The Tribune, Chandigarh, India

Rates have peaked as inflation slows: RBI

Singapore/New Delhi, Jan 5
Interest rates in India have peaked, Reserve Bank of India deputy governor Subir Gokarn said Thursday as data showed the food price index dropped for the first time in nearly six years. Gokarn, who handles monetary policy at the central bank, said economic growth concerns are back on "center stage," suggesting that the slowing economy was weighing more on the RBI's mind as the inflation threat recedes.

"We’re basically saying the cycle has peaked. I don't think in any of the governor's statements or in our guidance, we have made any explicit mention of actually starting to bring rates down," Gokarn told a TV channel after speaking at a conference in Singapore. "That’ll depend on how the inflation momentum is playing out," he added.

The food price index fell in late December on an annual basis for the first time since April 2006. That has a triggered hopes that the headline inflation rate for December, due to be released next week, may come in below 9% for the first time in a year, which could make it easier for the central bank to relax its hawkish stance.

"I think what is being suggested by him (Gokarn) is that it’s going to be data driven. It’s not that he is saying RBI won't cut rates. He’s just saying it depends on the magnitude of the data points," said Shubhada Rao, chief economist at Yes Bank in Mumbai.

The RBI will take cues from factory output data and the headline inflation number to decide on policy action at its review on Jan 24, but in terms of the policy stance, growth is clearly on the central bank's radar, Rao said.

November factory output data is due on January 12 and the headline inflation number for December is scheduled for release on January 16. India's 10-year benchmark bond yield rose marginally immediately after Gokarn's comments.

"The RBI has already given an indication that a reversal of the policy may be possible when there are definite signs of decline in inflation." said C.Rangarajan, chairman of the PM's economic advisory council. — Reuters

Re snaps 2-day rise on stocks, euro fall

The rupee snapped a two-day rising streak to end weaker on Thursday, on choppy local shares and as nervousness about Europe's debt crisis sent the euro plummeting against the dollar. But, losses in the rupee were limited due to expectations of robust dollar inflows as the government and the RBI have been taking measures to support growth in Asia's third largest economy, traders said.

AUTO EXPO 2012
New sedans, SUVs mark day 1
World’s top auto makers rush to Delhi show
Girja Shankar Kaura/TNS

New Delhi, January 5
There were launches galore at Pragati Maidan hereon Thursday as the 11th edition of the Auto Expo got underway with top Indian and foreign car manufacturers exhibiting their best models for the burgeoning Indian market.

Display of concept cars was the other flavour at the show, organized by CII, ACMA and SIAM, as car manufacturers jostled with each other for space with newer models for the Indian market.

As the high voltage launches unveiled the celebrity quotient was not missing at the sprawling exhibition grounds with Bollywood actors Amitabh Bachchan and Katrina Kaif lending their presence at the launch of the Avanti from the stable of Dilip Chhabria and the Q3 from Audi.

The day started early with country’s largest car-maker Maruti Suzuki India Ltd unveiling its compact SUV XA-Alpha with an intent to enter into newer segments.

"India is on course to become one of the top automobile manufacturers of the world, powered by the middle class and continued government support. Customers will become more and more sophisticated. The choice of vehicles will be dictated more and more by the way of life of customers. We’ll launch new products and create new categories to their choice," Maruti Suzuki India Ltd MD & CEO Shinzo Nakanishi said.

In fact the motto seemed to be “bigger the better” as global automakers targeted the Indian psyche with a flurry of SUV launches.

On Thursday Hyundai unveiled its concept multipurpose vehicle Hexaspace and also showcased a new version of the Sonata, which it expects to launch in India by February end.

"We’re showing our new concept multipurpose vehicle Hexaspace for the first time ... It’s too early to say when it could come in the market but it’ will take three to four years ..." Hyundai Motor India director (sales & marketing) Arvind Saxena told reporters at the global launch of the MPV.

The vehicle has a seating for eight passengers and all the seats are shaped hexagonally to create optimum space utilization. It has been designed for urban customers in the 30-40 age group, the firm said.

Auto major Mahindra & Mahindra, while saying it will invest over Rs 800 crore to develop a joint platform for two products with its Korean subsidiary Ssangyong Motor over the next 3 to 4 years, unveiled four models from the basket. Of these, the sports utility vehicle Rexton will hit the Indian market within the next six months.

Besides, the homegrown auto major also announced it would enter the heavy bus segment, to be developed on Mahindra’s Navistar platforms, during the next one year.

Global majors look for growth in Indian market

Ford, Volkswagen, Hyundai, General Motors and Nissan were among the brands looking to make a splash on the first day, with several unveiling chunky SUV vehicles targeting India's increasingly demanding car buyers. While the low-income country remains a cost-sensitive market dominated by sales of small family cars, a recent slowdown has led many manufacturers to look for profits from the more affluent middle classes. — AFP

ONGC finds gas reserves off Daman

New Delhi, January 5
State-owned Oil & Natural Gas Corp has discovered about 4 trillion cubic feet (tcf) of gas reserves off the Daman coast, which can produce 7 million cubic meters a day of gas in four years time.

"ONGC has over past few years made several discoveries some 50 km off the Daman coast. These cluster together hold about 132 billion cubic meters (4 tcf) of in-place reserves," a source close to the company said.

The Daman cluster fields constitutes the B-12 North & B-12 South, C-26 and SD. The exploratory efforts and drilling in the area is continuing.

The company is currently working on a plan to develop the reservoir found in the Arabian sea, he said adding ONGC may invest $4 billion in developing the reserves.

ONGC currently produces about 51 mmcmd of gas and the new reservoir found in a block that the company had got on nomination basis, would help add over 13% to its output. Its biggest gas field, Bassein off the west coast, currently produces 31 mmcmd.

"The field found off Daman can typically produce for 15 years," the source said adding ONGC plans to construct a gas receipt facility some 100-km south of Mumbai for processing the gas before it can be sold to consumers like power plants.

Separately, ONGC in a statement on Wednesday said it had made four oil and gas discoveries in the country. Gas was found in a well drilled about 7 km from Karimganj town in Assam while oil flowed in an exploratory well near Mandhali village of Mehsana district in Gujarat.

Also, oil and gas was would in a well in Nambar block, about 6 km from Noajan town in Golaghat district of Assam as well as in Viral block near Kadi town in Mehsana district of Gujarat.

"With these four discoveries, ONGC notifies 15 discoveries in three quarters of the fiscal 2012," the statement said. — PTI

DGCA asks Kingfisher to fix timeline for recapitalisation
Tribune News Service

Bangalore, January 5
Debt-ridden Kingfisher Airlines said Thursday the Directorate General of Civil Aviation (DGCA), the regulator of civil and commercial flight operations on the country, has asked it to provide a specific timeline for getting the grounded aircrafts back in the air and for its recapitalization efforts.

In a statement issuedtoday, Kingfisher Airlines CEO Sanjay Aggarwal said sthe airline’s senior executives met DGCA officials today to review the recently concluded financial audit by the regulator covering all domestic airlines.

The cash-strapped carrier had sprung a surprise last month by announcing that it would become part of oneworld, one of the world’s three largest global airline alliances, with effect from February 10, 2012.

Kingfisher will be the first carrier from the subcontinent to join any of the major global airline groups. Air India's bid to join the Star Alliance, another global airlines grouping major, fell through earlier this year after Star Alliance suspended the joining process of the national carrier claiming nonfulfillment of various conditions.

Kingfisher, whose debts run into thousands of crores of rupees, has grounded more than 15 planes in its fleet as it battles a prolonged cash crunch. Controlled by liquor tycoon Vijay Mallya, it has been seeking additional working capital from its lenders.

By becoming a part of oneworld, Kingfisher hopes to turn around financialy. It claimed joining oneworld would “strengthen its competitive offering and its financial position, enabling it to offer customers an unrivalled global network served by partners including some of the best and biggest airlines in the world”.

The Kingfisher statement also responded to media stories about the DGCA’s observation that the carrier’s financial stress could impinge on safety of passengers. Aggarwal said: “We’d like to clarify the DGCA didn’t have any significant findings or concerns with regard to safety at Kingfisher Airlines and that we’ve an adequate number of pilots and engineers to operate our scheduled services, which will continue to operate with utmost safety”.

Spot gold up Rs 60, silver sheds Rs 750

New Delhi, January 5
A divergent trend was seen in the bullion market here today as gold maintained its upward march for the third straight day by adding Rs 60, while silver declined by Rs 750.

Gold gained Rs 60 to Rs 28,180 per 10 grams on sustained buying in line with a firming global trend, while silver met with profit selling at higher level and fell by Rs 750 to Rs 52,450 per kg.

Traders said buying activity in gold picked up on a firming global trend as demand rose in Asia for the approaching Chinese Lunar New Year. In Singapore, gold rose by 0.8% to $1,623.97 an ounce, the highest level since December 21.

Back home, gold of 99.9 and 99.5% purity advanced by Rs 60 each to Rs 28,180 and Rs 28,040 per 10 grams, respectively. The metal has gained Rs 480 in the last two trading sessions. However, silver ready fell by Rs 750 to Rs 52,450 per kg and weekly-based delivery by Rs 205 to Rs 52,895 per kg. — PTI

Food prices fall for first time in six years

New Delhi, January 5
Food prices in India fell in late December, the first decline for nearly six years, official data showed Thursday, raising hopes that India's central bank may loosen its tight monetary policy stance.

In the week ended December 24, the wholesale price index for food articles fell 3.36% from a year earlier, as prices of pulses, vegetables and potatoes tumbled.

Food price inflation has been in double digits for more than a year, causing hardship for India's impoverished masses and heaping pressure on the Congress-led government.

"There has been substantial improvement. Food inflation has turned negative for the first time in the recent memory," Finance Minister Pranab Mukherjee said in response to the data.

The fall in the food index will increase expectations that headline inflation, at 9.11%, could ease in coming months and lead the Reserve Bank of India to start lowering interest rates. — AFP

Credit Suisse upgrades Indian equities

New Delhi, January 5
Credit Suisse upgraded Indian equities to "neutral" from "underweight," citing cheap valuations, easing headline inflation and slower earnings estimate downgrades in December.

"This is only the 14th quarter since 2000 that India has been among the four most undervalued markets in the region," the bank said in its research note dated Jan. 4, adding that on 12 of those 13 previous episodes, MSCI India outperformed MXASJ (MSCI Asia ex. Japan) after 12 months.

The four cheapest markets in Asia are China, Korea, Hong Kong and India, which was the bank's biggest underweight market since September 2010, according to Credit Suisse's price-to-book versus return-on-equity valuation model. — Reuters

Govt rules out coal price hike

New Delhi, January 5
The government said Thursday there was no proposal to increase coal prices at present even as Coal India has adopted a new system for pricing and excise duty on dispatches of fossil fuel has been raised.

"As of now the rise in the prices of coal is not under consideration," Coal Minister Sriprakash Jaiswal told PTI when asked whether the government was considering hiking prices in the wake of the new system.

Coal India Ltd, however, said that the burden on account of increase in duty will be passed on to the consumers, adding that it would be negligible. "The increase will be passed on to the consumers. It will be negligible," CIL chairman & MD NC Jha said.

The coal ministry had earlier increased stowing duty from Rs 10 a tonne to Rs 20 a tonne. — PTI

‘Euro collapse will hit EU, global financial system’

Hyderabad, January 5
The collapse of the euro will have catastrophic consequences not only for Europe but for the global financial system because of interconnectedness, said George Soros, chairman of Soros Fund Management which has assets of about $27 billion.

The eurozone debt crisis is a direct consequence of the crash of world economy in 2008 and weakening of the currency may lead to the breakup of the European Union itself, he said at an interactive session in Hyderabad on Thursday.

"If the common currency broke down, it will then lead to the breakup of the European Union itself. So it is political problem. Thus, euro crisis in my opinion is something more serious and more threatening than the crash of 2008," Soros added. — PTI