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Inflation, lending rates may ease in 2-3 months
3G Services
Banks for debt-swapping with moneylenders |
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‘Indian corporates have come of age’
Ludhiana steel makers reduce output by 40 pc
Ban on futures trading of four agri items flayed
Work on Caparo’s industrial park begins
Pak stops export of currencies
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Inflation, lending rates may ease in 2-3 months
Mumbai, May 9 This they expect to happen despite headline inflation spiralling to 7.61 per cent for the week ended April 26, up from the previous week's mark of 7.57, driven by soaring international commodity and oil prices. "Inflation will certainly come down in the short term, perhaps in 2-3 months. The present high rate is mainly due to the base effect and high international prices," HDFC's Managing Director Keki Mistry told PTI here. The inflation figure has been exaggerated by the base effect, Mistry said, adding that the combination of monetary and fiscal measures taken by the authorities would drive down inflation in the next couple of months. "I expect interest rates to stay stable in the short-term...I don't think anybody will effect a further hike in (lending). At the same time, lowering of interest rates are also unlikely in the short-term," he said. However, banks and home loan lenders might take a cue from the Reserve Bank, which, in its last monetary policy lowered the risk weight for home loans between Rs 20 lakh and Rs 30 lakh to 50 per cent, and extend some relief to borrowers. In the first indication of such a line of thinking, Union Bank of India, effected a 0.25-1 per cent cut in its lending rates for home loans up to Rs 30-lakh. However, while there might be rate reductions in select segments, an across-the-board cut in lending rates, including in banks' prime lending rates, appears unlikely over the next 2-3-months. Bankers said the fiscal and monetary measures initiated by policymakers to contain inflation, such as a 0.75 per cent hike in CRR, ban on export of certain essential commodities and removal of import duties, would take 2-3 months to show results. Private sector Axis Bank's chief financial officer Partha Mukherjee said that the present high inflation "doesn't send any dangerous signals to both, bankers and borrowers." "There is enough liquidity in the system and I do not think the high inflation will have any telling impact on the borrowers...I believe rates may come down in 2-3 months, when inflation is likely to ease to 6 per cent," he said. Senior bankers like State Bank chairman, O P Bhatt, and ICICI Bank's managing director & CEO, K V Kamath, had recently said that interest rates would stay stable in the short-term.
— PTI |
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Foreign players not suited for India: TRAI
New Delhi, May 9 "As the Authority firmly believes that allowing participation of new prospective service providers for 3G services, at this juncture, will have serious implications on the Indian telecom sector, you may like to revisit the issues before finalising the ministry's position on the subject," TRAI chairman Nripendra Misra said in a letter to finance secretary D Subbarao. Last month, TRAI had rejected Department of Telecom's proposal to reconsider allowing foreign players to offer 3G telecom services, saying existing players would be able to roll out network faster. "As the existing licensees have already made huge investments in infrastructure and their systems are in place, therefore, they will be in a better position to deliver 3G services efficiently at low incremental cost," TRAI had said in its views on Permitting New Entity for 3G Services. With the number of service providers going up to 13-14 in each circle, the regulator felt there would be sufficient competition to ensure that the spectrum is priced competitively, discourage cartelisation and offer services that are acceptable in terms of quality and price. Misra has shot off the letter to the finance secretary amid media reports that the finance ministry was backing DoT's proposal for global auction of 3G spectrum. — PTI
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Banks for debt-swapping with moneylenders
Chandigarh, May 9 The main objective of the new scheme is to mitigate acute distress faced by members of the SHGs, due to heavy burden of debt from the non-institutional lenders. Once approved, banks in Haryana will be asked to come forward and swap debts of SHGs availed from private moneylenders. Officials said all existing SHGs, which are credit linked with a prompt repayment record will be eligible under the new scheme. Even the saving-linked SHGs, which are yet to be credit-linked, will be eligible for debt swapping under the scheme, which will be a one-time measure only. It is proposed that the total limit of the loan will be a maximum of Rs 2.50 lakh. While no collateral security will be required for availing loan up to Rs 5 lakh, the book debts/assets created out of the loan will be hypothecated. Sources said the scheme was presented before the SLBC held recently. However, the banks were of the view that the scheme should be expanded to include individual members of the SHGs, so that they, too, can get their debts swapped. “We have now sent a fresh proposal, with the amendment suggested by the bankers committee to the head office of Punjab National Bank for its approval. Once approved by the convener bank of SLBC (PNB), it will be tabled in the next SLBC for final approval,” informed a senior official in SLBC. It is also proposed to amend the existing scheme of credit flow to SHG, so as to increase the funds available with these groups. Official sources said, earlier loans were extended only up to four times the savings with the group. It is now suggested that either loan up to four times of the savings, or Rs 50,000 be allowed to the SHGs — whichever is higher. |
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‘Indian corporates have come of age’
New Delhi, May 9 It marks the coming of age of the Indian companies and the economy on the whole, where there is a strong feeling among the domestic giants that the next generation and more is of India. The more consolidation and acquisitions would only strengthen the Indian companies and catapult them to become global entities. If successful, Bharti’s takeover could be India's biggest foreign takeover ever, and it would be a clear signal that big Indian companies are hungry for acquisitions undaunted by a global credit crisis. While the analysts have questioned Bharti’s ability to fund a deal that could top $20 billion, there are no doubts that there will be more acquisitions by Indian firms. Analysts point out that Indian corporates have come of age. First the Tatas acquisition of Anglo-Dutch steelmaker Corus Plc, then its $2.3 billion buyout of Ford Motor's Jaguar and Land Rover brands in March, and then Mahindra & Mahindra’s recent acquisition of an Italian gear maker with private equity firm ICICI Ventures, reflect this outward-looking approach of the Indian companies. Market watchers agree that some of the headline-grabbing acquisitions would have been unimaginable just a few years ago. Despite Indian out-bound M&A dropping 38 per cent, there have still been three $1 billion-plus deals. Analysts point out that the credit crunch around the world is squeezing small and mid-sized firms, but it is throwing up new opportunities for larger companies.
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Ludhiana steel makers reduce output by 40 pc
Ludhiana, May 9 The move to reduce production is expected to trigger steel prices further, said market experts. While an unhappy steel-consuming industry has blamed them for creating an artificial scarcity in the market in a bid to raise prices, the manufacturers expressed their helplessness and said high conversion costs and shortage of scrap had forced them to adopt this mode. "We reduced our rates significantly last month. But now, there is a shortage of scrap and we are not able to function at our total capacity due to high input costs which is why we have reduced production and also working hours from 20 to 12 now," said
K.K.Garg, president of North India Induction Furnace Association. Ingot prices have reduced to around Rs 28,500 per metric tonne from around Rs 34,000 over a month ago. Steel consuming industries like manufacturers of auto components, cycle parts and other engineering goods are unhappy. They said even after agreeing to slash prices, large manufacturers were yet to bring any reduction in prices. "We are in a fix as large producers have not reduced prices so far. Even local manufacturers are taking an advantage of the situation and creating an artificial scarcity in the market. They are waiting for the main producers to reduce prices. As of now, they have only increased rates, which is quite disappointing," rued S.C.
Ralhan, regional chairman of Engineering Export Promotion Council. |
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Ban on futures trading of four agri items flayed
New Delhi, May 9 The decision was taken by the commodities market regulator on Thursday as part of the exercise to control inflation in the country. Futures trading in rice, wheat, tur and urad had already been suspended by the FMC. Talking to The Tribune on this latest development, Joshi said the decision put into doubt the capacity of the present FMC to be true guardian of the forward market. The four commodities - chana, soya oil, rubber and potato - do not constitute more than one per cent point in the wholesale price index (WPI), he said, adding that the decision would only end up further harming the interest of farmers. “The decision has been take on the basis of pre-conceived ideas even though the majority said that forward markets had no impact on the price rise.” he added. Joshi, Prof Sen of the IIM-Ahmedabad, Siddharth Sinha, Forward Markets Commission member Kewal Ram and IIM-Bangalore professor Prakash Apte were members of the Abhijit Sen Committee, which recently submitted its report on the politically-touchy issue of the ban on commodity futures. The majority of members on the panel clearly said the futures trading had little impact on either spot prices or inflation and that a ban would only end up hurting farmers. |
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Work on Caparo’s industrial park begins
Hyderabad, May 9 The works on the Rs 3,500-crore industrial park commenced yesterday with the Chief Minister Y.S. Rajasekhar Reddy laying the foundation stone at Menakur village in Naidupet Mandal, about 150 km from Chennai. Caparo Group will set up five independent units at the 2,000-acre park. The mega projects include manufacturing of luxury buses for Indian market in collaboration with South Korean giant Hyundai Motors. The unit will roll out 2,000 buses annually from next year. The luxury bus building plant will be the first anchor unit of the global group having business interests in the manufacturing of steel, automotive and general engineering products. The CEO of Caparo Group and Swraj Paul’s son Angad Paul said Hyundai Motors would provide technical support so that all government regulations concerning the supply and manufacture of luxury buses in the country were complied with. Caparo group, which supplies aerospace components to global aviation companies, also plans to develop Aerospace Park. |
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Pak stops export of currencies
Islamabad May 9 Central Bank spokesman, Syed Wasim Ahmad told Geo News that the cash export of currencies by the exchange companies has been stopped forthwith. Forex market sources said the government had taken this step in 2001 also for salvaging the sinking rupee, which had triggered black marketing of dollar. Dollar in the inter-bank market was sold during Friday trading at Rs 69.70, while in the open market it remained at Rs 69.20. |
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Oil above $125
London, May 9 |
Gold regains 12K level Kotak Bank net up 41 pc Spencer's Retail plan Papa John's outlets Tata Metaliks to invest 1,000 cr Nissan’s partner in India Reliance Digital store
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