Mumbai, December 4
The market regulator, Securities and Exchange Board of India (SEBI), announcing a new set of measures aimed at the mutual funds industry, today said that all close-ended MF schemes must be listed and that investors would not be allowed to exit from close-ended mutual fund schemes before their maturity.

"SEBI has decided that all close-ended MF schemes must get listed. Besides, no early exit will be allowed in any scheme of mutual fund in the nature of close-ended scheme," SEBI’s chairman C.B. Bhave told reporters here after its Board meeting.

The schemes which have been approved earlier but not yet launched will also have to be amended accordingly.

"It will be obligatory for the asset management company to list the close-ended schemes," Bhave said.

The Board also decided that for such close-ended schemes, the underlying assets will not have a maturity beyond the date on which the scheme expires. All such funds must invest in instruments in line with their maturity profile, Bhave said.

Commenting on the overall mutual fund regulations, Bhave said that, "from the October experience, we didn't face any difficulty with regard to equity schemes even though the market had come off so much. We wouldn't want to tinker unnecessarily with something unless an issue comes up. So just now the focus is more on what happens with debt schemes," he said.

In October, the mutual funds industry was faced with a severe liquidity crisis following redemption pressure. — PTI

New Delhi, December 4
Inflation fell to its lowest in nearly seven months to 8.4 per cent, giving RBI enough room for deeper rate cuts to propel the economy — expectations of which fostered a strong rally in the equities market today.

The rate, measured by wholesale prices, eased for the fourth straight week and was lower by 0.44 percentage points in the seven-day period ending November 22 from the previous week.

However, inflation for food articles grew by 10.43 per cent from 9.93 per cent a week ago. Items like coffee, sea fish, masur, rice, eggs, arhar, fruits, vegetables and gram cost more in the week under review.

A sharp fall in global crude prices, which had touched a high of $147 a barrel in July and is now ruling near $45, and duty cuts on ATF (jet fuel) led to a huge decline in prices of industrial fuels in India.

The drop in inflation numbers will make it easier for RBI to cut key short-term rates — possibly this weekend when the government is expected to unveil a stimulus package for the housing, auto and export sectors.

The stock market rallied on these expectations and advanced by 482 points to close above the 9,200-points mark.

Crisil principal economist D.K. Joshi said, "Inflation has fallen sharply than our expectations, led by fuel group and manufactured goods prices. This gives RBI more leeway for interest rate cut and I expect agrressive reduction in both repo and reverse repo rate soon."

New Delhi, December 4
With the assembly polls in major states concluding, the government may slash petrol price next week by Rs 10 a litre, diesel by Rs 3 per litre and domestic LPG by Rs 20 per cylinder in line with fall in global oil prices.

“Polling in Rajasthan will end today and with it electioneering in the four major states. And so a revision in fuel prices is likely to be taken to the cabinet at its next meeting, scheduled on December 11,” a government source said.

For the first time in three years, state-run Indian Oil, Bharat Petroleum and Hindustan Petroleum are selling petrol at a profit of Rs 14.89 a litre and diesel at Rs 3.03 per litre.

But they continue to lose Rs 17.26 on sale of every litre of kerosene through Public Distribution System (PDS) and Rs 148.32 per domestic LPG cylinder.

“The UPA government is keen on rolling back the Rs 5 a litre hike in petrol, Rs 3 per litre increase in diesel and Rs 50 per cylinder hike in LPG prices announced in June. As oil firms continue to make losses on LPG, some of the margins on petrol may be used to bring down the cooking fuel price,” the source said.

Frankfurt, December 4
The European Central Bank (ECB) cut interest rates by 75 basis points on Thursday, its biggest ever move as inflation plummets and the euro zone economy sinks deeper into recession.

The move takes the ECB's main refinancing rate to 2.5 per cent, its lowest in nearly 2-1/2 years and marks the third cut in barely two months amidst signs that the financial crisis is biting hard into the real economy.

The majority of economists had expected a smaller, 50 basis point cut although a significant minority forecast a bigger move. Financial markets had priced in a 75 basis points reduction.

Other central banks have taken even more aggressive moves, with the Swedish central bank cutting by a record 175 basis points while the Bank of England cut rates by 100 basis points to 2 per cent, their lowest level since 1951.

The ECB also cut the rates on its overnight facilities by 75 basis points. Funds borrowed from its marginal lending facility would now attract an interest rate of 3 per cent and overnight deposits will pay 2 per cent. — Reuters

New York, December 4
Who could be India's Obama who could unite the country and march the nation forward at a traumatic time? US business magazine Forbes feels it is industry captain Ratan Tata.

"While it (India) has the sympathy of the world (after the recent attacks), India could have an Obama moment — one in which a leader, whose personal history epitomises the country's principles, marches forward to unite the country during its very moment of trauma. India has a chance now to get it right, but it needs a strong, credible leader to step up," Forbes said in a report.

"As an American, I don't get a vote in India, but if I did, mine would go to
Ratan Tata," added the report written by Forbes magazine' senior editor (Asia)
Robyn Meredith.

"He is not a politician, but he is the country's most respected business leader. His Tata Group owns the Taj hotel that was just attacked, but his family is just as connected to India's proud history as its shell-shocked present," Meredith wrote in a weekly column published online.

Posing the question whether should there be not a way to involve Tata at the highest level in the government, the report noted that "a fractured India" would immensely benefit from his acumen and constructive patriotism.

Meredith pointed out, "Should there not be a way to involve him in government at the highest level? A fractured India would benefit immeasurably from his acumen, his managerial skills, and his very obvious — but always constructive —patriotism."

Wondering what if the nation leapfrogged America's approach, the magazine pointed out that the political leap could be as successful as the country's technology jump. — PTI

New York, December 4
Top US phone company AT&T Inc. said on Thursday it would eliminate 12,000 jobs, about 4 per cent of its workforce, as it joins a raft of corporations trying to slash costs in the face of the economic downturn.

AT&T will cut the jobs over the remainder of 2008 and 2009, and take a charge of about $600 million in this year's fourth quarter for severance.

The carrier plans to cut its 2009 capital spending from this year's levels, though actual spending plans have not yet been finalised. AT&T said it would provide details on its capital spending in late January.

Shares of AT&T were down 2.5 per cent in pre-market trade following news of the job cuts, which the company attributed to "economic pressures, a changing business mix and a more streamlined organisational structure." — Reuters

New Delhi, December 4
The government has asked Reliance Industries to supply natural gas from the company's eastern offshore D6 fields to the beleaguered Dabhol power plant, a segment that gets top preference for gas allocation along with fertiliser units.

Detailing customers for the initial 40 million standard cubic meters per day of gas to be produced from Krishna Godavari basin D6 field, a petroleum ministry statement said that gas to Ratnagiri Gas and Power (Dabhol) will be within the overall allocation of 18 mmscmd for the power sector.

"It has been decided that RGPPL be supplied 1.4 mmscmd during January to March 2009 and 2.7 mmscmd during April to September 2009, subject to commencement of production, within the overall allocation of power sector (18 mmscmd)," it said.

Further, 8.5 mmscmd would be supplied to RGPPL after September 2009. Reliance is to begin production from its prolific D6 fields lying off the Andhra coast in January 2009 with an initial output of 5 mmscmd. This will rise to 25 mmscmd by March and to 55 mmscmd by July 2009.

The fertiliser sector would continue to get top priority over D6 gas with 14 mmscmd being allocated for existing units.

The statement said D6 gas would be sold to all customers at the rate of $4.2 per million British thermal unit (mmBtu) if crude oil price averaged greater or equal to $60 per barrel in the year preceding the sale.

As per the gas utilisation policy approved by the Empowered Group of Ministers (EGoM), Reliance is to first supply gas to existing gas-based urea plants and then give 3 mmscmd to LPG plants.

Thereafter, up to 18 mmscmd of gas was to be given to gas-based power plants that were lying idle/under-utilised or likely to be commissioned during 2008-09.

New Delhi, December 4
Welcoming the Bombay High Court upholding the $2 billion (Rs 10,000 crore) tax notice slapped on global telecom major Vodafone, the government today said it has "strengthened the hands" of authorities to bring under scrutiny the sale of assets in India to a foreign buyer.

The "Bombay High Court has upheld our jurisdiction to look into the case. Total tax liability is estimated to be around $2 billion", Central Board of Direct Taxes (CBDT) chairman N.B. Singh told reporters here today.

The CBDT will also file a caveat in the Supreme Court, he said on being asked about the Vodafone statement that it would approach the apex court against the Bombay High Court's decision.

"The decision of the court in this case has strengthened the hands of the Income Tax department in its attempt to bring to tax in India transactions involving transfer of assets situated in India between entities located outside the country", he said.

Other such deals which may come under scanner are AT&T-Tata and Vedanta-Sesa Goa among others.

The high court had yesterday dismissed Vodafone's petititon challenging the Income Tax Department's show-cause notice for the payment of capital gains tax.

Vodafone Holdings International, a Netherland-based company, had picked up the stake of Hutchison in Hutchison-Essar to form the new entity Vodafone-Essar in a $11.2 billion deal in 2006. — PTI

New Delhi, December 4
Air India today announced a limited-period promotional scheme to attract frequent fliers during the peak winter season, a move aimed to increase its market share.

The scheme, called 'Winter Warmth', envisages one free return ticket of two coupons on the national carrier's domestic network to those taking a minimum of eight flights on select sectors between December 5 and February 5.

The scheme would be applicable for travel between Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad during this period, an airline release said. — PTI