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RBI increases reverse repo rate
Industry hails mid-term review of credit policy
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Huawei to set up plant in India
Ericsson to buy Marconi assets for $2.12 b
POSCO plans jv in India
ONGC eyes S. Korean oil storage facility
Timex to open 130 stores
HCL Tech net jumps by 3.5 pc
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RBI increases reverse repo rate
Mumbai, October 25 Unveiling the quarterly credit and monetary policy review today, RBI Governor Y.V. Reddy announced that the reverse repurchase rate, or repo rate, has been hiked by 25 basis points to 5.5 per cent. The apex bank said the move was aimed at lowering inflation. The revised reverse repo rate will come into effect on October 26. The repo rate was earlier raised by 25 basis points to 5 per cent in April. The RBI noted that the country’s annual rate of inflation based on the wholesale price index stood at 4.62 for the week ended October 8 as manufactured items and food products saw an unexpected surge in prices in recent months. According to the RBI, the apex bank has kept unchanged the Bank Rate, at which the central bank lends to other commercial banks, and the Cash Reserve Ratio (CRR), the fortnightly cash balances maintained by commercial banks with the central bank. The bank rate and CRR currently quote at 6 per cent and 5 per cent, respectively. According to Mr Reddy, it would be difficult to contain inflation between 5 and 5.5 per cent forecast earlier because of rising international prices of oil. According to the RBI policy, upside inflationary pressures from oil prices can be expected to continue. “So far, there has been only partial pass-through of international crude prices into domestic prices of petroleum products and second round effects have not yet become noticeably significant,” the apex bank said. Despite the higher inflation projection, the central bank said the Indian economy was likely to expand by a healthy 7-7.5 per cent in the current fiscal year ending March 31, 2006, on a pick-up in the farm output. Healthy forecast
Meanwhile, the RBI said that India’s economy was likely to expand by a healthy 7-7.5 per cent in the current fiscal year ending March 31, 2005, thanks to a pick-up in farm output. In the April-June quarter, the first quarter of the fiscal year, the economy grew 8.1 per cent over a year earlier. The growth projection has been revised upwards following a jump in agricultural production and a fresh momentum in other industrial sectors. The RBI said in August that the Indian economy would post a growth of 7 per cent in the current fiscal year if the industry and services sectors continued to maintain a high growth momentum. India’s economy grew by 6.9 per cent in the fiscal year ended March 31, 2005, on top of a higher increase of 8.5 per cent in the previous year on increased agricultural production.
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Industry hails mid-term review of credit policy
New Delhi, October 25 “With adequate liquidity available, there will not be any adverse impact on cost of credit for investment for productive activities,”Mr Chidambaram said in his initial reaction to the central bank’s mid-term review of the annual policy statement. He said “it is encouraging to note that the RBI has upgraded the forecast for GDP growth in 2005-06 from 7 per cent to 7-7.5 per cent. Agriculture is likely to perform well, and the business confidence index is now at its highest level in the past 10 years.” The Finance Minister said there were indications of an investment boom supported by buoyant growth in credit as well as in equity finance. It was critical to maintain this investment momentum to accelerate growth, he added. The industry reacted positively to the RBI hiking the projection of the GDP growth rate for the current fiscal from 7 per cent to 7.5 per cent and maintaining status quo with regard to the bank rate. Another measure in the mid-year review of the policy lauded by the industry related to the increase in exposure of banks to the capital markets from 10 per cent to 20 per cent. ‘’The review of prudential limits for the capital market exposure was long overdue. The announcement that the RBI is willing to consider higher than prescribed limits (of 20 per cent of a bank’s consolidated net worth as direct capital market exposure and 40 per cent of aggregated capital market exposure) for banks is a welcome move,’’ CII President Y.Deveshwar said. Reacting to the increase in the reverse repo rate by 25 basis points, industry chamber FICCI said it was ‘’justifiable and practical in view of the global and domestic market realities’’. PHDCCI President K.N. Memani, however, said the increase in the reverse repo rate to 5.25 per cent should not harden the interest rate structure. ‘’We should aim to reduce the prime lending rate which at present is hovering between 10 and 12 per cent of the international lending rates.’’ ASSOCHAM President Anil K Agarwal said the hike in the reverse repo rate was a welcome step and on a par with the demands of industry. Similarly, the decision not to change the cash reserve ratio too is welcome. ‘’However, it would have been appreciated if the RBI had increased the bank rate by 25 basis points,’’ he said. ‘’The continuation of the bank rate and the CRR at the existing levels is a step in the right direction. However, the object of reducing the CRR to the statutory minimum level of 3 per cent should be achieved at the earliest in a phased manner,’’ Mr Memani said.
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Huawei to set up plant in India
Shenzen (China), October 25 "We are planning local manufacturing in India and will invest $60 million for the same. We applied in March 2005 for approval for the facility from Foreign Investment Promotion Board and waiting for the decision," Huawei Tech spokesperson Fu Jun said. He said the proposed manufacturing plant would meet the future bidding criteria in telecom PSUs where local manufacturing unit would be mandatory condition as well as enable the company to deliver quick customer service. The proposed centre to come up in Bangalore will focus on NGN (Next Generation Network), fixed wireless terminals, some part of 3G equipment, designing process of Huawei's products. Huawei is hopeful of starting the facility this year once the FIPB nod comes in, he added. Huawei's decision on manufacturing plant in India follows the policy decision of Department of Telecom to make vendors mandatorily have a production unit in the country. — PTI
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Ericsson to buy Marconi assets for $2.12 b
London, October 25
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POSCO plans jv in India
Seoul, October 25 POSCO said in a public notice to regulators today that it would own a 65 per cent stake in $ 14.50 million joint venture, with the remainder held by South Korea’s LG Corp. The new firm, tentatively named POSCO India Processing Centre, would be located in the western part of India to process electrical steel coil and sell the products to the booming Indian market, a POSCO official said. He did not elaborate. — Reuters
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ONGC eyes S. Korean oil storage facility
Seoul, October 25 India, which has surpassed South Korea as Asia’s third-largest oil consumer, is keen to engineer oil swaps with other big importers in order to cut down shipping costs on its growing imports from more distant sources. The ONGC has a stake in Russia’s giant Sakhalin-1 oil and gas field, which started pumping oil a month ago and will reach its full 250,000 barrels per day (BPD) capacity by the end of 2006. — Reuters
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Timex to open 130 stores
New Delhi, October 25 "Our main focus at the moment for India is to build our retailing business. We will adopt the franchisee route to set up the 130 stores in the next two years," Vice- President Asia Pacific of Timex Watches Kapil Kapoor said. The outlets to be christened 'Time Factory' will have the entire range of Timex products and also the international brands FCUK and Opex, the French range for women, which Timex had acquired couple of years back. "Test marketing has been done for FCUK, the launch in India will be done in the first quarter of next year," Kapoor said on the sidelines of the conference held to announce the company's becoming the official time-keeper for the forthcoming India Open 2005 golf event here.
— PTI
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Corporate results
New Delhi, October 25 The gross revenues of the company during the period were up 24 per cent to Rs 970 crore. The company has declared an interim dividend of 200 per cent on every share of the face value of Rs 2. HCL Technologies won a $100 million plus deal from a global telecom company. It also won two $50 million plus deal with a global bank and a global software product company. Chambal Fertilisers
Chambal Fertilisers and Chemicals Ltd today posted a net profit of Rs 46.56 crore for the quarter ended September 30, 2005 where as the same was at Rs 40.56 crore in the year-ago period. Total income for the second quarter is Rs 713.81 crore where it was Rs 688.77 crore in the same period last fiscal, the company informed the BSE.
Finolex Cables
Finolex Cables Ltd has posted a net profit of Rs 5.71 crore for the quarter ended September 30, 2005, as compared to Rs 5 crore for the quarter in the corresponding period in the previous year. Informing the BSE, the company said its total income (net of excise) has decreased from Rs 160.60 crore in Q2-05 to Rs 149.30 crore for the quarter this fiscal.
IPCL net up
Reliance Group company Indian Petrochemicals Corporation Ltd (IPCL) today posted a 119.56 per cent jump in net profit at Rs 303 crore for the quarter ended September 30, 2005 as compared to Rs 138 crore in the year-ago period. Total income has increased 12.25 per cent to Rs 2,079 crore for the second quarter from Rs 1,852 crore in the same period last fiscal, the company informed the BSE.
VSNL gains
Videsh Sanchar Nigam Ltd (VSNL) today posted a 3.29 per cent rise in net profit of Rs 91 crore for the second quarter this fiscal as compared to Rs 88.1 crore in the corresponding quarter in 2004-05. Total income has increased 18.97 per cent to Rs 961.2 crore for the quarter ended September 30, 2005 from Rs 807.9 crore in the same period last fiscal, the company informed the BSE.
ABB profit up
Power and automation major ABB Ltd today posted a 47.21 per cent increase in net profit at Rs 52.94 crore for the third quarter this fiscal as compared to Rs 35.96 crore for the same quarter last fiscal. Total income grew by 25.10 per cent to Rs 719.92 crore for the quarter ended September 30, 2005 from Rs 575.47 crore in the year-ago period, the Bangalore-based company informed the BSE.
Tata Motors net up
Tata Motors Ltd today posted a 9.26 per cent increase in net profit for the second quarter of this fiscal at Rs 337.87 crore against Rs 309.21 crore in the same quarter last year. Total income of the company in the period grew 14.78 per cent to Rs 4,839.35 crore in comparison to Rs 4,215.94 crore in the year-ago period, the company said. For the first half of the fiscal, Tata Motors recorded a net profit of Rs 610.54 crore where as the same was Rs 532.57 crore for the half year last fiscal.
Panacea Biotec
Panacea Biotec today reported a 106 per cent jump in net profit for the second quarter ended September 2005 at Rs 22.87 crore as compared to Rs 11.10 crore during the same quarter last year. The net sales during the quarter have increased by 68 per cent to Rs 132 crore as against Rs 78.65 crore in the corresponding period last year, the company said.
— Agencies
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Comba Telecom Jaipan Industries Japan Airlines N.K. Nayyar Allahabad Bank festival bonanza Shreyans group nets Rs 2.62-cr profit |
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