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US to inject $20 b to rescue
Citigroup
SBI enters general insurance biz
Aggreko to buy Cummins India
Realty prices need 30% cut: Goldman
Telcos add 10.42 m subscribers in Oct
Pandit stays at Citi, at least for now
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Govt seeks doubling of WB assistance to $6 b
Oil India’s IPO cleared
SEDL to invest Rs 450 crore
TDI launches business centre at Mohali
Axon shareholders approve bid by HCL
Prez for enhanced economic cooperation with Vietnam
Air India likely to cut fares
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US to inject $20 b to rescue
Citigroup
Washington/London, November 24 Washington, also under pressure to rescue its own ailing motor industry, effectively guaranteed most of Citigroup Inc's, potential $306 billion losses on high-risk assets. It was the biggest bank bailout yet and a measure of the crisis sweeping the world. The Gulf emirate of Dubai, home to a new luxury mega-resort built on a manmade palm-shaped island visible from space, announced it was reining in a building spree symbolic of extravagant boom years leading up to the current crisis. The United Arab Emirates began to bail out Dubai's lenders and consolidate its financial sector. Concerns Europe has entered a deep recession that could last well into next year were reinforced when a key survey of German corporate sentiment hit its lowest level in nearly 16 years in November. French President Nicolas Sarkozy said after talks with German Chancellor Angela Merkel their "determination to help European industry and notably the automobile industry is total". The Citigroup intervention had been widely expected in some form, but Asian markets trimmed losses, while European stocks rose 4 percent on news the US Treasury would not allow the number two US bank to fail in the way of rival Lehman Brothers. Citigroup shares jumped more than 30 per cent to $5.07 before opening in New York. US stock index futures pointed to a generally higher opening on Wall Street. S&P 500 futures were up one per cent. Citigroup has the farthest international reach of any US bank, with operations in more than 100 countries. The bank was widely felt to be too big to be allowed to fail. The plan calls for Citigroup, America's second-biggest bank, to issue $27 billion in preferred shares to the US Treasury and the Federal Deposit Insurance Corp. The Fed, Treasury and FDIC in return will shoulder most of the potential losses on Citigroup's $306 billion portfolio of debt assets, beyond an initial $29 billion in losses which Citigroup would be responsible for. "The US government is taking the actions necessary to strengthen the financial system and protect US taxpayers and the US economy," the Federal Reserve, the Treasury Department and FDIC said in a joint statement. Widespread response
Citigroup, whose shares slumped 60 per cent last week, was not the only bank having to raise more funds. In a major policy shift, the United Arab Emirates federal government will inject capital into its Emirates Development Bank, a newly created rescue vehicle preparing to absorb merging Islamic lenders Amlak and Tamweel, a leading official said. German business climate index, based on a monthly poll of around 7,000 firms, declined to 85.8 in November from 90.2 in October, the biggest month-on-month drop since September 11, 2001. UK stimulus package
Aides said US President-elect Barack Obama was considering delaying a campaign promise to rescind tax cuts on high-income Americans, while the British government was set to announce a stimulus package, including temporary tax cuts. Obama, who takes over from President George W. Bush on January 20, is ready to announce his top economic team on Monday, holding a news conference at 11 am in Chicago (1700 GMT). The potential size of the latest US stimulus plan appears to be growing from the $100 billion to $300 billion previously suggested by congressional leaders. One influential Democrat, Sen. Charles Schumer of New York, said on Sunday a package of up to $700 billion was needed to support the American economy. Britain is expected to announce a £20 billion ($30 billion) package, which will cut sales tax and offer help for businesses, low earners and struggling home owners. "I don't see this as a gamble. I see this as necessary, responsible action," Prime Minister Gordon Brown told the BBC.— Reuters |
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SBI enters general insurance biz
Mumbai, November 24 Regulatory authorities would be approached for the necessary approvals and the company hopes to commence business in the next financial year, SBI said in a statement. SBI chairman O.P. Bhatt said the joint venture was a part of the bank's strategic initiatives to retain its position as the pre-eminent financial services group in the country. "Insurance penetration in India is very low and the general insurance industry is expected to grow at a brisk rate of 15-20 per cent per annum over a period of next 10-years," Bhatt said. "SBI, with its unparalleled brand equity and extensive distribution network will be able to provide protection to people even in the far-flung rural and semi-urban areas throughout the country and help deepen the market," Bhatt added. With this foray, the bouquet of financial products offered by the SBI Group ensures its footprints in every area of financial services, the statement said. The bank is already offering life insurance products through its subsidiary, SBI Life Insurance Company. IAG's managing director and CEO Michael Wilkins said the joint venture was a significant step in IAG's strategy to pursue select international general insurance opportunities. "Entering the Indian general insurance market has been a priority for IAG for some time, to support our longer-term growth and profitability," Wilkins said.— PTI
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London, November 24 Glasgow-based Aggreko announced that the acquisition from Cummins India — a subsidiary of international power-generation specialist Cummins — would add a business bringing in revenue of about £2.4 million a year, with projected net assets of £1.1 million at the end of 2008. Rupert Soames, Aggreko's chief executive, said: "We have been trying to find a way to get into India for two or three years and this opportunity presented itself. "Although we have customers in over 100 countries worldwide, we have been particularly focused in the past two or three years making sure we have coverage in the four largest developing economies in the world. India is the last brick in the wall." Commenting on the plans for the Indian company, Soames added: "We plan to expand the business organically investing in new fleet and personnel. We will try to grow the business as fast as we can. We will just take it a brick at a time." He added: "Our investment in India means we will have achieved one of our strategic objectives, which is to have operations in each of the four largest developing economies in the world; the others being Brazil, Russia and China." — PTI
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Realty prices need 30% cut: Goldman
New Delhi, November 24 According to a report on Indian real estate, Goldman Sachs said, “Our India Real Estate team believes that prices may have to fall by up to 30 per cent in some geographies for affordability to catch up.” The report by Goldman Sachs comes as an endorsement of views expressed by finance minister P Chidambaram, who, last week, asked industry to reduce prices in order to boost consumer demand. It pointed out that prices in areas such as suburbs of Mumbai and Bangalore need to decline by up to 30 per cent in order to boost demand. “Although prices over the past three years have gone up in line with other economies globally, they have not corrected substantially, unlike its global peers,” Goldman Sachs said. The firm, however, warned that such a drop would have negative effects on the economy. It further said due to ongoing economic crisis, likely to be continued, demand for property would also continue to fall. “Demand for real estate is largely driven by income growth, demographics, interest rates, and inflation, but also people expectations of future prices. As the economy continues to slow due to the knock-on effect of the global financial crises, income growth will come off, thereby reducing demand for housing,” Goldman Sachs said. It said demand for commercial real estate would also be adversely affected due to the slowdown in the IT and business process outsourcing (BPO) sectors.
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Telcos add 10.42 m subscribers in Oct
New Delhi, November 24 A total of 10.42 million wireless (GSM, CDMA and WLL) subscribers have been added during October 2008 against 10.07 million wireless subscribers added in September 2008, the TRAI said. The total wireless subscribers stood at 325.73 million at the end of October 2008. Continuing the trend of adding telephone subscribers at a blistering pace, the country saw a net addition of about 10.29 million users (wireline and wireless) in October against 9.79 million in September. The total number of both wireless and wireline users now stands at 363.95 million, TRAI said. However, in the wireline segment, the subscriber base fell to 38.22 million in October from 38.35 million in September. The overall teledensity stood at 31.50 per cent atthe end of October against 30.64 per cent in September thisyear.— PTI
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Pandit stays at Citi, at least for now
New York, November 24 Over the past week, media was flooded with reports that Pandit was set to lose his job within a year of assuming the office, as he had lost the mandate for steering Citi out of its financial mess. Till a few weeks ago, Citi was being considered among the last ones standing in the world's biggest economic crisis in the recent times and Pandit was even being commended for successfully turning around the bank. But a sharp plunge in its share price over the past week to below four dollars, which wiped off more than half of the company's valuation, re-ignited the concerns about the bank's financial health and reports started surfacing that the board and investors wanted Pandit out of his corner room. A number of media reports suggested that Pandit was looking at selling the entire bank, or dis-assemble it into pieces to be sold out separately, in his efforts to revive the once-most-valued financial institutions of the world. However, the state-sponsored bailout of the battered Citigroup reached late last night has not only dispelled the doubts about the very existence of the financial services giant but also put to rest questions on the continuation of its India-born chief Vikram Pandit.
— PTI |
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Govt seeks doubling of WB assistance to $6 b
New Delhi, November 24 "We are having discussions with the World Bank to double the lending to India from $3 billion to $6 billion every year," finance minister P Chidambaram told reporters here at the Economic Editors Conference. Admitting that it may not be possible to garner adequate resources from overseas financial markets for the planned investment of $500 billion in the infrastructure sector during 11th Plan period, the finance minister that India is looking at alternative sources like the World Bank and other multilateral lending agencies. The Planning Commission has set an investment target of $500 billion for infrastructure sector during the Eleventh Plan Period, with about Rs 150 billion coming from the private sources, including overseas market. The rest will be provided by the government. However, with the world facing the financial crisis, it may not be possible to procure funds from the overseas financial markets, which are witnessing a credit crunch. Replying to a question, Chidambaram said the country is not seeking any assistance from the International Monetary Fund (IMF). Since the onset of the global crisis, the country' foreign exchange has dipped by over $60 billion.
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Oil India’s IPO cleared
New Delhi, November 24 The Cabinet Committee on Economic Affairs (CCEA) had, on January 10, approved initial public offering (IPO) of rail infrastructure company RITES through fresh issue of one crore equity shares and a simultaneous divestment of government's 10 per cent shareholding. However, the IPO has been put off indefinitely owing to the current market conditions and a change in the requirement of funds by RITES. "The IPO has been deferred on account of market conditions and in view of the change in requirement of funds of the company," the Finance Ministry said in a report released today at the Economic Editors' Conference here.— PTI |
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SEDL to invest Rs 450 crore
Chandigarh, November 24 This was stated by Sanjay Gupta, director finance, SEDL, while talking to mediapersons here today, after inaugurating the company’s office in Mohali. He said they were now diversifying from their core engineering business to setting up sugar mills.“While we have set up a sugar plant at Beed, with an investment of Rs 250 crore, we are planning to invest Rs 200 crore by taking the cooperative sugar mill at Bhogpur (near Hoshiarpur) on BOOT basis,” he said. He said while the sugar factory at Beed has been commissioned and will have a crushing capacity of 5,000 tonnes per day, it will be expanded to have a capacity to produce 100 kilolitres of ethanol per day and have exportable power of 20 megawatts. “In Punjab, we are the lone bidders for the cooperative sugar mill at Bhogpur, so we are likely to get the letter of intent from the state government for operating this mill next month. This mill has a crushing capacity of 1,000 tonnes of cane per day and in a phased manner, we will increase its capacity to 5,000 tonnes per day by 2012,” he said. Gupta also said SEDL had purchased 100 acres of land near Mahilpur in Punjab, and they planned to set up a food park on this land. “This year, we are expecting a surge in our engineering business — from Rs 155 crore last year to Rs 225 crore this fiscal. With the sugar factory being commissioned, the turnover is expected to be Rs 200 crore, thus taking the group’s turnover to Rs 425 crore,” he added.
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TDI launches business centre at Mohali
Chandigarh, November 24 TDI held a function here last night during which draw of lots for allotment of office-cum-retail space in the centre was held. Company’s Punjab chief operating officer Sanyam Dudeja claimed that the response for the project had been phenomenal from the investor community. He said construction of the business centre would start by the first week of December. The centre will have dedicated ground and first floor for retail space to house international brands as well as a multi-cuisine food court. The second and third floors have been dedicated for parking while the remaining floors will be developed as an office complex. |
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Axon shareholders approve bid by HCL
New Delhi, November 24 "As much as 99.99 per cent of the shareholders favoured the offer while a negligible per cent was against the proposal," HCL Technologies CEO and member of the board Vineet Nayyar told newspersons over a conference call. Since HCL had converted its offer into a scheme of arrangement, it required at least 75 per cent of the Axon shareholders to cast a favourable vote for the deal to go through. A resolution passed by Axon board said, "A majority in number of the scheme shareholders who voted, either in person or by proxy, representing over 75 per cent in value of all of the scheme shares voted, voted in favour of the HCL scheme." HCL has already picked up 10.43 per cent stake in Axon from the open market for £42.28 million. We are very pleased that the Axon shareholders have approved HCL's offer for the company. This acquisition continues to make sound strategic sense for HCL especially in the current macro economic situation", Nayyar said. Although AGM today has passed the deal, Nayyar sounded circumspect. "The process is still competitive one, there is still a possibility of a second bidder coming in," he said. In the race for Axon, HCL ousted rival Infosys Technologies through a higher offer that of 650 pence a share against 600 pence a share offered by Infosys. — PTI
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Prez for enhanced economic cooperation with Vietnam Ho Chi Minh City (Vietnam), November 24 "As our two nations stood by each other in the past, and as we stand now at the threshold of prosperity, it would be our endeavour to walk together, hand-in-hand, for future cooperation," she said at a dinner hosted in her honour by Chairman of Ho Chi Minh City People's Committee Le Hoang Quan. She said the ongoing economic reforms in both countries should provide new opportunities for the entrepreneurs, businessmen and industrialists. There was immense possibility of further strengthening cooperation in diverse areas so that the strategic partnership between the two countries continued to acquire greater strength, Patil said.— PTI
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Air India likely to cut fares New Delhi, November 24 State-owned carrier Air India is considering reducing air fares by 10-12 per cent, in the line with reduction of almost a similar percentage in ATF prices in past one month. With Air India likely to make an announcement soon, it is expected that private airlines will also follow suit. An Air India official said it could cut fare by 10-12 per cent some time in the first week of December. Confirming that a decision had been taken and would be sent for approval soon, he said “there is a need to stimulate the market by making more people fly.” When contacted, Air India executive director Jitendra Bhargava said: “We all know that ATF prices have been on a decline. But we are also conscious that airlines have suffered huge losses in the past due to high costs of jet fuel. We have to strike a balance keeping in mind economic viability. We are constantly monitoring the situation following a cut in fuel surcharge, taking into account losses and expenses.” Patel on Saturday had asked airlines to cut fares because of reduction in ATF prices. An aviation expert said higher fares have scared away passengers. Airlines have increased fares five times since early this year, stating that ATF prices have shot up. But now when ATF prices have actually come down drastically, carriers were giving excuses to get more relief.
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Washington/London, November 24
The United States agreed to inject $20 billion of new capital to rescue one of the world's top banks and European leaders said on Monday they would stand by European industry, especially the automobile sector.
