Finally, Dayanidhi Maran puts in his papers

Union Textiles Minister Dayanidhi Maran resigned from the Union Cabinet, sending shares of Sun TV and SpiceJet down sharply in Mumbai trading. According to reports, the DMK leader met Prime Minister Dr. Manmohan Singh at his official residence on Thursday after a Cabinet meeting and tendered his resignation. Maran's exit from the Union Cabinet comes amid reports that the CBI will question him in connection with the ongoing 2G scam. Maran is being probed for allegedly favoring certain companies in the award of license and spectrum during his tenure as Union Telecom Minister in the UPA-I regime. The CBI is also looking into some deals done by Sun TV, owned by Dayanidhi Maran's brother Kalanithi Maran, with Malaysia's Maxis. It is also investigating various aspects of Aircel's takeover by Maxis.

On Wednesday, the CBI informed the Supreme Court that during his tenure as the Union Telecom Minister, Dayanidhi Maran had delayed the award of 2G licences and spectrum to Aircel for nearly two years. This, in turn, forced Aircel’s promoter - C Sivasankaran - to sell the firm to Malaysia's Maxis Group (owned by T Ananda Krishnan) in 2006, the CBI said, adding that its investigation in the matter is in a preliminary stage. Sivasankaran had earlier alleged that he was forced by Dayanidhi Maran to sell Aircel to Maxis. Maran has repeatedly denied all the charges against him.

According to CBI, Sun Direct received Rs 5.99bn from Maxis between December 2007 and December 2009. This came within months of Aircel receiving 14 new 2G telecom licences. Astro, a Maxis Group company, also made investments of Rs. 1.11bn in South Asia FM Ltd. (SAFL), an FM company owned by the Marans. The CBI also told the apex court yesterday that it would conclude its investigation into the money trail in the 2G scam by the end of next month. The apex court will hear the matter again on July 11.

Murli Deora offers to resign: Reports

Mining and metal shares tumble on draft law

Shares of mining and metal companies tumbled after the Group of Ministers (GOM) approved the draft Mines and Minerals (Development and Regulation) bill. For entities involved in coal mining, 26% of the profits from this activity has to be shared. While for other mining activities, companies have to pay an amount equal to the royalty they are currently paying to the Government, i.e. an effective doubling of royalty payments. In its current form, implementation of this bill could reduce Coal India’s earnings by 15% while impact on metal companies would range from 2% to 9%.

Coal India (CIL) would be the worst hit followed by other miners such as Sesa Goa, NMDC, NALCO and Hindustan Zinc. On the metals front, SAIL and Tata Steel would be hit due to their captive mines whereas the likes of JSW Steel would be the least impacted. The bill would be taken up in Parliament in the forthcoming monsoon session once it receives a green light from the Union Cabinet.

The original mining bill had stated that for new mines, a company will have to allot 26% free shares in the company to the local people affected by its mining activity. For existing mines, a company 26% of profits should be shared with the local population. The new draft makes a distinction between coal miners and non-coal miners. The GoM, headed by Finance Minister Pranab Mukherjee, includes the ministers of Mines, Steel, Law, Commerce and Tribal Affairs, and the Deputy Chairman of the Planning Commission. Thursday’s meeting was attended by all the members of the GoM, except Home Minister P Chidambaram.

If Greece Goes, And If America Defaults, And The Rights And Wrongs Of Romneycare...

Source: Economist

Consumers want Mobile Phones to connect to their Cars and TVs: Amdocs Global Survey

Amdocs, the leading provider of customer experience systems, today announced the results of a global study that provides unprecedented insights into consumer behavior and attitudes as we move into the connected world, particularly that consumers are prepared to pay a premium for increased connectivity and quality of service. The research, conducted by Coleman Parkes, surveyed more than 4,700 consumers of various age groups in 14 countries, spanning North and South America, Europe and Asia-Pacific.

Consumers embrace the connected world
The survey found that consumers have quickly adapted to the connected world and expect to see continued evolution.

Demand ubiquitous connectivity (and are willing to pay for it) - More than 70% of respondents expect to be able do more on their mobile device. As a result, more than two-thirds of consumers expect and want their mobile device to connect to a wide range of other devices, such as televisions (43%) and cars (38%), and to have the ability to access their content from any device (54%). More than 40% of respondents are willing to pay a premium for this connectivity.

Financial sector to need 5 Lakh planners by 2015

SC sets up 2-member SIT to track down black money

The Supreme Court (SC) on July 4 appointed a Special Investigation Team (SIT), comprising two retired judges of the apex court to get to the bottom of the black money issue. Former SC judge justice B.P. Jeevan Reddy will be the chairman of the SIT while another former judge, justice M.B. Shah will be the Vice-Chairman of the panel. A bench comprising justice B. Sudershan Reddy and justice S.S. Nijjar directed the two-member SIT to monitor the investigation and steps being taken to bring back black money stashed away in foreign banks. The country's top court passed the order on a petition filed by leading lawyer Ram Jethmalani and others.

The high-level committee constituted by the Government to look into the issue of black money would also be a part of the SIT. The bench also directed the Government to disclose the names of all who have been issued show-cause notices by the authorities in connection with the probe into the black money issue. However, authorities would not disclose the names of those who have not been investigated in connection with deposits made in foreign banks, including Liechtenstein Bank. The apex court is expected to pass an order, revealing the names of 26 Indians who kept black money in LGT bank. The Centre has opposed the move, saying that it would violate bi-lateral agreement.

Food inflation slips to 7.61%...Fuel inflation at 12.67%

The annual rate of inflation in the food space declined in the fourth week of June, data released by the Government showed on Thursday. Inflation in the Fuel & Power space also edged slightly lower, the data revealed. Annual inflation in the Food Articles space declined to 7.61% in the week ended June 25 from 7.78% in the previous week, the Commerce & Industry Ministry said in a statement. Food inflation was at 19.88% in the year-ago period. Inflation in the Primary Articles group fell to 11.56% in the week under consideration from 11.98% in the week ended June 18, according to the Commerce Ministry statement.

Inflation in the Primary Articles space was at 19.23% in the comparable period last year. Inflation in the Fuel & Power group slipped to 12.67% in the week under review from 12.98% in the week ended June 18, the Government data showed. Inflation in the Fuel & Power space was at 17.14% in the week ended June 26, 2010. Inflation in the Non-Food Articles space declined to 17.69% in the week ended June 25 from 17.91% in the previous week, the Government data showed today. It was at 15.17% in the same period a year earlier.

Inflation in the Minerals group stood at 27.87% in the week under consideration versus 28.51% in the week ended June 18, according to the Commerce Ministry data. Inflation in this group stood at 22.01% in the year-ago period. On an annual basis, onions turned costlier by ~21% in the week under consideration, while on a week-on-week basis, they were up by ~4.2%. Vegetable prices were down ~8.7% on an annual basis, while on a weekly basis they were up over 4%.

India's exports surge by 46.4% in June: Govt

India's merchandise exports grew by 46.4% in June while imports too expanded at a faster clip of 42.4%, Union Commerce Secretary Rahul Khullar said on Friday. Overseas shipments stood at US$29.2bn last month while imports were at US$36.9bn, resulting in a trade deficit of US$7.7bn for the month, he told reporters in New Delhi. "US$29.2bn figure is a very, very high number for exports. Virtually all sectors grew well," Khullar said. During April-June 2011-12, merchandise exports grew by 45.7% to US$79bn while imports soared by 36.2% to US$110.6bn, the Commerce Secretary said. During the first quarter of the current fiscal year, the trade gap stood at US$31.6bn. The exporting sectors that registered strong growth during the quarter included Engineering, Petroleum Products, Gems & Jewellery, Readymade Garments and Electronics, Khullar said.

Export target achievable by 2014: Anand Sharma

Gross direct tax collections up 23.91% in Q1 FY12

Gross direct tax collections during the first quarter of the current fiscal (April - June 2011) were up by 23.91%. Gross direct tax collections rose to Rs. 1,04,136 crore as against Rs. 84,041 crore during the same period last year. Gross collection of Corporate Taxes was up by 23.49% and stood at Rs. 68,223 crore against Rs. 55,244 crore in the same period last year. Gross collection of personal income tax was up by 24.63% which rose to Rs. 35,859 crore as against Rs. 28,772 crore during the same period last year. Net tax collections, however, stood at Rs. 57,268 crore, down from Rs. 68,675 crore in the same period in last fiscal. This was on account of an increase of 205.01% in tax refunds, which stood at Rs. 46,868 crore as against Rs. 15,366 crore in the same period during the last fiscal.

Foreign tourist arrivals up 12.5% in June

Monsoon covers more parts of Gujarat and Rajasthan

The southwest monsoon has further advanced over remaining parts of Gujarat and some more parts of Rajasthan, the Indian Meteorological Department (IMD) said. Conditions are favourable for further advance of southwest monsoon over remaining parts of Rajasthan and thus would cover the entire country during the next 23 days, the weather office said.

Monsoon rains were 25% below normal in the week ended July 6, slowing from the 10% above average rains in the previous week, the IMD said on Thursday. The slowing rains reflect a weakness in the monsoon over rice, cotton and oilseeds growing areas of east, west and central India. But the weekly rains were above normal over the cotton and rice growing areas of Andhra Pradesh.

During the week ended July 6, the rainfall was excess/normal in 16 meteorological sub-divisions and deficient/scanty in 20 sub-divisions out of the total 36 meteorological sub-divisions. (Actual: 44.7 mm, Normal: 59.7 mm and Departure: -25%).

Cumulative seasonal rainfall (1st June to 6th July) was excess/normal in 27 meteorological sub-divisions and deficient/scanty in 9 sub-divisions out of the 36 meteorological sub-divisions. (Actual: 217.6 mm, Normal: 215.1 mm and Departure: +1%).

Furthermore, the weather bureau sees fairly widespread to widespread rainfall over west coast, northwest, central and northeastern states during the first half of the week ending July 13. Fairly widespread rainfall would occur over east and northeastern states during the second half of the week.

India's new plane market to touch US$150bn by 2030: Boeing

Boeing Company has Forecasts a US$150bn market for 1320 new passenger planes in India over the next 20 years as the economy aims for double digit growth. Globally, Boeing forecasts US$4trillion market for new aircraft over the next 20 years with a significant increase in deliveries. The company sees a market for 33,500 new passenger airplanes and freighters between 2011 and 2030. Boeing has recently announced that it will boost production to a record 42 737s per month by the first half of 2014. Boeing India President Dinesh Keskar said, "The economic and air-traffic growth will in turn stimulate demand for a variety of aircraft types.In 2011, the economy continues to do well.Indian air carriers are becoming profitable and we expect the GDP to maintain its upward trend in the long term."

FDI in multi-brand retail to boost food processing industry: ASSOCHAM

Allowing foreign direct investments in multi-brand retail sector will help the food processing industry in adopting new technologies and improving productivity to become globally competitive, apex chamber ASSOCHAM said today. The industry which was primarily driven by exports earlier is now witnessing rapid growth in domestic market. Key growth drivers include increasing urbanisation, changing lifestyles, more working women in the workforce and increasing nutritional needs, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM). Growing over nine per cent per year, the Rs. 5.45 lakh crore food processing industry is estimated to reach the level of Rs. 8.73 lakh crore 2014-15. Only seven per cent of total agriculture produce is processed in India compared to 53 per cent in the United States and 42 per cent in New Zealand. "There exists a huge gap in agriculture output, post-harvest produce and processing," said ASSOCHAM secretary general D.S. Rawat. "Despite high growth and large investments in recent years, the industry is still dominated by small scale and unorganised sector mainly involved in producing low value added products."

The critical need of the hour is to improve technology and productivity in order to be competitive globally, he said. The food processing industry will offer growing significant opportunities for new as well as existing players in the near future. A large part of food processing happens on the commodity side. However, as nutritional needs of the population increase and there are changes in urban lifestyles, it is expected that value added products will witness high growth...Read More

Cabinet approves phase 3 FM radio licenses auction plan

The Union Cabinet in its meeting today has approved the proposal of the Ministry of Information and Broadcasting to approve of the 'Policy Guidelines on Expansion of FM radio broadcasting services through private agencies (Phase-Ill)'. Cabinet has also cleared the proposal of the Ministry for conducting ascending e-auction, as followed by Department of Telecommunications for the auction of 3G and BWA spectrum, mutatis-mutandis, for award of license of FM Channels, as recommended by the GoM on Licensing Methodology for FM Phase-Ill.

FM Phase-Ill Policy extends FM radio services to about 227 new cities, in addition to the present 86 cities, with a total of 839 new FM radio Channels in 294 cities. Phase -III policy will result in coverage of all cities with a population of one lakh and above with private FM radio channels...Read More

Interim report on direct transfer of oil subsidies submitted to FM

The Union Finance Minister Pranab Mukherjee has said that the direct transfer of subsidies on LPG, Fertiliser and Kerosene will help in curbing pilferage and leakages. He was speaking on the occasion of submission of the Interim Report of the Task Force on Direct Transfer of Subsidies by the Chairman of the Task Force and Chairman, Unique Identification Authority of India (UIDAI), Nandan Nilekani, here today. The interim report recommends an implementable solution, in a phased manner, for direct transfer of subsidies on LPG, Fertiliser and Kerosene.

The Finance Minister Mukherjee said that the matter of distributing solar lanterns /solar cookers through LPG outlets and petrol pumps should be looked into. He further said that the success of direct transfer of subsidy on kerosene would also depend on State Governments as its distribution is being done through State Governments. He stated that subsidy on kerosene should be linked to PDS reforms.

Also present on the occasion were Sharad Pawar, Minister of Agriculture, Dr. Farooq Abdullah, Minister of New and Renewable Energy, S. Jaipal Reddy, Minister of Petroleum & Natural Gas and Srikant Jena, Minister of State for Chemicals and Fertilizers. Besides, Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, Smt. Sudha Pillai, Member Secretary, Planning Commission alongwith senior officials of Ministry of Finance and other concerned Ministries were also present...Read More

No change in fiscal deficit projection: FM

Volatility in IIP data is analytically disturbing: RBI chief

The volatility in the index of industrial production (IIP) data is analytically disturbing, the Reserve Bank of India (RBI) Governor Duvvuri Subbarao said in Mumbai. "When we were making policy the IIP number available to us in February 2010 was 6.8%, whereas the economy was actually growing much faster," the RBI Governor said. "Provisional numbers which are off mark by significant margin can mislead policy calculation," he said. Subbarao added that such revisions were also factors behind the RBI making inflation projections that proved to be below the actual number in the last fiscal year. He also said that India doesn’t have a consumer price index (CPI) that properly represents the whole nation. "There is merit in this criticism. It is not entirely erroneous. Conceptually CPI is a better indication of demand side pressure than WPI," Subbarao said. RBI's Deputy Governor Subir Gokarn said that the central bank is debating if higher inflation is the new normal for India. Changes in consumption patterns are affecting food inflation, Gokarn said. Separately, Finance Minister Pranab Mukherjee said that India was maintaining its fiscal deficit target for the financial year (FY12). The recent cut in duties on oil products may not hurt the Government’s deficit target, Mukherjee said.

India's service sector output accelerates in June

Sugar stocks shine on decontrol reports

Shares of Bajaj Hindusthan, Shree Renuka Sugar, Balrampur Chini, Sakthi Sugars and Dhampur Sugar advanced amid media reports that the Government could in a few days consider the proposal to decontrol the sugar sector. "There is serious thinking in the government on sugar de-control," Union Agriculture Minister Sharad Pawar was quoted as saying by a business newspaper. A delegation led by Maharashtra chief minister recently met the Prime Minister, demanding sugar de-control along with other demands like more export of sugar, he added. The Indian Sugar Mills Association (ISMA) reportedly believes that the first phase of sugar decontrol is likely to be implemented shortly. India is expected to have a bumper sugar output in the next sugar year October 2011 to September 2012.

Sugar Industry continues to suffer burden of excessive controls: Narendra Murkumbi

The Indian Sugar Mills Association (ISMA) is the apex organization of the private and public sector sugar mills in the country. The sugar industry is the largest agro-processing sector in the country. Sugarcane is bought by the sugar mills directly from farmers without any middlemen. The sugar season or sugar year is from October to September. In the last sugar season 2009-10, approximately Rs. 45,000 crores was paid to farmers as cane price. This year, it is expected to rise to about Rs. 51,000 crores. Speaking to newsmen, Narendra Murkumbi, President, ISMA said that the sector unfortunately continues to suffer the burden of excessive controls and regulations far in excess of those imposed on any other sector in agriculture or industry in India.

Deregulation of the Sugar Industry

Sugar industry in India is totally controlled by the Government. Certain percentage of sugar produced by the sugar manufacturers has to be given to the Government on administrated price for distribution of the same under PDS. In no other country in the world – not even in small countries like Kenya, Tanzania etc – such type of levies have been imposed on sugar industry. We have raised our demand before the Government to de-regulate the industry in phased manner. To start with, the following two steps may be initiated by the Government:-

Abolition of levy sugar obligation on sugar mills

Direct procurement by Government will increase Government subsidy by Rs. 2500 crores only. This amount is negligible in comparison to about Rs. 70000 crores of Food Subsidy Bill of the Government which is expected to go to about Rs.1.00 lakh crore after promulgation of Food Security Act. Earlier also, the Finance Ministry, Commerce Ministry and Planning Commission had supported proposal for abolition of levy sugar obligation. But the same could not be implemented due to various reasons...Read More

SBI to raise US$5bn via offshore loans by December

State Bank of India is planning to raise US$5bn debt through offshore loans by December, according to reports. SBI Chairman Pratip Chaudhuri reportedly said that the bank is confident of maintaining its net interest margin (NIM) at 3.5% this fiscal. The bank is also looking at increasing its credit growth by 16-19% in FY12, said reports.

Separately, SBI said that it has revised the Base Rate upwards by 25 basis points (bps) from 9.25% p.a. to 9.50% p.a. SBI also said that it has revised the Benchmark Prime Lending Rate (BPLR) upwards by a quarter percentage point, from 14.00% p.a. to 14.25% p.a. The revision in both, the base rate and the BPLR will be effective from July 11.

SBI said that it would soon seek Government approval for its Rs 200bn rights issue. The bank will give a revised proposal to the finance ministry this month. Chaudhuri said that the bank hoped to raise the capital by December. The proposal to be sent to the Government may have an option for a follow-on public offer (FPO). SBI denied reports of raising funds through qualified institutional placement (QIP), as that would bring down government holding.

SKS Microfinance soars 40% in 2 days on draft MFI bill

Shares of SKS Microfinance Ltd. hit 20% daily upper circuit for two days in succession (Thursday and Friday) after the Government said that the Reserve Bank of India (RBI) will be the sole regulator for the micro lenders in the country. The announcement was made by the Union Finance Ministry in a draft bill for the micro-finance institutions (MFIs). The Finance Ministry posted the draft legislation on its website late on Wednesday.

SKS CFO Dilli Raj said at a televised press conference in Hyderabad that the proposed MFI Bill will help ensure orderly growth for the sector. It’s hugely positive for the country’s microfinance lenders, he said.

The new law would require MFIs to get a Certificate of Registration from the RBI to start operations. The bill also said that any non-bank finance company (NBFC) already in the MFI sector can apply for such a registration within three months from the act becoming operational, as long as it has provided net owned funds of at least Rs. 500,000. The bill would empower the RBI to set margin caps, repayment schedules and maximum interest rates charged by MFIs, and allow it to issue directions on income recognition, provisioning for bad and doubtful debts and governance.

RBI issues draft guidelines on banks' equity investments

HDFC Q1 net profit up 21% YoY

HDFC Ltd. posted financial results for the first quarter ended 30th June, 2011. The Q1 net profit stood at Rs 8.44bn as compared to Rs. 6.94bn in the same period last year. HDFC's Q1 FY12 net interest margins (NII) was stood at Rs 11.51bn. For the quarter ended June 30, 2011, HDFC reported a profit before tax (PBT) of Rs 11.75bn compared to Rs 9.66bn in the corresponding quarter of the previous year – an increase of 22%. As at June 30, 2011, the total assets of HDFC stood at Rs 1415.89bn as against Rs 1161.11bn as at June 30, 2010 – an increase of 22%.

As at June 30, 2011, the loan book stood at Rs 124,168 crores as against Rs 1,01,625 crores as at June 30, 2010 – an increase of 22%. Loans sold during the preceding 12 months amounted to Rs 3,123 crores. The growth in the loan book, inclusive of these loans is 25%. The spread on loans over the cost of borrowings for the quarter ended June 30, 2011 stood at 2.30%.

For the quarter ended June 30, 2011, loan approvals grew by 22% and loan disbursements grew by 20% as compared to the corresponding quarter in the previous year. Gross non-performing loans (NPLs) as at June 30, 2011 amounted to Rs 1,038.15 crores. This is equivalent to 0.83% of the loan portfolio (previous year – 0.89%). HDFC’s capital adequacy ratio (CAR) stood at 13.8% of the risk weighted assets, as against the minimum requirement of 12%. Tier 1 capital was 12.2% against a minimum requirement of 6%.

Bharti Airtel unveils new organisation structure for India, S Asia

Bharti Airtel, a leading global telecommunications company with operations in 19 countries across Asia and Africa, today announced a new organization structure for its operations in India and South Asia. The new structure, which will be effective starting August 1, 2011, is aimed at driving greater business and functional synergies, providing a common interface to customers, and creating a de-layered and more agile organization. In addition, the new structure will provide more meaningful, empowered roles and enhance employee engagement.

Sunil Bharti Mittal, Chairman & Managing Director, Bharti Airtel, said "Bharti Airtel has always adopted transformational business models that have set the industry benchmark. As we move into the next phase of our growth journey, this new organization structure marks a major step towards building an organization of the future. Customers are at the core of our business and with this new structure we are proactively creating an integrated customer centric organization. I am confident that this will provide us a solid platform to achieve our vision of making Airtel the most loved brand enriching the lives of millions." The transformed organization structure will have two distinct Customer Business Units (CBU) with clear focus on B2C(Business to Customer) and B2B (Business to Business) segments...Read More

L&T Finance raises Rs 3.3bn via pre-IPO placement

Larsen & Toubro Ltd. (L&T) said on Thursday that its financial services subsidiary, L&T Finance Holdings has raised Rs. 3.3bn through placement of equity shares to the private equity fund of US-based Capital International ahead of its initial public offering (IPO). The L&T stock rose by 3% to end at Rs. 1,861 on BSE after being as high as Rs. 1,865. It had earlier touched a day's low of Rs. 1,808. L&T Finance has placed 60mn shares at an average price of Rs. 55 per share to the PE fund of Capital International, totaling Rs. 3.3bn. In March, L&T Finance had filed a DRHP with SEBI for an IPO of up to Rs. 17.5bn. Of this, it planned to raise Rs. 4bn through a pre-IPO placement.

L&T Finance is the holding company for the financial services business of the L&T group and operates through four units that manage the mutual fund, asset financing, infrastructure financing and working capital funding businesses. The proposed IPO, as contemplated in the DRHP, includes reservations for current L&T shareholders as well as for permanent and full time employees and directors of L&T Finance Holdings, L&T Finance and its subsidiaries, L&T Infra and L&T.

IFC to invest US$2.7mn in Jain Irrigation unit

IFC, a member of the World Bank Group, is helping Jain Irrigation Systems Limited in India set up Sustainable Agro-Commercial Finance Limited, a non-banking finance company, that will provide loans to Indian small-scale farmers to help them install micro-irrigation systems and improve productivity. The project is expected to benefit more than 600,000 farmers with limited access to credit, in the next five years. IFC will invest $2.7 million (equivalent to 120 million Indian rupees) in equity in Sustainable Agro-Commercial Finance, a subsidiary of Jain Irrigation Systems. Severe water scarcity hampers the growth of the agriculture sector in India. Micro- and drip-irrigation systems help reduce water consumption in agriculture, but are capital intensive. With improved access to credit, more farmers will be able to install micro-irrigation systems, which will help increase energy and water efficiency. "IFC’s support will help promote inclusive growth in the agriculture sector and lead to increased growth for the small farmer in India," said Anil Jain, Managing Director, Jain Irrigation Systems Limited and Director, Sustainable Agro-Commercial Finance.

The project will also help promote water harvesting and storage solutions for smaller farmers. "Efficient use of water in agriculture can play a key role in addressing India’s water scarcity challenges. By supporting this project, IFC will help improve farmers’ ability to access the needed financing to install micro-irrigation systems, conserve water, and potentially, increase agricultural productivity," said Anita George, IFC Infrastructure Director for South Asia. Jain Irrigation, winner of IFC’s 2010 Client Leadership Award, is one of India's largest integrated agribusiness players with manufacturing operations in micro-irrigation systems, plastic pipes and sheets, dehydrated onions, and processed fruits.

Blackstone to invest Rs1.50bn in FINO

Idea Cellular gets adverse ruling from Delhi HC

Shares of Idea Cellular fell on July 5 after the Delhi High Court said that six mobile permits of Spice Communications would not be transferred to the Aditya Birla group company because it did not comply with licence norms and merger guidelines. The Delhi High Court also slapped a fine of Rs 10mn for not giving the correct information to the court. Passing the judgment on the merger application of Idea and Spice, the High Court said Idea had not put the rejection letters by the DoT on merger of licence and did not place on record the relevant documents.

"It is directed that notwithstanding anything stated in the sanctioned scheme and in the order dated February 5, 2010, the six overlapping licences of the Spice would not stand transferred or vested with Idea till prior permission of the DoT is obtained," said Justice Manmohan in his 51-page order.

The High Court further said that it is of the view that costs should be imposed on Idea for not bringing to the notice of this Court the rejection letters dated January 7, 2010 and January 18, 2010 issued by DoT and for not placing on record relevant and material documents like licence, merger guidelines and correspondence exchanged between the parties.

Directing Idea to pay Rs 10mn to the DoT within six weeks, the court said, "The suppression of documents was not an innocent act especially in view of petitioners own understanding of licences and merger guidelines as reflected in the contemporaneous correspondences".

The High court bench further said that till DoT gives its permission to Idea to use the licences of the Spice Communications, the overlapping licences of Spice shall forthwith stand transferred with DoT. The spectrum allocated for such overlapping licences shall also forthwith revert back to DoT.

Idea advances as TDSAT stays DoT's Rs. 2.5bn penalty

Mobile Number Portability requests up 24% in May

Mobile Number Portability (MNP), requests has reportedly jumped up 24% in May from the previous month, data released by TRAI showed on Thursday. According to TRAI, 105.70 lakh subscribers had submitted requests until May to different service providers under MNP, with maximum being from Gujarat, followed by Rajasthan and Karnataka, reports stated.

Bajaj Auto June sales up 16% YoY

Bajaj Auto Ltd. said on Monday that its total vehicle sales in June 2011 stood at 366,657 units, up 16% over the same period last year. The Pune-based company's overall sales last month were up 2.2% compared to the previous month when it had sold 358,849 units. Bajaj Auto also said that its exports for the month under review grew by 25% to 142,124 units. The Company's motorcycle sales for June were up 14% at 322,827 units while Commercial Vehicle (CV) sales surged 34% to 43,830 units. Month-on-month, Bajaj Auto's CV sales were up 7.3% while bike sales rose 1.5% and exports climbed 12.1%.

Birla Pacific Medspa skyrockets on debut

Shares of Yash Birla Group Company Birla Pacific Medspa more than doubled on debut on Thursday. The stock hit a high of Rs. 30 and a low of Rs. 10. The companyh fixed the issue price at Rs. 10 per share, the lower end of the price band. The reports stated that the company raised Rs. 650mn through an IPO of 651.75 lakh equity shares. The company plans to utilise Rs. 49 crore for establishing 55 'Evolve' outlets, around Rs. 60mn for brand building and the balance for meeting working capital, Issue and other preliminary expenses.

Rushil Decor shares surge on debut

Shares of Rushil Decor rose 65% on debut on Thursday after opening at Rs 74. The stock closed at Rs119, up Rs47. The stock hit a high of Rs. 124 and a low of Rs. 74. The company had fixed issue price at higher end of price band of Rs. 63-72 a share for its initial public offering (IPO) of 54 lakh equity shares (excluding promoters contribution of 2,43,750 shares).

The issue, which opened for subscription during June 20-23, was subscribed 2.62 times. Retail and non-institutional investors helped the issue, with their subscription of 6.5 times and 1.35 times over reserved portion, respectivel. The report stated that the Company raised Rs. 40.64 crore (including promoters' contribution of Rs. 1.75 crore) through the issue, which will be used for setting up of medium density fibre board plant and for working capital requirement. Retail and non-institutional investors helped the issue, with their subscription of 6.5 times and 1.35 times over reserved portion, respectively.

US economy adds just 18k jobs in June

The US economy added just about 18,000 new jobs in June even as the unemployment increased marginally, a government report showed on Friday. The non-farm payroll reading was much below Wall Street expectations, sending stock futures down. US stocks had gained smartly on Thursday as an encouraging report on private sector employment raised optimism about a strong official jobs report. The rise in payrolls was significantly lower than the 105,000 forecast by economists.

Meanwhile, the unemployment rate rose to 9.2% last month from 9.1% in the preceding month, the Department of Labor said on Friday. The weaker than expected data heightened fears over the state of the US economy. The data for April and May were revised down by 44,000. Overall, the gain for May was revised downward to 25,000 from the initial report of 54,000.

The increase in nonfarm payrolls came mostly from private companies, which added 57,000 jobs in June, from a revised gain of 73,000 in May, the monthly report said. Government agencies have been shedding jobs as they grapple with budget pressures.

Moody’s cuts Portugal's ratings to junk status

Concerns over European debt troubles prevail after Moody’s Investor Service downgraded Portugal’s sovereign ratings by four notches, pushing it into junk territory. The global debt rating agency also warned that Portugal may well need a second round of rescue funds before it can return to capital markets. Moody's slashed Portugal's credit rating to Ba2, causing the debt-laden Iberian country to follow Greece into junk territory below investment grade. Greece is rated much lower, at Caa1. Standard & Poor's and Fitch Ratings both have Portugal at BBB-minus, the bottom of the investment grade range. It may be recalled that in April Portugal became the third eurozone country to request a bailout, after Greece and Ireland.

Moody's cited mounting concerns that Portugal will not be able to fully achieve the deficit reduction and debt stabilization targets set out in its loan agreement with the European Union (EU) and the IMF. Portugal must slash its budget deficit to 5.9% of GDP this year after overshooting its target last year, when the gap was 9.2%, and then reduce it to 3% by the end of 2013. Moody's said that there is an increasing probability Portugal will not be able to borrow at sustainable rates in capital markets in the second half of 2013 and for some time thereafter.

There was a growing risk that Portugal will require a second round of official financing before it can return to the private market, Moody's said, and the increasing possibility that private sector creditor participation will be required as a pre-condition. It also said that Portugal faced formidable challenges in reducing spending, increasing tax compliance, achieving economic growth and supporting the banking system.

Portugal reacted angrily to Moody's downgrade of its sovereign debt to "junk" status, complaining that it had not considered the country's recent austerity measures or new political consensus after an election.

Separately, Standard & Poor's warned that a plan for European banks to roll over some of Greece's debts into longer-term bonds would still be considered a default. The plan, floated by European officials, is part of an effort to negotiate another bailout for the debt-stricken nation by involving the private sector. Over the weekend, the European Union officially approved the final US$17bn installment of a US$156bn bailout for Greece. The funds are expected to keep Greece solvent through the summer.

Greek debt rollover plans amount to selective default: S&P

China hikes interest rates by 25 bps

China's central bank said that it would increase the benchmark deposit and lending rates by a quarter percentage point as part of the government's efforts to rein in spiraling inflation. The People's Bank of China (PBOC) said that it will raise the one-year yuan lending rate to 6.56% from 6.31%. The one-year yuan deposit rate will be hiked to 3.50% from 3.25%. This is the third rate increase by PBOC this year and its fifth rate increase in the latest round of monetary tightening. The Chinese central bank has also hiked banks' reserve requirement ratio (RRR) six times in 2010 and six times so far this year. The move is effective July 7. China's consumer price index rose 5.5% in May, the fastest increase in nearly three years. Analysts widely expect the headline inflation to hit another high in June because of rising food prices. The data is due to be released on July 15.

ECB ups refinance rate by 25 bps to 1.5%

The European Central Bank (ECB) on Thursday increased its benchmark rate by a quarter percentage point to tame inflation that has been consistently running ahead of the central bank's comfort level. The ECB lifted its refinance rate to 1.5% today from 1.25%. This was the second rate hike by the ECB in three months. ECB was widely expected to press ahead with a rate hike. ECB President Jean-Claude Trichet will sometime later hold his monthly news conference where he is expected to face a barrage of questions on the central bank's response to the ongoing sovereign debt crisis.

Earlier, the Bank of England, as expected, held its key lending rate unchanged, as it continues to grapple with above-average inflation and a sluggish UK economy. Separately, the ECB also hiked the rate on its marginal lending facility by a quarter percentage point to 2.25% and lifted the rate on its deposit facility by 25 bps to 0.75%. The euro extended a decline versus the dollar after the ECB announcement. It was at 1.4255, versus $1.4304 in the morning. It was at $1.4303 in late New York trading on Wednesday. The dollar index, which measures the US currency against six major trading rivals, was slightly up at 75.15. Stock indices in the UK, France and Germany held on to their moderate gains.

Australia leaves key rate on hold

Australia's central bank on Tuesday left its key interest rate steady as the central bank continues to examine the impact of its previous actions amid signs of moderation in the global economy. The Reserve Bank of Australia (RBA) kept the cash rate at 4.75%, with the rate-setting board saying that it judged the current mildly restrictive stance of monetary policy as appropriate. The RBA last raised its key cash rate in November 2010. The RBA board noted that the global economy is continuing to expand but the pace of growth slowed in the April to June quarter.

For Australia, economic growth through the year 2011 is unlikely to be as strong as earlier forecast, the RBA board said. "Over the medium term, overall growth is still likely to be at trend or higher, if the world economy grows as expected," it said. Australia's S&P/ASX 200 index in Sydney closed 0.3% lower at 4,657.

The Australian dollar was down 0.4% against its US counterpart at US$1.0694. A gradual recovery from the floods and cyclones over the summer is taking place, though the resumption of coal production in flooded mines is proceeding more slowly than initially expected, the RBA said in a statement. Supply-chain disruptions from the Japanese earthquake and high commodity prices have both contributed to slowing growth, it said.

Moody's warns on China's local debt

Underlining the dangers from a growing mountain of debt to the Chinese economy, Moody's Investors Service issued a report claiming that China's first official audit of local-government loans had underestimated their value by US$540bn, which would take the total to US$2.1 trillion. Moreover, these loans were the most at risk of falling into delinquency, Moody’s said. But Bank of America Merrill Lynch economist Ting Lu disputed the research by Moody’s on the scale of debt held by local governments, saying that translation errors had led to inflated estimates. Moody’s estimates are too pessimistic, according to Lu, who said he checked the assumptions and math used by the rating agency.

Euro-zone composite PMI sinks to 20-month low

Private sector activity in the euro-zone grew at its slowest pace since October 2009 in June, according to the final reading of the Markit composite purchasing managers index (PMI) released. The index fell to 53.3 from 55.8 in May, below an earlier estimate of 53.6. A reading of more than 50 indicates expansion while anything below it implies contraction. "The euro-zone economy as a whole looks to have expanded by approximately 0.6% in the second quarter, down from 0.8% in the first three months of the year," said Chris Williamson, chief economist at Markit. "However, the further loss of momentum in June bodes ill for the third quarter and suggests that growth may weaken further unless order books improve."

Separately, growth in Britain's services sector inched higher in June as against expectations of a slowdown, according to the CIPS/Markit PMI. The index increased to 53.9 from a reading of 53.8 in May. Economists had forecast a drop to 53.5. "The pace of growth remains below trend and, combined with earlier manufacturing PMI data, points to second-quarter growth in GDP of no stronger than 0.3%, down from 0.5% in the first quarter," said Chris Williamson, chief economist at Markit.

Thailand shares and baht rally on election results

Thailand shares and its currency baht spurted on July 4 after the ruling government conceded defeat in the weekend national elections. The For Thais Party will now form a new government, according to reports. Victory for the allies of exiled former Thai prime minister Thaksin Shinawatra has bolstered the prospects of foreign investors returning to this South East Asian nation. Pheu Thai, led by Thaksin’s sister Yingluck Shinawatra, was forecast to win 264 seats in the 500-member parliament, defeating the Democrat Party of Prime Minister Abhisit Vejjajiva, according to an Election Commission estimate. The defense minister said that the army had accepted the result.

The benchmark SET Index of Thailand shares advanced by the most since May 2010. It closed 4.6% higher at 763. The index had fallen to a three-month low on June 27. The baht rose 1.1%, the most since Feb. 29, 2008. The currency reached 30.41, the strongest level since June 23. The SET index dropped 3% in June, while the baht fell 1.4% against the dollar, the worst performance amongst Asian peers. The cost of protecting government bonds from default dropped the most in more than a year. Credit-default swaps on Thailand fell 11 basis points, or 0.11%, to 11 9.5 basis points, according to reports. That is the biggest drop since May 27 last year. A decisive election outcome increases chances of stability in a nation that has been beset by clashes between Thaksin’s supporters and opponents, killing more than 100 people since the last vote in 2007.

Carrefour and Casino spar over Pao de Acucar

Shares of French retailer Carrefour SA sank over 10% on July 5 as its plans for a merger of its Brazil unit and regional retailer Companhia Brasileira de Distribuicao Grupo Pao de Acucar (known as CBD), looked increasingly difficult. Carrefour had said on July 4 that its Board had approved a proposed strategic partnership in Brazil with Gama, which is a wholly-owned fund managed by BTG Pactual, that would get a capital injection from the Brazilian National Development Bank. CBD's existing partner Groupe Casino SA and Carrefour rival said that such a deal would violate terms of a prior agreement in which it was set to get control of CBD in 2012. Also on Monday, Brazil's BNDB repeated that it would only take a stake in the Carrefour-Gama deal if Casino was in agreement, according to reports. Casino, which owns a 43% stake in CBD but was not consulted about the proposal, pressed its claim that Carrefour's plan to merge its existing assets in Brazil with those of CBD was hostile and arose out of illegal negotiations. Carrefour was also criticised by some shareholders for not disclosing that it had held talks. The company insisted that the offer for CBD was not hostile.

Apple’s App store downloads top 15 bn mark

Apple has announced that over 15 bn apps have been downloaded from its revolutionary App Store by the more than 200 million iPhone, iPad and iPod touch users worldwide. The App Store offers more than 425,000 apps and developers have created an incredible array of over 100,000 native iPad apps.

"In just three years, the revolutionary App Store has grown to become the most exciting and successful software marketplace the world has ever seen," said Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing. "Thank you to all of our amazing developers who have filled it with over 425,000 of the coolest apps and to our over 200 million iOS users for surpassing 15 billion downloads."

"We sparked musical magic when iPhone users experienced Ocarina three years ago," said Dr. Ge Wang, a Smule co-founder and assistant professor at Stanford’s Center for Computer Research in Music and Acoustics. "And now with iPad, we’ve created the Magic Piano and Magic Fiddle apps. Who could’ve dreamt an iPad would make its way into the San Francisco Symphony?"

"iPad provides us with an unparalleled mobile device for creating gorgeous, immersive games," said Mark Rein, vice president and co-founder of Epic Games. "Infinity Blade has been a runaway hit with customers around the world and we couldn’t be more excited about our success on iOS devices."

"We’re bringing Martha Stewart, Angelina Ballerina, Sesame Street and many more of the world’s most popular books and magazines to iPad," said Nicholas Callaway, CEO of Callaway Digital Arts. "We knew the iPad was going to be a revolutionary storytelling device, but never could have anticipated it would become so popular, so quickly."...Read More

Facebook launches video chat and group chat

For subscription/ adding names to weekly newsletter mailing list, Click here

Website : http://www.indiainfoline.com

IIFL Centre, 2nd Floor,
Kamala City, Senapati Bapat Marg,
Lower Parel (W), Mumbai - 400 013
E-mail: editor@indiainfoline.com

 India's most popular website for business and investing.
© Copyright 2011, India Infoline Ltd
India Infoline takes no legal responsibility for accuracy or completeness of information or advice given.
This material is for personal use only.

Advertise with India Infoline

TOP