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Global stocks fall sharply
Rupee weakens to 40.72
JP Morgan to buy Bear Stearns
Hefty fine for unsolicited calls
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Mid-sized Sedan Segment
GM plans new small car
Coca Cola bullish on India
Birla Sun Life infuses fresh capital of Rs 124 cr
Transforming professionals into corporate managers
FM defends Budget
Who is trading oil at $110 a barrel?
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London, March 17 Traders reported that money markets were near standstill with banks increasingly wary of lending to each other. European shares sank nearly 3.5 per cent, following a sell-off in Asia where Japan's leading indexes shed 3.7 per cent. Wall Street looked set for a sharply downward open. The dollar hit new lows against the euro and a basket of six major currencies. Oil hit a new high of nearly $112 a barrel on the weaker dollar. Investors dived into safe haven assets, lifting gold to more than $1,030 an ounce at one point and sending yields on short-dated euro zone debt below 3 per cent for the first time in more than two years. "The markets are in a complete state of panic and in such situations there is no such thing as valuation or value in any asset," said Michael Klawitter, FX strategist at Dresdner Kleinwort in Frankfurt. In a shock move late on Sunday, the Fed lowered the discount rate it charges on direct loans to banks to 3.25 per cent from 3.50 and implemented steps to provide cash to a wider range of financial firms, using tools last used in the Great Depression. Minutes earlier, JPMorgan Chase & Co had said it would buy Bear Stearns for a rock-bottom price of $2 a share, valuing the US investment bank at the centre of a widening global credit crisis at about $236 million. Liquidity squeeze
Investors are now nearly fully pricing in a 1 percentage point cut in the main federal funds rate at or before the Fed's policy meeting on Tuesday.
That would take US rates down to just 2.0 per cent. There were also signs of continuing liquidity worries — three-month interbank lending rates for euro and sterling leapt. The Bank of England said it would offer Ł5 billion ($9.85 billion) of three-day funds in an exceptional fine-tuning operation designed to bring overnight interest rates down. "This action is being taken in response to conditions in the short-term money markets this morning," the bank said in a statement. Dollar sinks
Equity markets took a hefty hit across the world as uncertainty grabbed hold of investors.
European shares tumbled. The FTSEurofirst 300 was down 3.5 per cent. Earlier, Japanese stocks fell to about a 2-1/2 year closing low, dragged down by exporters worried about a rising yen. The Nikkei average fell 3.7 percent or 454.09 points to end at 11,787.51, its lowest finish since August 8, 2005. The broader TOPIX index shed 3.7 per cent or 43.58 points to 1,149.65, the lowest close since June 2005. The dollar plunged across the board. It slid as much as 3 per cent in early Monday trading as low as 95.77 yen according to Reuters data, the lowest since 1995, and set fresh all-time lows at 0.9637 Swiss francs.
The euro soared as high as a new record $1.5904 before dropping back to $1.5774. When the US currency falls, the price of gold, like that of oil, tends to rise as investors with dollars buy it to lock in value and non-dollar investors find it cheaper. Investors also bought bonds. Short-dated euro zone government bond yields were at their lowest in over two years and implied rates
down.— Reuters |
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Mumbai, March 17 However, the rupee premiums on forward dollar remained firm and rose further on sustained paying pressure from banks and corporates. Forex dealers said Indian rupee touching 41-mark against a US dollar is not far, if we were to consider the weak trend in equities, which analysts predict, would continue in the near term, leading to massive outflow of the capital. Rupee had appreciated to 39 level in September last year following massive capital inflows. However, on February 21 the local currency breached the 40-mark for the first time in five months. At the Interbank Foreign Exchange market, the Indian unit opened sharply lower at 40.74/77 per dollar from last Friday's close of 40.4350/ 4450 a dollar in line with the poor opening of stock markets. The rupee ended the day at 40.72/73 a dollar. It moved in a range of 40.68 and 40.83 per dollar. — PTI
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New York, March 17 JP Morgan Chase would pay about $270 million in stocks in the face of Bear's huge losses on investments linked mortgages. The government regulators have approved the deal which would help to stem the plummeting confidence in financial companies having an adverse effect on the economy. In January 2007, Bear's share had traded at $170 but fell sharply as mortgage crisis gripped the market and closed at $30 a share at New York Stock Exchange on Friday after it was forced to seek emergency funding because of the cash crunch. JP Morgan said the deal would be effective immediately and guarantee the trading obligation of Bear Stearns and its subsidiaries alongwith providing management oversight. The transaction would be a stock-for-stock exchange and JP Morgan would exchange 0.05473 shares of JP Morgan Chase common stock per share of Bear Stearns stocks. Based on the closing prices on March 15, the transaction would have a value of about $2 per share. There are no conditions attached to the deal and it is expected to be approved by the shareholders by the end of second quarter of this year. The Federal Reserve, the Office of the Comptroller of the Currency (OCC), and other federal agencies have given all necessary approvals. The Fed has agreed to fund up to $30 billion of Bear Stearns' less liquid assets. But one stumbling point for the sale, the Wall Street Journal said, appeared to be the amount of risk that JP Morgan would absorb in any type of transaction. — PTI
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Hefty fine for unsolicited calls
New Delhi, March 17 They will have to bear up to Rs 20,000 in case of second or subsequent such non-compliance. Apart from this, the receiver will be paid Rs 500 for the first unsolicited call and Rs 1,000 for every subsequent such call. The notification also prescribes that the complaint regarding Unsolicited Commercial Communication (UCC) shall be made by the subscriber to the service provider within fifteen days of the receipt of such call. TRAI had set up the National Do Not Call (NDNC) Registry in October 2007 to reduce the inconvenience to the telecom subscribers caused from the unsolicited tele-marketing calls. Till date, more than 8.3 million phone users have registered for in NDNC Registry. About 13,600 telemarketers have got themselves registered with the DoT. — UNI
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Mid-sized Sedan Segment
New Delhi, March 17 The company, which has been focusing on becoming a full-scale player to outgrow its small-carmaker image as a part of parent Suzuki’s global strategy, has managed to grow 53.2 per cent in the A3 (mid-sized sedan) segment during the April-February period. According to the latest data by the Society of Indian Automobile Manufacturers (SIAM), MSI’s sales in the period stood at 41,799 units as compared to 27,283 units in the same period last year. The growth has enabled the company to speed past Honda Siel Cars India (HSCI), which was at the number one slot in April-February period of the previous fiscal. HSCI sells City, its popular model in the segment. Hyundai Motor (India) comes third in the. The company sells two models - Accent and Verna - in the category. The fight for the fourth place in the segment is a close one, between Ford and Tata. Ford has Ikon, Fiesta and Fusion models in the segment, while Tata Motors has Indigo and Indigo Marina. MSI, which currently offers only the SX4 in the segment after its entry-level sedan Esteem was discontinued, will be launching the Swift Dzire by the end of the month. The new model is expected to consolidate its position further in the segment. Also, the company is working on a bigger sedan, expected to be launched in 2009-10, to compete with the likes of Toyota Corolla and Skoda Octavia that come in a price bracket of Rs 10-12 lakh in the fast growing A4 segment. — PTI
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GM plans new small car
General Motors (GM) today said it would look to make India its small car hub and export cars from the country once home demand is met, even as it plans a second mini-car for the country.
“We are very competitive in India. Manufacturing competitiveness is very good and manufacturing quality is at par with the rest of the world.,” said GM Group vice-president and president GM (Asia Pacific) David N. Reilly. The key to spurring demand in the Indian market, the company feels, is in the small car segment. In the country, GM operates the Chevrolet Spark, which is the lowest price car in the company’s stable. The car will not compete directly with Tata Motors Nano, but will be cheaper than GM’s current lowest priced car in India.
— UNI |
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Coca Cola bullish on India
New Delhi, March 17 "We are bullish on India. It is a matter of stimulation...as the growth comes, you have to put in incremental investments," E Neville Isdell chairman and CEO of US-based multinational Coke told PTI. "We are investing $250 million (Rs 1,000 crore)...this will not be the last. More investments will come," Isdell, who is visiting India as part of pushing business in tandem with a pleasure trip, said. Dubbing Coca Cola (India) as a "profitable" venture that is adding to the balance sheet of the global giant, the CEO said, "We have arrived in India. But we have not arrived to the level where we want to." "It is a question of long-term commitment. India figures in the global growth strategy of Coke. We are going to make it among the top 10 countries for Coke and then later among the top five," he said, but did not give any time frame on whether the first milestone would be achieved in five years or less. Stating that India is currently at number 17 in the list of countries where Coke is present, Isdell said the country had emerged among the best markets for the company during 2007. Recounting the tough time Coke faced in India owing to the pesticide controversy, Isdell said the company had learnt its lesson from the fact that despite it not doing anything wrong, the perception was contrary. "...It (pesticide) was not correct. But the perception took the form of reality and it was our credibility that took us out of it. We are doing well but we have to align with the society," he said. Asked about the acceptability of Coke in India and if it was getting hurt by a spate of controversies ranging from pesticide to water depletion being caused by the cola giant, Coke's worldwide CEO said, "We re-entered India in 1993 and had not become integral part of the society (at that time)." Listing out various corporate social responsibilities activities initiated by it since then as part of making itself more acceptable in India, Isdell said that though Coke was water-neutral and ground water usage was "zero degree", the company was taking a series of measures, including providing rain harvesting and other water-related facilities. — PTI
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Birla Sun Life infuses fresh capital of Rs 124 cr
Mumbai, March 17 This enhances the company's capital to Rs 1,224.50 crore as of February 26. This has been done to meet with the company's plans on capital expenditure to support the expansion of infrastructure and to conform to the solvency margin requirements as stipulated by the IRDA. During the year 2007-08, additional capital of over Rs 550 crore has been infused in various tranches by the company, bringing the capital base to Rs 1,224.50 crores as on date.
— PTI |
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Transforming professionals into corporate managers
Hyderabad, March 17 But they had one thing in common - the urge to get into corporate management to advance their careers. All are married and wanted a management degree fast. To get into Indian School of Business (ISB), they appeared for GMAT, scored high and having the required experience of minimum two years and a good academic record, they got selected for the batch of 2007-08, which will pass out next month. Bhaskar (45), a former army officer, is the eldest in the class of 425 students and is the source of enthusiasm for his batch mates most of whom are 20 years younger than him. He was to be promoted as a brigadier but decided to quit. Bhaskar says: “In Kashmir I was oversaw logistics, construction of military bases and expansion of cantonments. During my project at the ISB, I worked for a Mumbai-based real estate company. As such, I got a placement as business head of a top real estate company.” He said during the last decade, the country had taken off and he wanted to do a “hands on job instead of being a boss in the army and I needed an MBA from a top B-school”. Like Bhaskar, Dr. Sharma (35), MS in Orthopaedics, was not satisfied with his thriving private practice in Delhi. “The healthcare scenario has undergone a sea change. New private players are entering and hospitals chains were coming up fast all over. I can improve the managements of hospitals and produce better results. What can be more satisfying if I can positively impact a patient’s life as a manager? I wanted an MBA degree fast and ISB was the natural choice because of the one-year course,” he points out. Sharma will be heading a leading hospital chain in the country next month. One of the most interesting cases is of Aarti Kothari, a former business journalist from the Delhi bureau of Business World. After graduating in economics from St. Stephen’s College, Delhi, she joined the media. “After four years, I wanted to quit media. I had visited ISB as a reporter and was immediately attracted to its curriculum and the condensed course it offered within a year. I wanted to take up a marketing job. I have got a placement as a marketing strategy manager in a telecom company,” she said. Like Bhaskar, Sharma and Aarti, there are 422 more students who not only wanted to advance their careers through a top B-school like ISB but also change their job profile. V.K. Menon, ISB director, career advancement services, said: “Companies look for specific skill sets and we through interaction judge the potential skills of the students to identify the best slot where they will fit in and produce results immediately after they join as managers.”
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FM defends Budget
New Delhi, March 17 After the Budget announcement, the BJP had called it communal and had said the farmer loan issue was eyewash and propaganda. Rejecting BJP leader Arun Shourie’s allegations during the Budget debate, the finance minister said the government would provide resources to flagship programmes like loan waiver and the National Rural Employment Guarantee Scheme. Allaying fears that there were no budgetary provisions for the Rs 60,000 crore-loan waiver, the minister said it would be funded through the Budget in the next three years. Amidst protest by the BJP for paying hefty market prices to farmers, Chidambaram said the government would have to pay remunerative prices to the farmers though it would result in higher prices for the consumers. Pointing out that the government was facing a tremendous pressure in containing inflation, the minister said: “We might have to provide more subsidy to ensure that vulnerable sections are not affected adversely on account of rising commodity prices.” “To compensate the consumers, especially belonging to vulnerable sections of the society, the government could provide subsidy, though it must be targeted,” the minister said. Responding to worries expressed by Sharad Pawar of the NCP about India becoming an importer of food grains, the minister said no country as large as India can remain dependent on food grain imports it has to be self-sufficient. On maintaining growth rate, he said the government would make efforts for an economic growth rate of above 8 per cent and close to 9 per cent in 2008-09. While admitting that there was a slowdown in industrial production, he said the RBI must, therefore, focus on price stability and containing inflation while maintaining growth rate.
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Who is trading oil at $110 a barrel?
New Delhi, March 17 In addition to this, there are fears in Indian commodities market and other parts of the world that the oil-rich countries are routing their money to speculate, thus, adding more to the volatility of crude oil. Market watchers say it is not scarcity of crude oil in the international market or the problem of production that is adding to the prices as it has been in the past. These are just speculative excesses. Analysts tracking the sector say investment funds like the sovereign wealth funds, most of which originates from the West Asian countries may be adding to the already high prices of crude oil. Though there is no direct evidence of this but a lot of hedge funds have cut deals in West Asia. By trading “paper” barrels, the oil producing governments are reaping huge sums pumping black gold for consumers worldwide. Analysts say there are only the commodity prices that are rising gold and oil. It is very obvious who is funding them and reaping the benefit. There is also lingering doubt if the oil producing countries are doing this to take the advantage of the recessionary pressure in the US. Elaborating this, an energy trader based in London says: “This is jihad (holy war) of the economic kind.
The US has no choice but to pay for the oil at this price or more considering they have been consuming cheap oil all along. It is as if West Asia wants the western nations to realise that oil is not cheap and they should pay a decent price for a resource that is going to run out fast. However, the question is what is the decent price and how much is enough for a commodity like oil, besides why is it that there is so much volatility in black gold?”
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Cairn raises Rs 2,534 cr Gold soars to Rs 13,560 Order for BHEL Vishal Retail Godrej plans Bajaj Allianz plan Glenmark Pharma Awarded |
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New Delhi, March 17
In video (
