RBI cuts CRR by 50 bps; Repo rate unchanged

The Reserve Bank of India (RBI) on Tuesday left its main lending rate unchanged as it continues to battle inflation demons even as concerns are growing over a steeper-than-anticipated deceleration in economic growth. However, the Indian central bank slashed the cash reserve ratio (CRR) by half a percentage point to soften the tight liquidity conditions in the banking system. The CRR now stands reduced at 5.5%. The RBI has left the repo rate unchanged at 8.5% since late October after raising it 13 times since March 2010. The reverse repo rate stands steady at 7.5%. The marginal standing facility rate is at 9.5%. The bank rate also remains static at 6%.

The CRR cut announced today would be effective from the fortnight beginning January 28. As a result of the reduction in the CRR, around Rs. 320bn of primary liquidity will be injected into the banking system, the RBI said in a statement. "In reducing the CRR, the central bank has attempted to address the structural pressures on liquidity in a way that is not inconsistent with the prevailing monetary stance," the central bank added. This policy review is set in the context of a highly uncertain global environment and a delicately poised domestic balance between growth and inflation, the RBI said in a statement. Since the Second Quarter Review of Monetary Policy in October 2011, there have been significant changes in the global scenario. On the one hand, concerns over the sustainability of sovereign debt problem in the euro area have intensified. On the other, there are modest signs of improvement in the US. In the emerging and developing economies, growth has been moderating, reflecting the sluggishness in the advanced economies and the impact of earlier monetary tightening. Overall, notwithstanding the signs of recovery in the US, global growth prospects have weakened since the Second Quarter Review in October...Read More

D. Subbarao's statement on Q3 Monetary Policy

RBI Macroeconomic and Monetary Developments for Q3

Risks to RBI's Monetary Policy

Basis of RBI's policy stance in Q3 review

CRR cut to address structural pressures on liquidity

RBI lowers FY12 GDP growth forecast to 7%

The Reserve Bank of India (RBI) on Tuesday scaled down its GDP growth projection for the ongoing financial year citing the sharp deceleration in domestic industrial activity and risks from the global downturn. The baseline projection of GDP growth for FY12 is revised downwards from 7.6% to 7%, the RBI said today in a statement. In the Second-Quarter Review of October 2011, the RBI had projected a GDP growth of 7.6% for FY12, though with significant downside risks. In the Mid Quarter Review of December 2011, the central bank indicated that some of these risks were indeed materialising such as increase in global uncertainty, weak industrial growth, slowdown in investment activity and deceleration in the resource flow to the commercial sector. Consequently, while agricultural prospects look buoyant, industrial production has decelerated, the RBI said today. The slowdown in industrial production will also impact service sector growth, it warned. Further, weaker global growth will also have an adverse impact on the Indian economy, it said.

RBI retains inflation forecast at 7%

RBI cuts non-food credit growth estimate to 16%

Rupee, administered energy prices could spur inflation

Tough to predict future of OMOs: RBI chief

It is difficult to predict the timing and size of the open-market operations (OMO) over the coming few weeks, Reserve Bank of India (RBI) Governor Dr. Duvvuri Subbarao said in a conference call with analysts. The central bank's OMOs have limitations beyond a point, Dr. Subbarao said, adding that the RBI will need to assess how liquidity is behaving before taking a view on future OMOs. The OMOs remain on the table to deal with liquidity shortages, Deputy RBI Governor, Subir Gokarn was quoted as saying in the same conference call. They were referring to the central bank’s intervention in the government bond market to ease liquidity crunch. India’s 10-year bonds tumbled yesterday on speculation that the RBI could stop buyback of debt after announcing a wider-than-expected 50 basis point reduction in the cash reserve ratio (CRR). The yield on the 8.79% note due in November 2021 jumped to 8.35% after Dr. Subbarao said that it was too early for the central bank to decide whether or not to continue the OMOs. The RBI would look at the outcome of the CRR cut and demand before deciding on OMOs, Subbarao said yesterday. The RBI Governor said yesterday that the central bank would watch how the cut in CRR affects liquidity over the next one month before buying back any government debt through the OMOs. Any interest rate cuts in the future would depend on the movement in the Indian rupee, size of the fiscal deficit and the trajectory of inflation, Subbarao said. The RBI chief also said today that the Government needs to focus on expenditure compression in lowering the fiscal deficit.

India's 10-year yield spikes on OMO uncertainty

China And The Paradox Of Prosperity, The Republican Primary And Private Equity: Monsters, Inc.?

Source: Economist

India Infoline Venture Capital Fund's realty fund raises Rs. 5bn

India Infoline Venture Capital Fund, the venture capital arm of India’s leading financial services provider, the India Infoline group, today announced the successful completion of IIFL Real Estate Fund (Domestic) Series 1 (the "Fund"). The Fund has collected Rs. 500 crore. This is the IIFL group’s first foray into the private equity space. The Fund will have a term of four years from the Initial Closing Date, which may be extended up to two years. IIFL Alternate Asset Advisors Limited is the Investment Manager of the Fund. Balaji Raghavan, CEO and CIO of IIFL Alternate Asset Advisors Ltd. said, "We are highly encouraged by the response to the India Infoline group’s first real estate fund and successful foray into private equity. The corpus raised indicates the confidence investors have in our fund and the IIFL group in general. We will target deployment during the current year itself, focusing on leading and promising projects of top developers in major cities that are ongoing or to be launched. The target is to give Fund’s investors enhanced returns, backed by securities of quality assets and collaterals which have periodic cash flows." The focus of the Fund mainly remains on the real estate sector in India and by investing in equity, debt and equity linked Instruments of promising real estate and construction companies, which are involved in projects or ventures, having significant growth potential.

Bill & Melinda Gates Foundation commits US$750mn to Global Fund

The Bill & Melinda Gates Foundation today renewed its commitment to the Global Fund to Fight AIDS, Tuberculosis and Malaria. Announced at the World Economic Forum Annual Meeting in Davos-Klosters, Switzerland, the Gates Foundation is giving US$ 750 million through a promissory note – a new and innovative funding mechanism. "These are tough economic times, but that is no excuse for cutting aid to the world’s poorest," said Bill Gates, Co-Chair of the Gates Foundation. "The Global Fund is one of the most effective ways we invest our money in every year." Providing funding through a promissory note gives the Global Fund the flexibility and authority to distribute funds efficiently based on immediate needs, leading to greater impact. "By supporting the Global Fund, we can help to change the fortunes of the poorest countries in the world," said Gates. "I can’t think of more important work." Global Fund financing helps developing countries fighting against AIDS, tuberculosis and malaria. This public-private partnership creates economic opportunity and makes those living in poverty less dependent on aid. Since 2002, investments in the Global Fund have financed innovative prevention and treatment programmes in 150 countries with high burdens of disease. The Global Fund continues to save 100,000 lives a month. The Fund has provided antiretroviral treatment to 3.3 million people, detected and treated 8.2 million people with tuberculosis, and provided 230 million bed nets to families to prevent malaria.

The new commitment is in addition to the US$ 650 million the Gates Foundation has already contributed since the Global Fund was launched 10 years ago at the World Economic Forum Annual Meeting, which convenes the world’s top business and political leaders. The Foundation commends the recent political and financial commitments to the Global Fund by donor governments. All donors – rich, middle-income and poor countries, as well as the private sector – must continue to invest in the lifesaving work of the Global Fund. On the heels of releasing his fourth annual letter yesterday in London, Gates continued to challenge global leaders to invest in innovations that are accelerating progress against poverty or risk a future where millions needlessly die. While there has been tremendous progress against AIDS, TB and malaria, more must be done. Through unique partnerships and new financing mechanisms, the global community has the opportunity to have an even greater impact and save more lives. With record participation of over 2,600 leaders from government, academia, business and civil society, the theme of this year’s Annual Meeting is The Great Transformation: Shaping New Models. The Co-Chairs of the World Economic Forum Annual Meeting 2012 are: Yasuchika Hasegawa, President and Chief Executive Officer, Takeda Pharmaceutical, Japan; Vikram Pandit, Chief Executive Officer, Citi, USA; Paul Polman, Chief Executive Officer, Unilever, United Kingdom; Alejandro Ramirez, Chief Executive Officer, Cinepolis, Mexico; Sheryl Sandberg, Chief Operating Officer, Facebook, USA; and Peter Voser, Chief Executive Officer, Royal Dutch Shell, Netherlands.

Gates optimistic food crisis can be solved

Result Index

L&T Q3 net profit at Rs 9.92bn...Beats estimates 

Larsen and Toubro Ltd. (L&T) has announced net profit of Rs. 9.92bn for the quarter ended December 31, 2011. The net profit figure beat consensus analyst estimates. Q3 FY12 net sales stood at Rs. 140bn. Gross revenues stood at Rs. 141.55bn compared with Rs. 114.92bn in the corresponding quarter a year earlier. Q3 FY12 order inflow stood at Rs. 171.29bn vs Rs. 133.66bn in the year-ago period, reflecting an increase of 28%. The Company's total order book stood at Rs. 145,768 crores at the end of December 31, 2011. Other income for the reporting quarter stood at Rs. 4.49bn versus Rs. 2.51bn in the corresponding quarter a year earlier. The company's nine-month order inflow stands at Rs. 494.15bn while nine-month revenues are at Rs. 347.26bn.

Engineering & Construction (E&C) Segment

E&C achieved net Segment Revenue of Rs12424 crore for the quarter ended December 31, 2011 registering a y-o-y growth of 26%. Execution of various ongoing projects is on schedule. During the quarter, the Segment secured orders totaling to Rs15283 crore with International orders constituting 10 % of the total order inflow. 

(Cairn, BHEL, Kotak Mahindra Bank,  Maruti, NTPC, Sesa Goa and Sterlite Industries).

Food inflation falls 1.03%; Primary Articles inflation softens

Food inflation in India remained in the negative territory in the second week of January, mainly due to base effect and seasonal factors, data released by the Government showed on Friday. Inflation in Primary Articles decreased while that in Fuel & Power was static. The sharp drop in food inflation over the past several weeks is likely to provide much-needed breather to the consumers and the policymakers alike. However, it will be a while before the RBI starts considering a cut in its policy rates. For that to happen, the headline WPI print and core inflation should also fall materially. Earlier this week, the RBI slashed the CRR by 50 bps but left the repo rate unchanged at 8.5%. It also scaled down GDP growth forecast for FY12 to 7% and retained its inflation projection at 7%. Food inflation shrank by 1.03% in the week ended January 14 after shrinking by 0.42% in the preceding week, the Commerce & Industry Ministry said today. Food inflation stood at 17.14% in the corresponding week last year. 

Inflation in the Primary Articles group declined to 1.89% in the week under review, from 2.47% in the week ended January 7, according to the Commerce Ministry statement. It was at 18.35% in the year-ago period. Inflation in the Fuel & Power group stood at 14.45% in the week ended January 14, unchanged from the previous week, the Government data showed. It was at 10.87% in the comparable week of the previous year. Meanwhile, inflation in the Non-Food Articles space fell to 0.56% in the week under review from 1.84% in the previous week, the Government data showed. It was at 24.15% in the same period a year earlier. Inflation in the Minerals group increased to 24.94% in the week ended January 14, from 24.06% in the week ended January 7, according to the Commerce Ministry data. Inflation in this group stood at 16.21% in the year-ago period. On an annual basis, onions turned cheaper by ~79.1% in the week under consideration, and vegetable prices dropped ~47% on an annual basis. Fruits turned costlier by ~5.2% year over year, while Milk prices increased ~12.25% and Egg, Meat & Fish became pricey by ~20.3% compared to the year-ago period...Read More

Bank loans rise 17% in week through Jan. 13: RBI data

Bank loans to industry and consumers rose by 17.1% to Rs. 44.90 lakh crore during the 12 months through January 13, according to the latest data from the Reserve Bank of India (RBI). The non-food credit offtake was at Rs. 38.31 lakh crore during the year to January 14, 2011. The slowdown in credit growth is largely due to high borrowing costs after the RBI hiked the repo rate by 350 basis points through 13 increases since March 2010 to rein in stubborn inflation. Meanwhile, bank deposits climbed by 17% to over Rs. 59.61 lakh crore during the 12-month period to January 13, 2012 from Rs. 50.92 lakh crore during the corresponding period of last year, the RBI data revealed. At its policy meeting on January 24, the RBI had revised downwards its projection for non-food credit growth to 16% from the earlier estimate of around 17-18% for the fiscal year 2011-12. Deposit growth has been retained at 17%.

Rupee spurts on FII inflows, Fed easing pledge

The rupee rose to the highest level in more than two months versus the US dollar on Friday, as domestic stocks extended this month's stellar rally on robust FII inflows and the Fed pledged to keep rates near zero for the next three years. The rupee was set for a fourth weekly advance, the longest winning streak since April. The Indian markets were closed on Thursday for a national holiday. The rupee is up more than 1.5% on the week, including today's 1% gain. It has advanced by ~7% this month. The rupee was down 16% last year. The BSE Sensex rose ~1% in early trades, extending gains to a sixth consecutive session, on rising foreign fund inflows. Foreign institutional investors (FIIs) have bought Indian shares worth US$1.56bn so far in January, and another US$3.39bn in local debt. The RBI may reportedly intervene in the forwards foreign exchange market, in addition to the spot market, to help manage liquidity in the banking system. Banks borrowed Rs. 1.59 trillion from the RBI's repo window today, compared with Rs. 1.45 trillion on Wednesday, and significantly higher than the RBI's comfort zone of Rs. 600bn. On January 24, the RBI cut the cash reserve ratio (CRR) for banks by half a percentage point to 5.5 % on Jan. 24. The central bank eased monetary policy for the first time since 2009 to support economic growth. The euro held on to recent gains against the dollar, after hitting a five-week high, and Asian currencies headed for a fourth weekly advance after the Fed policy makers said they will keep interest rates near zero through late 2014. The Fed had previously pledged to refrain from raising borrowing costs until at least mid-2013. On Wednesday, the US central bank kept its target rate between zero and 0.25%, unchanged since December 2008. A widely tracked index of Asian currencies was near the highest level since Nov. 1. Malaysia’s ringgit hit a four-month high and South Korea’s won rallied for a third week.

PM sets up panel to examine sugar decontrol

Prime Minister has constituted an Expert Committee under the Chairmanship of Dr. C. Rangarajan, Chairman Economic Advisory Council to the Prime Minister, to examine issues relating to the sugar sector. The other members of the committee are:

• Dr. Kaushik Basu, Chief Economic Adviser, Ministry of Finance
• Secretary, Department of Food and Public Distribution
• Secretary, Department of Agriculture
• Dr. Ashok Gulati, CACP
• Nand Kumar, former Secretary, Department of Food and Public Distribution and Department of Agriculture and Cooperation and presently Member NDMA
• Dr. K.P. Krishnan, Secretary EAC – Convener

The Committee has been empowered to involve such experts, academics as required as special invitees. The Committee will look into all the issues relating to de-regulation of the sugar sector and it has been requested to complete its task as early as possible and give its recommendations to the Prime Minister. The Ministry of Consumer Affairs, Food and Public Distribution has been requested to provide the necessary support to the Committee in discharging its functions.

Dr. Reddy's has addressed USFDA concern on Fondaparinux

Govt to stop releasing weekly WPI data: reports

The Government intends to do away with publishing weekly WPI inflation data and will only release the monthly version of the widely tracked measure of prices at the wholesale level. The Cabinet Committee on Economic Affairs has reportedly approved a proposal on releasing only monthly WPI data, to check speculative movement in prices. The current weekly WPI series provides data on Primary Articles, including the sensitive Food Articles group, and Fuel & Power. The Government also unveils WPI data for Primary Articles, Fuel & Power, and Manufactured Goods on a monthly basis and is released on the 14th day of every month. Weekly WPI data represents just 25% of all the commodities in a basket while the monthly WPI data gives a more comprehensive picture of prices at factory gate, P.K Chaudhry, Secretary, Department of Industrial Policy & Promotion was quoted as saying. All other inflation numbers, be it the consumer price index (CPI) for rural labourers, the CPI for agricultural labourers, or the CPI for industrial workers, are released on a monthly basis. Even the new composite all-India CPI data is released on a monthly basis. Also, globally the inflation data is released every month. The proposed change is based on the recommendations of a working group on WPI. Meanwhile, inflation data for the week ended January 14 would be released on Friday, according to reports. In September 2010, the Government changed the base year for calculating WPI to 2004-05, from 1993-94. The new WPI series has 241 more items compared to the old index. The WPI now has 676 items, as against 435 items earlier.

Stable outlook for Indian Banks despite challenges: Fitch

Fitch Ratings says that the outlook for Indian banks remains stable in 2012, premised on domestic economy recovery in 2012, together with the government's continued commitment to maintain a minimum Tier 1 ratio of 8% for its banks (73% of system assets). While this is a base-case scenario, a build-up in credit concentration and weakening asset quality reflect mounting downside pressures. Part of the credit problem is cyclical and may ease with a lag if GDP growth picks up from mid-2012 on the back of lower interest rates to stimulate demand, as the Reserve Bank of India may look to loosen monetary policy if core inflation eases. However, should the Indian economy continue to slowdown through most of 2012, the resulting problems relating to asset quality could hurt banks' stand-alone credit profile and their Viability Ratings (VR). The structural part of the problem relates to the growing concentration risk that has resulted in Indian banks having a greater proportion of stressed assets than in 2008. Exposures to the struggling sectors of aviation and state power utilities may be restructured in 2012, together with growing exposures to infrastructure projects that face teething trouble. As a result, Indian banks may see the share of loans restructured in 2011 and 2012 rising to 7%-8% of loans, significantly higher than the 4.4% seen in the aftermath of the 2008 crisis.   Credit losses may however remain contained. While the immediate outlook on Indian infrastructure is negative, the long-term viability of the projects - which is still intact - may help limit credit losses. Since these exposures to stressed assets are very thinly reserved, government banks' profits may be impacted by 15%-20% due to higher loan loss provisions. Nevertheless, pre-provision operating profits of banks are seen as being adequate to absorb the rising costs, leaving equity intact...Read More

India offers to export fuel products to Pakistan

India has reportedly proposed to export petrol, diesel, and aviation turbine fuel, fuel oil besides sulphur, polyethylene and polypropylene to to Pakistan. S Jaipal Reddy, the Petroleum and Natural Gas Minister was quoted as saying that the refiners of India would be willing to look at the feasibility of constructing product pipelines to Pakistan, provided long-term guarantees for product offtake can be given by Pakistan. According to reports, details of the proposal will be worked out in the next few weeks. However, exporting petrol may not be easy, as it will require decision-making at the highest levels in both countries. India’s offer to export refined petroleum and petrochemical products by road, rail and sea assumes significance in the backdrop of the forthcoming Pakistan visit of the Indian trade minister. Indian Oil Corporation, Reliance Industries, Essar Oil, and refinery at Bhatinda, which will soon be fully commissioned are among the refiners who will benefit from the offer, added reports.

India and Pakistan agree on transit fee formula for Tapi gas pipeline

Lack of Data affecting forecasts in Real Estate: Chaitanya Parekh

"The current slowdown in the real estate market can be attributed, along with other influencing factors, to the lack of relevant and accurate industry data", - Mr. Chaitanya Parekh, Chairman and Managing Director Soham World at the 10th International Conference on "Good Urban Governance for Safe, Healthy, Green, Inclusive and Smart Cities" in Chennai. Parekh spoke about the dearth of quality housing at pricing that can truly be referred to as value for money and also about the rise of Real Estate Funds and the role played by Foreign Direct Investment (FDI) in the development and rise of such funds. He also spoke about the part played by the Central and various State governments in terms of introducing a regulatory body that should play its part in bridging the demand supply gap and also qualitative investment by real estate funds. On a cautious note Mr. Parekh stressed on the problems that the industry faced in terms of inaccuracies in data, the lack of complete data and the resulting inability of the industry to assess demand, this affects both developers and also real estate funds resulting in them working with limited or incomplete data. Another important facet of this shortcoming is its influence on pricing which, in the real estate industry, is determined by various components; the lack of relevant data has also played its part in deciphering this function. He added that developers along with the regulator have to play a play a vital role towards a data management system that will result in the availability of relevant and accurate data real-time, this in turn should increase the real estate sector’s profile as an organized industry sector.

RIL rating unaffected by planned share BuyBack: S&P

Standard & Poor's Ratings Services said that its long-term corporate credit rating on Reliance Industries Ltd. (RIL; BBB/Positive/--) is unaffected by the company's plan to buy back equity shares. A 25% drop in RIL's EBITDA in the quarter ended Dec. 31, 2011, compared with the previous quarter will also not affect the rating, in our view. We believe RIL's liquidity will remain strong despite the buyback, considering the company's significant cash and cash equivalent of Indian Rs. 745bn as of Dec. 31, 2011. The buyback plan could result in a maximum cash outflow of Rs. 104bn. Our rating on RIL already factors in a likely volatility in operating performance due to the cyclical nature of the refining and petrochemical sectors and the challenges at the company's KG D6 block, where gas production is declining. We believe RIL's financial performance will remain strong in the next 12 months, with the ratio of adjusted debt to EBITDA at less than 1.5x. We adjust the ratio for cash and cash equivalent excluding INR75 billion, which we assume the company needs for its operations. In our view, RIL's business strategy, particularly the use of its significant cash balances, would be a key determinant of any future rating action on the company.

RIL's share buyback to open on Feb 1

Temasek to invest Rs6.85bn in Godrej Consumer

Godrej Consumer Products Ltd has announced that the Board of Directors of the Company at its meeting held on January 21, 2012, inter alia, decided to seek the approval of the shareholders of the Company pursuant to the provisions of Section 81(1 A) of the Companies Act, 1956 and other applicable legal provisions for issue and allotment of 16,707,317 equity shares of Re. 1 each of the Company to Baytree Investments (Mauritius) Pte Ltd, at a premium of Rs. 409 per equity share for an aggregate issue size of Rs6.85bn on preferential allotment basis pursuant to Chapter VII of SEBI ICDR Regulations. The Company has received a binding offer from Baytree Investments (Mauritius) Pte Ltd and has accepted the offer. The investment is subject to customary conditions including signing of a share subscription agreement, shareholders' approval etc. Baytree Investments (Mauritius) Pte Ltd is an indirect wholly-owned subsidiary of Temasek, an Asia investment company incorporated in 1974. Temasek is headquartered in Singapore and supported by 12 affiliates and offices in Asia and Latin America.

GCPL acquires 60% stake in Cosmetica Nacional

Ikea puts India entry on hold: reports

Ikea is likely to delay its planned entry into India, on concerns over local sourcing requirements, according to reports. The company reportedly said that India requires single-brand retailers to source 30% of their goods from local small and medium-size companies. Ikea is continuing with plans to expand into other markets, including China and Russia, says report.

Reliance Infra eyes Kinder Morgan assets: report

Reliance Infrastructure is reportedly in the race to acquire energy assets from Kinder Morgan. The energy assets on the block are mostly in Texas, Louisiana and the Gulf of Mexico, as well as Brazil and Egypt. Other potential suitors include private-equity giants Apollo Capital Management and Riverstone Capital, according to reports. Apollo and Riverstone are reportedly mulling a potential joint bid for exploration and production assets Kinder Morgan got as part of its US$38bn takeover of El Paso Corp. in October 2011. Kinder Morgan has been offloading the unwanted E&P assets over the past month, and initial bids are due in the next two to three weeks, according to reports.

Tilaiya UMPP...Reliance Power taps RWE for mining tech

Ranbaxy announces court filing of consent decree with USFDA

Ranbaxy Laboratories Ltd has announced that the consent decree with the U.S. Food and Drug Administration ("FDA") that was signed on December 20, 2011 has been filed with the United States District Court for the District of Maryland. Under the terms of the consent decree, which is subject to approval by this Court, Ranbaxy has committed to further strengthen procedures and policies to ensure data integrity and to comply with current good manufacturing practices. "Today's announcement is the next step in the process of finalizing our agreement with the FDA to resolve this legacy issue," said Arun Sawhney, Ranbaxy CEO & Managing Director. "We are pleased with the progress we have made in upgrading and enhancing the quality of our business and manufacturing processes and remain committed to ensuring that all of our facilities and products meet the high standards that patients, prescribers and the public have come to expect from Ranbaxy." Sawhney continued, "As one of the premier global generic pharmaceutical companies, all of our efforts are focused on continuing to provide safe, effective and affordable products to consumers around the world."

Ranbaxy under pressure on US problems

Maruti Suzuki launches new A-Star

Car market leader Maruti Suzuki unveiled its youngest brand A-Star in a revamped "Spiced – Up" form today. The retail sales of the new refreshed A-star will begin from January 27th, 2012. Strategically positioned for the young and energetic, the brand A-star has come a long way in establishing itself as a youth icon. Explaining the modifications, Shashank Srivastava, Chief General Manager, Marketing said, "A-star is one of the most vibrant brands in our portfolio. Some of its high points such as contemporary styling, dynamic handling and ride quality, best in class turning radius, power, flat torque and superior performance has made A-star a popular choice especially amidst the youth. The smart modifications in the spiced-up A-star are in line with customer feedback and seek to enhance the overall look, feel and comfort of the buyers. " To strengthen its position and enhance its drivability, the Company had introduced an automatic variant of the A-star last fiscal. The automatic variant now accounts for almost 1/3 rd of A-Star sales. In line with the customer feedback, scooped front seats back was introduced to enhance the leg room for rear passengers. Incidentally, A-star is Suzuki's fifth World Strategic Model and is manufactured at the Company's Manesar facility...Read More

Bajaj Auto launches KTM Duke 200 bikes in India

Bajaj Auto Limited and KTM Sportmotorcycle AG today announced the much awaited launch of the KTM brand in India. Known for their legendary racing achievements, KTM is Europe’s second largest motorcycle manufacturer and dominates the off-road segment across the world. KTM debuts in India with its premium streetbike brand , the DUKE. The first offering from the KTM stable in India, the Duke 200 would be retailed through 34 dedicated KTM stores (erstwhile Bajaj Probiking Stores) in India along with KTM’s famous range of Accessories and Merchandise called KTM PowerWear and KTM PowerParts. In a segment crowded with full-faired Japanese motorcycles, the KTM 200 Duke will be the only one sporting the naked streefighter styling that all KTM Dukes, like the Super Duke 990 and the Duke 690, are renowned for. The 200 Duke will be powered by a single cylinder, 200cc, liquid cooled, DOHC, four valve engine which will pump out a peak power of 25bhp and a maximum torque of 19 Nm. Like all KTM’s the 200 Duke has the best–in-class power to weight ratio of 184 Ps/ton thanks to high strength- low weight components of the highest quality. It features first in class features such as a Trellis Frame, Upside Down forks by European specialists WP, an aluminium swing arm, a multifunction cockpit and many more. Packed with technology and features befitting motorcycles of far higher segments, the KTM 200 Duke has been launched at an extremely attractive introductory price of Rs. 1,17,500 (ex-showroom, Delhi).

Strides Arcolab sells generic pharmaceuticals operations for AU$ 375 Million

Strides Arcolab Limited today announced the sale of its 94% shareholding in Ascent Pharmahealth Limited, its subsidiary with operations in Australia and Southeast Asia, to Watson Pharmaceuticals, Inc. As part of the transaction, Watson also acquired the remaining 6% shareholding associated with Dennis Bastas, CEO of Ascent. The transaction was signed and closed simultaneously. The cash offer from Watson values Ascent at an enterprise value of AU$ 375 million. Ascent is a top five generic pharmaceutical company in Australia and is present across several countries in Southeast Asia, including Singapore where it is the leading generic pharmaceutical company. Watson is an integrated global specialty pharmaceutical company engaged in the development, manufacturing, marketing and distribution of generic pharmaceuticals and specialised branded pharmaceutical products focused on Urology and Women's Health. Watson has operations in many of the world's established and growing international markets. Commenting on the transaction, Arun Kumar, Executive Vice Chairman and Group CEO of Strides Arcolab, said: "The sale of Ascent is a value enhancing and forward-looking initiative for Strides. We have been clear about our intention to focus on our highly attractive steriles segment, which we expect to be our growth engine going forward. The transaction further facilitates the execution of this strategy and unlocks significant value for the Group, Furthermore, the proceeds from the transaction considerably strengthens our balance sheet."...Read More

Alfa Laval (India) announces delisting

Alfa Laval (India) Ltd. has announced its delisting offer bid opening/ closing dates. The bid will open on February 15th and will close on February 22nd. The Company has fixed the floor price for each share at Rs. 2,045 per share and an indicative price of Rs. 2,850 a share. As per the offer the Company has an estimated consideration Rs. 4172.21mn for the bid. In September 2011, the Board of Directors of Alfa Laval passed a resolution to delist the Company’s stock from the exchange. The promoter holding stands at 88.77%, while the remaining 11.23%, amounting to over 20.4 lakh shares is held by the public, with the total number of shareholders at 10,000. JM Financial Consultants is the merchant banker assisting Alfa Laval with the delisting. On the BSE today, the Company’s shares touched a new high of Rs. 2,895 before closing ~1.3% higher at Rs. 2,862.

Read FOMC statement on its latest policy review

Information received since the Federal Open Market Committee met in December suggests that the economy has been expanding moderately, notwithstanding some slowing in global growth. While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated. Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed. Inflation has been subdued in recent months, and longer-term inflation expectations have remained stable. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that over coming quarters, inflation will run at levels at or below those consistent with the Committee's dual mandate. To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014...Read More

Federal Reserve statement on long-term goals, policy strategy

IMF scales down global growth forecast; Sees more risks

With intensifying strains in the euro area weighing on the global outlook, the International Monetary Fund (IMF) has sharply cut its forecast for world growth this year, saying prospects have dimmed and risks to financial stability have increased. In an update to its World Economic Outlook (WEO), the IMF said that the euro area would fall into a mild recession in 2012 after the euro area crisis entered a "perilous new phase" toward the end of last year, affecting other parts of the world including the United States, emerging markets, and developing countries. Overall, activity in the advanced economies is now projected to expand by just 1.2% in 2012 a downward revision of ¾%age points relative to the forecast last September picking up to a still tepid 1.9% the next year. The global growth outlook for this year is 3.3%. "Given the depth of the 2009 recession, these growth rates are too sluggish to make a major dent in very high unemployment," the IMF said. With the revised forecast, the IMF also released updates on January 24 to its Global Financial Stability Report (GFSR), which tracks issues in banking and capital markets, and its Fiscal Monitor, which tracks government debt and budgets...Read More

Lagarde calls for urgent action to prevent another downturn

Eurozone flash composite PMI hits five-month high

The combined output of manufacturing and services industries in the debt-stricken eurozone surprisingly strengthened in January, a provisional reading of purchasing managers showed on Tuesday. Private sector economic activity in the 17-nation eurozone showed small but unexpected growth in January. The preliminary Markit eurozone composite purchasing managers index (PMI) rose to 50.4 from 48.3 in December. A reading of more than 50 signals expansion while anything below it denotes contraction. Economists had forecast a reading of 48.5. The eurozone services PMI rose to 50.5 from 48.8 in December, while the manufacturing PMI climbed to 48.7 from 46.9. This is the first time the service sector PMI has been above the 50 mark since August. The data indicates that the eurozone economy has stabilized after contracting in the final quarter of 2011, said Chris Williamson, chief economist at Markit. The rebound largely reflected an upturn in Germany and very modest growth in France, while the rest of the region continued to suffer, he said. "We remain cautious about the improvement. Inflows of new business continued to fall, meaning the marginal increase in output seen in January was the result of firms eating into their backlogs," Williamson said.

The euro erased its decline against the dollar after the report. It traded at US$1.3056 as of 9:16 a.m. in London, up 0.3% from yesterday. Germany's service sector expanded at its fastest pace in seven months - far quicker than expected - while manufacturing activity increased for the first time in four months. France's service sector grew at its fastest pace since August, but factory sector activity declined for the sixth straight month. German manufacturing gauge rose to 50.9 from 48.4 in December. Its services index jumped to a seven-month high of 54.5 from 52.4 in December. The composite index of both industries also reached a seven-month high. In France, the manufacturing PMI fell to 48.5 from 48.9. The services PMI rose to 51.7, a five-month high, from 50.3. Some of the recent growth may have been spurred by reducing backlogs of work, with the composite sub-index remaining below 50 at 47.2. European companies were also forced to cut prices for the second month to boost business, despite input costs rising. Factories also hired more workers this month with the jobs sub-index rising to 50.5 from 49.9. On the other hand, service sector firms reduced their workforce as they battled to check rising costs. Services companies grew more optimistic about the future with the business expectations index jumping to 56.0 this month from December's 53.6, the highest reading since August.

BOJ cuts economic forecast; Leaves rates steady

The Bank of Japan (BOJ) on Tuesday scaled down its projection of economic growth amid ongoing worries about the eurozone debt crisis and a stronger yen. BOJ Governor Masaaki Shirakawa and his colleagues lowered the economic forecast for FY13 to 2% from an October estimate of 2.2%. "Growth prospects will likely be lower for fiscal 2011-12, due to the revision of past GDP statistics in addition to the slowdown in overseas economies," the Japanese central bank said in a statement. But, the BOJ added that the world's third largest economy was expected to gradually return to a moderate recovery path in the first half of fiscal 2012-13. The BOJ said today that the current fiscal year that ends on March 31 would show a contraction of between 0.3% and 0.4%. In October, the BOJ had predicted that GDP would grow by 0.2% to 0.4% in FY12. GDP is seen growing 1.8-2.1% in fiscal 2012-13, down from a previous projection of 2.1-2.4%, the BOJ said today. For fiscal 2013-14, GDP growth is seen at 1.4-1.7%, up from 1.3-1.6% previously, it said. "Japan’s economic activity has been more or less flat, mainly due to the effects of a slowdown in overseas economies and the appreciation of the yen," the BOJ said. "Growth prospects for fiscal 2012-13 and 2013-14 will likely remain broadly unchanged because the economy is expected to gradually return to a moderate recovery path in the first half of the year starting April 1," it said. The BOJ cited the European sovereign debt crisis and concerns about strains from balance-sheet repair in the US as risk factors. The Japanese central bank also maintained a status quo on interest rates.

Japan logs first annual trade gap since 1980

German Ifo business confidence hits five-month high

German business confidence increased more than expected in January to touch a five-month high, bolstering optimism that the euro area's largest economy may avoid a recession. The closely-watched measure of German business sentiment rose for a third straight month in January. The Ifo business climate index stood at 108.3, up from a revised 107.3 in December. Economists had forecast a reading of 107.6. Ifo’s gauge of the current situation increased fell to 116.3 from 116.7, while an index measuring executives’ expectations advanced to 100.9 from 98.6. While the German economy is likely to have contracted in the fourth quarter of 2011 owing to the severity of the eurozone debt crisis, recent data points have eased fears of a recession. Today's Ifo report, along with yesterday's positive data on provisional manufacturing and service industries PMI adds to evidence that the German economy could be on the mend. The IMF too said yesterday that the German economy will weather a recession in the euro area and keep growing. The IMF yesterday forecast a GDP growth of 0.3% for Germany in 2012. While that is lower than its previous estimate, it compares with a contraction of 0.5% predicted for the euro region. Germany’s statistics office said on Jan. 11 that the economy probably shrank by about 0.25% in the final three months of last year. GDP growth slowed to 3% in 2011 from 3.7% in 2010.

UK's GDP shrinks 0.2% QoQ in Q4

The UK economy contracted more than forecast in the fourth quarter as manufacturers cut output and service industries ran out of steam, raising the specter of another recession. Fourth-quarter gross domestic product (GDP) shrunk 0.2% from the third quarter, hurt by weakness in the production and construction sectors, the Office for National Statistics (ONS) said on Wednesday. Analysts were looking for a drop of 0.1%. Public-sector strikes over pensions on Nov. 30 had some impact on GDP in the October to December quarter, the statistics office said. The UK GDP had expanded by 0.6% in the third quarter on a sequential basis. The British economy had grown by 0.8% in the fourth quarter from a year earlier. In 2011, it had expanded by 0.9% versus 2.1% in 2010. The provisional fourth-quarter GDP data underscore Tuesday's message from the Bank of England Governor, Mervyn King, that the path to recovery will be arduous. King said yesterday that policy makers can increase stimulus again if needed to aid the British economy and guard against a renewed severe downturn. The Bank of England policy makers voted unanimously this month to keep their target for bond purchases unchanged, with some officials saying that more stimulus was likely, BOE minutes published today showed. The central bank's nine-member Monetary Policy Committee unanimously backed the Jan. 12 decision to leave the key lending rate unchanged at 0.5% and to maintain its program of asset purchases at £275bn (US$429.2bn). The International Monetary Fund (IMF) has also cut its growth forecasts for the UK as the eurozone debt crisis dims prospects for global economic growth. UK's industrial production fell 1.2% in the fourth quarter, with manufacturing contracting 0.9%, the biggest fall for more than two years, today’s report showed. Construction output shrank 0.5%.

RIM names Thorsten Heins as new CEO and President

The Board of Directors of BlackBerry maker Research In Motion (RIM) announced that, acting on the recommendation of its Co-Chief Executive Officers to implement the succession plan they previously submitted to the Board, it has unanimously named Thorsten Heins as President and Chief Executive Officer. Heins was also appointed to RIM’s Board. The Board acted after conducting its own due diligence. Both appointments are effective immediately. Mike Lazaridis, former Co-Chair and Co-CEO, has become Vice Chair of RIM’s Board and Chair of the Board’s new Innovation Committee. As Vice Chair, he will work closely with Heins to offer strategic counsel, provide a smooth transition and continue to promote the BlackBerry brand worldwide. Heins said he looks forward to continuing to work with Lazaridis, globally recognized as a technology pioneer. He said, "Mike created a whole new way of communicating and I look forward to continuing our close collaboration." On the transition to CEO by Heins, Lazaridis said, "There comes a time in the growth of every successful company when the founders recognize the need to pass the baton to new leadership. Jim and I went to the Board and told them that we thought that time was now. With BlackBerry 7 now out, PlayBook 2.0 shipping in February and BlackBerry 10 expected to ship later this year, the company is entering a new phase, and we felt it was time for a new leader to take it through that phase and beyond. Jim, the Board and I all agreed that leader should be Thorsten Heins."...Read More