MUMBAI: The Reserve Bank's mid-year tightening of the monetary policy is not likely to make home, car and other loans more costly immediately, but pressure on interest rates is likely to build up in the coming months, according to top bankers. "There will be no immediate increase in interest rates after the (RBI) rate hike... There is an upward bias on interest rates which is due to a combination of many things, not just the (RBI) rate hike," ICICI Bank Chief Executive and Managing Director Chanda Kochhar said. According to State Bank of India Chairman O P Bhatt, it will take two to three months for the Reserve Bank rate hike to get reflected in lending rates. First, the deposit rates will be hiked, following which lending rates will go up, he said. The transmission mechanism between the RBI and rest of the financial system does not work very fast, the SBI chairman said. It always works with a time lag, he said. Continuing with its monetary tightening drive for the sixth consecutive meeting this year, the RBI today raised key short-term policy rates to rein in inflation. The RBI hiked the key short-term lending and borrowing rates by 25 basis points (0.25 per cent) each with immediate effect. Accordingly, the short-term lending (repo) rate has increased to 6.25 per cent and the borrowing (reverse repo) rate to 5.25 per cent. In a clear indication of a perceived asset bubble, the central bank tightened norms for housing loans by asking banks to keep aside more funds against home loans extended at "teaser" rates and decreasing the cap on loans made against realty buys by consumers, known as the loan-tovalue (LTV) ceiling. SBI, which was the first lender to introduce highly competitive teaser rates last year, is more likely to absorb the additional cost of funds that might result out of the RBI's move to increase provision ratios, Bhatt said. SBI will take a call on whether to extend its teaser scheme or not by end-December, he said. The additional measures taken by the RBI today will result in an increase of 0.05-0.10 per cent in the cost of funds, Bhatt said. The RBI's move to decrease the LTV will affect lenders in the premium segment and not SBI, whose average LTV is under 70 per cent, he said, adding that currently, nearly 13 per cent of the bank's total advances, or Rs 75,000 crore, were in the housing segment. Kochhar said ICICI, which had the popular "90:10" scheme under which it funded a majority of the home-buying amount, will not be affected much as the amounts allocated under the scheme are not la

NEW DELHI: An estimated annual savings of around Rs 1,00,000 crore makes a compelling case for the government to make a one-time investment of Rs 60,000-70 ,000 crore to build an electronic payment platform for all its transactions with individual households, says consulting firm McKinsey . Such a platform could help the government save Rs 71,000 crore a year, while benefiting individual beneficiaries to the tune of Rs 26,200 crore. Many of the beneficiaries would be from financially excluded households as most of the transactions between the government and households relate to welfare schemes, the consultancy said in a report Inclusive growth and financial security: The benefits of e-payments to Indian society released on Monday. The cost of building the e-platform is prohibitive, but benefits far outweigh the costs, as it would enhancing the efficiencies of the payment system by reducing leakages, increased the efficiency of delivery of services and lower administration costs. Leakages account for about 75-80 % of the losses that the government suffers due to the manual payment system, while share of transaction cost is estimated at 15-20 % of the losses, says the report. A National Rural Employment Guarantee Scheme worker loses as much as Rs 6-7 in wages and travel costs to redeem the Rs 100 she earned for a days work. The saving of Rs 1,00,000 crore is equivalent to about 10% of the total payment flow between the government and households, considering that in 2008-09, such payments in form of direct cash transactions, subsidies and public services such as education and healthcare amounted to Rs 13,30,000 crore. Savings would be maximum on welfare schemes such as targeted public distribution system and national rural employment guarantee programme where the government could save as much as Rs 82,700 crore, as payment inefficiencies are 30% or more. (See table) The savings of Rs 1,00,000 crore is equal to 20% of the fiscal deficit or 25% of the governments welfare spending. The amount is enough to meet the entire expenditure on Sarva Shiksha Abhiyan, the universal primary education programme, or double the outlay for fertiliser subsidy. However, the most significant gain from an e-payment platform in a country of 80-100 million poor households would be in the form of financial inclusion. An e-payment platform would enable the formal financial sector to more easily and efficiently reach disadvantaged Indian households and offer modern financial products, the report says. But getting to a point where the government can make this saving requires all its departments and agencies to be fully networked to ensure that all information transfer is electronic. It would require installation of accessible and convenient transaction points, with one in every village. The government would also need to ensure reliability of payment by making the system tamperproof. This would require installation of identity authentication infrastructure, especially at payment points that serve the poor, illiterate and rural sections of India. That apart, the e-payment investment can be made viable only if the financial service providers

and intermediaries align themselves as stakeholders in the set-up . The government would also need to ensure that the infrastructure created is put to use. This would entail transfer of all salaries is done electronically, and use of cash and cheques is eliminated. Similarly, all payments to vendors and

NEW YORK: US government-rescued General Motors hopes to raise 10 billion dollars when it relists its stock later this month, The Wall Street Journal reported on Tuesday. GM plans to disclose new figures about its initial public offering (IPO) on Tuesday, the newspaper said, citing people familiar with the plan. According to the new projections by GM, the largest US automaker could have a stock-market value at the start of trading of 50 billion dollars -- in line with the solidly profitable Ford Motor Co. -- and it could be as high as 60 billion dollars, the newspaper said. The plan would reduce the US government's stake in General Motors Co. below the symbolically important 50 per cent, to about 35 per cent. The IPO plan envisions the shares would be priced at 26 dollars to 29 dollars each, the sources told the Journal. The plan includes a stock split that will triple the number of GM common shares available to 1.5 billion. Outstanding warrants -- the right to buy shares -- boost the total to 1.8 billion. Through the IPO, GM plans to sell 24 per cent of its total shares, or about 10 billion dollars' worth, based on the midrange of the share-price estimate, The Wall Street Journal calculated. The actual price of the stock to be sold in the IPO would be set "about November 17, and the sale would take place the following day," it said. The shares to be sold are owned by the US Treasury, a union-run trust and Canadian federal and provincial governments, the newspaper said, citing the people familiar with the plan. Under the plan, the Treasury would sell seven billion dollars of its shares, paring its 61 per cent stake to about 35 per cent -- lower than many observers expected, it said. The United Auto Workers trust, which pays for retiree health care, would

BANGALORE: As the Chinese pitter-patter into IT services turns into a loud clatter, Indian majors are pushing hard to grab a bigger slice of that market. TCS, Infosys and Wipro plan to shift at least 10% of their new outsourcing projects to Chinese cities of Dalian and Chengdu, for the first time since Indias software exports industry took note of the Chinese threat a decade ago.

Top customers like GE and General Motors are demanding that Indian vendors deliver some services from locations outside India because of geo-political risks and location redundancy. Indias tech behemoths are also realising that by creating local jobs in China, they can gain a bigger share of the Dragonlands $10-billion-plus outsourcing market. While TCS plans to increase its existing 1,200-employee base by over five times in the next few years, Infosys will invest $100 million to build a 4,000-professional-strong team. Wipro, the third-biggest software exporter, will have around 1,000 professionals in a years time. A clear inflection point for China has been clients acceptance over the last few months. And despite some risk perceptions, we are selling Infosys China, and not just China, as a new location to customers, says SD Shibulal, chief operating officer, Infosys. Over 80% of the work we do in China is for our global customers, he added. Testing of software applications, engineering design for automobile and consumer durable firms are among projects set to get increasingly shipped to China. Clearly, China is no longer a pure rival for India Outsourcing Inc. Instead, it is increasingly helping Indian technology vendors position themselves better by offering a choice of delivery centres beyond India to customers. Its no more about being rivals, says Girija Pande, chairman of TCS Asia Pacific operations. We are now seeing more load that can be sent to China. In fact, we are already doing both IT and BPO projects, added Pande. Rising wages, attrition rates and increasing scarcity of employable labour are among the top reasons for this shift in the way Indian IT industry has been looking at China. A September report by Goldman Sachs says Infosys revenues from China could top $200 million in three years, from $100 million today. TCS China revenues are expected to reach $250 million from almost $100 million currently, the report added. While bidding for global outsourcing contracts, Indian vendors are beginning to break up a project into pure application development and software testing components. Of these, non customer-facing portions such as testing is increasingly going to China, says Amneet Singh, vice-president, global sourcing at consultant Everest Group. Some clients are also concerned about growing geo-political risks in India because of terrorist threats and delicate equations with neighbours such as Pakistan and China. We received calls from several customers after the 26/11 Mumbai attacks. Since then, we have noticed China come up more frequently in our discussions," said a CEO at one of the top Indian tech firms that has a development centre in Mumbai. Another inflection point for Chinas growing outsourcing industry is the rise of local firms like HiSoft, NeuSoft and VanceInfo. Some like HiSoft are looking at success stories of Infosys and Cognizant and globalising their operations. HiSoft, for one, got listed on Nasdaq in June and has already started getting customers like GE, UBS and Citibank to offshore work to China. Theres a growing need from CIOs to diversify and China is positioned as an ideal complement to India, says Ross Warner, a spokesman for HiSoft, based out of Beijing. The company started working with GE in Japan eight years ago. Its no secret that we look up to their (Infosys) journey and are now focussing to replicate some of that, adds Warner. Moreover, MNCs that aspire to sell into China are often requested by the government to purchase from China. This is a factor motivating MNCs like GE, 3M and Nokia to procure to China, says James Friedman, analyst at SIG. However, even as China is set to become a $30-billion outsourcing powerhouse in five years, there are hurdles it needs to overcome. While the country produces more engineers than India, lack of experience in handling large, complex projects remains a worry. Plus, Chinas wage rates are a higher than Indias because employers have to spend on social security. This is a common mistake which is made because in China, one would have to pay 50% tax to the government plus a premium of 10-15% if the person can speak English, says Frances Karamouzis, research.

2/11/10

NEW DELHI: Projecting a growth of 40 per cent in India's oil demand in next decade, Prime Minister Manmohan Singh on Monday stressed on securing energy supplies at affordable prices to meet requirement of rapidly expanding economy. "India needs adequate supplies of energy at affordable prices to meet the demand of its rapidly growing economy ," he said inaugurating the Petrotech-2010 oil and gas conference here. India , which consumed over 138 million tonnes of fuel in 2009-10, imports three-fourth of its oil needs and one-third of its gas requirement. It imported USD 79.5 billion worth of 159.2 million tonnes of crude oil. "Demand over the next 10 years will increase by over 40 per cent, whereas the increase in supply from the maturing (domestic) oilfields is expected to be around 12 per cent," he said. Domestic sources are inadequate to meet the increasing demand for energy. The nation's domestic oil production was about 34 million tonnes in the last fiscal. To bridge the shortfall, the government is encouraging national oil companies to acquire oil and gas fields abroad, Singh said. The Prime Minister stressed on building strong economic partnership with hydrocarbon-rich countries. Singh said oil and gas today are not seen as mere commodities to be traded freely. "They are often used by countries to meet their political objectives." In the last two decades, Asia's share in the growth in demand for hydrocarbons has risen substantially while that of the OECD countries and the European Union has declined. "This shift has been caused by high rates of economic growth and increasing populations in many Asian countries." "There are supply-side uncertainties. Many mature fields are declining in production. Some energy endowed countries have problems in augmenting production because of various reasons including lack of the required technology and political uncertainty," Singh said. Another challenge, he said, is climate change. "Because of this challenge, the demand on energy technologies goes beyond productivity and efficiency issues," he said, calling for a rethink on the traditional energy basket being loaded in favour of fossil fuels. "The concept of a Global Energy Equilibrium (the theme of Petrotech conference) suggests a matching of demand and supply of hydrocarbons in a manner which is optimum. However, apart from the difficulty of defining what an optimum balance would exactly mean, there are many other factors which have a bearing on how different countries meet their hydrocarbon demand," he added.

NEW DELHI: Indians could grow wealthier than the Chinese in the next 30 years if the government brings in fundamental changes, starting with clear property rights to farmers, says a renowned American economist. "When I say India would be richer than China in 2040, I don't necessarily mean India's GDP (gross domestic product) would be bigger," said Derek Scissors , fellow at the Asian Studies Centre at The Heritage Foundation, a Washington-based conservative think tank. "What I mean is household wealth of Indians would be bigger than that of the Chinese if the right policies

are adopted," Scissors, who was here to deliver a lecture at the invitation of the Aspen Institute India, told IANS in an interview. The senior research fellow, who focuses his studies on the economies of China and India, said the key to increasing wealth of Indians lay in granting property rights to farmers. "The original and vital aspect of China's economic progress was the granting of a very specific set of property rights to the farmers in the 1970s. That was the trigger. Agricultural productivity just absolutely soared," he said. In comparison, India has about 70 percent of its population in farms still producing much lower than potential. "By property rights, I mean the economic definition, which is not to say that Indian farmers do not have rights, but the extent of these are totally unclear," said Scissors, also the adjunct professor at George Washington University. "The land registration act, the state ownership of resources, the contest over title that undermines Indian agricultural productivity," he added. Indian agriculture largely consists of small farmers, who are either working as tenants on other big farms or have marginal holdings which curb productivity. Scissors was also critical of some of the rural population-centric, state-run social welfare programmes like the national rural employment scheme. He said such initiatives make the beneficiaries dependent on doles rather than be independent. "That's not the way to create wealth, that is a way to perpetuate the power of the government. It may have some political advantages, but they are myopic because you are not solving the problem of rural poverty. You are just alleviating it temporarily. It's a bandage solution," said Scissors. "These are poor substitutes. That's what you do; you make farmers into permanent dependents of the state. What you want is farmers to create wealth for themselves." Scissors said the granting of property rights would also resolve another serious, growing concern -- the acquisition of land by companies for various industrial and infrastructure projects. "If farmers want to take their land out of circulation because some companies have great projects, let them get paid a lot of money. Farmers own the land. Just have a bargaining process, where I own the land and you are making me an offer I want, yes, then I will take it. And if you are not, then you are out of luck," said Scissors. The other two key areas in which Scissors would like to see changes are infrastructure and education. "Infrastructure will develop and flourish in India, if there is a clear set of titles and a clear set of people who are to be compensated and not just everyone sticking their hands in the till." Though India has a number of programmes to widen the reach of primary and secondary education , Scissors said, the country needs to implement and monitor these in letter and spirit to ensure their effectiveness.

"If you get people who do not have to work on the farm, because agricultural productivity is higher, give them a secondary school education, they can move into manufacturing. Their wages will rise and India will have the capacity to have a flood of export income."

BEIJING: Made in America, imported by Asia. In a reversal of the trade flows that have so unbalanced the global economy, some of the dollars that the Federal Reserve is expected to start minting soon to buy U.S. Treasury bonds will wash up on Asia's shores, presenting a headache for policymakers already fretting about rising inflationary pressure. Resentment in emerging markets about the global spillover effects of easier U.S. monetary policy is likely to hang over next week's summit of the Group of 20 leading economies in Seoul. "What will happen with another round of quantitative easing by the Fed? It's creating inflation, alright. Just not necessarily in the U.S., but on the other side of the globe," said Frederic Neumann, an economist with HSBC in Hong Kong. In fact, a lot of investors are counting on the Fed to succeed where the Bank of Japan has long failed and generate inflation at home, too. U.S. core inflation of 0.8 percent is lower than it has been since the early 1960s, but asset managers have been snapping up Treasury Inflation Protected Securities and other hedges against rising prices. Gold scaled a record nominal peak last Friday. On the face of it, though, worries of inflation in the developed world any time soon are akin to a malnourished man refusing to eat more for fear of growing obese. In a world of substantial excess capacity, high unemployment and tightening fiscal policy, inflation is likely to remain low in rich countries, the International Monetary Fund said in its latest World Economic Outlook, published last month.

It saw deflation as a more pertinent threat and projected that excess supply in the United States and the euro zone would not be used up until 2014. "For high inflation to emerge, there would have to be multiple shocks, including a sudden move to financial or trade protectionism that would undo much of the integration of markets that has taken place over recent decades. Such a scenario seems remote," the IMF said. TOO MUCH SLACK Indeed, without significantly stronger financial and structural policies, potential output in rich economies is likely to remain appreciably below pre-crisis trends, the IMF said. And, it added, any mistakes by governments in rolling back public deficits could cause a long period of deflation or low inflation and disappointing economic growth. Jan Hatzius, chief U.S. economist at Goldman Sachs , said there was so much slack in the economy that U.S. interest rates might stay close to zero for several years: -- the capacity use rate in U.S. manufacturing is currently 72.2 percent, compared with a long-term average of 80.7 percent; for utilities, the rate is 79.4 percent versus 87.6 percent.

-- residential and commercial real estate vacancy rates are well above their long-run averages. -- the Labour Department's "underemployment" rate is 17.1 percent compared with an average since 1994 of 9.8 percent. In addition to the unemployed, the rate counts those who have given up looking for work and part-timers who want a full-time job. Against this background, Hatzius said a widely followed rule of thumb for the appropriate stance of monetary policy, named after economist John Taylor, points to the need for the fed funds rate to be around minus 5 percent now, not zero. As such, Hatzius expects the Fed to announce after its policy-setters meet on Wednesday a second asset-purchase programme initially worth $500 billion and eventually expanding to $2 trillion. The impact would be to add half a percentage point to U.S. growth through the stimulus of lower bond yields, a wealth effect from rising equity prices and a knock-on drop in the dollar. Speaking in Beijing this week, Hatzius said the impact of "QE2" would be benign for Europe, where growth is weak, because it would let monetary conditions stay looser for longer. "But in some parts of the world, it causes more problems. And Asia is probably in the latter camp," he said. "If there are spillovers into countries that are already on the verge of overheating, then domestic policymakers are going to tighten more than they otherwise would." WHAT'S THE POLICY MIX? Which leaves markets grappling with what form the tightening will take -- currency appreciation, tougher monetary policy or fiscal restraint. Australia and India both raised interest rates on Tuesday, as did China on Oct. 19. While the Reserve Bank of India signalled a pause in its tightening, the World Bank called on Wednesday for China to keep raising rates. Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch in Hong Kong, said China's capital controls help it keep out unwanted inflationary inflows -but only up to a point. "The Chinese authorities have many tools at their disposal with which to lean against these sorts of pressures. They're going to have to use those tools more aggressively than they otherwise would have done if the Fed goes for further quantitative easing," he said. The United States, of course, would like China to tighten by allowing its exchange rate to rise faster. While politicians focus on the nominal rate of the yuan against the dollar, China's higher inflation rate is already pushing up the economically more important real exchange rate. Indeed, Bank of America Merrill Lynch last week nudged up its forecast for inflation across emerging Asia in 2011 to 4.0 percent from 3.3 percent and said rising bond yields suggested investors were already on the scent. "This highlights one of the great ironies of QE2: it creates inflation in the region that least needs it," economists T.J. Bond and Marcella Chow said in a report.

3/11/2010

BANGALORE: Top consumer brands are realising that serious investment in social media tools beyond putting up a Facebook page or having a twitter account can help them gain a bigger share of the new-gen customers wallet. Companies have realised that they were callously investing in social media without expecting a return on investment.

Now clients have begun to demand more, said Advith Dhuddu, founder and CEO of AliveNow, a Bangalore-based social media management agency. FMCG company Capital Foods , which manufactures Chings Secret soups, sauces and instant noodles, uses Facebook extensively by discussing innovative recipes centred around the brand. Sales of Chings Secret over the year has grown 8-9% month-on-month. We spend 35% of our marketing budget on social media and believe that a substantial part of Chings growing sales is because of the connect with the Facebook generation, said Ajaay Gupta, MD and CEO, Capital Foods. To boot, for little over a year, the firm did not invest in above-the-line advertising channels like television. JustDial is using social media to expand sales despite having an online presence. Since the connect between buyers and sellers happens in real time, the seller gets an audience who wants to buy. This shortens his sales cycle, increases return on investment and makes them keep investing in JustDial, says VSS Mani, founder & CEO of JustDial. Till now, advertising through social media forms a small part of a brands marketing budget. But experts see this pie growing since the Indian social networking audience grew 250% (September, 2010, year-on-year) driven mainly by Facebook and Twitter. Brands themselves are calling us to manage their social media presence after seeing successful case studies elsewhere, said Mihir Karkare, assistant vice-president of Social Wavelength, a Mumbaibased social media agency. Lifestyle brands think users of social netoworking sites their target audience both by income and age. They reach out to increase frequency of sales from loyal consumers while adding new ones. Cafe chain Barista Lavazza too tied up with Google Maps to offer an e-coupon whenever consumers searched for directions to a Barista outlet. Plus, it also uploaded an album of cafe merchandise and beverages on its Facebook page. It invited consumers to tag themselves on the photographs, for example the fastest user could redeem a product at their outlet. The cafe also bagged sales from friends who accompanied the winners. We noticed that consumers who received coupons on Thursday drove a spike in deals over the weekend, said Saurabh Swarup, head of marketing at Barista Coffee Company, said. Earlier, search engine optimisation was a rage. Now it has been replaced by social media optimisation, added Dhuddu. Yet, others feel that brands still do not understand the potential of the medium. Only when the senior management starts looking at social media in a holistic way, will it become a medium for generating results, said Prasanth Mohanachandran, co-founder of AgencyDigi. Facebook which has 26.2 million Indian users while Twitter has around 3.02 million users according to Vizisense, an online audience measurement firm.

TOKYO: Panasonic Corp. said Thursday it has invested $30 million in Tesla Motors Inc., the US maker of electric sports cars, eyeing an expansion in the global market for electric vehicles. Panasonic, Japan's biggest home appliance maker, said it will acquire about a 2 percent stake in Tesla. Panasonic said the two firms will jointly market battery packs for electric cars. Shares in Panasonic jumped 3.7 per cent to 1,181 yen on Thursday following an announcement of the capital tie-up with Tesla. Apart from Panasonic, Toyota Motor Corp. already has invested $50 million in the high-end electric car maker. Toyota, the world's No. 1 automaker, has also signed a $60 million contract to have Tesla help develop an electric version of Toyota's RAV4 crossover vehicle. Tesla opened its first Asian showroom in a fashionable Tokyo neighborhood last month, hoping to woo rich buyers before eventually widening its appeal with cheaper models.

But the company has not turned a profit since it was founded in 2003, and so far Tesla has sold only about 1,000 of its high-end electric cars. It currently sells just one vehicle, the $109,000 Roadster sports car, which is popular among celebrities and performance-car enthusiasts.

4/11/10SHANGHAI: US auto giant General Motors said on Thursday it had become the first international carmaker to sell two million vehicles in a year in China, now the world's largest auto market. The strong China sales further underlined the country's growing importance to GM, where it has been the market leader for five years and the carmaker's international operations are now based. "This is another important milestone for General Motors in China," GM China president and managing director Kevin Wale said in a statement. In a sign of GM's momentum, Wale pointed out it was only three years ago that GM -- along with its Chinese joint venture partners -became the first to sell one million vehicles a year. China overtook the United States last year to become the world's largest auto market for the first time and is on track to hold onto the top spot this year, analysts say. "Over the past decade, China's vehicle market has experienced unprecedented growth," Wale said. "GM has grown with it, working with our joint ventures to expand our lineup of vehicles and brands, adding to our portfolio of services, and increasing our production capacity to meet the changing needs of consumers," he added. The US car maker announced on Wednesday it had agreed to closer ties with partner Shanghai Automotive Industry Corporation (SAIC), China's biggest car company, including cooperation on the development of new energy vehicles. GM's other joint ventures in China are SAIC-GM-Wuling, a mini-commercial vehicle joint venture with SAIC and Liuzhou Wuling Automobile, and FAW-GM Light Duty Commercial Vehicle, a tie-up with China's FAW Group launched in August. The US company said it and its joint ventures have benefited from record monthly sales throughout the year. In October, GM sold 199,641 vehicles in China, a 19.6 percent rise year-on-year. SAIC Group, the biggest domestic carmaker which sold 2.7 million vehicles last year, has said it is closely watching GM's 13 billion-dollar US initial public offering. A spokeswoman for the Chinese automaker declined to comment on Thursday on reports that it would like to invest in the listing, saying only: "We hope their IPO will be successful". GM hopes the listing, one of the largest in US history, will allow it to break from government ownership. GM was forced into a state-backed bankruptcy reorganisation in June 2009 and emerged a little more than a month later. The US government owns a 60.8 percent stake in General Motors Company and the Canadian and Ontario governments have a combined 11.7-percent holding.

NEW DELHI: In a spectacular debut on the bourses, Coal India today became the country's fourth largest company in terms of valuation with a market capitalisation of Rs 2.16 lakh crore and pushed MMTC out from the club of top-10 most valued firms.

Coal India Ltd (CIL) witnessed a sparkling trading session and became the part of the elite club on the very first day of trade, causing setback to the public sector trading firm MMTC, which finished the day with m-cap of Rs 1.3 lakh crore. "The coal sector will continue to see growing demand and investors are keen to participate. The CIL deal opens up opportunities for other entities seeking to grow their business and take it to the next level," DSP Merrill Lynch Head of Global Capital Markets Saurabh Sonthalia said. CIL today listed on bourses with a handsome premium of 17 per cent and settled with a gain of 39.73 per cent at Rs 342.35 over its IPO issue price of Rs 245 a share on the Bombay Stock Exchange. State-run coal major emerged as the fourth most valued firm after Mukesh Ambani-led Reliance Industries, energy giant ONCG Corp and the country's largest lender State Bank of India . With a m-cap of Rs 3,61,516.18 crore, Reliance Industries remains the country's most valuable company, followed by ONGC at the second position with m-cap of Rs 2,93,239.08 crore and SBI at the third spot with the valuation of Rs 2,18,112.72 crore. Besides, IT giants TCS and Infosys Technologies were left behind by the world's largest coal firm CIL in terms of mcap. TCS ended with a total valuation of 2.09 lakh crore while Infosys finished the day with an m-cap of Rs 1.76 lakh crore. Others in the top 10 list included--NTPC (Rs 1,60,539.11 crore) at seventh spot, ICICI Bank ( Rs 1,44,932.24 crore) at eighth, ITC (Rs 1,35,997.95 crore) at ninth and L&T (Rs 1,31,968.58 ) at tenth position. Infrastructure giant L&T also today made a smart entry in the kitty of the country's ten most valued firms, replacing the telecom major Bharti Airtel, which grabbed the twelfth spot with a m-cap of Rs 1,23,951.05 crore.

MUMBAI: Durables-to-oil and gas conglomerate Videocon Group said on Thursday it is planning to split its various businesses, a move that could help them raise capital or induct strategic partners into some businesses. With the help of independent external consultants, the company will look at various options available to reorganise and segregate various business segments of the company, said Videocon in a statement to the Bombay Stock Exchange (BSE). This move will ensure greater focus on the operation of each of the companys diverse businesses and enhanced value for shareholders and improvement in the business prospects of the company, said the release. The company is run by three brothers, Venugopal, Rajkumar and Pradeepkumar but Venugopal has always the first among equals. On Thursday, the company announced a 7.1% increase in its net profit at Rs 159.9 crore in the quarter ended September 30, over the same period last fiscal. The company had a net profit of Rs 149.3 crore as on September 30, 2009, Videocon Industries said in a filing to the BSE. During the quarter, the companys income from operations stood at Rs 2,985.5 crore, a 13.9% jump from Rs 2,621.2 crore recorded in the corresponding period last fiscal. On Thursday evening, two of the scions of the Dhoot family, Anirudh, and Saurabh, said that only Mr Venugopal, the chairman, would be able to elucidate on the logic behind the announcement. But calls to Venugopal Dhoots mobile remained unanswered. The group had earlier indicated that it will separate a few of its businesses in order to have a more focused approach.

Earlier this week, Videocon had said it has appointed merchant bankers ICICI Securities and Morgan Stanley to help unlock value from its oil and gas assets, either through an initial public offering or a demerger. The company has recently discovered hydrocarbons in the Tarakan basin of Indonesia and had also announced a gas find in a second well in Mozambique in Africa. Exactly a decade ago, Videocon group had restructured its operations by forming eight strategic business units or profit centres. Since then, the $2-billion Videocon Industries has diversified into capital-intensive businesses such as power, telecom, media, oil and gas. Some experts feel such restructuring is an easy way to get new partners and financial options. A company, which is diversified, will generally get lesser value compared to a singlefocused company put together, said Avinash Gupta, VPresearch equity, Bonanza Portfolio. If the businesses are split, then it can help them get better valuation from each business and raise fresh resources from the market, he added. On the day of the announcement, the companys stock closed 0.25% up at Rs 260.50 on the BSE while the benchmark index Sensex closed 2.09% up to 20893.57. MIRANDOLA: Italian industrial group Fiat SpA intends to strengthen its home country roots and has no wish to delay investments, its chief executive said on Friday. CEO Sergio Marchionne has clashed with trade unions on his efforts to boost productivity at Fiat's Italian plants and the dispute has delayed its Fabrica Italia (Factory Italy) investment plan to boost production. Fiat's investment plans for Italy envisage spending 20 billion euros ($28.28 billion).

"After having enabled the company to compete at international level, we intend to strengthen our roots in Italy," Marchionne said, speaking at a prize-giving ceremony. "Whoever thinks this (row) is a way of gaining time and delaying investments is not aware of how much time we have already wasted. We ask that all those involved are available to work together in the same direction," he said. Fabrica Italia is our way of rolling up our sleeves and looking to resolve the problems, he said. Last month, Marchionne provoked an angry reaction when he said Fiat would perform better without its loss-making Italian plants, stressing Italy must boost efficiency to remain competitive. By 1142 GMT, Fiat shares were up 1.6 per cent at 12.7 euros. The auto sector index is down 0.12 per cent.

5/11/10WASHINGTON: In a historic decision, the International Monetary Fund board agreed on Friday to boost the voting power of big emerging economies and make China the third leading voice in the global lender. "This historic agreement is the most fundamental governance overhaul in the fund's 65-year history and the biggest ever shift of influence in favor of emerging market and developing countries to recognize their growing role in the global economy," IMF Managing Director Dominique Strauss-Kahn told a news conference. Under the deal, first clinched by finance ministers of Group of 20 leading economies in South Korea last month, 6 percent of IMF voting shares will be transferred to "dynamic" emerging market countries from industrial economies. The move would vault China over Germany, France and Britain into third spot behind the United States and Japan. It would also lift other large emerging powers India, Brazil and Russia into the top 10 of the 187-member institution. Emerging economies have gained more clout in the IMF over the past five years, but Friday's shift is by far the most

significant, amounting to an overhaul of the global economic order established when the IMF was set up after World War Two. The IMF's member countries will vote on the reforms in the coming weeks, with 85 percent of support needed for the changes to pass. Some countries will also require legislative approval, including the United States. Strauss-Kahn said he did not believe this week's congressional elections in the United States, where Republicans won control of the House of Representatives, would delay approval in Washington. The move doubles IMF member quotas, or subscriptions, boosting the lender's resources by about $755.7 billion at current exchange rates, the fund said. The board also endorsed changes in its own makeup to reduce Europe's influence on the 24-member decisionmaking body. European countries will give up two of the eight or nine seats they hold at any given time to emerging countries at the end of two years. BIGGER SAY, BIGGER RESPONSIBILITY

U.S.-China tensions have flared this year over business and trade, but especially over China's undervalued currency that Washington argues gives Beijing an unfair trade advantage. Analysts believe that unless China allows its currency to rise significantly, the Obama administration may wait to submit the IMF vote changes to Congress for approval. Strauss-Kahn said having a bigger say in the IMF came with greater responsibility in the global economy and China recognized that. "I think (IMF reforms) may have an influence on the behavior of the Chinese authorities. They were willing to have this position, they were willing to be better represented in the IMF, which shows they do care about multilateral institutions," he said. "I expect they will behave, or have in mind the importance of their role." The IMF board's approval on Friday came before next week's G20 leaders' summit in South Korea where the United States is seeking agreement to limit global trade imbalances. Emerging economies are unlikely to be sympathetic after the U.S. Federal Reserve embarked on a new $600 billion bond-buying spree this week, sparking criticism from Brazil, China and South Africa that the Fed's money printing could weaken the dollar and send a surge of investor cash into their economies. NEW YORK: In signs of continuing financial woes, a staggering 141 American banks have gone belly up so far year, surpassing the total count of bank failures in 2009.

this

The world's largest economy saw the collapse of 140 banks last year, at a time when the country exited one of the worst recessions. Four banks -- Western Commercial Bank, Pierce Commercial Bank, First Vietnamese American Bank and K Bank -were shut down by the authorities on November 5. According to the Federal Deposit Insurance Corporation ( FDIC), which insures deposits at over 8,000 American banks, the latest failures would cost more than $254 million. In October alone, 12 banks went out of business. Seven banks were closed down in September, while August saw the failure of ten entities. The maximum number of failures this year happened in April, when 23 entities went belly up.

Official data showed that the count of 'problem' banks -- those at risk of failure -- climbed to a 17-year-high of 829 in the June quarter. Small and medium banks are facing the brunt due to rising defaults, triggered by high number of unemployed people. Notwithstanding massive stimulus measures, the jobless rate continues to hover near ten per cent. Last week, the US Federal Reserve announced that it would purchase government securities worth $600 billion in coming months, a move aimed at bolstering the national economy, which expanded at just two per cent in the September quarter.6/11/10 NEW DELHI: Industry body CII today said sourcing of infrastructure equipment, nuclear hardware and military aircraft from the US by India could create over seven lakh jobs in America in the next ten years. A CII survey of member firms with operations in the US clearly shows that Indian business is now engaged across a wide spectrum of sectors in America, and not just IT and ITeS. The Report, 'India - A Growth Partner in the Indian Economy', estimates that, "India sourcing of US military and nuclear hardware and civilian aircraft could create over 700,000 jobs in the US over the next ten years." Yesterday, US President Barack Obama had announced USD 10 billion worth of deals between Indian and US companies, including a USD 2 billion equipment order from Anil Ambani Group firm Reliance Power and the purchase of 30 Boeing 737 aircraft by low-cost carrier SpiceJet . These deals would create more than 50,000 jobs in the US. The report also said that Indian firms operating in the US have been aggressively hiring US workers and a large majority of the workforce for their America operations were local citizens. It further said that Indian firms having operations in the US are actively engaged as stakeholders in community development programmes for development of libraries, health research and imparting skills to college graduates. "These examples of deep integration... show that Indian business is in the US for the long-term and see themselves as partners in the resurgence of the US economy," CII Director General Chandrajit Banerjee said. The father-son duo of Deepak Puri and Ratul Puri know a thing or two about reinvention. For a good part of the last 15 years, Moser Baer India, their flagship, has soared and sunk with businesses that can be best characterised as here today, gone tomorrow. They started in 1984 with floppy disks, which made way for CDs, which made way for DVDs, which is now making way for Blu-Ray discs and pen drives, which will probably make way for, well, something. Much as they want to know what that might be, they also want to look beyond the fleeting nature of technology. The business they have identified to look beyond, power, is very different from everything they have done so far. If digital storage is new economy, power is as old economy as it gets. If digital storage is about engaging with global markets, power is about engaging with local governments. If digital storage is perpetually threatened by obsolescence, power is good to last for perpetuity. We wanted to do a business away from technology, says Deepak Puri, the 69-year-old patriarch of the group. As Moser Baer India strived to stay three steps ahead of technology, Deepak Puri and Ratul Puri, his 39-year-old son, conceptualised the power strategy. The energy sector always interested me, says Deepak Puri. This time around, the opportunity was there, and we thought it would be a good business to be in for 60-75 years. Its as big a reinvention the Puris have undertaken as any. Over the next five years, the Puris plan to invest Rs 34,000 crore, about 16 times the current revenues of Moser Baer India, to set up 5,000 MW of power capacity across

three mediums: thermal, hydro and solar. And they are doing all this outside the flagship company. But can entrepreneurs in the digital-storage business, even if they have been terrific there, crack the power business? Akhil Gupta of The Blackstone Group , one of the worlds largest private equity funds, thinks so. In August, Blackstone invested Rs 1,350 crore for a minority stake in Moser Baer Projects, the holding company set up by the Puris to drive this expansion into power. We looked at 14 projects they had implemented and found they were good in project management, says Gupta, CMD, Blackstone Advisors India . These are generic skills and you can apply them to any sector. This reinvention can also be seen as a rebirth. Back in the 1980s, Moser Baer began life in Kolkata by manufacturing electric cables. But it quit the business soon, as not much was happening in the power sector for private players. Although the power sector was opened to private players in 1992, the push came from the passage of the Electricity Act, 2003. For instance, private players could now sell power outside their state of location and buy coal mines. The IRR (internal rate of return) in the thermal business is 18-20%; if the fuel linkages are good, 25-30%, says Kameswara Rao, leader, energy, utilities and mining, PricewaterhouseCoopers.

BEIJING: Top European automaker Volkswagen AG plans to make electric vehicles at its two China car ventures, with the first locally made model available on the market as early as 2013, local media said on Monday. Volkswagen, which make cars in tieups with SAIC Motor Corp and FAW Group, will bring its hybrid sport utility vehicle Touareg to China this year, auto.huanqiu.com said, citing VW China president Karl-Thomas Neumann. From 2014 to 2018, Volkswagen plans to make and sell 10,000 electric vehicles in China, Neumann was quoted as saying during an electric vehicle forum in south China. Volkswagen is joining General Motors, Nissan Motor among others in the race for China's fledgling but potentially promising green car sector. GM has started making the electric version of its Chevrolet new Sail at its venture with SAIC. It will also bring its Chevrolet Volt, which runs about 40 miles on batteries before using engine power, to China in the second half of 2011. Nissan, which runs an auto venture with Dongfeng Motor Group , had earlier signed a deal with the municipal government of Wuhan to jointly promote its Leaf in the central Chinese city. In June, Beijing unveiled a pilot scheme to hand out subsidies to buyers of fuel-efficient cars in five Chinese cities as it moves to cut emissions in the world's most populous country and the world's largest producer of greenhouse gases.

China's output of electric vehicles is expected to reach 1 million units by 2020, Wan Gang, Minister of Science and Technology, was quoted as saying by State owned Xinhua news agency in October. China will account for less than 9 per cent of the total plug-in hybrid and electric car demand by 2020, according to a recent research report by industry consultancy J D Power & Associates .

8/11/10

SAN FRANCISCO: Google and Dell plan to push ahead with more acquisitions, helping maintain a takeover spree

thats

boosted

the

value

of

US

technology

mergers

to

more

than

$60

bn

this

year.

Google is likely to buy more companies about the size of YouTube and DoubleClick, its two largest deals, to help offer more online services, the companys head of mergers and acquisitions said in an interview last week. Dell plans more takeovers in its drive to double the size of its data-center business to $30 bn in sales, a company executive said. Internet and computer companies are increasingly relying on acquisitions to gain new technology and customers. Amazon.com is near an agreement to spend $540 mn for Quidsi, owner of Diapers.com, two people familiar with the matter said on Sunday. For Google, the largest Internet search company, absorbing more startups could provide fresh ways to sell ads and compete with social-networking sites such as Facebook. The world changes really quickly, and companies that were small two years ago are huge today, David Lawee, vice president of corporate development at Mountain View, California-based Google, said in a November 4 interview. It wouldnt surprise me to see more large opportunities for us. Google has stepped up its dealmaking in 2010, spending $1.6 bn on more than 20 companies in the first nine months of the year, according to regulatory filings. Its acquisition of mobile-ad service AdMob Inc. and a pending bid to acquire travel data aggregator ITA Software, for about $700 mn each, would be the companys third- and fourth-largest deals since it went public in 2004. Google paid $1.65 bn for YouTube, the worlds biggest video-sharing site, in 2006. It acquired DoubleClick, an online advertising company, for $3.2 bn in 2008. When asked if Google would buy more companies of the size of those businesses, Lawee said, Yes. Dell, meanwhile, is using deals to grab a bigger chunk of market for data centers large rooms of servers and storage systems that deliver software and information over the Internet. The company is racing with Hewlett-Packard, International Business Machines Corp. and Oracle Corp. to become one-stop shops for data-center technology.

SYDNEY: Investors gave stocks a wide berth on Wednesday on renewed worries China may hike interest rates this week and after top level meetings in Europe failed to produce a clear solution to tackle Ireland's debt crisis. Dublin has so far resisted pressure to request aid, although euro zone ministers have agreed to send a joint European-IMF mission to Ireland that could prepare the way for a bailout to prevent its debt crisis spreading to other countries. Asian stocks excluding Japan dropped to their lowest level in four weeks, while European bourses opened lower with the FTSEurofirst 300 index of top European shares down 0.2 percent. The rally in the dollar, meanwhile, briefly paused after two top Federal Reserve officials were reported by the Wall Street Journal as saying the central bank may need to go beyond its latest plan to pump $600 billion into the U.S. economy. The MSCI Asia stock index excluding Japan fell 1.5 percent to its lowest level since Oct. 20, on track to close lower for an eighth straight session. Among the worst performers, Australian shares slid 1.6 percent as BHP Billiton and Rio Tinto both suffered falls of more than 2 percent. Investors worry that China, Australia's largest export market, is preparing more aggressive steps to tame

inflation and thus risk slower growth. CHINA INFLATION Chinese Premier Wen Jiabao said his government was preparing steps to tame price rises, feeding into market expectations that China will intensify tightening policies. There is talk that it may do so as soon as Friday. "China wants to send a message to everybody that this time they are serious in fighting inflation, reducing excess liquidity and controlling speculative inflows," said Danny Yan, who helps manage more than $400 million at Tai Fook Asset Management. Hong Kong's Hang Seng index shed 2.2 percent, while Chinese shares fell 1.9 percent. Several other markets in Asia were closed for holidays, including Singapore, Indonesia, Malaysia and India. Japan's Nikkei average, however, eked out a small gain as shares in some exporters, such as car makers, benefited from the yen's softness against the dollar. The dollar hit a six-week high of 83.59 yen in New York, and was last at 83.44, while the euro, which fell as low as $1.3446 overnight, edged up to $1.3500. Worries about further policy moves in China also knocked commodity prices lower. Shanghai copper and zinc futures fell by their daily limit, chasing losses of 5 to 8.5 percent in London in the previous session. "We know it's coming, but we don't know when. The uncertainty is a risk-appetite killer, but like Rumsfeld once said, 'it's a known unknown'," a trader in Hong Kong said, referring to comments by former U.S. Defense Secretary Donald Rumsfeld. Three-month copper on the London Metal Exchange fell 1.1 percent to $8,060 a tonne, down about 10 percent from a record high of $8,966 set on Nov. 11. Spot gold was a touch lower on the day at $1,335.00 an ounce, having shed 2 percent the previous day to a two-week low, while crude oil slipped 0.5 percent to $81.95 a barrel, still shaky after Tuesday's 3 percent fall. U.S. Treasuries held on to most of the gains made on Tuesday, with the 10-year note yield flat at 2.84 percent, off a 3-1/2-month high near 3 percent set on Monday.LONDON: Gold demand is being lifted this year by a recovery in jewellery buying in the key Indian market, and robust growth in Chinese gold consumption, the World Gold Council said on Wednesday. Releasing its third-quarter Gold Demand Trends report, which showed a 12 per cent year-on-year rise in gold demand in the third quarter, the WGC said jewellery consumption in particular looked set to improve on last year's level. "The main drivers for this year are the impact of the Indian and Chinese markets," said the WGC's research manager Eily Ong. "In 2010 in total, jewellery demand could actually exceed that of 2009." Concerns over the global economic outlook and currency market stability have supported investment in gold this year, helping it to a record $1,424.10 an ounce last week. But identifiable investment levels are below 2009's stellar levels.

Investment demand almost halved in the third quarter from the previous three months, during which concerns over euro zone sovereign debt levels fuelled a surge in investment in bullion. But Ong said jitters remain in the wider financial markets, caused by measures such as the United States' quantitative easing policy announced earlier this month, which could still lead to another jump in investment. "If there is continuing uncertainty over the impact of QE2 and uncertainty over what is happening with the Asian market -- whether they will continue to tighten policy, or whether whatever they are doing now will succeed in curbing inflation -- we could probably see what we saw in Q2 again," said Ong. "There could be more investors allocating their assets into gold as a store of value, and for capital preservation." Demand for investment products such as gold exchange-traded funds softened in the third quarter. ETF demand was down 7 per cent year-on-year to 38.7 tonnes, less than a seventh of the "exceptional" flows seen in the second quarter. INDIA BUYS But other forms of demand rose. Jewellery buying climbed 8 per cent to 529.8 tonnes in the last quarter, accounting for 57 per cent of total demand. In the second quarter jewellery buying accounted for just 40 per cent of overall consumption. India bought nearly 50 tonnes, or 36 per cent, more gold jewellery in the third quarter than in the same period of the previous year, bringing its jewellery consumption in the quarter to 184.5 tonnes.

NEW DELHI: The government has empowered boards of state-run Oil & Natural Gas Corp (ONGC) and Indian Oil Corp (IOC) to invest up to 5,000 crore in a project without its approval on Tuesday by certifying them as maharatna companies. Indias biggest fuel refining and marketing company IOC and countrys largest energy explorer ONGC are armed with greater financial powers just before their follow-on public offers (FPOs) expected in this fiscal year. The prestigious status of a maharatna will empower us to chart new and innovative strategies and inspire us to scale greater heights in the future, IOC chairman BM Bansal said. Earlier, IOC was a navratna with powers to invest in a project worth 1,000 crore or less. IOC and ONGC were among the four navratnas granted the maharatna tag in May. But they could not enjoy their new status because their board did not have required number of independent directors. Other two companies to get the elevated status were NTPC and SAIL. Maharatna status provides greater autonomy and operational flexibility to state-run companies. Only a public listed navratna company, having minimum average turnover of 25,000 crore and net profit of 5,000 crore in past three years is eligible for the status. Certificates were awarded to the companies by heavy industries & public enterprises minister Vilasrao Deshmukh, companies said in their statements. 18/11/10

NEW YORK: General Motors on Wednesday announced a hike in the number of shares in its stock listing, which puts the US auto maker on track to rebound from bankruptcy with the largest public share offering in US history. The largest US auto maker said it would sell 478 million shares instead of the 365 announced previously due to

strong interest by investors, for a price between 32 and 33 dollars per share. The offer could pull in 22.4 billion dollars for GM, making it the largest IPO in US history, taking into account options for issuing supplementary shares. Credit card giant Visa currently holds the record with its blockbuster IPO 19.7 billion dollars in 2008. GM is returning to public trading on the New York Stock Exchange after an 18-month hiatus. The NYSE delisted GM after the company filed for Chapter 11 bankruptcy protection on June 1, 2009. It emerged a month later with the government owning a controlling stake. The price range of 32 dollars to 33 dollars represents an increase of as much as 27 percent from the November 3 estimate of 26-29 dollars. Once the world's largest corporation, GM sold more vehicles than any other automaker from 1931 through 2007, after which it lost the crown to Japan's Toyota. Hit by falling sales amid a steep US recession, GM was forced into the government-backed bankruptcy reorganization after receiving billions in emergency aid. The auto maker transferred its main assets to a new government-supported car company under a plan financed by the Obama administration and the Canadian government. The US government owns a 60.8 per cent stake in General Motors Company, the Canadian and Ontario governments have an 11.7 per cent holding, and the United Auto Workers union's retiree health care trust fund owns a 19.93 per cent stake. With the IPO, the US Treasury's stake is expected to fall to 40.6 per cent. The embattled US auto industry has been showing consistent gains so far this year amid a US economic recovery that began in July 2009 from the worst recession since the 1930s. And a successful IPO would provide a victory for President Barack Obama as his administration moves beyond an election "shellacking" fueled -- in part -- by anger about economic policies, including the bailou

ZHUHAI: China is emerging as a competitor in the international arms market , offering increasingly sophisticated fighter jets , missiles and equipment that are beginning to rival Russia and other longtime exporters. With the same low-cost strategy that worked for toys and electronics, Chinese firms are targeting cost-conscious customers, albeit in an industry still dominated by the United States, Russia, France and Britain. ``China's share of the global market may never be that big, but it will have a growing niche with poorer countries such as African states,'' said Richard Bitzinger, a senior fellow at Singapore's Rajaratnam School of International Studies. The Chinese challenge has been on display at this week's Zhuhai air show, a biannual aviation industry event that wraps up Sunday. Pilots have given aerial displays of China's latest-generation J-10 fighter, and exhibition halls are stocked with models and mock-ups from military aircraft maker Aviation Industry Corp. of China. Sprinkled among the exhibits are a half dozen flight simulators, highlighting a push to offer not just aircraft but also

training

and

after-sales

service.

That all-encompassing approach will be key to further growth as Chinese firms seek to woo buyers for more sophisticated aircraft such as the J-10 and F-8T, which compete directly with products from the West. ``China is building a client base for the future,'' said Rob Hewson, London-based editor of Jane's Air-Launched Weapons, who was attending the air show. ``They hope to be servicing these customers for decades to come.'' That was not always the case. China's arms industry had long been known for cheap knockoffs of Russian hardware: East Timor's president once described the Chinese patrol boats his country was purchasing as a ``fake Gucci ship.'' These days, technological advances are driving expansion. Deliveries of big-ticket military hardware more than doubled between 2007 and last year, according to the Stockholm International Peace Research Institute, lifting China to seventh place among arms exporters. The institute tally excludes sales of small arms and ammunition, of which China has long been a major supplier. The FC-1 Xiaolong multirole fighter jet is an example of what's behind that growth.

Developed in cooperation with the Pakistani air force, which calls it the JF-17 Thunder, the plane is being offered at the relatively low price of about $15 million, making it a cost-efficient replacement for aging workhorses such as the MiG-21 and Northrop F-5 Tiger. Other overseas successes include: _ The Hongdu K-8 trainer and ground-attack jet, also developed jointly with Pakistan. About 250 have been sold to countries such as Egypt, Ghana, Pakistan, Sudan and, most notably, Venezuela, beating out Russian competition for China's first major sale in South America. _ The F-7 jet fighter, based on the Russian MiG-21. About 100 have been sold to Bangladesh, Namibia, Nigeria and other developing countries. In Nigeria's case, the arrival of 12 of the planes in April did much to revive a fighter fleet that had become largely inoperable. _ The WZ-551 armored personnel carrier, sold to Argentina, Sudan and a half-dozen other countries. The growing sales coincide with a sharp decline in China's weapons imports, although it remains dependent on Russia for key components, including engines for the JF-17, G-10 and L-15. Deliveries of ships, submarines and fighter planes from Russia peaked in 2006 and then went into sharp decline. One reason was Russian wariness of Chinese reverse engineering: Stung by China's flagrant copying of the Su-27, the Chinese version is known as the J-11, Russian makers became increasingly reluctant to sell their most advanced technology to Beijing.

MUMBAI: Mahindra Samriddhi, an initiative of Mahindra Farm Equipment, eyes having 600 Mahindra Samriddhi centres and five million farmers under its ambit by 2020, a top company official said. "Mahindra Samriddhi, aimed at helping farmers get the maximum yield from their farms, aims to have around 600 centres and five million farmers under its ambit by 2020," Mahindra & Mahindra's Automotive and Farm Equipment Sectors President, Pawan Goenka, told PTI here. Presently, there are 96 Samriddhi centres pan-India with a strong concentration in Chhattisgarh, Gujarat and Maharashtra. Nearly 70,000 farmers are already being helped by the Samriddhi centres run by the automotive giant's

dealers. Going forward, the company plans to look at business beyond tractors in the form of selling seeds, crop-care materials and other agri-consulting through Samriddhi by making it a stand-alone business, but that is still some time away, "say, five years from now," Goenka said. The Mahindra Samriddhi stall was recently visited by US President, Barack Obama, in Mumbai, and he was impressed by the work done in the Indian agricultural sector. He also interacted with a farmer, Lalit Vairagade, who had been helped by Mahindra Samriddhi to enhance his crop-quality. Samriddhi's concept revolves around helping farmers enhance their yields. It helps them out with soil-testing, planning out their crop and providing them information on how much fertilisers and water should be used, etc. "In other words, we provide overall agri-consulting," Goenka said.

On an average, farmers helped by Samriddhi have reported a 15-20 per cent improvement in their yields after the first year, Goenka said. Mahindra Samriddhi, now operates from Mahindra tractor dealerships and helps them in bonding with farmers in rural areas. The dealers conduct soil-testing for a nominal charge and also sell them seeds and other crop-care materials. Apart from this, many non-Mahindra customers also come to these dealerships and quite a few of them get converted into a Mahindra tractor customer. "Apart from an additional income-stream through sale of seeds and crop-care materials, they also get new tractor customers," Goenka said, enumerating the benefits dealers get from Samriddhi.

21/11/10

NEW DELHI: China may be the biggest contributor to global growth as the world comes out of the recession , but it is India that is at the forefront of creating demand for countries battling slowdown. It was the second biggest net importer of goods and services in 2009, just behind the US, providing a market for countries battling contracting domestic demand. This is important in context of the current debate on global imbalances wherein the role of each country needs to be appreciated and appropriate action demanded. China had a huge net export of $349 billion in 2009, indicating that it was sucking up global demand through its cheaper mass produced goods. In contrast, India imported $69 billion of goods and services in 2009, while the US was a net importer of about $699 billion. This means that India injected demand into the global markets by creating a demand for products, helping in creating jobs and sustaining other economies. "Countries such as US and India are injecting demand into the global demand because we have deficits. Actually, India is second largest contributor to the global net demand. In 2009, India contributed something like 6.5% of the total net injection of demand," said Arvind Virmani, executive director-India , International Monetary Fund . Traditionally India has been a net importer, which earlier was seen as a sign of dependence on other countries. But globalization has changed this thinking as currently India is a big market for exporting nations. "India has provided markets for other countries," said Madan Sabnavis, chief economist, Care.

Most of the industrialized nations have grown to a level where they are net exporters in value terms, as they export high technology objects and in turn import the basic low value products. "Countries like China, Germany and Russia which are withdrawing demand from the system because they have surpluses," Mr Virmani said emphasizing on the need for balance in global growth. Hit hard by the global financial crisis in 2008 most of the developed world is still grappling with the problem of inadequate demand and growth, which is fueling joblessness. They have tried both a mix of fiscal monetary measures to expand their economies to get over the problem. The latest US Feds move to print money to buy $600 billion of government bonds has come under scathing attack from China and some other emerging economies. The decision is expected to depreciate the value of dollar by about 20% over next eight months when this cash will reach markets. China, under pressure from the US for keeping its exchange rate low to make its exports competitive, did not lose much time in criticising the Fed move seen largely targeted at keeping the dollar undervalued. "There is an imbalance in the global economy, which has to be removed if we are to have a sustainable global recovery especially in a period in which there is a huge shortage of demand," Mr Virmani said.

CHENNAI: Procter & Gamble, makers of Maggi noodles and Ariel detergent, is planning to build a manufacturing plant in Chennai, which will be the worlds largest consumer product companys hub for south India. A delegation from the American multinational has held talks with government officials and the due diligence, or detailed evaluation of financial and other aspects, is done, people familiar with the development told ET. While the investment into the venture is yet to be finalised, a company official said the plant will come up either at Cheyyar or Mahindra World City. A P&G India spokesperson refused to comment: As per company policy, we do not comment on speculation. A couple of sources within the company, however, confirmed the news on condition of anonymity. The facility will manufacture liquid detergent and will become an export hub to neighboring markets, they said. This will make P&G the first company to manufacture liquid detergent in the country where the . 12,000-crore detergent market is equally split between washing powder and detergent bars. P&G , which has only 15% share compared to Hindustan Unilevers 37% in the detergent market, is desperately trying to catch up. The company that entered the mass segment with Tide Naturals last year is set to become the first player in the niche liquid detergent. During his visit to India two years ago, Bob McDonald, the global CEO of P&G , said the company is looking at setting up 19 manufacturing facilities globally including India, which has become one of the largest growth markets for international marketers across segments. He had also said that P&G is looking to tap bottom and mid segment of the market for growth. The company is looking to flood Indian market with new products and penetrate into rural market, which has been traditionally dominated by its rival Hindustan Lever. The company recently said that it is looking at tripling its revenues in India within the next three to four years. P&G in India has a combined . 4,500-crore turnover between its three subsidiaries Procter & Gamble Health & Hygiene, Procter & Gamble Home Products and Gillette India . It has seen 30% year on year growth in India. Its focus categories include household care, healthcare and beauty & grooming.

MUMBAI: Mexicos Cemex SAB de CV , the worlds third-largest cement maker behind European giants Lafarge and Holcim, is close to buying the cement business of Nagpur-based Murli Industries for about $550 million. Cemex has made an offer of $550 million after several months of due diligence, said a person involved in the negotiations. However, the price is still being negotiated and the final figure would depend on the outlook for cement prices, the person added. Two other people involved in the talks confirmed that a transaction was imminent but did not comment on other details. The investment-banking unit of equity brokerage Motilal Oswal , which helped Shree Renuka Sugars in its Brazilian acquisition earlier this year, is advising Murli Industries which also makes paper and edible oils along with Macquarie Capital. Bank of America Merrill Lynch is advising Cemex, said the persons involved in the talks and others who are aware of the impending transaction. AM Chandak, chief financial officer of Murli Industries, declined to comment for the story, when reached on his mobile phone. This will be the first major deal in Indias cement sector after 2005 when Swiss major Holcim took control of two of Indias largest cement companies, ACC and Ambuja Cement India. Both companies had a common set of promoters, the Mumbai-based Sekhsaria and the Kolkata-based Neotia families. Earlier, Lafarge and Italcementi, the fifth-largest cement maker in the world, were also in discussions with Murli, according to one of the people. Murli Industries, which has a 3 million-tonne plant in Maharashtras Chandrapur, plans to build two more, one in Rajasthan and the other in Karnataka. The planned new units, with capacities of 3 million tonnes each, would be built in tandem with 50 mw captive power plants. But the company is yet to order any equipment for these plants, according to industry officials. These officials attributed the slow progress to Murlis debt of about Rs 600 crore, resulting in a debt to equity ratio of 2.5:1. Murli Industries is expected to completely exit the cement business through this deal. The deal would value Murli Industries cement operations at an enterprise value of over $180 per tonne as against a replacement cost, or the cost of building a new plant, of $120 a tonne, analysts said. This seems to be expensive for a 3 million-tonne plant with 40% utilisation, said an analyst with an institutional brokerage who did not wish to be named. But foreign cement companies have been willing to pay top dollar to enter India, the worlds second-largest cement market which is growing at close to 10%. In April, Frances Vicat acquired 51% in Andhra Pradesh-based 2.5 million-tonne cement maker Bharathi Cement. The financial details of this deal were not made public, but according to industry sources, the valuation was in the range of $200 a tonne, amounting to a deal size of $500 million. For 2009-10, Murli Industries reported a net profit of Rs 40.30 crore on the back of revenues worth Rs 571.68 crore. Shares of Murli Industries on Friday closed at Rs 78.30 on the Bombay Stock Exchange, down 3.1% from Thursdays close. Its highest in the previous 52 weeks was Rs 117 with a low of 40. Cemex has been aggressive in buying companies in the last five years. In 2005, it acquired London-based RMC Group for $5.8 billion, and later Australias Rinker Group for about $14.2 billion. Cemex, which employs more than 50,000 people, had sales of $15 billion in 2009. The company did not respond to e-mails sent to its corporate communications department. Globally, there is a huge interest in buying

Indian companies, but there are very few sellers here, said a senior investment banker, who did not wish to be named. Cemexs global competitors, Holcim, Lafarge and Germanys Heidelberg, have established themselves in the 270 million-tonne Indian cement market. While Holcim controls about a fifth of the market here through ACC and Ambuja, Lafarge operates a 6.5 million-tonne capacity. The Mexican major was earlier rumoured to be in talks with local companies, including Mehta Groups Gujarat Sidhee Cement. It had also initiated talks with the Birla Groups Mangalam Cement twice between 2002 and 2004. But differences over valuations led to these deals falling through, according to industry sources.22/11/10

NEW DELHI: The fast moving consumer goods market in rural India is tipped to touch $100 bn (around Rs 45,735 crore) by 2025 on the back of "unrelenting" demand driven by rising income levels , according to a study by research firm The Nielsen Company. "The Indian rural market is set to become a USD 100 billion opportunity for retail spending in the next fifteen years," according to a statement released by the company today. According to Nielsen, rural India accounts for more than half of sales in some of the largest FMCG categories. "While the ability of lower priced packs to improve accessibility is known, their pace and presence has been unrelenting," The Nielsen Company India Vice President Prashant Singh said. In addition, premium skin care brands typically associated with the urban population are growing nearly twice as fast in rural areas, he added. At present, rural consumers spend about USD 9 billion per annum on FMCG items and product categories such as instant noodles, deodorant and fabric, with the pace of consumption growing much faster than urban areas, as per the findings. The Nielsen study also suggests that the number of direct-to-home television connections in rural areas is already more than double that of urban centres and growing dramatically. "Today, two out of five new mobile telephone connections are in rural," the statement added. "These findings have wide-ranging, practical implications for creating successful portfolio strategies and packaging formats that recognise these traits and appeal to the rural consumers' senses," Singh said.

NEW DELHI: The government on Wednesday said that state-owned MOIL, which will hit the capital markets on November 26, would become the first PSU to come with a public offer where retail investors can invest up to Rs 2 lakh. "This would be the first issue by a PSU (MOIL issue) where retail investors will be able to invest up to Rs 2 lakh," Disinvestment Secretary Sumit Bose told reporters here. As per the new norms announced by the market regulator Sebi in October, investment limit for retail investors in initial share sale offer has been doubled to Rs 2 lakh as against Rs one lakh earlier. MOIL, formerly known as Manganese Ore (India) Ltd, will hit the capital market on November 26 with a public issue of 3.36 crore equity shares and the IPO would close on December 1.

The government has fixed the price band at Rs 340-375 a share for the issue, which is expected to raise up to Rs 1,238 crore through the share sale programme. The issue has been priced, taking into account number of factors including strength of the company, its management and assessment of its peer firms, Bose said. On roping in anchor investors, he said, "We are not going for anchor investors in this issue. There is adequate demand by FIIs." The IPO will have the Centre divest 10 per cent of its stake in the country's largest manganese manufacturer , while Madhya Pradesh and Maharashtra governments will shed five per cent each. The issue would raise a total of Rs 1,238 crore at the upper end of the price band, including 5 per cent discount to retail investors and MOIL employees. Steel Secretary Pradeep Kumar Misra said that the largest domestic producer of manganese ore was likely to be listed on domestic bourses by December 13. "Tentative date for listing will be 10-12 days after the issue closes," Misra said, adding, "Market for MOIL is fairly assured." "Market should take this issue enthusiastically. We also welcome retail investors. The basic objective of the government of India in disinvesting in PSUs is larger holding of public," he said. MOIL has a total employee strength of 6,734 and its about 3,000 employees have already opened demat accounts. For the half year ended September 30, the company's turnover was Rs 635 crore, as compared to Rs 430 crore in the first half of previous fiscal. Profit after tax for the first half of this year stood at Rs 330 crore against Rs 201 crore in the year-ago period. 24/11/10

NEW YORK: General Motors Co's underwriters exercised their full overallotment option, making the initial public offering of the US automaker the biggest in the world, at $23.1 billion. The underwriters, led by Morgan Stanley, JPMorgan Chase & Co, Bank of America Merrill Lynch and Citigroup Inc, exercised their option on an additional 71.7 million shares worth $2.37 billion. They also exercised their option to purchase 13 million shares of mandatory convertible junior preferred stock for $650 million, GM said on Friday. The US automaker last week raised $20.1 billion in an IPO of common and preferred shares in the biggest US IPO ever. With this full overallotment, GM has now raised $23.1 billion, outpacing Agricultural Bank of China's $22.1 billion July IPO and making GM the biggest IPO globally.

The

full

overallotment

exercise

reflects

strong

demand

for

the

stakes

in

the

company.

Barclays Capital, Deutsche Bank, Goldman Sachs, Credit Suisse and Royal Bank of Canada are GM's other major underwriters. Lazard and Boston Consulting Group served as advisers to the Treasury. Evercore Partners advised GM. The closing for the additional shares is expected to take place on Dec 2.

GM stock rose 32 cents, or nearly 1 percent, to close Friday at $33.80.

BANGALORE: The Mumbai terror attack of 2008 created a term that is increasingly coming into the lexicon of IT outsourcing, ' India plus one'. Some attribute the origin of that term to Forrester Research , which, following the terror attack and the Satyam scandal, recommended that companies should derisk by spreading their outsourcing operations beyond India, to at least one other country. Recently, Hewlett-Packard's VP of enterprise services Robb Rasmussen said in an interview to CIO.com that a lot of HP clients want an India-plus-one strategy. "Historically, they've had a presence in India, but to mitigate risk,they'd like to have some assets somewhere else," he said. Tom Georgens, CEO of storage company NetApp , told TOI last month that the company needed to diversify from India, which is currently its second biggest site, the first being its California headquarters. "There are risks of inflation, the infrastructure may not catch up, and there are any number of things that are beyond our control," he said. India currently dominates the outsourcing market. A survey by Capgemini, in partnership with Harris Interactive, which was released in September this year, found that more than 60% of the US companies surveyed were outsourcing to India. China came in second at 27% and Latin America at 25%. Most estimates indicate that India has well over a 50% share of the total outsourcing market. But current trends suggest this figure will come down. John C McCarthy, VP and principal analyst in Forrester Research, says clients are increasingly looking at an India-plus-one strategy to hedge geopolitical risks. Firms are also seen to need to curry favour with local governments for local licenses and business, and with more and more countries jumping on the offshoring bandwagon and offering themselves as competitive locations, global firms are being compelled to give some of the outsourcing business to those geographies. Siddharth A Pai, MD of IT consulting firm TPI, says many global customers are looking at an I2+1 strategy, two India locations (one a main city like Bangalore or Chennai and the other a tier II or tier III location like Mysore or Noida) and another geography. "Customers today are asking for such combinations. That's because costs are going up in India, and customers want to mitigate geopolitical risk. Besides, alternative geographies are emerging," he says. Amongst alternative geographies, a popular destination is China. Given that many companies are looking at tapping its massive domestic market, offering a share of the outsourcing pie is clearly a way to get the local government to make its entry smoother. NetApp's Georgens said China churns out a number of engineers, and it is a big market. "Though language is an issue, we have to pay attention to China," he said. Forrester recently put out a list of countries that are potential offshore alternatives to India. That list comprises of Argentina, Brazil, Mexico, Eastern Europe (Baltics, Poland, Czech Republic, Hungry, Romania, Bulgaria, Slovakia, Ukraine), Egypt, Russia, Malaysia, Philippines, Vietnam and China.\

CHENNAI: South Korean electronics major Samsung, which has announced Rs 350 crore fresh investments at its facility near here by 2016, is planning to make India its production hub for Middle East and other neighbouring markets in five years, a company official said Friday. Announcing commencement of Samsung's second refrigerator plant in India, J.S.Shin, president and CEO (South West Asia), told reporters: "All our future expansions will be at our Chennai plant. We will invest Rs.350 crore in Chennai plant and five years later, India may be the production hub for Middle East and other neighbouring markets."

Samsung's Indian subsidiary, Samsung India Electronics has signed a memorandum of understanding (MoU) with the Tamil Nadu government to expand its facility located on 80 acres near here to make mobile phones and accessories, consumer electronics and information technology hardware. Queried about the company's plans to develop a vendor base in the state, Samsung India's deputy managing director Ravinder Zutshi said efforts were on in this direction. He said the percentage of local content in the company's products varies from product to product. According to Shin, Samsung's Indian subsidiary contributes around 2.5 percent of the company's global turnover and this is expected to double by 2013. Samsung India posted revenue of $2.2 bn last year and this is expected to go up to $3.5 bn this calendar year. Samsung's global revenue is $116.8 bn. In order to increase its business, Samsung India has decided to design products for the Indian market rather than customising products designed and made in South Korea for the domestic market. The company has set up a five-member product innovation team at Delhi that will work on some product segments, an official told IANS while declining to comment on the products that Samsung India is planning to design and develop for the Indian market. Samsung India will Saturday commission its $75 million refrigerator plant (1.2 million capacity per annum) at Sriperumbudur near here to make frost free (Inspira brand) and direct cool (Pride brand). With the commissioning of the second plant, Samsung India's total refrigerator annual production capacity will go up to 2.6 million units. According to Zutshi, the refrigerator business contributes around $500 million to revenues.

Samsung India also makes flat panel televisions, front loading washing machines, liquid crystal display (LCD) monitors and split air conditioners at its Sriperumbudur facility and refrigerators will get added to the list Saturday. The company has invested in the plant over $100 million since 2007.

The company's other plant is located in Noida near Delhi making all the above products as well as mobile phones.

MUMBAI: Auto giant Mahindra & Mahindra today said it has agreed to acquire 5.5 per cent of IT firm Tech Mahindra's stake from UK-based British Telecommunications Plc (BT). UK's largest fixed-line phone company BT holds 30 per cent stake in Tech Mahindra.

"Pursuant to a proposal received from BT, the company has agreed to acquire 5.5 per cent of the equity shares of Tech Mahindra from BT over time through an inter-se transfer among qualifying promoters at a market related price, in accordance with the SEBI regulations," M&M said in a filing to the Bombay Stock Exchange. Financial details of the deal were not disclosed. M&M will also waiver rights to buy BT's remaining stake in the software services provider, and the agreement will automatically terminate if BT's stake in Tech Mahindra falls below 10 per cent, the filing said. The company has also agreed to consider further proposals from BT in this regard, it added. Meanwhile, M&M share was trading at Rs 759.80, down by 2.75 per cent from its previous close on the BSE.

27/11/2010LONDON: Some of the leading technology companies such as Google are raising the compensation for its employees, which also reflects the entities' improving business performance. A newspaper reported that some of the world's largest technology firms are lifting pay rates apart from taking other measures to retain employees. This also reflects improved performance in the companies' businesses and heightened competition for workers with the right experience, the report added. "Hewlett-Packard said this week on an internal blog for employees that it would reverse across-the-board cuts to base salaries that had been ordered by former chief executive Mark Hurd in February 2009," the daily noted. According to the publication, Google earlier this month decided to hike the pay of its workforce by 10 per cent while Intel has given message to employees "that bonuses early in 2011 would be the highest in a decade". The newspaper noted that wireless and mobile-device expertise is especially sought after. Internet entities such as Facebook have been recruiting people from Google and other established companies. "Hewlett-Packard's about-face on salary cuts is the most dramatic in some respects, both because of the company's size - it has about 304,000 employees - and because it is one of the first acts by Leo Apotheker, who took over as chief executive in September," the daily said. In