New Delhi, October 14
A report by stockbroking house Kotak Securities has pointed out that an analysis of exports from India and foreign institutional investment inflows into India in fiscal 2011 shows wide gaps between reported official and bottom-up data from companies and FIIs.

The research note says this can be attributed to data limitations partly, but says a better understanding of the nature and type of exports and foreign inflows is critical to fully appreciate the drivers of exports and implications for balance of payments, reserves and exchange rate as well as to mitigate risks to the Indian economy from "illicit foreign" flows, if any.

The report points out it is difficult to explain the surge in exports of engineering goods in 2011 and the few prior years. "Our study of export data of major engineering companies (including automobiles and metals) shows the increase in their exports does not reconcile with the steep increase in official export data", it adds.

In fact the gap is quite substantial. Exports of engineering goods according to official data jumped 79 per cent year-on-year from US $30 billion to $68 billion in FY2011. On the other hand, exports of "engineering" firms included in the BSE-500 index rose 11 per cent year-on-year to Rs 638 billion in FY2011 from Rs 577 billion in FY2010. This observation holds true for the past few years too, the report says.

It is also difficult to explain the surge in FII inflows in FY2011, the research note says. A bottom-up study of flows of FII funds and excchange traded funds (ETFs) does not reconcile with the reported $22 billion of FII inflows in FY2011.

"At best, we can account for $4.5 billion of FII flows based on data of listed FIIs, ETFs and estimates of EPFR Global. We admit EPFR Global data doesn’t capture all the sources of foreign institutional investment (sovereign and private equity funds, for example) that can invest in India. Nonetheless, the difference is stark", the report says.

A study of official export data shows remarkable growth in two areas in the broad category of engineering goods - metal & metal products and transport equipment.

Exports of copper cathodes rose 444% to Rs 317 billion in FY11 and was the key driver of the $17 billion growth in exports in metal products. Similarly, a huge jump in exports of cars, drilling rigs and unclassified ships accounted for the major portion of the $9 bn rise in exports of transport equipment. “We didn't see the same growth in exports of large listed companies", the note said.

Looking for credible explanations for this gap, the report is of the view that the gap between the surge in exports as per official data and a more muted performance of the listed entities would suggest that exports are largely being driven by smaller listed players or unlisted entities or the quality of data is suspect.

London, October 14
For an October revolution, dress warm. That's the word going out - politely - on the Web to rally street protests on Saturday around the globe from New Zealand to Alaska via London, Frankfurt, Washington and, of course, New York, where the past month's Occupy Wall Street movement has inspired a worldwide yell of anger at banks and financiers.

How many will show up, let alone stay to camp out to disrupt city centres for days, or months, to come, is anyone's guess. The hundreds at Manhattan's Zuccotti Park were calling for back-up on Friday, fearing imminent eviction. Rome expects tens of thousands at a national protest of more traditional stamp.

Few other police forces expect more than a few thousand to turn out on the day for what is billed as an exercise in social media-spread, Arab Spring-inspired, grassroots democracy with an emphasis on peaceful, homespun debate, as seen among Madrid's "indignados" in June or at the current Wall Street park sit-in.

Blogs and Facebook pages devoted to "October 15" - #O15 on Twitter - abound with exhortations to keep the peace, bring an open mind, a sleeping bag, food and warm clothing; in Britain, "Occupy London Stock Exchange" is at pains to stress it does not plan to actually, well, occupy the stock exchange.

That may turn off those with a taste for the kind of anarchic violence seen in London in August, at anti-capitalism protests of the past decade and at some rallies against spending cuts in Europe this year. But, as Karlin Younger of consultancy Control Risks said: "When there's a protest by an organisation that's very grassroots, you can't be sure who will show up."

Concrete demands are few from those who proclaim "We are the 99 percent", other than a general sense that the other 1 percent - the "greedy and corrupt" rich, and especially banks - should pay more, and that elected governments are not listening.

"It's time for us to unite; it's time for them to listen; people of the world, rise up!" proclaims the website United for #GlobalChange. "We are not goods in the hands of politicians and bankers who do not represent us ... We will peacefully demonstrate, talk and organize until we make it happen." — Reuters

New Delhi, October 14
Headline inflation remained close to the double-digit mark at 9.72% in September as all items, including food products, fuel and manufactured goods, grew costlier, a development likely to prompt the Reserve Bank to continue with its policy of monetary tightening. Inflation, as measured by the wholesale price index (WPI), stood at 9.78% in August. The rate of price rise was recorded at 8.98% in September, 2010.

As per data released by the government today, overall inflation in June this year was revised upward to 9.36% from the provisional estimate of 9.22%. On an annual basis, food items became 9.23% more expensive during the month under review. Onions grew 23.58% costlier, while fruit prices were up 15.98% and the rates for potatoes rose by 14.64%. Overall, vegetable prices witnessed 14.04% inflation during September, 2011.

Inflation in overall primary articles, which have a share of over 20% in the WPI basket, stood at 11.84% in September, compared to 12.58% in August. Nonfood primary articles, which include fibres, oil seeds and minerals, became dearer by 14.82% in September, as against 17.75% in the previous month.

Prices of manufactured products, which have a weight of around 65% in the WPI basket, went up by 7.69% year-on-year in September compared to 7.79% in August. — PTI

New Delhi, October 14
A four-day service outage on BlackBerry smartphones will not only cast a shadow over the reputation of its Canada-based manufacturer but may also force a substantial number of its Enterprise service customers to have a rethink over continue using the service which could go on blink again or face business losses.

While the head of Research In Motion (RIM), the company that makes the BlackBerry smartphones, has said he could not say when its services would return to normal after the outages, the frustration building up among hundreds of thousands of BlackBerry smartphone users could mean its rivals could get a foothold in the market that has been dominated for long by the Canadian firm.

RIM president Mike Lazaridis has used video messages to apologize to millions of BlackBerry users worldwide for the failure that affected four continents. While for three days the company could not fix the core switch that failed in England, the fourth day of outages have been blamed on the backlog of emails caused by the initial technical failure.

The repeated shutdowns of email and messaging services that left BlackBerry users with only voice calls and SMS text infuriated Indian business customers, who depend heavily on doing business “on the move” through their BlackBerrys.

More than a million people in the country use BlackBerry and the majority remains in the Enterprise service.

Besides, a large corporate user base relies on RIM’s Enterprise email system and its BlackBerry Messenger platform is a huge hit among young people. Also its competitive pricing has led to it outselling its main rival Apple’s iPhone by around five to one.

Reacting to the recent outage of Blackberry services, Vishal Tripathi, Principal Research Analyst at Gartner said, “It's much more frustrating for the enterprise users as it hampers their productivity. This (outage) will further impact BB's image in India . A three-day outage is highly inconvenient & they should reach their customers more actively either through various communication modes or Social Media to allay consumer fears.”

New Delhi, October 14
Troubles for the debt-ridden Kingfisher Airlines escalated with state-owned oil marketer Hindustan Petroleum Corp Lt (HPCL) suspending fuel supplies to the Vijay Mallya-promoted airline in Delhi on nonpayment of dues, resulting in cancellation of at least six flights.

Sources said Kingfisher owes HPCL approximately Rs 100-130 crore and the two sides are currently working to resolve the issue.

The airline has been put on a “cash-and-carry payment option” by oil companies for the past ten months, which means payments need to be cleared every day for fuel and no credit or tabs are allowed.

GMR, which operates the Delhi and Hyderabad airports, has also threatened the airline it would put it on a cash-and-carry system after outstanding dues touched Rs 90 crore (Rs 68 crore for Delhi and Rs 22 crore for Hyderabad).

Kingfisher Airlines, the only listed domestic airline to end fiscal 2010-11 with a loss of Rs 1,027 crore, recently announced to discontinue its low-cost wing Kingfisher Red.

However the airline is not only defaulting on payments to airports and oil companies. The sources added the carrier has also delayed salary payments for the second consecutive month this October.

Salaries are generally credited to the accounts of its employees on the seventh day of every month however this is yet to happen this month, they say.

Chandigarh, October 13
Basmati rice cultivators in the northern region may not be able to reap a rich harvest this year. As some basmati varieties have begun trickling in the mandis (grain markets) of Haryana and Punjab, farmers are realizing they would not be able to get the high prices offered to them last year.

As two basmati varieties - PB 1 and PUSA 1121 (in a very small quantity) - have started coming in the mandis, the farmers are getting Rs 200 to Rs 250 per quintal less price than last year. According to reports, PB 1 has been bought by the traders and exporters for Rs 1,700 per quintal as against Rs 1,900 per quintal last year.

Similarly, farmers have sold their PUSA 1121 basmati variety in the Taraori mandi in Haryana for Rs 1,900-2,000 per quintal. Last year this variety had fetched Rs 2,200 per quintal at the beginning of the marketing season. With the demand for basmati likely to remain low this yea, thanks to huge inventories available with rice exporters from the previous year, traders expect these basmati varieties may not be able to fetch the same prices as were offered in October-November 2010.

It is learnt most exporters have huge stockpiles of shelled basmati available with them and are unlikely to show much interest in the new crop that will flood the mandis from next week onwards. This low demand would have a direct impact on crop price and farmers may have to sell their produce for less. This year the yield of various basmati varieties is expected to be good, and the area under cultivation of basmati varieties in both Haryana and Punjab has gone up.

Another factor that could dent the profit of basmati growers and exporters is the huge depreciation of the US dollar against the Indian rupee. Basmati meant for exports is traded in dollar terms. With a 10 per cent depreciation in the dollar vis-avis the rupee since last year, exporters will get less money (in rupee terms) for this staple grain as its global prices have has remained almost the same as in 2010.

Indian basmati rice currently fetches $1,110 a tonne in the international market as compared to an average price of $1,056 a tonne in 2010. Since exporters are not getting a high price for the foodgrain they will be unwilling to buy basmati at a higher price.