Circular trading to create artificial volumes still exists, though regulators are doing their best to prevent such practices. If investors take necessary measures, they will not only help regulators but also themselves and not fall prey to investments in stocks which exist only on paper. I think the best way is to rely on research provided by neutral agencies. NSE (^NSEI: 5439.25 -7.85) and BSE have taken positive steps in this direction and have made arrangements with some professional agencies to make such research easily available.

Some signs of slowdown are seen in sectors like cement, which clearly suggest the road ahead won't be be very smooth for retail investors. This could make investment in Sensex component stocks a bit risky. In short, investors must follow a bottom-up approach and not top-down, considering the fact that Sensex at 18,000 is expensive compared to the global peers and it is only liquidity which is driving the market.

BY Yahoo

Govt plans to divest stake in ONGC, IOC

2010-08-07T06:41:00.000-07:00

he petroleum ministry has said that the government plans to sell 5 per cent of its stake in Oil and Natural Gas Corporation (ONGC (ONGC.NS : 1230.85 -11.5)) and 10 per cent in Indian Oil Corporation (IOC (IOC.NS : 367 +8.4)) to raise about Rs 21,000 crore this fiscal. "We have received a note from department of disinvestment (DoD) that says they have approval of the finance ministry for divestment of government stake in ONGC and IOC," said Petroleum Secretary S. Sundareshan on Friday.

The proposal, he said, is for sale of 5 per cent or 10.6 crore equity shares in ONGC through a follow-on public offer (FPO), which at Friday's trading price of R1,233.3 would fetch the government R13,189 crore.

In IOC, DoD has proposed to sell 5 per cent of government equity through a FPO.

"Simultaneously, IOC also proposes to sell 10 per cent of the expanded equity capital (through an FPO) to raise funds for its expansion plans," he said.

Post stake sale, the government's shareholding in ONGC will come down to 69.1 per cent from 74.1 per cent.

In Indian Oil Corporation, the twin divestment and stake sale would reduce the government holding from 78.9 per cent to 64.6 per cent.

"We are not preparing any Cabinet note. It is the Department of Disinvestment which will do that. We only have to seek approval from the minister (Murli Deora)," Sundareshan said.

According to the road map being prepared, IOC would be the first to be disinvested. It will first sell 10 per cent or 24.3 crore equity shares that at Friday's stock price of R363.9 would fetch the company R8,835 crore to help it part-finance its capital expenditure programme of R75,000 crore.

This would be followed by the sale of 10 per cent government holding amounting to 19 crore shares to raise R7,000 crore. The nation's largest oil firm wants to take advantage of the recent government decision to free fuel prices by tapping the capital markets.

China Everbright IPO is 17-times oversubscribed

2010-08-07T03:31:00.000-07:00

Everbright is aiming for a nearly $3 billion listing on the Shanghai Stock Exchange on August 18, with a little more than half of the listed shares available to institutional investors and most of the rest allocated to strategic investors.

The strategic investor portion of the IPO, which could China's second-biggest this year, was nearly seven-times oversubscribed.

The bank has set an undemanding price range of 3.0-3.3 yuan ($0.44-0.49) per share for the listing to whet investor appetite, a source said on Friday.

Everbright did not comment directly on its target price range, which will be announced late on Sunday.

"In researching the IPO pricing, we will look to offer a discount on the basis of other comparable banks' values, according to appropriate pricing and market principles, in order to ensure that investors can share in the investment value of Everbright Bank," Chairman Tang Shuangning said

BlackBerry's armor has cracks: Security experts

2010-08-06T07:50:00.001-07:00

Research in Motion's resistance to giving governments access to its BlackBerry network misses a major point -- authorities could probably hack the data on their own if they want it badly enough, security experts say.

Indeed, a major attack against BlackBerry users by a telecom in the United Arab Emirates employed that very tactic a year ago, according to RIM. Experts say other malicious programs are likely to be lurking around, readying to be sprung.

India, Lebanon, Saudi Arabia and the United Arab Emirates say they need RIM's cooperation so they can decode messages scrambled with BlackBerry's proprietary technology. They have threatened to restrict RIM's operations if the company won't meet their demands, which they say are driven by national security concerns.

But if RIM doesn't back down, the governments themselves could instead choose to hack into the BlackBerry network.

"I could design a good hundred ways to gain access," said Bruce Schneier, a security expert who is chief security technology officer for BT.

Officials with Canada's RIM did not respond to a request for comment.

Security experts say they'd almost certainly attack at the network's most vulnerable points: the BlackBerry smartphone itself and the BlackBerry server. Those two pieces of equipment sit at either end of the network where they offer would-be hackers access to unscrambled data.

Last year's attack in the UAE is a good example of how a hacker might work. It employed spyware created by SS8, a closely held U.S. security firm, RIM says.

Emirates Telecommunications Corp, the UAE's largest telecoms operator, sent the program to its BlackBerry disguised as a software update. It told its customers that the it would enhance the performance of their equipment, but RIM says it was mainly intended to tap into their communications.

The telecom declined comment at the time.

RIM said it quickly discovered the so-called "malware" because of a glitch in its implementation, and told users not to install it on their phones. But hackers might go undetected, experts say.

To prove the point, a security researcher named Tyler Shields released a spyware program earlier this year for attacking BlackBerries via the handset. It allows hackers to intercept messages that reach the device and use its microphone to tap conversations in the immediate vicinity of the phone.

"I wanted to demonstrate that BlackBerry handhelds are susceptible to spyware," said Shields, who works for the Burlington, Massachusetts-based security firm Veracode Inc.

The program, dubbed TXSBBSpy, did not include installation software as Shields never intended it to be used. He only wanted to show the BlackBerry was not unhackable.

A successful attack on a Blackberry Enterprise Server could prove even more devastating because each server manages data for hundreds of users.

Hackers could write code to take advantage of vulnerabilities in the software that runs those servers, said Chet Wisniewski, senior security adviser at Sophos, anti-virus software maker. Such a program would allow outsiders to view messages from all the users hooked up to the computer via their handsets.

RBI has done enough on inflation: Gokarn

2010-08-06T07:19:00.000-07:00

The Reserve Bank of India has taken adequate measures to manage inflation and expects food inflation to ease on good monsoon rains, a deputy governor at the central bank said on Friday.

The statement calmed markets that had feared further steep rate hikes to rein in double-digit inflation. It also echoed the views of government officials who have said price rises would ease with normal monsoon rains despite a record of forecasts that have underestimated inflation.

(For HIGHLIGHTS: Deputy governor's comments, click http://in.reuters.com/article/idINIndia-50675920100806)

Food inflation has eased to 9.53 percent in the week to July 24 from more than 17 percent in January this year, on account of good monsoon rain, a fall in seasonal prices of fruits and vegetables, and the release of government food grains in the market.

"We have done enough to manage inflation. We expect to see the effects in the second half of the year because policy actions act, or have an effect, with a lag," said Subir Gokarn, one of the four deputy governors at the Reserve Bank of India (RBI), who runs the monetary policy division.

"You will see them manifested over the next few months."

The wholesale price index, India's most closely watched inflation measure, is expected to record a sixth month of double-digit rises in July.

(For a graphic on monsoon rain, please click http://graphics.thomsonreuters.com/F/07/IN_MNSRF0810.gif)

India's 10-year benchmark bond yield fell as much as 8 basis points after his comments.

At 12:43 p.m. (0710 GMT), the yield on the benchmark 10-year bond was down 8 basis points at 7.81 percent from before the comments. It had closed at the day's high of 7.91 percent on Thursday, its highest since May 7.

The statement follows media reports last week saying that central bank deputy governor K.C. Chakrabarty was stripped off his portfolio after reported off-the-record comments calling for more forceful policy to tame inflation -- possibly a sign of dissent within the bank over how to rein in price rises.

DEMAND PRESSURES

Analysts say food prices may moderate in coming months, but due to food inflation spreading to non-manufacturing industries the central bank could raise policy rates by 25 basis points in its next policy review on September 16.

"On the demand side, clearly capacity constraints are beginning to show in indicators of demand side inflation," Gokarn said, adding the central bank was trying to address demand pressures through rate actions.

Since March, India's central bank has raised its main lending rate by a total of 100 basis points to 5.75 percent and the borrowing rate by 125 basis points to 4.50 percent.

Price rises are a hot political issue and Finance Minister Pranab Mukherjee told parliament on Wednesday that rising prices were a cost that Asia's third-largest economy was paying for fast economic growth.

The central bank lifted its inflation forecast for the fiscal year ending March 31 to 6 percent from a previous forecast of 5.5 percent, while the economy is expected to grow at 8.5 percent.

"I think the concern now is not really food inflation, which is easing, but core inflation which is shooting up and is reflecting demand-side pressures," said N.R. Bhanumurthy, economist with the National Institute of Public Finance and Policy, a New Delhi-based think-tank.

"The situation is worrisome and I expect at least another 25 basis points hike in the offing."

Gokarn said the impact of a fragile global recovery on capital inflows and commodity prices would ease inflation pressures.

"If global growth is slow, the commodity prices tend to soften and that will act to contribute to inflation management."

Referring to liquidity, Gokarn said the economy had moved from excess liquidity to a deficit or balanced scenario.

"If you look at the change in the call rate, which is effectively the anchor for the short term for the yield curve, it has gone up by the sum of the both reverse repo and the corridor."

India gold traders still pick bargains; premiums up

2010-08-06T07:18:00.002-07:00

Gold traders continued to snap up bullion on Friday afternoon as the rupee hit its highest level in seven weeks, making the dollar-quoted yellow metal cheaper, with premiums continuing to be on the higher side, dealers said.

(For Slideshow: More glitter to gold, click http://in.reuters.com/news/pictures/slideshow?articleId=INRTXPMAF)

"Deals are happening after every five minutes, I have marked for about 200 kgs from morning," said a dealer with a state-run bank, which deals in bullion.

The rupee strengthened to its highest level in nearly seven weeks as some corporate sold dollars, with broad losses in the U.S. unit versus majors and other Asian currencies also boosting sentiment.

International gold was buoyed by physical buying interest from jewellers and investors and by the weaker dollar ahead of key jobs data from the United States.

Premiums have more than trebled to $1.50/1.60 for an ounce of gold from 40 cents at the start of July.

"Banks have hiked premiums by 30-50 cents and even parties are willing to buy at higher premiums," said a dealer with another state-run, bullion-dealing bank.

"Last week was execllent for gold sales, premiums would continue to inch higher if prices fall," said Haresh Acharya, head of bullion desk at Ahmedabad-based wholesaler, Parker Agrochem.

Indian gold demand is set to pick up for the busy festival season, starting with Raksha Bandhan on Aug. 24, and extending till Dhanteras in November, the single-biggest gold buying day.

Give gas for old units, says ADAG

2010-08-06T07:18:00.001-07:00

With the government yet to consider gas allocations for new power projects, the Anil Ambani group seems to have changed its strategy. It is now seeking gas for the expansion of its existing gas based power projects instead. The first such proposal entailing an investment of Rs 10,000 crore has been submitted by Anil Ambani's Reliance Power Ltd to the government to expand the capacity of its existing 220 megawatt gas-based power project at Samalkot in Andhra Pradesh to 2,400 mw.

"The power ministry has recommended an allocation of 8 million standard cubic metres of gas per day (mmscmd) for this project at the July 28 meeting of the Empowered Group of Ministers (EGoM)," said a petroleum ministry official.

Asked about the status, he said, "Wait for the minutes of the EGoM meeting to come."

A source close to the company said, "Requests for similar gas allocations may also be sought by the company for expanding its existing gas-based power projects at Kochi (165 mw) and Goa (48 mw)."

The company's spokesperson refused to comment but confirmed seeking gas supplies for expansion of Samalkot.

Gas allocations for Samalkot have been sought by Reliance Power out of its share of gas of 28 million standard cubic metres per day agreed to for the company's gas based power projects following the Supreme Court order in the Ambani's gas dispute case.

"We (Reliance Power) request you to immediately allocate 8 mmscmd of natural gas for our Samalkot project from our request of 28 mmscmd," Reliance Power said in a July 20-dated letter to power minister Sushil Kumar Shinde.

Ratan Tata Will Say Tata To TATA in Dec. 012

2010-08-05T02:07:00.001-07:00

Noel Naval Tata's role in the over $71 billion crore salt-to-software conglomerate clearly got bigger last week with his appointment as managing director of Tata International. In the meanwhile, the board of Tata Sons announced on Wednesday it had formed a selection committee, comprising five members, including an external member, to decide on a suitable successor to groups chairman Ratan N Tata, who retires in December 2012 when he turns 75.

"The committee has commenced its work," a press release said, adding that "the selection process for a prospective candidate would consider suitable persons from within the Tata Companies, other professionals in India as well as persons overseas with global experience."

The committee will comprise two directors from the Sir Dorab Tata Trust and the Sir Ratan Tata Trust, two members from the Tata Sons board and one external, non-Tata Group person. The selection committee names being speculated about are NA Soonawala, Keki Dadiseth, Jamshed J Irani, R Gopalakrishnan, AN Singh and the outsider and Ratan Tata's close confidante and Bombay Dyeing Group chairman Nusli Wadia. Ratan Tata will not be a member of the search committee.

Ratan Tata had said in the past that his successor could be an expatriate. "It would be certainly easier if that candidate were an Indian national. But now that 65% of our revenues come from overseas, it could also be an expatriate sitting in that position with justification now that we are a company that has global reach and global presence," Ratan Tata had told The Wall Street Journal last November to a question on how he was conducting the search for his successor

"The successor, I would hope, would have integrity and our value systems in the forefront and hopefully would carry on the path that we have tried to set for the company's growth," Mr Tata had observed. The chairman had indicated to a magazine earlier in 2009 that his successor would need up to 18 months as handover time.

While names, including Indra Nooyi of PepsiCo and Vikram Pandit of Citigroup have been talked about, Noel Tata has been considered a frontrunner for the group chairman's position. Indeed, the stint at Tata International is expected to give the 53 year-old Noel Tata exposure to the group's overseas businesses; he has spent about a decade at Trent, building the retail business. Tata International, a leather and engineering and trading company has a presence across ten African nations. A graduate of Sussex University, Noel Tata is the son-in-law of Pallonji Mistry, the largest single shareholder in Tata Sons with a stake of 18%.

In addition to Mistry, the board of Tata Sons, chaired by Ratan Tata comprises among others FK Kavarana, Jamshed J Irani, Ishaat Hussain, R Gopalakrishnan, RK Krishna Kumar and Arunkumar Gandhi.

Reliance Industries says to buy Shale stake in U.S.- R

2010-08-05T02:05:00.000-07:00

Reliance Industries (RELIANCE.NS : 1012.45 -3.6) said on Thursday one of its units had signed definitive agreements to enter into a Marcellus Shale gas joint venture with United States-based Carrizo Oil & Gas Inc.

Reliance will pay a total $392 million, comprising $340 million of cash and $52 million of drilling carry obligations, the company said.

Under the deal, Reliance will acquire a 60-percent interest in Marcellus Shale acreage in Central and Northeast Pennsylvania that is currently held in an equal joint venture between Carrizo and an affiliate of Avista Capital Partners, India's top listed firm said in a statement.

Reliance will acquire all of Avista's stake and 20 percent of Carrizo's stake in the existing joint venture, the statement said.

(Reporting by Devidutta Tripathy; editing by Malini Menon)

(For more business news on Reuters India click http://in.reuters.com)

(For Quotes and Interactive Charts of Reliance Industries Ltd http://in.reuters.com/money/quotes/chart?symbol=RELI.BO)

Intraday Call

2010-08-05T00:19:00.000-07:00

Buy Dlf @ CMP tGT IS 318

Buy Everonn @530 Sl 521

Buy Unitech @83.55 sl 82

Hot pick Buy Chennai petro @268 Sl 260

August Hot Script For F&O

2010-08-04T03:52:00.000-07:00

Buy Cairn India at CMP target is 355 to 365

Buy Hindustan Phosphorus at 183 tgt is 230 by this month.

And welcome the festival season

August Hot Script For F&O

2010-08-04T03:44:00.000-07:00

Buy Cairn India at CMP target is 355 to 365

Buy Hindustan Phosphorus at 183 tgt is 230 by this month.

And welcome the festival season

Volvo bus unit hit by strike

2010-08-04T00:32:00.000-07:00

Swedish commercial vehicle major Volvo is facing trouble in India as production at its bus manufacturing facility near Bangalore has been severely impacted. Workers at the plant have been on strike for a week, but now it has begun to cripple operations.

If the current crisis continue for some more days, the company may not only able to fulfil the domestic demand. It is also expected to postpone export plans, sources closed to the development told FE.

Over 500 employees attached to Volvo Buses Workers Union (VBWU) in Volvo Buses India Pvt Ltd (VBIP) have resorted to an indefinite strike after a three-month go-slow, demanding wage hikes and reinstatement of a few suspended employees.

Volvo Buses, in which the Swedish parent holds 70%, is a joint venture with Bangalore-based bus body builder Azad Group.

The company had initiated wage negotiations with the trade union early this year, with 25 sittings so far. "However the discussion have reached a stand-off since the union now seeks to link this discussion to revoking the suspension of four employees," said a Volvo spokesperson. The company had placed four workers under suspension in April on allegations that they assaulted management staff, besides keeping them hostage for eight hours. A police inquiry in this connection is still underway, he said.

"This has caused serious damage to the company. This situation is not sustainable in the current business environment," he said. At present manufacturing at the plant level is being undertaken with the help of management staff and non-union staff.

He refused to quantify the loss due to strike, but sources in the company said the production could have come down by half in the past three months. Each of Volvo bus cost in the range of Rs 65-70 lakh. The spokesperson confirmed that the company do not maintain any inventories as it manufacture buses against orders.

BP Controls Gulf Well That Caused Record Oil Spill

2010-08-04T00:26:00.001-07:00

BP Plc said it controlled the pressure in its Gulf of Mexico oil well with drilling mud, a “significant milestone” in its attempt to permanently seal the source of the world’s worst accidental oil spill.

BP began pumping mud into the top of the well for its “static kill” operation at 3 p.m. local Houston time yesterday and the operation lasted about eight hours. The well “appears to have reached a static condition -- a significant milestone,” BP said in a statement in London today.

If the static kill is successful, BP would be able to plug the Macondo well from the top. The company still needs to complete a relief well to permanently seal the damaged well, National Incident Commander Thad Allen said at a Houston press conference.

Government scientists issued revised estimates on Aug. 2 that the well spewed 4.9 million barrels of oil, making it the largest accidental maritime oil spill. About 800,000 barrels was captured by BP, and some was skimmed or burned. Scientists expect to quantify within days how much oil remains in the Gulf, potentially in underwater plumes, Allen said.

“There’s still residual oil out there,” he said. “Our intention is to size our force based on the requirements -- how much oil is out there and how much do we have to recover.”

Three-quarters of the oil leaked from the well has evaporated, dispersed, or been recovered. The remaining oil is so diluted that it doesn’t represent much of a risk for the Gulf, the New York Times reported, citing a government report to be released today.

London Trading

BP rose 2.55 pence to 415.65 pence in London trading yesterday. It has fallen 37 percent since the Deepwater Horizon drilling rig exploded on April 20, killing 11 workers and triggering the spill.

London-based BP reported a record quarterly loss of $17.2 billion when it reporting earnings on July 27 after booking a $32.2 billion pretax charge related to the Gulf of Mexico oil spill. The company said it would expand asset sales to raise as much as $30 billion over 18 months to help pay for cleanup costs and liabilities from the environmental disaster, which also cost Chief Executive Officer Tony Hayward his job.

Ecopetrol SA and Talisman Energy Inc. agreed to buy BP’s fields in Colombia for $1.9 billion in cash, the company said in a statement yesterday.

Relief Well

BP said its relief well, which would inject mud and cement into Macondo from the bottom, will “most likely” intercept the damaged bore by mid-August. The company has said the relief well may complete the permanent kill by the end of the month.

Oil continues to wash ashore 20 days after BP stopped the flow by installing a new cap on the well. About 644 miles (1,036 kilometers) of the region’s coastline is oiled, according to a government operational report late yesterday. About a quarter of the Gulf remains closed to fishing, the National Oceanic and Atmospheric Administration said on its website.

Storms may drive oil onto shore through hurricane season, which ends Nov. 30, Allen said.

Scientists are trying to quantify in the next several days how much oil was skimmed from the surface or burned at sea, how much evaporated, how much was dispersed into the water and how much may yet hit shore, Allen said.

Bay of Campeche

The Macondo spill exceeds the 3.3 million barrels that the Royal Swedish Academy of Sciences estimated leaked from Mexico’s Ixtoc-1 well in the Bay of Campeche in 1979. The worst spill was in the 1991 Persian Gulf War when retreating Iraqi forces opened valves, releasing 6 million barrels into the sea, according to the U.S. Environmental Protection Agency.

BP is accelerating damage payments, saying yesterday it recognizes “frustration” from small-business owners as it transfers authority over claims to an independently administered fund. The company said it processed 2,600 claims during the past three days under an expedited system that eased documentation requirements.

The company has issued a total of 93,000 checks for $277 million in damage claims. Some claims will be deferred until later this month, when the $20 billion Gulf Coast Claims Facility run by Kenneth Feinberg will begin operating, BP said.

Nissan, Hyundai Extend Gains as U.S. Auto Sales Cool in July

2010-08-04T00:24:00.000-07:00

Nissan Motor Co. and Hyundai Motor Co. led U.S. sales gains among major automakers in July as industrywide demand cooled amid consumer concerns that the economy may weaken.

Nissan, Japan’s third-largest carmaker, said sales rose 15 percent while Seoul-based Hyundai reported a 19 percent increase. Deliveries fell 3.2 percent at Toyota Motor Corp., the world’s biggest carmaker, and 2 percent at Honda Motor Co.

“It’s companies that really focus on retail sales that are coming through this year,” said James Bell, an industry analyst for Kelley Blue Book in Irvine, California. “Interest in all Hyundai vehicles has been buoyed by the introduction of Tucson and Sonata. Nissan’s core products have all been shined up in the past year, and retail buyers are noticing.”

Nissan and Hyundai gained even as many potential customers shunned showrooms amid signs that the economic recovery is slowing. A U.S. jobless rate that remains near a 27-year high helped push the New York-based Conference Board’s measure of consumer sentiment to the lowest in five months.

Nissan fell 2.2 percent to 662 yen as of 10:09 a.m. in Tokyo trading, while Hyundai dropped 2.3 percent in Seoul. Toyota declined 1.1 percent and Honda fell 1.2 percent.

Industrywide Sales

Industrywide sales grew 5.2 percent, faster than the 4.2 percent increase for carmakers based in Japan and South Korea, according to data compiled by Bloomberg. The overall growth rate was the slowest this year, declining from 14 percent in June and 19 percent in May.

Sales rose 6.4 percent for General Motors Co., the largest U.S. automaker, 3.3 percent for Ford Motor Co. and 5 percent for Chrysler Group LLC.

The percentages aren’t adjusted for one more sales day last month than in July 2009. Some automaker report adjusted figures.

“July had the opportunity to be such a great month. It started out strong, but definitely didn’t finish strong,” said Jessica Caldwell, a senior analyst at Edmunds.com, an automotive research website in Santa Monica, California.

U.S. market share for Asian companies fell to 48.2 percent in July from 48.7 percent a year earlier. The U.S.-based companies’ share rose 0.1 percentage point to 43.7 percent.

Toyota sold 169,224 Toyota, Lexus and Scion-brand vehicles last month, down from 174,872 a year earlier. Bob Carter, head of Toyota-brand sales in the U.S., said the results were “very good” given the effect of the so-called cash-for-clunkers government incentives that began in the year-earlier month.

Toyota

“Last July was a particularly good month for us” as a result of the federal program, Carter said in a conference call yesterday. Toyota led the industry in July in retail sales, or deliveries to non-fleet customers, he said.

July showed a return to normal trade-in conditions for the first time this year, with more customers swapping vehicles from rival brands than repeat Toyota buyers, Carter said.

“Our trade-ins appear to be 43 percent Toyota, 57 percent competitive makes, which is where we were historically,” he said.

Deliveries for Lexus were held back by a sales suspension of the HS hybrid sedan that lasted most of the month, said Mark Templin, head of the luxury brand in the U.S. The Toyota City, Japan-based company fixed a fuel-system problem that triggered the sales freeze on June 25, and Lexus dealers began repairing vehicles late last week, he said.

Toyota’s U.S. market share in July fell to 16.1 percent from 17.5 percent a year earlier, according to research firm Autodata Corp., based in Woodcliff Lake, New Jersey.

Honda

Honda, Japan’s second-largest automaker, sold 112,437 Honda and Acura vehicles, a drop from 114,690. The decline was led by its top-selling Accord and Civic cars and Fit hatchbacks, Tokyo- based Honda said in a statement.

Like Toyota, Honda cited the year-earlier effect of the cash-for-clunkers program. Honda’s market share declined 0.8 percentage point to 10.7 percent, according to Autodata.

Nissan, growing at its fastest pace in the U.S. since 2004, reported sales of 82,337 Nissan and Infiniti models last month, an increase from 71,847 a year earlier. Light trucks led the growth, surging 52 percent. Car sales, dominated by the Altima sedan, fell 0.1 percent.

“It seems the news has turned more negative on the economy, but our floor traffic was really good in July,” Al Castignetti, vice president of the Yokohama, Japan-based company’s U.S. sales unit, said in an interview. “The people who were coming in to our dealerships were buyers.”

Nissan’s market share rose to 7.8 percent from 7.2 percent in July 2009. Its U.S. sales have gained 25 percent this year.

Hyundai, Kia

Hyundai, South Korea’s largest automaker, sold 54,106 vehicles in July, a record for the month. Gains were led by the Sonata sedan, a competitor to Toyota’s top-selling Camry, and Elantra compact cars.

“We remain very bullish about our prospects for the second half of this year as we substantially increase production to improve vehicle supply while launching four new products over the next five months,” Dave Zuchowski, vice president of Hyundai’s U.S. sales unit, said in a statement.

Kia Motors Corp., Hyundai’s affiliate, said its sales rose 21 percent to 35,419.

Subaru, the auto brand of Toyota-affiliated Fuji Heavy Industries Ltd., increased sales 9.8 percent. Mazda Motor Corp., partly owned by Ford, reported an 8.9 percent increase, helped by the addition of the new Mazda2 hatchback.

U.S. sales for Asia-based auto brands              Jul-10      Jul-09     Change %    DSR % Toyota     169,224     174,872     -3.2%      -6.8% Honda      112,437     114,690     -2.0%      -5.6% Nissan      82,337      71,847     14.6%      10.4% Hyundai     54,106      45,553     18.8%      14.4% Kia         35,419      29,345     20.7%      16.2% Mazda       20,732      19,032      8.9%       4.9% Subaru      23,983      21,839      9.8%       5.7% Mitsubishi   5,648       4,847     16.5%      12.2% Suzuki       1,952       3,507    -44.3%     -46.4% Total:     505,838     485,532      4.2%       0.3%

*DSR, or daily selling rate, adjusts for the number of selling days in a month. In July 2010 there were 27 selling days, compared with 26 in July 2009.

Buy Hcl tech

2010-07-29T08:28:00.000-07:00

Buy Hcl Tech Fut of August At CMP and TGT is 430

and welcome the Festive season .

HCL Tech Q4 net up 23% at Rs 238 cr

2010-07-29T08:27:00.002-07:00

T services giant HCL Technologies Ltd (HCLTECH.NS : 378.05 +5.5) today posted a growth of 23.26 per cent in its standalone net profit at Rs 237.82 crore, for the quarter ended June 30.

HCL Technologies had a net profit of Rs 192.94 crore in the same period previous year, the company said in a filing to the Bombay Stock Exchange (^BSESN : 17992 +34.63).

The IT major's total income rose to Rs 1,330.61 crore in standalone, from Rs 1,145.54 crore in the same period last year.

For the year ended June 30, the company reported a decline of 4.58 per cent in its consolidated net profit at Rs 1,259.19 crore.

It had a net profit of Rs 1,319.63 crore in the same period a year-ago.

The total income of the IT firm increased to Rs 12,136.29 crore for the year ended June 30, as against Rs 10,229.41 crore in the same period year earlier, the filing added. The board of directors of the company has recommended a final dividend of Rs 1 per equity share on the face value of Rs 2 each to the shareholders.

Shares of HCL Technologies surged 6.2 per cent to touch a month high of Rs 396 on the BSE in the early trade.

Food inflation eases to to 9.67 pct

2010-07-29T08:27:00.001-07:00

India's food inflation eased and fuel inflation notched up in mid-July, but the data is unlikely to change the RBI's decisive move towards stamping down on double-digit inflation.

The Reserve Bank of India (RBI) had on Tuesday raised interest rates more forcefully than expected and said the balance of its policy stance had shifted to containing double-digit inflation and anchoring inflationary expectations.

With the RBI lifting its headline inflation projections for the year to end-March to 6 per cent, economists now expect a more aggressive tightening than earlier foreseen.

Data released on Thursday showed the food price index rose an annual 9.67 per cent in the week to July 17, compared with the previous week's increase of 12.47 per cent, with prices of cereals, rice and vegetables falling on the week.

The fuel price index rose 14.29 per cent in the period, as against a 14.27 per cent in the previous week. The government raised prices of fuels in late June.

The primary articles index rose 14.50 per cent compared with the week-ago reading of 16.48 per cent.

Wholesale price inflation, the most widely watched measure of prices, was at 10.55 per cent in June, holding in double digits for the fifth straight month. The country's chief statistician said on Monday, it could be around 11 per cent in July.

Various government arms have different inflation forecasts, ranging from Prime Minister Manmohan Singh's prediction of 6 per cent by December to the 7 per cent to 8 per cent projected for the period by his economic advisers.

They also differ on their reading of the causes of inflation. The government blames high food prices and says a good monsoon will cool prices, while the RBI says demand-side effects would keep inflationary pressures intact.

High prices are a political headache in a country where hundreds of millions live on less than $1.25 a day.

Massive street protests have been mirrored in parliament, where the opposition parties have stalled proceedings demanding a vote against the Congress-led government for failing to control inflation.

Realty to soar as service tax hike kicks in from July

2010-03-05T22:22:00.000-08:00

If you are planning to buy a house, grab it before July, as realty prices are set to increase later. The service tax of 3.3%, announced in the Budget, will be effective on your home from July as the amendments to the Finance Bill will be put into effect in June.

Moreover, banks have decided to increase interest rates in the range of 0.25-0.5 percentage points on home loans, which could further be hiked in the forthcoming credit policy.

Companies including realty majors like DLF, under the aegis of Delhi-based real estate body National Real Estate Development Council (Naredco), will soon approach the FM for a rollback of service tax.

The property prices are expected to go up with real estate companies passing on the additional burden to buyers. Effectively, someone buying a house property in Delhi will have to pay a service tax of 3.3% on the price of the accommodation and also a stamp duty of 8% as a sale of immovable property. The 3.3% tax will not include the amount to be paid towards special charges like garden facing or community hall facility as these charges will be taxed at 10% of the total charges. However, Sanjay Chandra, MD of country's second-largest realty firm Unitech says an increase in interest rates is unlikely to affect the demand as the increase is only in trigger rates and hence there is no change in effective interest rates.

"The service tax will have some marginal impact, but the market will absorb that for two reasons. One, the change in personal tax slabs will leave more disposable income in the hands of consumer and second, the better prevailing economic conditions are likely to result in at least 10% increase in the salaries of the working class for the next financial year. These two facts will more than offset the marginal impact of service tax, which is expected to be 2% to 3%," he said.

When contacted, Naredco president and realty company Omaxe's group chairman Rohtas Goel said, "We will hold a meeting of the association to discuss the Budget proposals, particularly levying of the service tax on housing, which will have a negative impact on the realty sector."

However, finance ministry officials have said they won't entertain any request for change in the Budget proposal. Central Board of Excise and Customs member YG Parandhe said, "We are not taking up the issue as it stands now" when asked if there is a possibility to relook at the proposal.

Tax collection target set at Rs 4 lakh crore

2010-03-05T22:21:00.000-08:00

The Central Board of Direct Taxes(CBDT) has said the direct tax collection targets for the country have been set at Rs 4 lakh crore of which 2.8 lakh crore have already been collected so far.

"We are going to put in serious efforts and achieve the mark of Rs 4 lakh crore," said S S N Moorthy, chairman,(CBDT) at CII event on Friday.. Moorthy further added that the tax collection targets for Mumbai have been set at Rs 1.42 lakh crore of which Rs 1 lakh crore has been collected so far. He however confirmed that it would not be advisable and possible to abolish the wealth tax.

"Even in western countries, the Estate Duty is collected which is similar to the Wealth Tax in India," he said.

Commenting on the Union Budget 2010, Sunil Mitra, revenue secretary, ministry of finance, said that the Budget clearly showed the government's vision of becoming a facilitator from enabler through increasing budget outlay for infrastructure development.

"The strong message that is coming up from the Budget is that the government is now going to become a facilitator as it earmarked Rs 3 lakh crore for the development of physical and social infrastructure. Moreover, increase in public equity in four companies like, NTPC, REC etc in the previous year showed government's commitment towards the disinvestment raising Rs 13,000 crore.

GM to offer 661 U.S. dealers reinstatement

2010-03-05T22:19:00.000-08:00

General Motors Co said on Friday it will offer reinstatement to 661 of its U.S. dealers that had been targeted for closure as part of its bankruptcy restructuring last year.

GM planned to terminate franchise agreements with about 1,300 U.S. dealers by the end of 2010 in a bid to operate its retail networks more efficiently and return the company to profitability. Some 1,160 of them have sought arbitration.

GM North American President Mark Reuss said the automaker has opted to reinstate more than half of the dealers appealing closure in an effort to complete the arbitration process before the congressionally mandated deadline of July 15.

The company plans to continue settlement talks with some 500 dealers who will not be offered reinstatement and remain in arbitration, Reuss said.

To be reinstated, the dealers will have to meet certain business criteria, including minimum working capital requirements, sales and profitability within 60 days of receiving reinstatement letters next week, GM said.

"We are highly confident that this is the right size and the right quality," Reuss said in a conference call with reporters.

GM had 6,150 dealerships at the end of 2008, including franchises of Saturn, Saab, Hummer and Pontiac -- the four brands GM is selling or winding down.

The U.S. Treasury owns 60 percent of GM after the 2009 bankruptcy restructuring.

Congress in December required an arbitration process for terminated dealerships at GM and Chrysler, which received more than $65 billion combined in taxpayer-supported bailouts and other financing over the past year.

Chrysler closed nearly 800 showrooms last June when it emerged from bankruptcy under new management led by Fiat. More than half of them have sought arbitration, saying their franchise rights were terminated unfairly.

The arbitrator under the legislative plan would be required to consider dealer profitability over the past four years as well as how a dealer would support the plans at GM and Chrysler to become viable.

Arbitration would also take into account how well a dealership was capitalized and dealership performance.

GM Chief Executive Ed Whitacre said in January the company would review the circumstances surrounding termination decisions that were made under his predecessor, Fritz Henderson, who was forced out in December in a split with the board.

GM has already agreed to reinstate dozens of dealers in an earlier, in-house appeals process. It has also budgeted up to $600 million to compensate dealers.

D-Day nears for Dubai's $3.5 bln debt hurdle

2009-12-14T00:18:00.000-08:00

Heavy rain pounded Dubai on Sunday adding to the gloom of the emirate's debt woes a day before the deadline of the $3.52 billion bond by state-owned developer Nakheel, with no word on how it will be handled.

Dubai's stock market did soar for a second consecutive session on Sunday as traders reacted to a surge in Nakheel's bond price last week on mounting speculation it will repay.

The Islamic bonds, or sukuk, had been trading around 110 cents to the dollar before the government shocked investors on Nov. 25 with a request for a six-month standstill on the debt of state-linked Dubai World.

The announcement sent the sukuk down to mid-40 lows, but closed on Friday at about 54 cents to the dollar.

Fund managers and bankers regard Monday's outcome as the litmus test for Dubai World's planned $26 billion restructuring and Dubai as a whole for resolving its debt burden.

But the odds of Nakheel, the developer of palm-shaped islands, repaying are low.

"It's very hopeful people (speculating)," says a Dubai-based fund manager. "It seems very strange that if Dubai World intended to pay they would have gone through the last two weeks of pain."

A sudden u-turn and repayment would placate disappointed and confused investors in the immediate term. Dubai's handling of the situation has tarnished its reputation.

Dubai's finance chief on Thursday tried to reassure investors saying its actions were more important than its public image. But, Dubai World has few options.

"The key thing is the lack of clarity," said Nish Popat, ING's head of fixed income in the Middle East. "What's needed more than anything else is some sort of information to understand what the plans are going forward and how they are progressing."

Reflecting rising repayment hopes, five-year credit default swaps for Dubai fell more than 30 basis points on Friday to 533 basis points, according to CDS monitor CMA DataVision, compared with a peak of almost 700 bps at the end of November.

The level is still high given the CDS was quoted at about 300 bps before the Nov. 25 announcement.

"The CDS spreads are better, and news of a hedge fund buying into Nakheel - this is all positive ... even if you buy Nakheel at 50, and they pay out 70, you're still making good money," said a banker from a Dubai government-controlled lender.

If Nakheel does not pay on Monday, it would technically be in default, but it would still give its restructuring team a two-week grace period to reach an agreement with creditors.

Dec. 28 is the final cut off point. After that a cross default clause in its original prospectus will be triggered that covers Nakheel and its guarantor Dubai World, adding to the overall debt burden.

Regional markets have been struggling for weeks under the issue.

"Prices are so distorted right now," said Haissam Arabi chief executive at Gulfmena Alternative Investments. "Tomorrow is a big day, until we get some clarity (about Dubai's debt) there will be no real trend. The main catalyst we are waiting for is Nakheel news."

STRIKING A DEAL

Analysts have speculated Nakheel could repay its bond at 70 cents to a dollar and issue new debt for the remainder.

"Such an outcome would be beneficial for both parties involved," EFG Hermes analyst Fahd Iqbal wrote in a research report. "Creditors would receive a portion of their money back with a promise for the remainder to be delivered at a later stage while Dubai World, along with other government related parties, would have continued access to capital markets."

With time running out for a deal on Nakheel's bond, bondholders may have to accept some impairment, leaving Dubai World free to negotiate with longer-term debt holders.

But vociferous minority holders of Nakheel's bond are still demanding repayment, which could lead to potentially damage larger claims.

The third option is for Dubai World to outline details of its restructuring plans and announce a standstill agreement with its creditors. This would make Nakheel's bond date irrelevant in the grand scheme of things and buy valuable time for Dubai.

"It would bring confidence if there is a settlement of good faith or they restructure or they pay, but the rest will linger as there is debt outstanding to corporates, contractors and all kinds of creditors," said John Sfakianakis, chief economist at Banque Saudi Fransi-Credit Agricole Group in Riyadh.

Dubai's government and affiliated firms owe non-financial Japanese companies roughly $7.5 billion in credit that had not been collected as of Oct. 31, a study by Japan's government showed.

In addition, fears that Dubai's debt problems are not limited to the state-linked firm has already battered investor confidence. In February, Borse Dubai has $2.5 billion of debt maturing, while Dubai ruler's own firm Dubai Holding will face almost $1.9 billion of debt repayments in the first half of 2010.

"There is no precedent for such a situation in the region - tomorrow is D-Day," said one banker.

WB to back Indian firms in emerging economies

2009-12-05T00:22:00.000-08:00

World Bank Group president Robert Zoellick on Friday said it is willing to help Indian companies operating in developing countries. He projected the South-South trade to rise, while forecasting India would return to 8-9% growth rate in two years. "There may be an opportunity for us to help Indian companies operating in other developing countries," he said. "We are going to see much of the South-South business and trade."

Zoellick said he was committed to get additional resources for India. "I had the opportunity this morning to speak to the Prime Minister how fully committed I am in trying to get India more financial resources from the World Bank Group," he said, concluding his four-day trip to India.

The World Bank is currently working on projects of more than $22 billion in the country, including a $3.6-billion loan from its arm International Finance Corporation, which funds private projects.

Vodafone seeks extension for India tax claim reply

2009-11-20T04:20:00.000-08:00

Vodafone has sought an extension until Jan. 29 to reply to a tax claim notice issued last month by the Indian tax department, Minister of State for Finance S.S. Palanimanickam said on Friday in a written reply to question in parliament.

On Oct. 30, India's tax department issued the notice to Vodafone over its $11.2 billion purchase of Hutchison Telecom's Indian operations in 2007, and had said the British firm needed to comply by Nov. 16.

PM's visit to U.S. comes with rapid trade growth

2009-11-20T04:03:00.000-08:00

Reuters - Prime Minister Manmohan Singh arrives in Washington on Monday for a state visit set to boost the burgeoning economic relationship between two countries, which had relatively marginal commercial dealings a decade ago.

Following are key aspects of economic ties that took off with the end of the Cold War and the embrace of economic reforms by India -- an adoption of market-friendly policies in which Singh played a prominent role earlier in his career:

BILATERAL TRADE - Two-way trade, just $5 billion in 1990, reached $14 billion in 2000 and rose to nearly $50 billion last year, according to U.S. figures, making the United States India's largest trading partner. The United States sells India aircraft and parts, advanced machinery, cotton, fertilizers, and computer hardware.

It imports Indian textiles and leather goods, Internet services, agricultural products, gems, leather products, and chemicals. India reckons trade has at least doubled in the past five years, while U.S. exports to India have tripled in that period.

INVESTMENT - U.S. cumulative direct investments through mid-2008 of nearly $16 billion in power and oil refineries, telecommunications, electronics, food processing and services make the United States one of India's largest investors, according to U.S. statistics.

The Indian embassy lists the United States as the largest portfolio investor in India. U.S.-bound investment from India has grown about 75 percent annually since 2002, the embassy says.

INFORMATION TECHNOLOGY - India says two in five of America's Fortune 500 companies outsource their software in India. With India's growing wealth, the telecom sector has grown about 20 percent a year in recent years.

India has courted investment in the sector, projecting that it needs some $84 billion worth of telecoms equipment to hit its target of 650 million subscribers by 2012. The U.S. hi-tech regions of the Silicon Valley in California and Route 128 Corridor in Massachusetts have deep ties with their Indian counterparts, Bangalore and Hyderabad.

NUCLEAR POWER - The 2005 U.S.-India Civil Nuclear Agreement, which eases strictures on U.S. nuclear exports to India, opens India's potential $150 billion market in power plants. This offers potential for big deals for U.S. nuclear reactor builders such as General Electric Co and Westinghouse Electric Co, a subsidiary of Japan's Toshiba Corp.

ARMS SALES - India's embassy says U.S. arms sales to India have risen from almost nothing a few years to about $3.5 billion last year. The United States is competing with Europe and Russia to supply India 126 multi-role fighter aircraft worth up to $10.4 billion, the biggest such market in decades.

In March, the Obama administration approved a $2.1 billion sale to India of eight Boeing Co P-8I maritime patrol aircraft, the largest U.S. arms transfer to India to date. In January 2008, Washington and New Delhi clinched India's previous largest U.S. arms purchase -- six Lockheed Martin Corp C-130J Super Hercules military transport planes valued at about $1 billion, including related gear, training and spares.

Microsoft, Yahoo in 10-year Web search partnership

2009-07-30T03:20:00.000-07:00

Microsoft Corp and Yahoo Inc inked a 10-year Web search deal to challenge market leader Google Inc but stopped short of combining their display advertising businesses.

The long-expected deal effectively means Microsoft's new Bing search engine will be combined with Yahoo's experience attracting advertisers to pose the first serious threat to Google, if the companies get regulatory approval and can make the partnership work.

Yahoo shares fell 11 percent as some investors were disappointed by the limited scope of the deal, which did not include upfront payments for Yahoo, which could have been $1.5 billion or more, according to a Sanford Bernstein research report last week.

"Microsoft will be able to report a greater share in terms of search... And Yahoo doesn't have to spend any more money on search," said Barry Diller, chief executive of IAC/InterActiveCorp, which owns rival search engine Ask.com.

Shares of Microsoft were flat, while Google shares fell 1.2 percent.

Microsoft and Yahoo still face antitrust and privacy issues and likely opposition from Google, which dropped its plans for an advertising partnership with Yahoo last year under pressure from the U.S. Justice Department.

The companies said they expect the deal to be "closely reviewed" by regulators, but were "hopeful" it can close in early 2010.

Google said on Wednesday only that it was "interested" in the Microsoft/Yahoo partnership, while the chairman of the U.S. Senate antitrust panel said the deal warrants "careful scrutiny."

The deal culminates a lengthy, and at times contentious, dance between the two companies. They have been in on-and-off-again talks on a search partnership since Yahoo rebuffed Microsoft's $47.5 billion takeover bid last year.

Microsoft Chief Executive Steve Ballmer clashed last year with former Yahoo CEO Jerry Yang, who was strongly opposed to an all-out acquisition. Relations between the two companies improved under new Yahoo CEO Carol Bartz, who took the reins in January and started to shake up Yahoo's top management.

Ballmer and Bartz met "three or four times" over the past six months as they hammered out a deal, according to Ballmer.

HOW THE DEAL WORKS

Under the deal announced on Wednesday, Microsoft's Bing search engine will power search queries on Yahoo's sites. Yahoo's sales force will be responsible for selling premium advertising based on search terms for both companies.

Microsoft's AdCenter technology will serve the standard sponsored links that appear alongside search results.

While Yahoo CEO Bartz had previously said that any deal would require a partner with "boatloads of money," she said on Wednesday that the agreement provided "boatloads of value", saying the revenue share agreement in the Microsoft deal was more valuable to Yahoo than a one-time payment.

"Having a big up-front cash payment doesn't really help us from an operating standpoint," Bartz said in a conference call with Microsoft CEO Ballmer.

Microsoft will compensate Yahoo through a revenue-sharing agreement that pays Yahoo at an initial rate of 88 percent of search revenue generated on Yahoo sites in the first five years.

Each company will maintain its own separate display advertising business and sales force, they said.

Analysts said it will be tough for the two companies to make a significant dent in Google's dominance in search, but it was a step in the right direction.

According to comScore, Google has a 65 percent share of the U.S. search market, compared to Yahoo's 19.6 percent and Microsoft's 8.4 percent.

"Overall, it's a big positive for two companies that have been struggling to keep up with Google. This consolidates their resources and allows them to make a more concerted push as the No. 2 entity," said RBC Capital Markets analyst Ross Sandler.

Yahoo estimated the deal will boost its annual operating income by about $500 million and yield capital expenditure savings of $200 million. Yahoo also expects the deal to boost annual operating cash flow by about $275 million.

Yahoo reported income from operations of $13 million in 2008, hurt by $487.5 million in goodwill impairment charge and $107 million in restructuring charges. In 2007, operating income was $695 million.

Yahoo's Bartz said that the deal will result in "redundancies" in Yahoo's staff, though she declined to be specific. She stressed that any changes would not occur until after approval by antitrust authorities in the U.S. and Europe and full implementation of the partnership.

Shares of Yahoo were down $1.89 at $15.33 on Nasdaq, while shares of Microsoft were flat at $23.47. Google shares were down $5.13 at $434.72

Mousavi’s Facebook Friends Surge as Iranians Avoid Clampdown

2009-06-19T05:22:00.000-07:00

Facebook Inc. users in Iran are flocking to a page created for Mir Hossein Mousavi, posting information and photographs backing the leading challenger to President Mahmoud Ahmadinejad.

A profile for Mousavi now has more than 63,000 “friends,” up from about 2,500 a month ago, according to Palo Alto, California-based Facebook, the world’s most popular social- networking site.

Activists in Iran are using social-networking sites such as Facebook and Twitter Inc. to organize rallies and attract supporters. Twitter, which lets users post 140-character messages, said this week that it was delaying a network update because of demand for its services in Iran. Closely held Facebook said yesterday it is getting reports that users in Iran are having difficulties reaching the site.

“There was a tremendous amount of activity on Facebook from Iranian users related to the election, with both sides discussing and organizing around their candidates,” said Debbie Frost, a spokeswoman for Facebook.

The state-owned Data Communication Company of Iran, which acts as the gateway for all Internet traffic entering or leaving the country, has slowed Web access to a crawl, according to Arbor Networks, a Chelmsford, Massachusetts-based maker of security software for Internet-service providers.

Censorship Resistance

“The Iranian government hasn’t taken the draconian step of cutting the Internet altogether,” said Jonathan Zittrain, a professor at Harvard Law School in Cambridge, Massachusetts, and co-director of the Berkman Center for Internet and Society. “The government has a lot of tools to effective blocking, but some Web sites are naturally censorship resistant.”

Technology-savvy Iranians are turning to proxy servers, which route Internet traffic around blocked Web sites, Zittrain said. People outside of Iran are also playing a role, letting Iranians use their computers as proxy servers, he said.

That means information is still getting out of Iran, said Turi Munthe, chief executive officer of London-based Demotix Ltd. Set up as an outlet for photographs taken by “citizen journalists,” Demotix lets people submit photos from Iran that can be sold to the press, Munthe said.

“We were flooded with photos before the election, then there was a total shutdown,” Munthe said in an interview from London. “Now there’s a trickle, as the choke on those Internet connections is eased at night. We never know when those gaps will open or how long they will last.”

Election Protests

Protests in Iran began after election officials said Ahmadinejad won about 63 percent of the June 12 vote, to about 34 percent for Mousavi. Mousavi and his supporters have accused Ahmadinejad of vote-rigging. Demonstrations now are entering a seventh day as the authorities struggle to contain popular anger at the election result.

The turmoil is pitting the Islamic republic’s ruling clergy against young Iranians and more educated voters who want social freedom and better ties with the West.

On the Mousavi Facebook page, users are asking for ways to circumvent Internet-filtering software and for information on demonstrations around the country. Most of the posts are in Farsi.

Others are turning to software from Fring.com, which lets users broadcast messages to most social-networking sites, including San Francisco-based Twitter. The software can bypass blocked Web severs, according to Fring CEO Avi Schecter. Traffic to Tel Aviv-based Fring has doubled since the June 12 election, Schecter said.

Niloofar Nafici, 26, a Facebook employee whose family fled Iran before she was born, compared what’s happening today to a student uprising in 1999.

“People are approaching me now and saying, ‘Can you imagine if we’d had this 10 years ago,’” Nafici said. “It would have been a completely different story.”

India Inc created 3,00,000 jobs in US: Study

2009-06-19T05:17:00.001-07:00

When the Indian outsourcing industry is being blamed for taking away American jobs, a study has found that corporate India has created employment for 3,00,000 people in the US between 2004 and 2007.

An India Brand Equity Foundation study released in Washington on Wednesday by Commerce and Industry Minister Anand Sharma mentioned USD 105 billion contribution by the Indian industry to the US economy during 2004-07.

"This revealed a story of commitment to optimise and to invest in the future of the relationship," Sharma said.

The USD 50-billion Indian outsourcing industry has come in for a major attack in the US, bolstered by President Barack Obama's calls to the US companies to move from Bangalore to Buffalo.

Concerned over the backlash in the US, the Indian industry has been trying to lobby with influential Americans and opinion leaders about the benefits that the American can derive from developing economies.

State-run banks may resist bigger rate cuts

2009-06-19T05:15:00.000-07:00

Indian banks are likely to resist mounting government pressure to sharply cut rates as they grapple with expensive deposits raised at the height of the credit crisis and rising bond yields.

India's newly elected government wants its banks to lend more and cheaply to boost economic growth, following other Asian economies such as China, which lifted limits on bank lending to grease the wheels of its economy.

The pressure is adding to the risks for shares of state-run banks, which have underperformed the bank index and privately held banks this year.

"Profitability and margins could be under pressure particularly if specific Indian banks pursue a very aggressive growth strategy and decrease the spread earned on banking products," said Brayan Lai, a credit analyst at Calyon in Hong Kong.

"From a top down perspective, I prefer Indian state-run banks due to their quasi-sovereign backing and recapitalisation plans but, from a bottom-up approach, I'd be worried as some dubious lending may take place," he said.

Shares of the country's biggest lender State Bank of India (SBIN.NS) have gained 32 percent so far this year, lagging a 46 percent gain in the bank index and a 57 percent jump in shares of privately held ICICI Bank (ICICIBANK.NS).

SBI and its associates control a quarter of all loans, and state-run banks as a sector corner 55 percent of all assets.

SBI cut its deposit rate by 25 basis points, its fourth cut in 2009, but has yet to reduce its lending rate. Chairman O.P. Bhatt said the economic recovery was yet to reflect on banks' asset growth and passing on rate cuts to customers will take time.

WORRIED POLICYMAKERS

With bank loan growth slowing sharply, policymakers worry that by not passing on to customers the deep cuts in official rates these banks may threaten an economic revival.

While the central bank has cut its main lending rate by 425 basis points since October, state-run banks have cut their lending rates by 150-200 bps.

Loan growth has slowed from around 27 percent in November to around 15 percent in early June and halved from rates of around 30 percent seen in the financial year to March 2008.

At a meeting with the heads of state-run banks last week, Finance Minister Pranab Mukherjee urged them to follow the central bank and reduce interest rates.

Bankers say more deposit rate cuts would lead to a flight of money from bank deposits to federal schemes that yield an attractive 8 percent tax-free rate.

"Banks are at a crossroads: if they keep cutting their deposit rates, they won't get the funds and if they don't get the resources what will they lend," said K. Ramakrishnan, chief executive of the Indian Banks Association, an industry body.

CARE research data showed these schemes have lost heavily to bank deposits which accounted for 55 percent of household schemes at March 2008. In 2004, these schemes garnered 20 percent of savings and their pool shrank by nearly 4 percent last year.

"To me, current interest rates are fair and are conducive enough for healthy loan growth when the economy turns," Ashish Parthasarthy, deputy treasurer at HDFC Bank, said.

Private sector lenders such as HDFC Bank and ICICI, while free from government pressure to cut rates, will still need to follow state-run banks or lose customers.

Angel Broking analyst Vaibhav Agrawal estimates a 10-20 bps drop in margins in the next two quarters after a 40 bps fall in the March quarter.

Privately held banks such as ICICI, Yes Bank (YESBANK.NS), Kotak Mahindra Bank (KOTAKBANK.NS) and mid- to smaller state-run banks such as Dena Bank, Corporation Bank and Oriental Bank of Commerce (ORIENTBAN.NS) will gain as they rely more on bulk deposits, he said.

Goldman Sachs said banks' return on equity will fall to 14.3 percent in 2009 from 16.6 percent a year ago as net interest margin shrinks to 3.45 percent from 3.65 percent in 2008, with state-run banks being affected the most.

Another factor worrying banks are rising bond yields.

Banks have to park roughly a quarter of their deposits in bonds, and benchmark yields are up 156 bps this year, squeezing their margins.

"You can't have a situation where banks' deposit rates are falling and benchmark yields are going up," said J. M Garg, chairman of state-run Corporation Bank.

Obama says will talk to Saudis about oil prices

2009-05-29T03:15:00.001-07:00

U.S. President Barack Obama said on Thursday he would discuss oil costs when he meets with Saudi Arabia's King Abdullah next week and plans to say that big price rises are not in Riyadh's interests.
"I don't think it's in Saudi Arabia's interests to have a situation in which our economy is dependent -- or disrupted constantly -- by huge spike in energy prices," Obama said when asked by a reporter what his message would be during his June 3 visit to Saudi Arabia.
Obama spoke to reporters after a meeting with visiting Palestinian President Mahmoud Abbas.
Obama, who also met with Abdullah in April on the sidelines of the London G20 meeting, said the United States and Saudi Arabia had both a "commercial relationship as well as a strategic relationship."
Obama said he also wanted to make the point that it is not in the world's interests for the United States to be so dependent on fossil fuels because of their impact on global climate change.
"I'll be very honest with King Abdullah, with whom I've developed a good relationship, indicating to him that we're not going to be eliminating our need for oil imports in the immediate future," he said.
"That's not our goal," Obama added, but he said his administration was committed to diversifying its energy sources.
Saudi Oil Minister Ali al-Naimi said on Wednesday he believed the global economy had strengthened enough to cope with oil at $75-$80 a barrel. He attributed the recent rises in oil prices to economic optimism.
White House spokesman Robert Gibbs, asked for reaction to Naimi's comment, said Obama was "concerned about anything that raises the cost of living in a fragile economic time."

UPA Rocks ! ! !

2009-05-29T02:14:00.000-07:00

In the first week of june market(SENSEX) again goes upto the 15000.And in that senerio all midcap scripts on their top.And talking about the bluechip secssion they are not on their way.
Buy Usher Agro @34 and sell tham on in between @ 37 to 39
Buy Usher Agro @41and sell tham on in between @ 43to 44
Buy Usher Agro @42and sell tham on in between @ 45to 46
In bluechip Suzlon Energy buy @ 90 sell tham on in between @ 92to 95

India better placed to battle slowdown

2009-05-29T02:11:00.000-07:00

The economic meltdown has had a varying impact across emerging economies. During current fiscal, GDP forecast for the BRIC nations have been revised downwards by 1.5% for India, 2.5% for China while Brazil and Russia slumped into recession from the fourth quarter of 2008. Amongst BRIC, growth is expected to ebb the least in India in foreseeable future. Higher degree of insulation of the Indian economy can be attributed to multiple factors of which the diversity of small and medium enterprises sector is one.
The SME sector is often credited for granting national economies flexibility, diversity, and the strength to weather economic downturns. Underlying the differential impact of the crisis on BRIC nations is varying degree of resilience of these economies. The highly heterogeneous Indian SME sector, producing more than 8000 odd items, contributes 40% of the industrial output and account for more than 80% of companies. Next to agriculture, they are the biggest employers. One third of SME production caters to export market. This is in sharp contrast to Brazil, Russia and China which has a less diversified SME sector with more than 65% of their production catering to export markets. Incidental to global meltdown, factors like low export orientation, high import substitution and diversification of Indian SMEs have contributed to restraining the downward spiral during this crisis.
This discernable edge of the Indian SME sector is mainly due to more than five decades of concerted governmental initiatives that is not blinkered by the export market. And the initiatives to further strengthen them continue. The decision to set up a dedicated bourse for SMEs was made late last year. This will facilitate access to capital markets for those small units which do not currently qualify the stringent norms of stock exchanges. Apart from credit needs, it will also fillip adherence to corporate governance norms, a matter receiving less attention from small family owned enterprises. While this will increase attractiveness of the Indian SME sector to private equity investors, increased liquidity brings with it the challenge to control volatility in foreign investment - a lesson underscored by this crisis.
Across BRIC countries, the common credit issues faced by SMEs include high risk perception owing to information asymmetry, non-availability of adequate capital for investment and difficulties in accessing capital markets. In India, SME finance is primarily routed through public and private sector banks and the non banking financial companies (NBFCs). Categorisation of SME loan as 'priority sector lending' has mandated banks to maintain a certain percentage of their portfolio for SMEs. This, coupled with government guarantee schemes, has enhanced access to credit at reduced cost of funds. At the same time, concerns of information asymmetry have been addressed by setting up specialised credit rating agencies like SME Rating Agency of India (SMERA). In comparison, public sector banks in China prefer large state owned enterprises to SMEs owing to implicit government guarantees enjoyed by the former. Private sector banks, have until recently shied away from SMEs offering limited services at unreasonable price. Bulk of financing needs in China or Brazil even today is either met by attracting foreign investment or from informal sources like family, money lenders, etc. Lately, with skeptical foreign investors, the SME juggernaut has been quick to sap growth in both China and Brazil.
The latest Indian policy to redraw the contours of the cluster development program by developing model clusters across the country is set to integrate efforts across the value chain to achieve optimum results at industry level. Yet emergence of these 600 odd clusters (and ten times as much unofficially) has not been natural to the world's largest democracy. Purposeful governmental intervention with the idea of encouraging spontaneity in inter-firm networking in areas like logistics and marketing were done to facilitate collective learning and reduce transaction cost for financiers. Subcontracting between SMEs within clusters has also aided specialization and innovation. China's SME development policy is distinct to that of Brazil or India. It's decision to establish industrial parks though effective in reaping benefits of scale have had limited success in integrating and optimizing the SME value chain.
Never ignore the important for the urgent at a time when billions of taxpayers' money are being used to bail out giant corporations across globe, as a pointer to the future, SMEs merit to be fostered using every available lever. Governments across countries need to coordinate more to up their ante on offering ideological climate for SMEs to promote equitable growth both within and between nations.

Equalising expatriates tax burden

2009-03-22T12:07:00.000-07:00

Why Tax equalisation?

Today, with economies going global, companies are deputing its skilled and experienced employees (referred to as 'expatriates') all across its global locations to carry out their businesses. In such a situation, the expatriate's salary and effective purchasing power are depleted, in comparison with his former home place. One cause of salary and purchasing power reduction is - no doubt - the taxation effects.

An expatriate, being a person of ordinary economic prudence, would not agree to being assigned to a host country, with tax rates higher than in his home country and end up paying higher taxes on his income. At the same time, an expatriate would prefer being assigned to a host country with a lower tax regime to benefit by saving taxes on his income. Such disparity in tax rates between the home and host country gives rise to the concept of TEQ.

The principle behind a "TEQ" policy is that the expatriates will not need to suffer, neither a financial hardship nor experimenting a financial windfall, all being the result of the tax consequences of an international assignment. It means an expatriate pays no more and no less tax as a result of his assignment than he would have paid had he never left his former home. The company would be paying all related worldwide effective taxes for the expatriate.

How does TEQ work?

TEQ policy is designed to make tax a neutral factor in an expatriate's compensation package. That is, the assignee should bear a tax burden equal to that which would have been borne had the expatriate remained at home. The expatriate is responsible during the assignment for "hypothetical" or "stay-at-home" tax, which would be calculated on the remuneration the expatriate would have earned if the assignee continued to live and work in the home location (i.e. it excludes all assignment-related compensation). Hypothetical tax will normally be withheld from the expatriate's normal pay and is retained by the employer as a "tax reserve". The company would then pay all required home and host country taxes on assignment income (including taxes on expatriate benefits) during the assignment.

For a number of companies, the expatriate would not be tax equalised on income from non-company sources, for example net investment income from home and host countries, which means that the expatriate will remain fully liable for all actual worldwide taxes payable on the personal income.

TEQ- the process:

The tax payable by an expatriate in the host country is calculated based on the tax system of the host country after claiming all the relevant exemptions and deductions given by the applicable tax laws of the host country. On the other hand, the taxes payable in the home country would be computed using the relevant tax laws of the home country. Tax calculations of both the counties would be compared and then if the host country taxes are more than home country taxes, the difference would be borne by the employer company. And if the taxes of the host country are less than those of the home country, the difference would be recovered from the salaries of the employees.

Under an equalisation policy, any tax savings will go to the employer but, similarly, any additional tax liability will be borne by the employer.

Benefits of the TEQ policy:

Such policy will put the assignee in a tax neutral position during the assignment. Mobility is promoted because several assignment locations are producing no tax benefits or detriment to the assignee. The company will be paying all worldwide actual taxes and the employee only paying his usual home country.

ata Motors' small car makes it big on Web

2009-03-22T12:03:00.000-07:00

Tata Motors (TATAMOTORS.BO : 160.9 -10.7) small car is making a big web in the online space. For, 19,50,000 entries is what you get if you do a Google search for Nano. And it throws up 18,10,000 image entries in just 0.08 seconds. In the blogosphere too, there is frenzied activity. In the past week alone, there have been 1,414 blog postings that have sprung up and 1,37,759 new blogs have been created on Nano.

While Ratan Tata's People's Car is breaking new ground in the brick and mortar world, it could also be navigating new frontiers in the virtual world. The company too is pushing Nano on the Web. There is an Orkut community and a Facebook profile, a Tata Nano Forum and company administered blogs. Senior Tata Motor officials have been interacting with potential buyers and Nano fans in their attempt to catch the pulse of customers and car lovers.

Social networking is a new tool that Tata Motors has put to use for selling Nano. The Nano campaign, few hours before its release, has been intensified through its extension to networking sites such as Facebook and Orkut, making the 'world's cheapest car' known to a larger mass.

The official Tata Nano Orkut Community has 51,300 members and Orkut on its own has 378 communities. On Facebook there are 44 groups that keep discussing Nano. The official Tata Nano Facebook profile says 'good, bad and ugly, all comments are welcome'. The Tata Motors Forum has 22,763 users who have till now covered 31 subjects related to Nano.

Interestingly, several Nano fans have responded from across the globe and were keen to see the car in their country from Australia to Serbia but the company has responded saying there were no immediate plans for exports.

On its own website, Tata's marketers also discuss sales strategies. There have been several queries for online buying and the company has responded stating that this would be difficult at this stage. Buyers have expressed their desire to buy the car on-line and are even willing to transfer funds pronto. Instead, the company has offered options ranging from contests to building your own Nano on the Web.

AIG Plans Retention Pay for Staff Facing Dismissa

2009-03-17T12:36:00.001-07:00

American International Group Inc., the insurer under fire for handing out bonuses after its $173 billion government bailout, budgeted $57 million in “retention” pay for employees who will be dismissed.

AIG disclosed the payments, part of a larger $1 billion program meant to retain staff, in a March 2 filing. The insurer was chastised yesterday by PresidentBarack Obama for awarding $165 million to staff of the derivatives unit blamed for the firm’s near collapse, and New York Attorney General Andrew Cuomo said he’ll subpoena AIG to get details on those payments.

“Spending a billion dollars on retention payments while the company is on its deathbed is ludicrous, particularly when some of those payments are going to employees the company plans to terminate,” said Representative Elijah Cummings, a Maryland Democrat on the House Oversight and Government Reform Committee.

The disclosure on expenses for “employees expected to be terminated” may signal AIG is planning staff cuts after leaving total employment unchanged at 116,000 last year, according to regulatory filings. The U.S. saved the firm from bankruptcy in September, and the company posted the biggest quarterly loss in U.S. history in the three months ended Dec. 31.

“As part of restructuring the company, we will ultimately eliminate jobs that are, at the moment, critical to maintaining ongoing operations and winding down certain businesses,” said Christina Pretto, an AIG spokeswoman. “To have one of these positions obviously implies an uncertain future, and creates an incentive to leave the company. To retain such mission-critical people, we are making retention payments to them.”

The March 2 filing didn’t say how many employees will get portions of the $57 million.

Auto Unit, Lender

The world’s biggest financial companies have cut more than 280,000 jobs since the middle of 2007, according to data compiled by Bloomberg. The total includes about 1,000 cuts at AIG, which trimmed staff at its U.S. auto unit and consumer lender. The regulatory filing that lists 116,000 jobs companywide doesn’t specify which units added or cut staff, and Pretto declined to comment on the total number of workers.

AIG, which got an initial two-year loan for $85 billion in September, created retention programs designed to keep some staff in place through the end of 2009, according to regulatory filings. Under a revised package valued at $173 billion announced this month, the insurer has five years to repay loans by divesting businesses, raising the possibility AIG will have to make more of the payments.

‘Double Down’

“To retain the same individuals for a period further in time, we might be paying out sums of money that are ‘double down’ on a bet that the company will be turned around,” said Frank Glassner, managing partner of Veritas Executive Compensation Consultants LLC.

The company planned to award about 4,600 of its managers and employees a total of about $1 billion, Bloomberg News reported in January, citing two people familiar with the situation. In addition to $450 million for employees in the financial products unit that sold credit-default swaps, AIG was to give about $470 million to staff of three other subsidiaries and $148 million to top executives, according to the people and company filings.

Of the $450 million for the financial products unit, the $165 million in retention pay was for 2008 and due to be paid by March 15, $55 million was paid in December and an additional $230 million was originally earmarked for 2009 retention payments. Chief Executive Officer Edward Liddy has said he wants to reduce the 2009 payments by at least 30 percent.

AIG gave bonuses of $1 million or more to 73 people at the unit, including a top recipient who got $6.4 million, Cuomo said today in a letter to Representative Barney Frank, chairman of the House Financial Services Committee.

Frank said today he is “troubled” that AIG wants to pay extra to keep employees at the unit.

“That leads me to question the judgment,” he said in Washington.

U.S. Stocks Advance After Unexpected Gain in Housing Starts

2009-03-17T12:34:00.000-07:00

U.S. stocks advanced, recouping yesterday’s losses, on an unexpected rebound in homebuilding and speculation that the Federal Reserve will outline more plans to bolster the economy tomorrow.

Centex Corp. helped lead a rally in construction companies and Home Depot Inc. jumped 6 percent as housing starts unexpectedly climbed 22 percent in February, the biggest jump since 1990. Citigroup Inc. and JPMorgan Chase & Co. rose more than 3 percent. Producers of raw materials posted the only decline among 10 Standard & Poor’s 500 Index industries after Alcoa Inc. cut its dividend and Nucor Corp., the nation’s biggest steelmaker by market value, said it will report a first- quarter loss because of dwindling demand.

The S&P 500 rose 1.5 percent to 765.36 at 2:24 p.m. in New York. The Dow Jones Industrial Average increased 77.66 points, or 1.1 percent, to 7,294.63. The Russell 2000 Index added 2 percent.

“The markets are in a show-me phase,” said Tom Wirth, senior investment officer at Chemung Canal Trust Co., which manages $1.5 billion in Elmira, New York. “Housing is showing signs of stabilization, which should help firm up the equity markets.”

The S&P 500 yesterday halted a four-day rally that had propelled the index up almost 12-perent from its 12-year low on March 9. The gains were triggered by optimism that the worst of the financial crisis was over after Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. said they were profitable in the first two months of the year.

15 Percent Slump

The S&P 500 has declined 15 percent in 2009, rising in only two of 10 weeks this year, as mounting losses at banks raised concern the government would be forced to nationalize some lenders. The index lost 38 percent in 2008, its worst year since the Great Depression.

Yesterday’s declines came as a rally in financial companies was snuffed out by concern over rising credit-card defaults, while SanDisk Corp. led a slump in technology shares.

Today’s advance came amid speculation that Fed policy makers will consider increasing the pace and size of a $600 billion program to purchase mortgage securities and other assets. That would signal a more aggressive stance from Fed Chairman Ben Bernanke after the economy and job market deteriorated further since the Federal Open Market Committee last met, analysts and investors say.

The FOMC meets today and tomorrow and is expected to release a statement tomorrow afternoon.

‘Optimism Building’

“Bernanke has been cheerleading the economy so there could be some optimism building around his comments tomorrow,” said Eric Bjorgen, a portfolio manager at Leuthold Group, which oversees $3.2 billion.

Centex gained 50 cents, or 7.3 percent, to $7.39 today and an S&P gauge of 13 homebuilders added 4.6 percent. Work began on 583,000 homes at an annual rate in February, topping the 450,000 projected by economists in a Bloomberg survey, the Commerce Department said. The jump was influenced by warmer weather and an 82 percent surge in starts on condominiums, apartments and townhouses.

Home Depot advanced the most in the Dow average, adding 6 percent to $21.35. The largest home-improvement retailer was raised to “buy” from “hold” at Jefferies & Co., which cited market share gains.

Citigroup Inc. had the Dow’s second-biggest gain, climbing 5.2 percent to $2.45, extending its rebound from a March 5 closing low to about 140 percent. The stock is still down 63 percent this year.

Material Producers Slump

Alcoa and Nucor Corp. helped drive down raw-material producers in the S&P 500. Alcoa slid 50 cents to $5.62. The company said it will slash its dividend to 3 cents a share from 17 cents and cut costs to conserve cash.

Nucor fell the most in three months after forecasting a first-quarter loss of as much as 65 cents a share because of lower-than-expected demand. Nucor lost $4.43 to $32.52.

Genworth Financial Inc. and Hartford Financial Services Group Inc. advanced after state insurance regulators said a major insurer’s failure will not jeopardize the entire industry.

“Even a major insurer failure, while traumatic in terms of job displacement and, perhaps, for shareholders, will generally not impose systemic risk,” Michael McRaith, director of insurance for Illinois, said in prepared testimony to the Senate Banking Committee on behalf of the National Association of Insurance Commissioners.

Insurers Advance

Genworth climbed 12 cents, or 8.3 percent, to $1.56 and Harford advanced 32 cents, or 6.9 percent, to $6.87.

Morgan Stanley fell 1 percent to $22.78 as the stock was downgraded to “underperform” by Bank of America Corp. analyst Guy Moszkowski, who cited concern over the bank’s commercial real estate holdings.

Financial shares in the S&P 500 added 2.1 percent. The group dropped as much as 2.2 percent in the first half hour after analyst Meredith Whitney told CNBC that banks’ profit forecasts “may come back to haunt them” because they probably don’t include writedowns on bad assets and provisions for loan losses.

Banking Outlook

Bank of America Chief Executive Officer Kenneth Lewis said on March 13 that his company was profitable in January and February, joining JPMorgan and Citigroup in suggesting the nation’s three biggest banks are recovering from the credit crisis.

The announcements last week helped spark a record rally in financial shares. The S&P 500 Financials Index surged 34 percent last week, the steepest advance since S&P created the gauge of banks, insurers and investment companies in 1989.

Cisco Systems Inc. gained 1.9 percent to $15.74 today. Goldman Sachs Group Inc. added the world’s largest maker of networking equipment to its “conviction buy” list, citing the introduction of its so-called blade platform.

'Layoffs in IT sector needed to remain afloat'

2009-03-17T12:33:00.001-07:00

An information technology sector veteran has strongly defended job cuts, saying it's natural in times of recession to stay the course and remain afloat.

"When there is no business, companies have to react; otherwise no body will survive. Either you have to reduce everybody's salary, or you have to let some people go and move on with that", the former IT Secretary of Karnataka, Vivek Kulkarni, said in Bangalore.

"Because, if you do not have labour flexibility, you can't do business well", added Kulkarni, who has more than 25 years of experience in business and government, and is currently Chairman and CEO of knowledge process outsourcing firm, Brickwork India.

He admitted that IT companies have resorted to various ways to layoff their staff.

Some companies are forcing their managers to give a "lower-rate" to their employees so that they can be removed, citing "non-performance".

Kulkarni knows a company which lost an account of 6,000 people (staff working on an outsourcing contract). "What will you do (when that happens). So, there will be temporary dislocation; no permanent harm".

In times of recession, layoffs are quite natural. He said companies which have lost big accounts and are operating from huge facilities after signing multi-year lease contract, are reducing and rationalising staff.

Kulkarni said the year 2009 is going to be challenging for freshers in the IT sector and it would be tough for them to get jobs, but expressed confidence that hiring would restart in the first quarter of financial year 2010-2011.

On the impact of US recession on the Indian IT companies, he said while large players such as Citi Bank and Goldman Sachs "who have received government money (bailout package) will behave based on government directions", there are other US companies who would be keen to outsource to India for the first time.

"For what I am finding is that for the rest of the companies (US companies who have not received Government aid) to survive, they have to do business (they would benefit if they outsource to India)", he said.

According to him, Indian IT companies are increasingly looking at the domestic market.

"Because our economy is big. Our companies can, instead of doing it for Citi Bank, they can do it for SBI (SBIN.NS : 950.05 -37). So, we can do work for our companies and that's picking up. I see that Indian IT companies now focus on domestic sector a lot".

"We are a country...we are big enough. We may not need help from foreign countries (outsourcing) all the time to grow".

Kulkarni said: "if we have the right government, if they are able to come up with some policies, we should be okay by Septemeber/October of this year".

Govt says to meet direct tax collection goal

2009-03-17T12:32:00.001-07:00

ndia expects to meet its downwardly revised direct tax collection target of 3.45 trillion rupees ($67 billion) for the 2008/09 fiscal year ending on March 31, a finance ministry official said on Tuesday.

"We are confident of meeting the target for 2008/09," the official, who declined to be named, told reporters.

In last month's interim budget for 2009/10, the finance ministry had revised down its forecast for direct tax receipts in 2008/09 to 3.45 trillion from 3.65 trillion, reflecting a slowdown in the economy.

The official said direct tax receipts between April 1, 2008, and March 16 rose 18 percent from a year ago to 2.96 trillion rupees, including advance taxes paid by the corporates for the fiscal fourth quarter.

The government has forecast the fiscal deficit at 6 percent of gross domestic product, much higher than an initial forecast of 2.5 percent, as growth slows to around 7 percent in 2008/09 from 9 percent a year earlier.

India gold demand still weak, buyers eye falls

2009-03-17T12:30:00.000-07:00

India's gold demand was weak on Tuesday as buyers stayed away on hopes of more falls, traders said.

"We are not able to sell even one gram of gold. The local demand is very bad and everyone is waiting for lower prices," said Ranjeeth Rathod, a director with Chennai-based wholesaler, MNC Bullion.

The benchmark April contract recovered from a low of 15,109 rupees per 10 grams to trade 15,168 rupees, still down 0.15 percent, at 1:50 p.m.

Overseas gold dipped 0.4 percent pressured by scrap dealers selling to lock in profits around $920 per ounce, but a rise in Asian equities suggested some recovery in risk appetite.

Traders said a fall in prices to a minimum of $875 an ounce would revive demand ahead of the weddings in the first week of April.

"All traders have placed advance orders in between $875 and $905 for fresh buying," said Harshad Ajmera, proprietor of JJ Gold House in Kolkata.

Local gold was cheaper than bank gold, signifying weak demand and profit-taking by traders.

"There is disparity of around 200 rupees between bank and local gold,"

Why Obama can't stop outsourcing

2009-03-02T10:55:00.000-08:00

The Indian information technology industry has reacted with a mix of hope and caution after President Barack Obama said last week that he will not allow US companies that send jobs away to enjoy his tax breaks.

Obama is presumably talking about industry-specific tax breaks, though the details are not clear yet. But it is clear to me that he cannot go very far.

For instance, the US plan can affect General Motors, which is getting government help. I know from experience that GM is doing advanced design for its next generation of automobiles using aviation-standard materials in Bangalore. Does Obama's budget mean that GM will stop using India as a base for innovation? How will GM keep a global edge?

Now, take Accenture, which many think is a US company. It is actually incorporated in Bermuda. Will a US-based retail company (like J.C. Penney, for instance), handing over IT work to Accenture suffer from Obama's moves? If it does, and rival IBM gets a deal that Accenture might have had, remember that IBM has tens of thousands of employees in India, doing work for US clients. The simple point is that US has itself led efforts in making the world economy in an inter-connected web. The nitty-gritty of crunching IT spending is going to be painful.

US firms have already lost the game of efficiency in automobiles to the Japanese and in overall manufacturing to the Chinese. In pharmaceuticals and services, Indian firms can shake the US in everything but blockbuster product development. If you take new products, IT and distributed global research and development are at the heart of whatever remains of Ameri-can capital efficiency, innovation and competitiveness.

In other words, US firms are no longer US firms, but effectively global firms. By doing harm to what Americans call outsourcing, Obama may be axing a branch he is sitting on. Which is why I see his speech as little more than symbolic post-election posturing. If the benefits of tax breaks are outweighed by the gains of outsourcing, US firms will do what makes more sense to them.

Satyam takeover: LandT seen as favourite

2009-02-02T10:22:00.000-08:00

Larsen and Toubro looks best placed to pounce on Satyam Computer Services (SATYAM.BO : 57.6 +3.55) if India's market regulator relaxes a rule on takeover pricing for the fraud-hit outsourcing company.

After spending around 7 billion rupees ($140 million) on its stake, LandT, India's leading engineering and construction firm, has become Satyam's biggest shareholder as the government-appointed board of Satyam is seeking a strategic investor for the firm.

"They have been looking to grow their IT business and have been looking at a large IT business, this will take it to a logical conclusion. They can merge LandT Infotech into Satyam," said V.K. Sharma, head of research at Anagram Stock Broking.

LandT built up a 4 per cent stake in Satyam by early January, only to be blindsided by its Jan. 7 disclosures of massive accounting fraud that have left the outsourcer struggling for survival. Satyam's founder chairman and former managing director are being held in jail.

As other potential bidders emerged for the company, LandT trebled its shareholding to 12 per cent to protect its interests and keep open the option of quickly raising the size and value of its own smaller outsourcing unit.

It could increase its stake further, but once its holding hits 15 per cent it would have to make an open offer for another 20 per cent of the company -- at the average share price over the last six months, according to Indian takeover law.

Satyam's market value has plunged to about $800 million from $7 billion in May 2008.

Currently, the mandated six-month average would work out to an offer price of about 325 rupees, according to Thomson Reuters data showed --versus Friday's close of 54 rupees. An average price over 10 days would work out to about 38 rupees.

US-based outsourcer iGate and India's Spice group, among others, have expressed interest to buy Satyam, attracted by the firm's global clientele such as General Electric and Nestle and bankers say LandT was unlikely to shy away from a bidding war.

"If any of the bidders look to build half of Satyam's business, it would take them 5 years. Right now, they are looking purely at cash accretion to their existing businesses," said Sanjeev Patkar, head of equities at Dolat Securities.

Last week, Satyam said fund manager Fidelity raised its holding in the company to 6.8 per cent and since then Fidelity has increased its stake further.

Bankers say foreign takeover interest is limited in Satyam given the lack of clarity on the company's books, and a number of class action lawsuits filed by US shareholders.

COMMITTED BUYER

Funding is unlikely to be a problem for LandT. Its senior vice-president for finance R. Shankar Raman said last week LandT had cash and cash equivalents of $920 million at the end of 2008.

Add in its existing sizeable stake, a strong brand image and relationships with domestic institutions and funds that owned more than 15 per cent of Satyam late last year, and bankers say LandT is well placed to see off other bidders.

State-run Life Insurance Corp, which owns 4.3 per cent of Satyam, is also the largest shareholder in LandT with a 17.4 per cent stake at the end of 2008.

"Going by what has happened, I believe LandT is committed to a deal. They would be prepared to go the distance," said a banker who has previously advised LandT. He declined to be named as he was not authorised to speak to the media. Satyam's board has named Goldman Sachs and India's Avendus to find a strategic bidder for the company.

Even if LandT loses a bidding war, it will probably gain in another way. Having raised its stake to 12 per cent from 4 per cent when Satyam shares were under 40 rupees, it lowered the average cost of its stake to about 80 rupees a share.

"It is playing into a bidding war. LandT need not worry about losing. It just increases the chances of exiting the investments at a profit," said a banker not involved in the deal.

In mid-January, Satyam's new board said it would take 8 to 12 weeks to restate its accounts for a number of years.

"Besides the floor price, the only other deterrent is the complete lack of clarity on Satyam's financials," said an analyst at a Mumbai brokerage, who asked not to be named as he was not authorised to speak to the media. He said a board seat might give LandT a better idea of the real state of accounts.

Reliance Q3 net falls but beats f'cast

2009-01-22T11:04:00.000-08:00

India's largest listed company, Reliance Industries Ltd (RELIANCE.NS : 1136.3 +16.45), said its quarterly earnings fell 9.8 percent from a restated year-ago profit, its first drop in three years, but beat forecasts as refining margin eased less than expected.

"This was one of the most challenging quarters for Reliance with volatility in prices and margins," Chairman and Managing Director Mukesh Ambani said in a statement on Thursday.

"Producers and consumers are coming to terms with slower global trade and economic outlook," he said.

Reliance, India's largest petrochemical producer and refiner, is set to get a boost when it starts pumping 30-40 million cubic metres of natural gas a day from its deep-sea fields off India's east coast in the second half of February.

Another driver would be sales from the newly commissioned 580,000 barrels per day refinery which is run by subsidiary Reliance Petroleum.

Reliance Industries said net profit fell to 35.01 billion rupees ($713 million) in its fiscal third quarter ended Dec. 31 from a restated 38.82 billion rupees excluding one-off gains a year earlier.

A Reuters poll had forecast a net profit of 30.98 billion rupees.

Refining margins, a key measure of profitability, dropped to $10 per barrel from $15.4 a barrel a year ago, against market expectations of $9.16 as sluggish demand in the wake of global economic slowdown pushed oil prices sharply lower.

Reliance's refining margins are significantly higher than the Asian benchmark in Dubai as its refinery can process cheaper heavy crude to produce high value products.

Crude oil prices plunged more than $100 from its peak of $147 barrel in July, to $44.60 at the end of December.

Reliance's retail fuel pumps in the country are shut as it awaits fair competition. India subsidises state-run oil companies to enable them to sell fuels at heavily discounted, government-set rates but private firms get no such assistance.

Last week, P. Raghavendran, president of the company's refinery business, said Reliance would reopen its fuel pumps "once we see a reasonable period of stability when we don't have to shut down again. It depends on when the government comes out with a clear policy and international prices stabilise".

Rival Oil & Natural Gas Corp is set to report a second consecutive fall in quarterly net profit due to lower crude prices, and its outlook is weighed down by falling output and its costly acquisition of UK-listed Imperial Energy.

Earlier on Thursday, South Korea's top refiner SK Energy posted a weaker-than-expected 45 percent rise in fourth-quarter core profit, on reduced demand for petrochemical products.

Ahead of the results, shares in Reliance, which has a market value of around $36 billion, closed up 1.21 percent at 1,132.95 rupees in a Mumbai market that rose 0.4 percent.

The stock fell 37 percent in the December quarter, more than a 25 percent drop in the benchmark index and 33 percent loss in the sector index.

Panasonic Electric to shut 3 plants, cut 800 jobs

2008-12-28T11:14:00.001-08:00

Panasonic Electric Works, the building materials unit of consumer electronics maker Panasonic Corp, said it will close three additional plants in Japan and cut 800 workers as a slowing economy hits demand.

The company, which sells lighting equipment, built-in kitchen systems and other building products, will carry out the plant closures and job cuts by the year ending March 2011, a Panasonic Electric spokesman said on Sunday.

The latest streamlining measures come on top of two factory shutdowns and elimination of 200 jobs so far in the current business year to March 2009, the spokesman said.

Of total job cuts of 1,000, 550 of them will be full-time positions.

Panasonic Electric Works, owned 51 percent by Panasonic Corp, the world's No.1 plasma TV maker, has not decided which three of the remaining 13 domestic factories will be closed, he said.

Housing starts in Japan, battered by a regulatory change last year, were flat in November compared with a year earlier, far below a median forecast for an 8 percent rise.

Panasonic Electric Works in October cut its net profit forecast for the year to March 2009 by 12 percent to 38 billion yen ($419 million), which would be down 16 percent on the year.

Satyam defers Monday board meeting until Jan 10

2008-12-28T11:09:00.000-08:00

Satyam Computer Services Ltd (SATYAM.BO) said it had postponed a board meeting set for Monday until Jan. 10 to mull options beyond just a possible share buyback.

The board will consider measures to strengthen Satyam's governance structure, including increasing the size and altering the composition of the board, the company said in a statement issued late on Saturday.

New York-listed Satyam, India's No. 4 software services exporter, has hired DSP Merrill Lynch to conduct a review of the company's "strategic options" to enhance shareholder value, the statement said, without giving details.

Reliance Pet may begin fuel exports in April

2008-11-11T04:53:00.000-08:00

Reliance Petroleum may start exports from its new 580,000 bpd refinery in April although the plant is likely to begin trial runs near to its end-December target, analysts and trade sources said.

The export-focused refinery is entitled to a five-year tax holiday, but if commercial production were to start in December or January, the firms would only receive tax breaks for three months in the first year.

India's fiscal years run from April to March.

Analysts say the new refinery may be started and stabilised in phases over the first quarter of 2009.

Reliance Chairman Mukesh Ambani in June told shareholders revenue from the new refinery would begin from this year.

But since then, slowing demand has hit the outlook for refineries, prompting firms like Total and Petroplus to consider cutting back runs on unprofitable products like gasoline.

Refinery margins for complex Asian refiners in October were about $6.34 a barrel while those for simple refiners were about $2.29 a barrel.

Reliance commissioned its existing 660,000 barrels per day (bpd) refinery six months ahead of schedule but only announced commercial operations six to eight months after trial runs.

Earlier this year, Reliance sold several cargoes of diesel under term contracts to various trading houses, including its first ever advance term sale of 0.005 percent sulphur diesel, which will be produced at the new refinery.

The sales were an attempt to lock in customers before the plant comes online. A trade source, who could not be named, said Reliance had not yet signalled when supplies of ultra-low sulphur diesel would begin.

Vodafone to focus on cost control after revenue cut

2008-11-11T04:46:00.000-08:00

Mobile phone group Vodafone cut its full-year revenue outlook for the second time in four months on Tuesday but said it would maintain profits and boost free cash flow by cutting 1 billion pounds ($1.6 billion) of costs.

Investors and analysts welcomed the focus on cost controls and on improving performance, instead of on growth by expansion, pushing shares in the world's largest mobile phone group up 9.5 percent to 118.6 pence by 1125 GMT in a falling wider market.

Vodafone Group Plc, reporting its first set of figures under new Chief Executive Vittorio Colao, also reported first-half results that met expectations, but said conditions would be challenging.

Vodafone is rated A- by both Standard & Poor's and Fitch Ratings and Baa1 by Moody's Investors Service.

Vodafone said it had reviewed its strategy due to the more difficult economic environment and said it would focus on growing mobile data and on its execution in emerging markets.

It will also focus on driving operational performance and strengthening capital discipline.

"We are already represented in most of the key emerging markets, where significant growth is expected in the coming years," it said. "Our principal focus now will be on execution in these markets."

Analysts at Cazenove said the new strategy made sense and others welcomed the suggestion that Vodafone would focus on its current markets rather than chase further acquisitions.

But Society Generale said investors should sell into strength and said the results benefited from favourable currency movements.

"This is a large downgrade pre-currency and highlights the cyclicality of Vodafone," it said in a note.

Telecoms groups had previously been seen as resilient to a downturn, but so far this year the European telecoms shares have not done any better than the wider market.

McCain-Obama Race May Be Decided Early; Watch Virginia's Vote

2008-11-04T02:25:00.000-08:00

Barack Obamaand John McCain will be carefully watching Virginia early tonight. Television viewers should, too.

The state is in the first wave to close polling places, at 7 p.m. Washington time. The results will be telling. Obama has pushed hard to flip the state, which hasn't backed a Democratic presidential candidate since 1964, and he led in pre-election polls.

``An Obama win in Virginia would be a sign the race is over,'' said John Fortier, a research fellow at Washington's American Enterprise Institute who wrote a book about the U.S. Electoral College. ``If he wins Virginia, he is likely to be doing well elsewhere.''

Virginia's results may signal a tidal wave of states turning Democratic after backing Republican President George W. Bush in 2004. Another on the watch list at 7 p.m. is Indiana, which also hasn't backed a Democrat sinceLyndon Johnson won in a nationwide landslide 44 years ago.

Ohio follows Virginia and Indiana with a scheduled poll closing time of 7:30 p.m. Washington time. In 2004, the state and its 20 electoral votes remained too close to call until the next day, when Democrat John Kerryconceded. For McCain, the state is critical: No Republican has ever won the White House without claiming Ohio.

Red States Close

North Carolina and West Virginia, two other states Obama is contesting that went Republican in the last two elections, close at the same time as Ohio.

Half an hour later, at 8 p.m., the biggest of the battleground states, Florida, is slated to close all its polls, along with those in Michigan, Missouri, New Hampshire and Pennsylvania.

``It is nearly impossible for McCain to win without winning Ohio, Virginia, and Florida,'' Fortier said. Bush won all three in 2004, ending up with 286 Electoral College votes. A candidate needs 270 to get to the White House.

The first poll closings may also offer early clues on Senate and House races. Kentucky's balloting is due to finish by 7 p.m. and attention will be on Senate Minority Leader Mitch McConnell's efforts to hold his seat. A loss for the Republican would bolster Senate Democrats' chances of getting to the 60 seats they need to block a filibuster.

Oil prices fall below $63 amid recession woes

2008-11-04T02:22:00.000-08:00

Oil prices fell below $63 a barrel in Asia Tuesday after more evidence of a U.S. recession piled up and hopes China will prop demand waned.

Light, sweet crude for December delivery fell $1.24 to $62.62 a barrel in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore. After rising above $69 per barrel in Asian trade Monday, light, sweet crude for December delivery tumbled $3.87 to settle at $63.91 overnight.

Monday's rally in crude oil futures proved short-lived after U.S. manufacturers reported lethargic activity numbers for October. The Institute for Supply Management said its manufacturing index fell to 38.9, the worst reading in more than a quarter century. Any reading below 50 signals contraction.

The manufacturing data along with weak U.S. auto sales "poured cold water" on the oil market, said Victor Shum, energy analyst at consultancy Purvin & Gertz in Singapore.

"The overriding concern is the economy in the U.S.," Shum said. "For 2008 there is unlikely to be any demand growth for oil and in 2009 there may be some modest growth but much less than we would have seen otherwise."

Adding to the gloomy outlook for the oil market, Credit Suisse cut its forecast for growth in China's oil demand next year to near zero from 4 percent on the back of lower economic growth forecasts.

"The latest set of economic data out of China suggests a much more severe economic slowdown is under way there. Hopes of even a slightly decoupled China in 2009 are fading fast," the investment bank said in a report.

Oil industry analysts had believed that the booming economies of India and China would pick up any slackening of demand if Western nations went into recession. That view has weakened in recent months, as the economic crisis in the United States spread across the globe.

Stock markets, often a barometer of the economy for oil traders, were mixed in Asia. Japan's Nikkei 225 stock average jumped 6.3 percent as investors played catchup to Asia's rally Monday following a long weekend. Hong Kong's marked edged up 0.3 percent, but markets in China and Singapore fell.

Shum said he expects oil to continue trading within its recent $60 to $70 band. Prices have tumbled since spiking to nearly $150 a barrel in July.

The recent output cut by the Organization of Petroleum Exporting Countries is likely to achieve a "fairly good level" of compliance from member nations, creating a floor for the oil price, he said.

But a second cut at OPEC's next meeting in December seems unlikely and would be difficult to implement, Shum said.

To keep prices from falling further, Venezuela's Oil Minister Rafael Ramirez has said OPEC, which controls about 40 percent of world crude oil production, will need to cut production by at least 1 million barrels daily on top of the already announced cut of 1.5 million barrels a day.

In other Nymex trading, gasoline futures fell 2.17 cents to $1.3408 a gallon, adding to a steep fall overnight. Heating oil fell 2.17 cents to $1.9611 a gallon while natural gas for December delivery fell 0.1 cent to fetch $6.837 per 1,000 cubic feet.

In London, December Brent crude fell $1.51 to $58.94 on the ICE Futures exchange after plummeting $4.84 overnight.

RBI rate cut, Banks now see fall in interest rates

2008-11-01T20:43:00.000-07:00

With the Reserve Bank of India taking a number of steps to shield the economy from the spillover effects of the global financial crisis, bankers on Saturday said that the steps would induce banks to cut lending rates like commercial, home, auto loans as well as deposit rates.

Soon after the RBI's announcement, IDBI Bank reduced its home and educational loan rates by 50 basis points with immediate effect. The rate cut would be applicable to both existing and new customers, the bank said. Following the revision, home loans would now be available at an interest rate of 11 per cent against 11.50 per cent earlier. Simultaneously, the margin on housing loans has been enhanced from 15 per cent to 20 per cent for loans of up to Rs 30 lakh and to 25 per cent for loans over Rs 30 lakh, the bank said.

Punjab National Bank which had cut home and personal loan rates last week, had reduced prime lending rate (PLR) on Friday. Other banks are expected to come out with a rate revision in the coming weeks.

Reeling under pressure of costly borrowing, corporates will surely heave a sigh of relief as the cut in CRR, statutory liquidity ratio (SLR) and repo rate by RBI will ease liquidity in the system thereby lowering interest rates.

ICICI Bank joint MD Chanda Kochhar said that the steps taken by the banking regulator will bring down interest rates. "It shows the mindset of the regulator that is continuously monitoring the situation and coming up with measures on dynamic basis," she said.

However, there could be a time lag for the interest rates to come down. As Bank of India chairman and managing director T S Narayanasami said, "Ideally speaking, liquidity should bring down interest rates, but this may take a month or two because banks have a lot of sanctions in the pipeline, which are yet to crystallise into disbursements."

IDBI chairman Yogesh Agarwal said, "By using the repo rate, the RBI is signalling that the overnight rates must fall in the corridor within the reverse repo and the repo rate. All these are strong growth signals," he said. Inter-bank call money rate closed at 17.50-18 per cent during the weekend.

Bankers say that the steps would bring relief to the entire banking system and ease lending and deposit rates. "I would say the system would need some more liquidity for the whole economic cycle to go back to active levels. One will still have to see reduction in market rates. Deposit rates and lending rates have not come down," Kochhar said.

Narayanasami said there is pressure on deposits, liquidity alone cannot solve the issue of certain banks, which are currently operating on a high credit-deposit ratio.

Banks, which had been on an advertisement spree asking consumers to park their savings in fixed deposits, now say that rates are expected to fall to single digits. "We see single digit deposit rates soon," Punjab National Bank CMD K C Chakrabarty said.

As banks are unanimous that the interest rates will come down over the month, Bank of Baroda CMD MD Mallya said his bank may take a call on reducing interest rates early next week.

Sebi changes SLB mechanism, extends lending tenure

2008-11-01T20:39:00.000-07:00

n a bid to popularise the Securities Lending and Borrowing (SLB) framework, the Securities and Exchange Board of India (Sebi) has reviewed the system and instructed the exchanges and depositories to extend the tenure from the present seven days to 30 days.

Addressing another grievance of the trading community, the Sebi has extended the SLB timing to the normal trading hours of 9:55 am to 3:30 pm. Currently, the trading window for SLB activity is open only for one hour from 10 am to 11 am. The SLB system was introduced after the Sebi allowed short sales by all participants earlier this year.

The regulator also set guidelines on corporate actions like dividend declaration, bonus issues and stock splits, which could take place when the stock is lent out. In case of a dividend declaration, Sebi says, "The dividend amount would be worked out and recovered form the borrower at the time of reverse leg and passed on to the lender."

And when there is a stock split, the positions of the borrower would be proportionately adjusted so that the lender receives the revised quantity of shares. In case of other corporate actions like bonus issues and amalgamation and open offer, the broad guideline states, "The transactions would be foreclosed from the day prior to the ex-date. The lending fee would be recovered on a pro-rata basis from the lender and returned to the borrower."

Sebi had earlier expressed its disapproval to the foreign institutional investors (FIIs) lending shares for short sales purpose in the overseas markets. The regulator had also mentioned that they would be working on strengthening the domestic SLB scenario. It was in April this year that the new SLB framework became operational, but there were few takers for this. This was also one of the reasons why overseas investors preferred to have short sales transactions in the over-the-counter (OTC) market overseas.

The lack of popularity to the SLB was due to various reasons. Prime amongst them was that the lending mechanism was only for seven days, hence somebody who wanted to go short on particular scrip, had to return the borrowed shares in seven days. Regulations do not allow for 'naked short sales' wherein speculators can sell shares that they don't own. In naked short selling, they could take a short position in the market and on the day of delivery, pay the difference to settle the trade of carry the position forward, as was in the earlier badla days.

However, it is the margining involved in short sales that was a sore point for many participants. Unlike the cash market where there are three margins and futures and options where there is a fixed margin, there are five types of margins levied on trades in the SLB segment.

The problems

• Lending mechanism was only for 7 days. Going short on a scrip, meant returning borrowed shares in that period

• Regulations did not allow for 'naked short sales' where speculators can sell shares they don't own

• Unlike cash market (three margins) and futures and options (fixed margin), there are 5 types of margins levied on trades in SLB segment

The alterations

• Exchanges and depositories to extend tenure to 30 days

• SLB timing extended to normal trading hours of 9:55 am to 3:30 pm from the present trading window of just one hour from 10 am to 11 am

• New guidelines on corporate actions like dividend declaration, bonus issues and stock splits, which could take place when the stock is lent out

• When there is a stock split, position of the borrower would be proportionately adjusted so that the lender receives the revised quantity of shares

Today market will FIRE in positive side (cross your fingures)

2008-10-16T12:18:00.000-07:00

Today market will go as by its older days. We have two major good thing in hand lower inflation,lower crude prices and further expecting a rate cut by the rbi.Backup given by good results from infosys and today by hdfc bank.Beating all estimates in the street.

For intraday buy hcc at 50 and sell at 58 buy ril at 1400 and sell at 1485 buy wipro at 280 tgt 300.

Another positive news waiting is that lower crude prices can make the govt to announce a rate cut in fuel rates

BEST OF LUCK