Govt move on GAAR spooks Dalal Street

The Government is planning to introduce short-term capital gains tax on equity derivative products sold overseas, stoking concerns that foreign capital inflows into the domestic assets will be adversely hit. The proposed new regulations would come through the introduction of the so-called General Anti-Avoidance Rule (GAAR) next month, according to reports. Finance Minister Pranab Mukherjee in his budget presented on March 16 for FY13 proposed to introduce GAAR in order to counter aggressive tax avoidance schemes. He said that it would be ensured it was used in appropriate cases. The Centre could tax participatory notes (P-Notes), which are issued by foreign portfolio investors (FIIs) registered with market regulator SEBI to overseas investors.

Indian shares dropped sharply on concerns that the Government could tax P-Notes but recovered on Friday after the Finance Minister said that there won't be any tax liability on the holders of P-Notes. “Indian tax authority would not go beyond foreign institutional investors (FIIs) to check the details about the P-Note holders. Accordingly, a question of liability for tax in India of the P-Note holders would not arise. Necessary clarification will be issued,” he told reporters in New Delhi on Friday. Referring to the provisions in the Finance Bill 2012 on overseas investments, Mukherjee said, “I would like to categorically clarify that the intention of the Government is not to cause any harassment to genuine investors.”

FIIs wanting to avoid the new tax would have to exit or shift to new locations that do not attract the new tax levy before the end of FY12 that ended this week, according to reports. Domestic brokerage IIFL said that the introduction of GAAR could give powers to the tax department to deny double taxation treaty benefits to foreign funds based out of tax-havens like Mauritius. A large proportion of foreign investment in the Indian stock market comes through companies registered in Mauritius and are exempted from tax in India under a Double Taxation Avoidance Agreement (DTAA) with Mauritius. Overseas portfolio investors, routing their investments via countries like Mauritius, currently do not pay any tax on short-term capital gains, IIFL said in a note to clients. "If the bill is passed as it is, then from 1st April 2012, FIIs domiciled in such treaty locations may have to prove that they have created this structure for genuine business purposes and not just for avoidance of tax," IIFL said.

Denial of tax benefits by the Revenue Authorities in different countries, often by disregarding the form of the transaction, has been a matter of conflict between the Revenue Authorities and the taxpayers, according to PwC. The proposed GAAR provisions would override the provisions of the tax treaties signed by India, it added.

P-Notes are financial instruments used by investors or hedge funds that are not registered with the stock market regulator - Securities and Exchange Board of India (SEBI) to invest in Indian securities. India-based brokerages buy Indian securities and then issue participatory notes to foreign investors. Many purchasers of P-Notes are believed to be overseas funds registered in countries safe from Indian taxes, such as Mauritius. India has a double tax avoidance treaty with Mauritius.

Tax on P-notes...FM tries to sooth frayed nerves

Bond yields rise on Govt's borrowing plan

The yield on the benchmark 10-year Government bonds climbed on Wednesday after the Centre said that it will borrow 65% money from the market in the first half of FY13. The Union Government plans to raise Rs. 3.7 trillion through bond sales during April-September 2012. The amount is in line with bond traders' expectations of Rs. 3.6 trillion to Rs. 3.8 trillion. The announcement came after market hours on Tuesday. The yield, which has risen nearly 22 bps since March 15 on concern about heavy debt supply, hit nearly a three-month high of 8.54% in intraday trade on Tuesday. In his Budget speech delivered on March 16, Finance Minister Pranab Mukherjee had said that the Government's gross borrowing target in FY13 would be Rs. 5.7 trillion. One reason for the Government to borrow heavily in the first half of FY13 is the heavy repayments worth Rs. 605.7bn that are due during April to June this year.

The Reserve Bank of India (RBI) issued the Government's borrowing calendar yesterday, and said that the Centre will borrow between Rs. 150bn and Rs. 180bn on a weekly basis. The Government will try to stick to the borrowing plan and not overshoot it, Economic Affairs Secretary R. Gopalan said after a meeting with RBI officials in New Delhi. "We have planned this very carefully. We had problems with income tax refunds last year (FY12), but this year we have taken care of that problem," Gopalan said. Net borrowing for April-September stands at Rs. 2.85 trillion after accounting for redemptions, he said. In FY12, the Government had increased its borrowing amount twice to Rs. 5.1 trillion from an initial budget estimate of Rs. 4.17 trillion. The Centre plans to reduce its budget deficit to 5.1% of GDP from an estimated 5.9% in FY12 that ends on March 31, Mukherjee said on March 16.

Govt to front load borrowings...65% of FY13 debt sales in H1

France In Denial, Obamacare And The Supreme Court And Ngozi For World Bank Presidency

Source: Economist

Army chief claims he was offered bribe

Once again, havoc prevailed in both houses of Parliament today, this time, on Army chief general VK Singh's statement that he was offered a bribe of Rs. 140mn, reports said. In an interview to a daily, Army chief general VK Singh claimed that he was offered a bribe of Rs. 140mn by an equipment lobbyist for clearing the purchase of 600 substandard vehicles, reports added. In the interview Singh said, "One of these men had the gumption to walk up to me and tell me that if I cleared the tranche, he would give me Rs. 14 crore. He was offering a bribe to me, to the Army Chief. He told me that people had taken money before me and they will take money after me." Opposition parties, led by the BJP, raised the matter noisily and created a din in both Houses of Parliament. AIADMK and JD-U members joined the protests by raising slogans and waving copies of the newspaper that carried the Army chief's interview. The Lok Sabha and the Rajya Sabha were then adjourned till noon. The Army Chief said that 7,000 of those of which were already in use in the Army had been sold over the years at exorbitant prices, reports said. The army chief also said that the defence minister AK Antony was acquainted with the matter. Meanwhile, Antony has ordered a CBI probe on Army chief's "serious" allegations, reports added. "We will have to handle it," reports said quoting Antony.

Army chief says he didn't leak letter to PM

No room for fall in Mumbai home prices: CRISIL

According to CRISIL Research, India’s largest independent and integrated research house, new home prices in Mumbai are unlikely to decline in 2012. Notwithstanding a 40 per cent dip in sales of new homes since mid-2011, a sharp rise in construction and funding costs, in addition to amendments to the Development Control Regulations (DCR), will increase costs for builders and prevent a reduction in home prices. CRISIL Research expects a 7-9% increase in costs of key inputs in 2012, following a 25% increase in these costs the year before. Through 2012, CRISIL Research foresees cement prices in Mumbai rising by 5%, steel by 7-9% and labour costs by 10-15 per cent. Funding costs too will remain high. Given constraints in obtaining a significant increase in bank funding, builders’ dependence on costlier alternative funding will continue. Recent amendments in the DCR will increase costs for builders further by 15%, on an average. DCR norms govern land development in Mumbai. The modified rules, which came into effect from January 2012, have revised the method of calculating the floor space index (FSI). Unlike the earlier practice, spaces allotted for balconies, flowerbeds, terraces and niches are now included in the FSI calculation. These spaces typically comprise one-third of the built-up area – even more for high-end apartments. This revision will impact the total area available for sale and, in turn, the revenues of builders. However, the new rules do permit builders to buy additional FSI of up to 35% of the current FSI, by paying a fee calculated at 60 per cent of the ready-reckoner rate – the rate at which the stamp duty is levied...Read More

India to be world's largest economy by 2050: study

India will have a GDP of US$85.97 trillion by 2050 in purchasing power parity terms, enabling it to surpass China as the world's largest economy, says a report by Knight Frank and Citi Private Bank. "China will overtake the US to become the world's largest economy by 2020, which in turn will be overtaken by India in 2050," according to the report. China will have a GDP of US$80.02 trillion by 2050 in terms of purchasing power parity. The US - currently the world's largest economy - is expected to have a GDP of US$39.07 trillion by 2050. In 2010, India was the world's fourth largest economy in purchasing power parity with a value of US$3.92 trillion compared to China's US$9.98 trillion. India would have the second fastest economic growth during 2010-2050, with its GDP expanding at the rate of 8% during the period. The list of world's top ten economies will include Indonesia (4th), Brazil (5th), Nigeria (6th), Russia (7th), Mexico (8th), Japan (9th) and Egypt (10th).

India's infrastructure growth rebounds in February

Growth in India's eight core sector industries rebounded in February 2012, with all the constituents of the widely tracked gauge showing material improvement over the previous month. India's infrastructure sector growth jumped to 6.8% in February 2012 versus 6.4% in the same month a year earlier, the Government said on Thursday. Core sector growth stood at a measly 0.7% in January of this year. The Index of Eight core industries has a combined weight of 37.90% in the Index of Industrial Production (IIP) with base 2004-05. India's infrastructure sector output expanded by a healthy 6.7% in November after touching a six-year low in October. Core sector growth turned back up in December (4.6%) before sliding again in January. The Index of Eight core industries stood at 145.6 in February as against 136.4 in February 2011. It was at 149.30 in January and 149.4 in December. Core sector growth during April-February 2011-12 stood at 4.4% versus 5.8% in the corresponding period last year. Coal production registered a growth of 17.8% in February compared to 7.5% in January. Petroleum Refinery production surged by 6.2% in February as against a drop of 4.6% in January. Electricity Generation expanded by 8% in February versus 3.2% in January. Steel production rose by 4.3% in February as against a contraction of 2.9% in January. Cement production registered a growth of 10.8% in February compared to 10.6% in January. Crude Oil production inched higher by 0.4% in February versus a fall of 2% in January. Fertilizer production rose by 4.1% in February as against 4% in January. Natural Gas production dropped by 7.6% in February compared to a decline of 10.4% in January.

BRICS to examine proposal on Development Bank: PM

Following is the text of the Prime Minister’s statement at the Plenary Session of the fourth BRICS summit in New Delhi today: 

"Let me once again welcome all of you to New Delhi. India is privileged to host the fourth BRICS Summit and assume the Chairmanship of the group. 

The global situation facing us presents a mixed picture. On the one hand, emerging market economies are growing at a healthy pace and increasing their share in global trade and output. 

On the other hand, many obstacles have to be overcome if we are to sustain rapid growth in the years ahead. We are all affected by the global economic slowdown, the volatility in food and energy prices, the challenge of reconciling growth with environmental objectives, the political uncertainty in West Asia and the rise of terrorism and extremism. Our responses to these challenges may be different, but there is much common interest that binds us together. 

I would like to share some thoughts on ten specific issues that I believe concern us all. 

First, each of our countries has a unique demographic profile that presents its own challenges. In India, for example, we need to create 8 to 10 million jobs every year over the next decade to absorb the expected growth in the labour force. We are working on ambitious programmes of skill upgradation and education and creation of an environment conducive to an expansion of productive job opportunities. We would like to learn from the experiences of other BRICS countries on how they are dealing with these problems. 

Second, the conceptual analysis that produced the positive BRICS narrative was based on a model of catch-up growth in which supply side constraints were not adequately addressed. Today, it is clear that constraints such as the availability of energy and food for countries that account for more than 40% of the world population can impede the entire story. Water is another critical area of scarcity which needs much greater attention than it has received thus far. We have much to learn from each other in how to handle these problems, and there is also room to cooperate internationally. 

Third, we are united in our desire to promote sustained and balanced global economic growth. As members of the G-20, we must together ensure that appropriate solutions are found to help Europe help itself and to ensure policy coordination that can revive global growth. 

We should also cooperate closely to breathe life into the Doha Round, looking for innovative solutions to overcome barriers that have stalled progress. 

Fourth, as large and diverse economies, we should make a special effort to find ways to exploit intra-BRICS complementarities. We should promote greater interaction amongst our business communities. Issues such as easier business visas must be prioritized. As large trading countries, BRICS have a strong interest in removing barriers to trade and investment flows and avoiding protectionist measures...Read More

PM’s statement during fourth BRICS summit

PM asks South Korean CEOs to have faith in India

Prime Minister Dr. Manmohan Singh on Monday asked top corporate honchos in South Korea to keep faith in the Indian Government policies and assured them that the long-delayed POSCO project will be given requisite support.

"I recognise that sometimes our processes can be slow but there are effective mechanisms for resolution of problems and differences and a strong rule of law. The Government is keen to move forward with the POSCO project and there is some progress in this regard," Singh said while addressing CEOs of South Korean industry. 

POSCO had planned to set up an integrated steel mill at Jagatsinghpur district in Odisha at an investment of Rs. 520bn but the project has been delayed for over six years due to hurdles in land acquisition and regulatory clearances. 

Investment from South Korea is a priority for India, the Prime Minister said today, adding that the Government was taking proactive steps to improve the business climate. 

"India is a stable and profitable long term investment opportunity. Investment from Korea is a priority for India," Dr. Singh said. "We will take pro- active steps to address investor grievances and improve the business climate in the country...I urge Korean industry to have faith in India." 

Many states in India have been actively encouraging foreign investment and we will support these efforts, the Prime Minister said. He urged South Korean industry to have faith in India, Dr. Singh said in his address to South Korean CEOs during his two-day official visit to this country. 

Citing examples of LG, Samsung and Hyundai, Dr. Singh said that Korean companies were among the early investors to look at India as an investment destination. Korean companies have always recognised these strengths and competitive advantages of the Indian economy, he said...Read More

Indian economy will return to high growth path: PM

Govt hikes interest rates on Small Savings Schemes

Based on the decisions taken by the Government on the recommendations of the Shyamala Gopinath Committee for Comprehensive Review of National Small Savings Fund (NSSF), the interest rates for small saving schemes are to be notified every financial year, before 1st April of that year. Accordingly, the rate of interest on various small savings schemes for the financial year 2012-13 effective from 1.4.2012, on the basis of the interest compounding/payment built-in in the schemes, shall be as under:

Necessary notifications, including those requiring amendments to rules of small savings schemes will be notified separately.

Stop accepting public deposits: RBI to Muthoot Fincorp

The Reserve Bank of India (RBI) has directed Muthoot Fincorp Ltd. to stop allowing the use of its premises/branches or officials, in any manner by Muthoot Estate Investments for accepting deposits from public. Muthoot Fincorp Ltd. is a registered non-deposit taking Non-Banking Financial Company with its registered office at Muthoot Centre, Punnen Road, Thiruvananthapuram, Kerala. The company was registered on March 2, 2002 with registration No.N-16.00170. It has come to the notice of the RBI that a partnership firm with the name of Muthoot Estate Investments, in which the promoters of Muthoot Fincorp are partners, has collected and has been collecting deposits in the form of fixed deposits, cumulative deposits and special public deposits from the public. These deposits are collected through the branches of Muthoot Fincorp located at different places in Kerala, the RBI said. In terms of Section 45-S of the RBI Act, acceptance of deposits from the public by Muthoot Estate Investments, which is a partnership firm, is prohibited, the central bank said. Members of the public are hereby cautioned to note that acceptance of deposits by the company or Muthoot Estate Investments is punishable with imprisonment and those who deposit money with the company or Muthoot Estate Investments may do so at their own risk, the RBI said.

Trade deficit may rise to US$428bn by FY16: ASSOCHAM

India’s trade deficit could rise from US$130.5 bn in 2010-11 to US$428.3 bn by 2015-16 and become unsustainable with merchandise imports rising from US$380.9 bn to US$858.6 bn, industry body ASSOCHAM said today. The imbalance likely to be above US$180 bn in 2011-12. While the share of manufactured goods in exports of China, Japan and Germany is very high, India’s share has declined from 44.1 per cent in 2000-01 to 37.5 per cent in 2010-11, according to a study by The Associated Chambers of Commerce and Industry of India (ASSOCHAM). The country’s merchandise exports during 2015-16 will stand at US$430.3 bn dollars, up from US$250.5 bn dollars in 2010-11 with exports of manufactured goods rising from 101.6 billion dollars to 119.6 billion dollars. Exports of petroleum products are set to rise from 41.9 billion dollars to 51.2 billion dollars in the same period. On the flip side, said the study, oil imports will jump from 106.1 bn to 243.7 billion dollars while gold imports will rise from US$33.9 bn to US$83.3 bn in the same period. However, if capacity building of the industry takes place and competitiveness of Indian exports improves, then merchandise exports can stand at 549 billion dollars in 2015-16 and the trade deficit will be 309.6 billion dollars...Read More

Jewellers strike to continue until rollback of levies

Jewellers in India, the biggest importer and consumer of gold, would continue with their strike until the government rolled back the taxes on unbranded jewellery, reports said. The strike had entered the 12th day on Wednesday. A strike was called on Mar 17 by the All India Gems & Jewellery Trade Federation protesting the 1% hike in excise duty on unbranded jewellery and doubling of customs duty gold imports proposed in the Union Budget 2012-12 on Mar 16. The shutdown entered the 12th day today with more than 85% of stores closed, said Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation. Finance Minister Pranab Mukherjee said on Tuesday that the government would set an "acceptable formula" on the takes, but ruled out a reduction in the import duties on gold and platinum. "Whatever be the formula, the excise rules cannot be implemented and we do not want this excise duty imposed on our trade," Bamalwa declared. He added that the strike would continue "until the finance minister rolls back the excise duty," reports said. The duties were proposed with the aim to control current account-deficit which was being fuelled by record bullion purchases, reports said. There are increasing concerns that demand and thereby imports of gold may decline due to higher prices of the yellow metal. Purchases may slump to 25-30 tonnes in March, down from about 75-80 in the same period a year earlier, reports said earlier quoting Prithviraj Kothari, president of the Bombay Bullion Association. Imports in the first quarter (Jan -Mar) may be 125-150 tonnes, he added. The country was losing Rs. 10bn daily due to the nationwide strike and is the first since 2005, reports said earlier, quoting Bamalwa. Reports said that if Indian investors found gold to be a very expensive investment, there was a chance that there would be a shift in fund allocation to equities.

FM to reconsider excise duty on unbranded jewellery

GJEPC expresses dismay of 1% excise tax on Jewellery

RBI announces guidelines on Fair Practices Code for NBFCs

The Reserve Bank vide its circular dated September 28, 2006, issued guidelines on Fair Practices Code (FPC) for all NBFCs to be adopted by them while doing lending business. The guidelines inter alia, covered general principles on adequate disclosures on the terms and conditions of a loan and also adopting a non-coercive recovery method. A review of the guidelines is made in view of the creation of a new category of NBFCs viz; NBFC-MFIs and also rapid growth in NBFCs’ lending against gold jewellery. The revised guidelines issued under Section 45 L of the Reserve Bank of India Act, 1934 (Act 2 of 1934) and of all the powers enabling it in this behalf, in supercession of the CC dated September 28, 2006, is enclosed in the annex. The Guidelines have also incorporated the instructions issued vide CC No. 95 dated May 24, 2007 on ‘Complaints about excessive interest charged by NBFCs’ and CC No. 139 dated April 24, 2009 on ‘Clarification regarding re-possession of vehicles financed by NBFCs’ for reference. The NBFCs may note to make suitable amendments in their existing FPC. The FPC so modified should be put in place by all NBFCs with the approval of their Boards within one month from the date of issue of this circular and should be published and disseminated on the web-site of the company, if any, for the information of the public.

MGNREGA wages hiked...Linked to CPI

The wage rates for the MGNREGA works have been revised upwards for all the States and Union Territories and is now linked with the Consumer Price Index for Agricultural Labour (CPIAL). A notification to this effect is being issued for the period April1, 2012 to March 31, 2013 and a Statement in this regard was laid in the Lok Sabha on Monday by the Union Rural Development Minister Jairam Ramesh. It is to be recalled that in his budget speech on July 6, 2009, the Finance Minister had said that the Government is committed to providing a real wage of Rs. 100 per day as an entitlement under MGNREGA and on January 14, 2011, the Ministry of Rural Development issued a notification revising MGNREGA wage rates by linking it to the CPIAL. Subsequently in March 2011, after inter-ministerial consultations, it was decided that the revision indexed to CPIAL would be done annually and the revision would become effective on April 1 each year. The statement said that on September 23, 2011, the Karnataka High Court directed that the notified minimum wage prevailing on January 1, 2009 for agricultural labourers in the state should be the notified. Accordingly, wage rate for Karnataka has now been fixed at Rs. 155 per day as opposed to the existing Rs. 125 per day for the unskilled manual workers. But the notification will be subject to the outcome of the Special Leave to Appeal pending before the Supreme Court. The next date of hearing is on April 9. Earlier, Ramesh informed that the MGNREGA Act will be amended in the Budget session of Parliament, which will pave the way for the end of disparity between the MGNREGA wage rate and the minimum wage rate for agricultural labourers, though both are not related and the nature of work also varies.

ONGC bags four exploration blocks under NELP IX

Oil & Natural Gas Corp. (ONGC) has bagged four oil & gas exploration blocks out of the 16 areas that were offered under the ninth round of New Exploration Licensing Policy (NELP). Oil India, Gail India, Sankalp Oil & Natural Resources, Deep Energy, Focus Energy, Pratibha Oil & Natural Gas and Pan India Consultants also emerged as winners. ONGC bagged exploration rights for one block as sole operator while also winning three others as part of a group. A consortium led by Oil India won two blocks. Gail India led a consortium that was awarded one onshore block in the Cambay basin. Deep Energy, a subsidiary of Deep Industries, in a consortium with other companies has got operatorship of three onshore blocks. The Government, which received bids for 33 blocks out of the 34 on offer, is expecting investments of ~US$600mn from NELP IX. Approval for six blocks is pending, and will be considered for award separately, Union Petroleum Secretary, G.C. Chaturvedi said. He also said that 10 blocks - seven deepwater and three shallow water - have not been awarded as the bids for these blocks were rejected due to low percentage of profit petroleum offered by the bidders to the Government. One block - CB-ONN-2010/7 - has not been awarded as the single bid received for this block has been rejected due to inadequate net worth of the bidder. The NELP IX awards were approved by the Cabinet last week, but details were pending.

PSCs signed for 13 blocks under NELP-IX

Maharashtra Budget: Prepare for costlier LPG, natural gas

Get ready to shell out more money if you are living in the financial capital of the country, Mumbai. In the Maharashtra Budget 2012-13, State Finance minister Ajit Pawar increase taxes on cooking gas and transport fuels, reports said. The budget proposes to tax LPG for domestic use and natural gas used by taxis and autorickshaws and hike the one levied on petrol and diesel vehicles. So, an LPG cylinder that costs Rs,405 at present, may see a hike of at least Rs. 20, due to a 5% tax. Also, the minister also proposes to make car purchases more difficult with the tax rate on diesel cars and jeeps to be increased by 4%, and for petrol vehicles, to be up by 2%. However, the minister has given some concessions for CNG vehicles. The state budget proposes more than doubling the tax on plaster of Paris from 5% to 12.5% which would translate to higher prices interior decorations and also, Lord Ganesha idols. Even though cigarettes and alcohol have not seen any levy increase, this time, it is beedis that would see a tax levy of 12.5%, if proposals go through. The budget may have left out cigarettes and alcohol from being taxed this time, in a sharp contrast to previous budgets, as consumption of alcohol had dropped last year, and was one of the reasons for the lower state revenue. In order to simplify the sales tax on luxury items such as dry fruits, Pawar has proposed to levy a 5% uniform sales tax. Announcing an amnesty scheme for paying outstanding electricity duty, Pawar proposed that if the outstanding electricity duty as on Dec 31, 2011 is paid in a single installment, 50% of interest accrued on it would be waived.

Tamil Nadu Budget FY13: Fiscal deficit to be under 3%; growth at 9.4%

FMC suspends futures trading in guar complex...Prices tumble

After a number of regulatory measures such as cutting open position limits, raising margins on buy side and ceasing the launch of fresh contracts failed to check the price rise in guar, the commodity regulator, Forward Markets Commission, has finally suspended futures trading in the guar complex, reports said. Since November, prices of guar seed futures have been on an upward spiral and gained over 500% during this period. They hit the 4% upper price limit frequently, reports added. The reason for the rise in prices was initially attributed to robust fundamentals and the FMC also sent out a team to Rajasthan to investigate the reason for the price rise, reports said. Last week, FMC banned fresh positions in the running contracts of guar seed and guar gum and only permitted squaring off existing positions in contracts until July. The exchanges then, under the advice of FMC, did not launch August and September contracts.Following the announcement, guar prices crashed in the spot market. According to reports, in Jodhpur, at the main arrival centres, guar seed prices fell Rs. 2,000 per 100 kg to Rs. 25,500. Guar gum prices also declined to Rs. 83,000 from Rs. 88,000 earlier.

Godrej Properties announces redevelopement project in Mumbai

Godrej Properties Ltd has announced that its wholly owned subsidiary Godrej Projects Development Private Ltd entered into agreement with Kamal Landmarc Property Leasing and Finance Private Ltd to undertake residential redevelopment project in Chembur, Mumbai.

The company has announced that it will develop 18 residential buildings in Sahakar Nagar, Chembur, Mumbai through Godrej Landmark Redevelopers Private Ltd(GLRPL) , a subsidiary of GPDPL,under a tripartite agreement entered amongst GLRPL, Kamla and 18 societies on 29th March, 2012.

Mumbai realty firms fall on duty hike report

Shares of real estate companies with major exposure to Mumbai fell after a newspaper reported that the state government of Maharashtra was planning to increase stamp duties in the city by as much as 160 times for residential and commercial properties. "This will impact the investor sentiment and could have an adverse impact on demand for residential property in Mumbai," one real estate analyst was quoted as saying. The Maharashtra government has proposed to hike stamp duty on leave-license properties to 0.1% on market value or 1% of the average annual rent or deposit paid, whichever is higher, for residential properties. For commercial properties, the duty proposed is 0.4% for lease agreements over 60 months. This is a whopping 160 times increase from the previous fixed amount of Rs. 25,000 for residential and Rs. 50,000 for commercial properties for 60 months. The state government's aim behind this move is to mobilize over Rs. 10bn and restore Mumbai to its previous glory. HDIL, DB Realty, Indiabulls Real Estate, Godrej Properties, Oberoi Realty and Phoenix Mills were among the top losers in the real estate space.

Revision of stamp duty for leave-license is going to impact rental market: JLL

Warburg Pincus exits US$272mn investment in Kotak Mahindra Bank

Private Equity firm Warburg Pincus LLC sold 26.5mn shares of Kotak Mahindra Bank, exiting an over seven-year investment in the bank where it first invested in Nov 2004, reports said. It had then picked up 2.75% stake for Rs. 750mn through its two entities - Madison and Melany Holdings. In 2005, it bought additional 2% stake at Rs. 385 a share. It then raised its stake more than 9% by buying additional stake in various tranches. Currently, the 26.5mn shares holding, valued at Rs. 14.04bn or US$272mn based on Kotak Mahindra Bank’s closing price on Friday, represents about 3.6% of the bank's equity. Also, there was a block deal of 26.5mn shares in Kotak Mahindra Bank on the BSE on Monday. According to an exchange filing, Warburg Pincus sold a 3.3% stake in Kotak on Feb. 1. Warburg Pincus had part sold its stake in Kotak Mahindra bank by selling 17.5mn shares at a price of Rs. 490 per share aggregating to Rs. 8.57bn in February this year.

TRAI issues direction on misleading tariff ads

In order to further improve transparency in telecom tariff offers for facilitating the telecom subscribers to choose the tariff plans that best meet their needs, the Telecom Regulatory Authority of India (TRAI), has issued a direction to all Telecom access service providers on ‘Preventing Misleading Tariff Advertisements’. This direction has been finalised after extensive consultations with the stakeholders including holding ‘Open House Discussions’ at various places across the country. A tariff advertisement is considered to be misleading, which in any way, is likely to induce the consumer to subscribe to a tariff plan, which he would not have subscribed; contains an untrue statement; omits a material fact having bearing on the subscriber’s decision; and fails to disclose attached limitations and restrictions. Through this Direction, the telecom access service providers have, inter alia, been directed that advertisements published by them - are transparent and non-misleading and unambiguous; disclose all material information in unambiguous manner; contain the website address and customer care number of the telecom access service provider; and the advertisements issued in vernacular languages contain all the mandatory disclosures in the same vernacular language. Further, the service providers have been mandated to maintain an advertisement register which must include a specimen of every tariff related advertisements, and carry out internal audit to ensure that they are complying with all aspects of this Direction and to report compliance to the authority on half yearly basis.

TRAI unveils Response paper on exit policy

TCI raises wider corporate governance issues at Coal India

The second largest shareholder in Coal India Limited after the Government, the Children’s Investment Fund Management, TCI, has commenced legal action against the Government of India. TIC is of the opinion that the issue has far wider corporate governance implications for India, reports said. TCI partner, Oscar Veldhuijzen said the fund had launched the action, after repeated attempts to engage with Coal India and the Government had failed. "We are not asking for anything unreasonable," reports said quoting Veldhuijzen. TCI holds ~2% in CIL and was unhappy about the reversal in prices Coal India adopted ‘blindly’ following the Government’s directive, which was a breach of its fiduciary duties towards shareholders, the fund says. Earlier reports stated that TCI was against the move of the Government to make Coal India sign fuel supply agreements (FSAs) with private power producers to supply coal to them at subsidized rates and guaranteeing to supply 80% of contracted quantity. "It (CIL) sells much of its coal under Fuel Supply Agreements at up to a 70% discount to market rates," reports said quoting Veldhuijzen. According to reports, on Tuesday, TCI sent a written notification to the Ministry of Finance claiming it had contravened two international agreements for the "promotion and protection of investments", one with Britain and one with Cyprus, (where the fund which holds the CIL shares is placed). Veldhuijzen said that TCI hoped to resolve matters during a "grace period" over the next six months, but should that not happen, the next step would be a tribunal mediated by an independent expert.

Govt mulls disinvestment in NALCO

Telenor threatens international arbitration

Scandinavian telecom company Telenor, has sent a notice to the Indian government saying that it would seek international arbitration if a solution was not found to the telecom licence issue in six months, reports said. "We have informed the Government of India of our intent to invoke the provisions of the Comprehensive Economic Cooperation Agreement between India and Singapore," Telenor spokesperson Glenn Mandelid said in an emailed statement. Telenor and Unitech had formed a joint venture telecom company Telenor to cater to the Indian telecom space. However, earlier this year, the Supreme Court ordered cancellation of all 122 licences issued in January 2008 by the then telecom minister, A Raja. Uninor was one of the worst affected companies by this judgement as it had 22 licenses which stand cancelled. Although Telenor has not specified an amount, it intends to "seek compensation for all investment, guarantees and damages," it said in the notice to the government. The Telecom major said it was hopeful that it remained the government's intent to protect and encourage bonafide foreign investments in the country, reports said. Corporate Affairs Minister M Veerappa Moily said that he had 'not seen' Telenor's ‘letter’ and added that the government would 'examine it legally within the parameters of (his) ministry'. "There is a thing like a rule of law. Whether you go to international law-...but we will have to examine within the parameters of our law and the law of the land," Moily stated. Meanwhile, the Income Tax department has frozen the shares owned by Unitech in Uninor, reports said. Telenor owns 67.25% of the joint venture, while Unitech owns the remaining component. Telenor, which had bought stake in the company after the licences had been awarded, has accused partner Unitech of "fraud and misrepresentation". The Scandinavian company now wishes to migrate the business to a new venture and apply for fresh licences in an auction. Unitech is opposing its partner’s move and both sides have appealed to the Company Law Board.

L&T Finance acquires Fidelity’s Indian MF business

L&T Finance Limited (LTF), a subsidiary of L&T Finance Holdings Limited (LTFH), has announced today that it has executed definitive agreements to acquire FIL Fund Management Private Limited (Fidelity AMC) & FIL Trustee Company Private Limited, the companies carrying on the mutual fund business of Fidelity in India, subject to regulatory approvals. Fidelity AMC, incorporated in 2004, manages the 15th largest mutual fund in India with a market share of 1.3% and an average AUM for the quarter ended December 2011 of Rs88.81bn (~68% of its assets are equity oriented). It has built a robust equity oriented franchise which has access to large HNI customers and a strong SIP portfolio. Its equity assets are the 10th largest in India with a market share of 3.1%. Further, in the past 3 years, the fund performance has resulted in 4 of its 5 equity funds being ranked amongst top 10 in their respective category. It was awarded by Lipper in 2011 for being Best Equity Fund House over the past 3 years. L&T Financial Services established its presence in the Mutual Fund industry through the acquisition of the mutual fund business of DBS Chola in January 2010. Since then, L&T Mutual Fund has grown its total average AUM by a CAGR in excess of ~ 33% to ~ INR 4,616 crores (average AUM for the quarter ended December 2011). It has a strong debt–focused portfolio with a pan India distribution network...Read More

Kingfisher Airlines announces new "holding plan"

Kingfisher Airlines has begun the 2012 summer schedule operating approximately 120 daily flights with 20 dedicated aircraft. This is a "holding plan" that we have put in place pending re-capitalisation and return to full utilisation of the aircraft fleet. In this "holding plan" the airline has taken adequate care to ensure that part of our core inter-metro schedule is retained, while connectivity is maintained to many cities where we are the sole operator. This is to ensure that public interest is not compromised. In the current schedule, the airline has taken care to ensure that we maintain schedule integrity with 100% reliability. The DGCA are also monitoring our safety standards on a constant basis. This will give guests the required comfort to confidently book and fly with us. As a result of this "holding plan", there are several stations to which operations have been temporarily suspended. There are, however, skeletal staff present at such airports to assist guests who may have been previously booked to fly with us and come to the airport. Our staff will assist them in re-booking their travel or processing refunds.

Since we could resume operations after getting re-capitalised, most staff at these stations have been asked to stay at home whilst remaining on the Company's rolls. There is however much speculation on whether we are going to lay off a large number of our staff. To clarify, we are in a "holding" pattern right now and are waiting for various decisions from the Government and our Consortium of Bankers on FDI policy, working capital funding, etc. All of these will have a major impact on the staffing decisions we will have to make. The airline dearly like to retain staff who have remained incredibly dedicated and loyal under extremely trying circumstances. Our immediate priority is to access our funds to pay outstanding staff salaries. The airline would also like to state, that as directed by the Honourable Income Tax Appellate Tribunal, Bangalore, we have paid a sum of Rs 440mn towards TDS dues which was due on or before March 27, 2012...Read More

Essel stake in IVRCL crosses promoter holding

After Essel Group’s 10.2% stake buy of IVRCL on Wednesday and ~2% buy today, the former’s stake in the Hyderabad-based infrastructure company has crossed the holding of the promoters, reports said. The Essel Group has 2% higher stake in IVRCL than the promoter and promoter group of the company who hold 11.2%. Reports said that with the open offer cut off trigger at 25% at present form 15% earlier, there is potential for Essel to increase its stake further in the company without triggering open offer. The open offer size has also been upped to 26% from 20% earlier. "While this is ok as an investment, we will fight it out if there is a proposal for hostile bid. Normally, when such investments are made, they get in touch with existing promoters, but this was not the case," said R. Balarami Reddy, Executive Director of Finance, IVRCL. The promoters, led by Chairman and Managing Director, E. Sudhir Reddy, had diluted their holdings over the years to raise funds which finally brought down their stake to 11.2%.

Essel Group acquires 10% stake in IVRCL

Essar Oil completes refinery expansion project

Essar Oil Ltd (EOL) has announced the completion of the Rs. 8,300-crore expansion of its Vadinar Refinery with the successful commissioning of the final Delayed Coker Unit (DCU), which is amongst the world’s largest. The Vadinar Refinery is now India’s second largest single-location refinery, with an annual capacity of 18 million tonnes (375,000 barrels per day) and a complexity of 11.8, which also makes it among the world’s most complex refineries. The capacity expansion and complexity enhancement gives the Vadinar Refinery the capability to process much heavier crude diet. The share of ultra heavy crude, which currently constitute 20% of crude basket, will go up to 60%; and as a result the overall share of heavy and ultra heavy crude will go up to 80% of the refinery’s total crude basket. The company has already entered into long-term crude sourcing contract with global suppliers, including several national oil companies from Latin America. In terms of product yield, the Vadinar Refinery now has the flexibility to produce higher value, high-quality products, including Gasoline (petrol) and Gasoil (diesel) conforming to Euro IV and V norms, that have growing acceptance in both domestic and international markets. Close to 80% of its production will now be of valuable light and middle distillates; and 50% of the production of Gasoil (diesel) and Gasoline (petrol) will meet Euro IV and Euro V specifications. EOL is targeting newer markets like Australia, New Zealand and north-west Europe, in addition to countries in the Indian subcontinent for exporting high quality fuels. However Essar Oil will continue to market a majority of its products in the domestic market...Read More

Bajaj Electricals board promotes Anant Bajaj as Joint MD

Bajaj Electricals Ltd has announced that the Remuneration & Compensation Committee of the Board and the Board of Directors, in their respective meetings held on March 28, 2012, have approved the promotion of Anant Bajaj as the Joint Managing Director of the Company effective April 01, 2012 for the remainder period of his five year term from February 01, 2011 and approved the remuneration payable to him, subject to the approval of the Shareholders of the Company, by way of Postal Ballot. Further the Company has informed that the Remuneration and Compensation Committee of the Board of Directors of the Company at its meeting held on March 28, 2012 has granted 1,40,000 Options under ESOP 2011 from the available Stock Options, to 11 eligible employees, at a price of Rs. 182.20 per option, being the closing price on NSE where the traded volume was high. These options will Vest in the employees over a period of 4 years from the date of grant as per ESOP Scheme 2011. The Company has so far granted 25,95,000 stock options under ESOP 2011 to the eligible employees, including the aforesaid 1,40,000 Stock Options.

Salman Khan buys stake in Yatra.com

Salman Khan reportedly buys less than 5 % stake in Yatra.com as well as plays a role of the brand ambassador. Sharat Dhall , President, Yatra.com was quoted as saying, "the company will launch a multimedia campaign featuring Salman Khan with a marketing budget in excess of Rs. 0.3bne within a few days, coupled with new product offerings such as instalment payment for air tickets. Yatra.com, launched in 2006, looks to double its share in the online travel business in one year to 50% with the help of the new campaign and new products, reports added.

Sify to sell stake in MF Global venture to PhillipCapital

Sify Technologies Limited, a leader in Managed Enterprise, Network and ICT Services in India, announced that they have reached an agreement for sale of their entire stake in MF Global Sify Securities India Pvt Ltd. for an all cash deal. According to the terms of the agreement entered with MF Global Sify Securities India Pvt Ltd., MF Global Overseas Limited and PhillipCapital Group, the Singapore based financial services company, through its related companies, will buy a majority stake in MF Global Sify Securities India Private Limited. The transaction is subject to regulatory and statutory approvals in the respective countries.

MT Educare IPO subscribed 4.8 times

The initial public offering (IPO) of MT Educare has been subscribed by 4.80 times, according to the data published on the National Stock Exchange of India (NSE). The issue has received bids for 52.71mn shares as against the 10,991,815 shares on offer, the NSE data showed. The Retail section was subscribed 6 times, while Non-Institutional portion was subscribed 8 times. The retail portion was subscribed 2.17 times. The IPO had opened on March 27 and closed on March 29, 2012.

NBCC IPO...Govt fixes issue price at Rs 106/share

Hyundai launches new i-Gen i20

Hyundai Motor India Ltd, India’s largest passenger car exporter and second largest manufacturer announced the launch of its All New iGen i20 today. The i-Gen i20 is available in 12 variants. The Petrol variants range from Rs. 473,400 to Rs. 665,894, the diesel variants range from Rs. 596,334 to Rs. 744,013 and the automatic variant is priced at Rs767,405.  The i-Gen i20 now comes with a more powerful and refined 1.2 Kappa petrol engine with Dual VTVT mechanism which delivers 84 ps of peak power. The advanced and hi-tech 1.4 U2 CRDi diesel comes with 6-speed manual transmission that delivers 90ps power and the best-in-class torque of 22.4 kg-m. The 1.4 Gamma automatic petrol delivers 100 ps power and 13.9 kg-m of torque. A number of first- in-segment features are available in the i-Gen i20 like Rear Parking Camera with display in the cabin mirror, Electro Chromic Mirror which offers anti-glare vision during night time driving, Clean Air-Cluster ionizer for fresh air in the cabin, Auto Headlight Control Function (the lights turn on automatically when visibility drops), 6 Airbags, Rear Disc Brakes, Supervision Cluster and Rain Sensing Wipers...Read More

Hindustan Motors introduces 2012 Mitsubishi Outlander

Bernanke to hold easy money policy to boost jobs

Federal Reserve chairman Ben S. Bernanke on Monday reiterated the central bank's long-standing commitment to keep interest rates exceptionally low in a bid to boost growth and reduce unemployment. Bernanke signaled that the Fed's monetary policy will remain accommodative as he looks to curtail the current high unemployment rate in the world's largest economy. In a speech to fellow economists in Arlington, Virginia, Bernanke said, "We cannot yet be sure that the recent pace of improvement in the labor market will be sustained." But improvements in the labour market may be supported by continued accommodative policies, he added. "The drop in the US jobless rate may reflect a reversal of the unusually large layoffs that occurred during late 2008 and over 2009," Bernanke said. Bernanke said that the recent decline in the jobless rate, from 9.1% last summer to 8.3% in February, was somewhat out of sync with the rather modest pace of economic growth. The US economy needs to grow at a much faster clip to bring down the unemployment rate further, the Fed chairman said. The Fed's accommodative monetary policies should help, over time, to reduce long-term unemployment as well, he said. Bernanke said that US wage growth was too soft to present an inflation risk and points to a labor market that was still operating below its potential. The dollar traded near its lowest level this month against the euro following Bernanke's remarks. The greenback is down versus all but one of its 16 major counterparts this year. US stocks have been rising steadily over the past several months, thanks to the Fed’s policy of keeping rates near zero and taking extraordinary measures to boost the US economy.  The S&P 500 has more than doubled since the bear market three years ago. The US central bank has pledged to keep interest rates near historic lows until late 2014. Bernanke offered no hints on whether the Fed could initiate a third round of quantitative easing (QE) to boost economic growth. At the same time, he made it clear that the Fed was in no rush to reverse the monetary easing that was launched in response to a deep recession.

Moody's: China's new growth target reflects new realities

Moody's Investors Service says that China's authorities have begun to prepare for a rebalancing of the economic roles of the public and private sectors, and which if successful would imply a fundamental realignment in the country's political economy over the next decade. In a special report, Moody's says that a new phase of structural policy reforms is coming into focus following the Chinese government's announcement of a new, lower annual GDP growth target of 7.5%. "The new target underscores the government's desire to engineer a soft landing, consistent with its long-term goal of seeking more balanced growth, decreasing the economy's reliance on investment and exports, while increasing the share of consumption," says Tom Byrne, a Senior Vice President with Moody's Sovereign Risk Group. "In addition, we believe the authorities currently have time to prepare for this rebalancing." The report is entitled, "Lower Growth Target Reflects China's New Realities," and was authored by Byrne and Matt Robinson, Moody's Director of Sovereign Research. "This rebalancing of the economy is especially important if China is to maintain a relatively rapid pace of economic growth well above the world average growth rate," says Byrne. "Furthermore, the natural slowing of growth from diminishing export competitiveness and productivity gains provides the impetus for this new round of strategic reforms," says Byrne. From a broad perspective, the reforms would affect state enterprises, corporate governance, private sector development, the urban residential hukou system, and financial sector liberalization...Read More

Bigger bailout funds needed to boost euro area growth: OECD

Euro area finance ministers meeting this week need to boost the firepower of the European stability funds to at least one trillion euros, OECD Secretary-General Angel Gurría said. The current level of commitment to the rescue funds is not enough to restore market confidence, he said. A credible financial firewall will provide governments with the breathing space they need to focus crucially on revitalising Europe’s economic growth and competitiveness. The economic, fiscal and financial imbalances of the area have led to weak bank balance sheets, high unemployment and low growth. The survey calls for an ambitious programme of reforms in product and labour markets, tax systems and education to rebalance the economies, restore competitiveness , boost growth and bring down stubbornly high levels of unemployment – particularly among the young. It argues many reforms would stimulate growth even in the short-term. 

To boost economic activity at the EU level, a step change in the political commitment to the Single Market is needed. The OECD says national regulations, rigidities and poor implementation of existing EU rules are frequently holding back cross-border economic activity, growth and job creation, and are undermining the EU economy’s efficiency and competitiveness. Greater progress is needed in opening services markets. The report calls for an annual review for each country of the obstacles to benefitting fully from a market of 500 million consumers. Despite some 24 million unemployed people across Europe, most EU countries expect growing skill shortages in certain sectors. Labour mobility within Europe is low. The EU should encourage migration in order to help workers and firms to achieve the most productive job matches. The two surveys highlight the need for Europe to make fundamental changes to financial supervision and regulation. Europe needs an effective system of crisis resolution and excessively close ties between domestic banks and governments need to be undone.

Germany's unemployment rate falls to all-time low of 6.7%

Unemployment in Germany fell more than expected in March, raising hope that Europe’s biggest economy is holding its own even as some of its fellow eurozone members struggle amid a crippling debt crisis. Germany's seasonally-adjusted unemployment rate fell to 6.7% in March from 6.8% in February, the Federal Labor Agency reported on Thursday. Economists said that the figure was the lowest since the current statistical series began in 1998. The seasonally-adjusted number of unemployed Germans fell by 18,000 to 2.84 million, the agency said. Economists had forecast a decline of 10,000. Germany’s adjusted jobless rate was 5.8% in January, according to the latest figures released by the Paris-based Organization for Economic Cooperation and Development (OECD). That compared with 10% in France, 9.2% in Italy and a euro-area average of 10.7%. Demand for workers remains high in some industries, the labor agency’s BA-X index showed yesterday, with a measure of employment intentions rising in March after falling last month.

German business confidence jumps to eight-month high

Germany's business confidence surprisingly touched an eight-month high in March, indicating that Europe’s largest economy may remain unscathed from the region's long-running credit crisis. The Munich-based Ifo institute said today that its business climate index, based on a survey of 7,000 executives, increased to 109.8 from a revised 109.7 in February. Economists had forecast no change from the February's initial reading of 109.6, according to reports. The monthly index is based on a survey of around 7,000 German firms in the manufacturing, construction, wholesale and retail sectors. Ifo’s gauge of the current situation was unchanged at 117.4, while an index measuring executives’ expectations increased to 102.7 from 102.4. Germany’s economy contracted 0.2% in the final quarter of 2011. ECB forecasts show that the German economy will grow by 0.8% this year, according to a panel of economic experts who advise the government. Eurozone growth will recover to 1.1% next year after a 0.1% contraction in 2012.

UK's economy shrinks more than expected in Q4

The UK economy contracted at a faster-than-expected pace in the fourth quarter of 2011 as output of the dominant service sector declined. The British economy shrank by 0.3% in the final three months of 2011 compared to the previous quarter, the UK Office for National Statistics (ONS) reported on Wednesday. The ONS had previously estimated a 0.2% quarterly contraction. The UK's GDP in the October-December period rose by 0.5% over the year-ago period compared to an earlier estimate of 0.7%. Chancellor of the Exchequer George Osborne yesterday said that Britain was now in the recovery phase. The UK economy received a boost from net trade in the fourth quarter. Business investment fell 3.3%, less than the 5.6% fall previously estimated. Consumer spending rose 0.4% in the fourth quarter, though this was less than the 0.5% previously forecast. Real household disposable income fell 0.2% in the fourth quarter, the second successive quarterly decline. The savings ratio - the share of post tax income put aside - fell to 7.7% from 7.9%. The UK economy grew by 0.7% in 2011, with output in the fourth quarter 0.5% higher than the same period a year earlier, revised down from a previous estimate of 0.7%. A separate report showed today that the UK's current-account deficit narrowed to 8.5 billion pounds in the period from a downwardly revised 10.5 billion pounds, as the trade gap fell.

US Q4 GDP growth unchanged at 3%

The Commerce Department on Thursday reported that US real GDP for the fourth quarter rose at a 3% annualized pace, unrevised from an earlier estimate. That was the third revision, and was in line with analysts' estimates. The Q4 GDP growth was the quickest pace since the second quarter of 2010. The world's largest economy had expanded by 1.8% in the third quarter. A downward revision to exports was offset by stronger business investment in software. Consumer spending rose 2.1% in the fourth quarter, unrevised from prior estimates. A key measure of inflation, the core personal consumption index, which excludes food & energy prices, increased 1.3%, also unrevised from prior estimates. Corporate profits before-tax fell 0.4% quarter-to-quarter, down from a 1.2 % rise in the third quarter. This is the first quarterly decline in profits since the fourth quarter of 2010. Post-tax profits increased at a 1.1% rate, slowing from 2.7% the prior quarter. Gross domestic income, which measures output from the income side, increased at a 4.4% rate - the fastest since the first quarter of 2010 - from a 2.6% rise in the third quarter. Personal income was US$13.162 trillion at a seasonally adjusted annual rate, up US$3.3bn over the previous estimate. Disposable income was US$10.6bn more than previously thought. The build-up in business inventories accounted for the bulk of the rise in output in the last quarter of 2011. But the final GDP revisions showed a slightly better growth picture. Business spending was revised up to a 5.2% growth rate from 2.8%. Although rebuilding of inventories added 1.8% to GDP in the October to December quarter, the pace of accumulation was not as fast as previously reported. Business inventories increased US$52.2bn, instead of US$54.3bn. Excluding inventories, the US economy grew at an unrevised pace of 1.1%. That was a sharp drop from the prior period's 3.2% pace. Federal Reserve Chairman Ben S. Bernanke said this week that the US economic growth must accelerate to reduce the unemployment further. While he offered no hints about the US central bank's plan for a third round of quantitative easing, all options appear to be on the table.

Japan's industrial output falls 1.2% in Feb

Shares of Japanese manufacturers slid on Friday after the nation’s industrial production unexpectedly fell and investors waited for a string of US data, including personal income and spending. The Japanese government reported today that the nation’s industrial production slid 1.2% in February from a month before. The median estimate of economists had called for a 1.3% increase. However, accompanying survey results for expectations of future production showed a gain in the March forecast, now set at rise of 2.6% from a previous average projection of a 1.7% gain. The forecast put April production higher by 0.7%. Japan's unemployment rate slipped to 4.5% from January's 4.6%, the Internal Affairs Ministry reported. The result beat expectations, which had predicted no change. The core consumer price index, which strips out fresh-food costs, rose 0.1% from a year earlier, or 0.2% from the previous month, the ministry said, marking the first such gain in prices in five months. Economists had projected mild deflation of 0.1%. Spending by households of two or more people jumped 2.3% in February, blowing away forecasts for a 0.2% drop.

Oracle acquires clinical trial apps firm ClearTrial

Oracle on Thursday announced that it has entered into an agreement to acquire ClearTrial, a leading provider of cloud-based Clinical Trial Operations (CTO) applications that make the planning, sourcing, and tracking of clinical projects and financial performance faster and more accurate. ClearTrial’s activity-based costing solutions use embedded intelligence based on deep industry expertise to help life sciences companies manage the rising costs and increasing complexities of bringing new therapies to market. The combination integrates best-in-class functionality from ClearTrial with leading clinical trial execution and analytics capabilities from Oracle, creating the most comprehensive closed-loop clinical trial management offering from planning to payment. Biopharmaceutical and medical device companies are expected to significantly improve their ability to manage clinical trials across geographies, outsourcers, therapeutic areas and trial phases resulting in a better return on their R&D capital investments.

Jim Balsillie to resign as Director of RIM

Jim Balsillie, former Co-CEO of Research In Motion (RIM), has resigned as a Director on the Company’s Board. "As I complete my retirement from RIM, I'm grateful for this remarkable experience and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success," said Jim Balsillie. "On behalf of the Board and everyone at RIM, I would like to thank Jim for his 20 years of service to RIM," said Barb Stymiest, Chairman of RIM’s Board of Directors. "His energy, drive and enthusiasm helped build one of the most successful technology companies of our time." In addition, David Yach will be retiring from his role as CTO, Software after 13 years with the Company and after four years with the company. Also, following an open dialogue on the future of global operations, Jim Rowan, COO, Global Operations, has decided to pursue other interests. The Company is currently undertaking a search to hire a single COO with responsibilities to run the Company’s operations.

Moody's takes actions on 7 Portuguese banks; Outlook negative

Moody's Investors Service has taken rating actions on seven Portuguese banks and banking groups. The senior debt and deposit ratings for four banks were downgraded by one notch, aligning their ratings at the same level or one notch below the ratings of the Portuguese government, which was downgraded to Ba3 from Ba2 on 13 February 2012. The debt and deposit ratings of Banco Santander Totta (a subsidiary of Banco Santander S.A.) were lowered by two notches to Ba1. The debt and deposit ratings of Banco Comercial Portugues (BCP) and of Caixa Economica Montepio Geral (Montepio) were confirmed at Ba3. All ratings have a negative outlook.

The downgrades of most of the banks' debt and deposit ratings reflect Moody's downgrades of their standalone bank financial strength ratings (BFSRs), which are driven by the following key factors:

• Expected further deterioration of banks' domestic asset quality and profitability given the country's poor economic outlook which is driven in part by the austerity measures needed to address the sovereign's weakening credit profile
• Additional asset risks stemming from banks' substantial holdings of government-related debt
• Prolonged and ongoing lack of access to private wholesale funding sources;...Read More

Tyco's flow control biz to merge with Pentair

Pentair, Inc. and Tyco International Ltd. announced a definitive agreement to combine Tyco's Flow Control business ("Tyco Flow") with Pentair in a tax-free, all-stock merger. The transaction values Tyco Flow at approximately $4.9 billion, including assumed net debt and minority interest. Upon completion of the transaction, which has been unanimously approved by the boards of both companies, Tyco shareholders will own approximately 52.5% of the combined company and Pentair shareholders will own approximately 47.5%.

The combination will bring together complementary leaders in water and fluid solutions, valves and controls, and equipment protection products to create a premier industrial growth company. The merged company, with estimated pro forma 2012 revenues of $7.7 billion, is expected to create enhanced shareholder value through:

• Increased global scale with greater access to developed and fast growth regions;
• Broader presence in key sectors with greater opportunity to capitalize on growth trends in the energy, infrastructure and industrial sectors;
• More robust portfolio of complementary products and customer solutions;
• Significant operational and tax synergies; and
• Strong balance sheet and cash flow generation to support growth and return of capital to shareholders.

The new company will be named Pentair and will be led by Randall J. Hogan, Pentair's current Chairman and Chief Executive Officer...Read More

Roche increases offer price for Illumina to US$51/share

Roche announced on Thursday that it has increased its offer price for all outstanding publicly-held shares of Illumina, Inc. to US$ 51.00 per share in cash. All other terms and conditions of the tender offer remain unchanged. Severin Schwan, CEO of Roche, said: "Based on our discussions with Illumina shareholders we have seen interest to accelerate the takeover process. As a result, we are increasing our offer price to US$ 51.00 per share. Roche’s preference continues to be a negotiated transaction. We look forward to the possibility of a swift completion that offers immediate value to Illumina’s shareholders." Greenhill & Co., LLC and Citigroup Global Markets, Inc. are acting as financial advisors to Roche and Davis Polk & Wardwell LLP is acting as legal counsel...Read More

Total reports gas leak at Elgin platform in North Sea

On 25 March, Total reported that a gas leak following a well operation occurred on the same day at the wellhead platform on the Elgin gas field which is located in the UK North Sea approximately 240 km east of Aberdeen. Total immediately launched internal emergency procedures and Crisis Management Teams have been mobilized in Aberdeen and Paris. The gas leak at the Elgin wellhead platform remains ongoing. 238 personnel have been evacuated onshore, and no injuries have been reported. Production on the Elgin, Franklin and West Franklin fields is fully stopped. All necessary measures are being taken to respond appropriately to the situation and to minimize its impact. Investigations are ongoing to analyze the causes and to determine the remediation of the gas leak. Total is actively monitoring the situation with standby vessels in the area. A surveillance aircraft flown over the area has confirmed a sheen on the water in the vicinity of the platform. This sheen is related to drilling muds and/or light condensate associated to the gas representing a volume estimated today at about 30 m3. Preliminary assessments indicate no significant impact to the environment and dispersants are not considered necessary at this stage. Oil Spill Response Limited (OSRL) has been alerted and is currently evaluating the situation. Total’s UK-based affiliate Total E&P UK Limited is cooperating fully with all relevant authorities including the Department of Energy and Climate Change (DECC), the Health and Safety Executive (HSE) and the Scottish Environmental Protection Agency (SEPA).

BMW recalls 1.3mn cars to fix faulty battery-cable cover

BMW AG on Monday announced that it will recall 1.3mn cars to fix faulty battery-cable covers in the vehicles’ trunks, according to media reports. About 367,000 cars in the US are affected by the recall, reports said. The company said that in a small number of cases, the battery cable cover has been mounted incorrectly. In rare cases, the car may not start, and in extremely rare cases, the electrical system could malfunction, leading to a fire. The recall includes BMW 5 and BMW 6 Series models built between 2003 and 2010, according to media reports. The German luxury car maker reportedly said that it has not received news of any accident or injury linked to the fault. A BMW spokesman was quoted as saying that the recall was a precautionary measure, with nine related defects having been reported. It has filed a notice to the US National Highway Traffic Safety Administration.

Rio Tinto may move out of diamond business

Rio Tinto has begun a strategic review of its diamond business that will include exploring a range of options for potential divestment of its diamond interests. Rio Tinto operates three diamond mines, Argyle in Australia (100 % interest), Diavik in Canada (60 % interest), and Murowa in Zimbabwe (78 % interest), as well as Bunder, an advanced diamonds project in India (100 % interest). Harry Kenyon-Slaney, chief executive Diamonds & Minerals, said "We regularly review our businesses to ensure they remain aligned with Rio Tinto's strate of operating large, long-life, expandable assets. "The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply. We have a valuable, high quality diamonds business, but given its scale we are reviewing whether we can create more value through a different ownership structure.

Bausch & Lomb to acquire Ista Pharma for US$500mn

Bausch + Lomb, the global eye health company, and ISTA Pharmaceuticals, Inc. announced that they have signed a definitive agreement under which Bausch + Lomb ("the Company") will acquire ISTA for US$9.10 per share in cash, or a total of approximately US$500mn. The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close in the second quarter of 2012. Bausch + Lomb's acquisition of ISTA accelerates the company's strategy to strengthen its pipeline and marketed products and capabilities. The transaction is expected to drive growth and high performance for the long term. The combination adds ISTA's portfolio of industry-proven non-steroidal, anti-inflammatory, allergy, glaucoma and spreading agents to Bausch + Lomb's robust, complementary portfolio of existing Rx ophthalmology and OTC eye health products. The companies also have complementary development pipelines. ISTA's pipeline includes candidates in various stages of development to treat various ocular conditions including inflammation and pain, while Bausch + Lomb's pipeline of pharmaceutical innovations include the first of a new class of ocular anti-inflammatory agents to come along in decades, and a promising approach to reducing intra-ocular pressure in patients with open-angle glaucoma or ocular hypertension...Read More