New Delhi, July 16
Headline inflation declined to 7.25 per cent in June as prices of manufactured goods eased a little but food inflation still remains a concern with vegetables, wheat and pulses becoming costlier.

While headline inflation has been gradually coming down, food inflation is still very stubborn. Inflation, as measured by the wholesale price index, was 7.55% in May. In June last year it was 9.51% and has come in much lower this year.

Overall food inflation rose to 10.81% in June, from 10.74% in May. In June last year, inflation rate in this category was 7.6%. Food articles have 14.3% share in the WPI basket.

Industry is arguing that there is a need to ease supply side issues to tackle food inflation. According to CII director general Chandrajit Banerjee, while there is an improvement in the inflation numbers over the same period last year, the high food and fuel prices have been the major contributors for June inflation and policy initiatives are needed to ease the supply side bottlenecks in agriculture by delisting perishables from the APMC Act, permitting farmers to directly sell their produce in the market and open up FDI in retail.

Since manufacturing or core inflation has eased, industry is seeking reduction in interest rates as it would have no impact on supply side or food inflation.

Assocham in a statement said that manufactured products inflation has kept on falling since the beginning of the year and has hovered around 5% or the last four months.

“Since the RBI had earlier been arguing for interest rate hikes because of increases in core inflation, the monetary authorities should now revise interest rates when core inflation is showing falling or flat trends,” the chamber added.

FICCI president R.V. Kanoria said in any case with prices of food articles exerting a large pressure on inflation, the government requires to address this issue from the supply side. A tight monetary policy will have no bearing on such inflation but would only continue to constrain growth.

Reuters adds: Businesses want lower interest rates to help drag Asia's third largest economy back from a nine-year low of 5.3% GDP growth in the first quarter of 2012.

But a faltering monsoon, key to volatile food prices, tempered expectations of a rate cut, with the government warning inflation could accelerate without more rain.

"I don’t expect this number to prompt the RBI to immediately cut rates," said Shubhada Rao, chief economist at Yes Bank in Mumbai. "The inflation expectation still remains elevated, and the outlook is cautious because of the performance of monsoon, and its impact on food prices, as well as the impending and much awaited hike in fuel prices."

New Delhi, July 16
Despite facing cancellation of 2G cellular licences following the Supreme Court’s February order, two foreign telecom firms — Norway’s Telenor and Russia’s Sistema — have kept their faith in the Indian market and have only been trying to further consolidate their position.

Both Telenor, which operates which operates in joint venture with Unitech under the name Uninor and Sistema in partnership with Shyam Telecom and under he brand name MTS, have been extremely aggressive in their marketing strategy over the past few months, despite the date of their cancellation of the licences coming closer.

The Supreme Court, while granting the extension to the department of telecom for completing the 2G spectrum auction process had also extended the date for the cancellation of the licences till September 7.

DoT has been given time till August 31 to complete the process, a deadline which it is bound to miss in the wake of even the reserve price for the auction not having been finalized as yet.

Even though the two firms have served notices on the Indian government threatening legal recourse in international courts if their business interests were not protected, the two are optimistic that things would work out favourably.

While putting pressure through diplomatic channels, both Uninor and MTS have not only been adding new subscribers but have also very aggressively priced their call rates, forcing consumers to shift from other telecom operators even if it meant for a few months. 

New Delhi, July 16
Maintaining that India remains an attractive investment destination, Commerce & Industry Minister Anand Sharma asserted on Monday that “policy making is a sovereign decision”.Reacting to US President Barack Obama’s remarks that India has placed restrictions on FDI in many sectors and the investment climate is not conducive, Sharma retorted the United States government must show leadership to bring down protectionism and trade barriers.

Responding to Obama’s remarks, Sharma said, “We have taken note of this observation. There is always a difference between perception and reality. He has every right to convey what his perceptions are. But, the policy making is a sovereign decision, and Indian FDI policy regime is investor-friendly”.

Obama’s statement had stirred up a debate once again on the reforms process in India. The Indian government’s reaction while rebutting the perception that the country is not investor friendly was to stand its ground on the fact that policy making is a sovereign right to fend domestic criticism.

Sharma cited several recent reports by international agencies like UNCTAD, JBIC, Kearney and Ernst & Young to drive home the point that India has been rated as among the top investment destinations in the world.

On the reforms process, Sharma told reporters, “We have an abiding commitment to reforms. And, yes when it comes to taking decisions, they are taken after an inclusive process of consultations which my government believes in. They have been made in past, they will be made in future. We have followed a calibrated approach in following the path of economic reforms".

There was also a swipe aimed at the US administration to address issues which it finds tricky. "We would rather urge the United States to demonstrate leadership in bringing down barriers, encouraging capital flows and trade in the world which is good for every economy. The United States should be leading the fight against protectionism and taking forward the stalled Doha development round of the WTO to a meaningful conclusion," he added.

He also pointed out several Indian companies have made big investments abroad including in the US creating over half a million jobs in America at a time of job losses there.

Sharma said when it came to taking more decisions on economic reforms, "the prime minister has said and I’m also saying we’re committed to continue following our roadmap of economic reforms”.

Mumbai, July 16
Reliance Industries has repurchased shares worth Rs 2,512 crore from its public shareholders making it the country's biggest share buyback programme ever while overtaking an earlier exercise by Piramal Healthcare.

With this, Mukesh Ambani-led RIL has managed to achieve nearly one-fourth of the targeted amount of Rs 10,440 crore from the buyback programme, which began in Feb 2012. The company can continue its buyback programme till Jan 19, 2013.

According to the latest data, RIL has bought back 3.51 cr shares for Rs 2,512 cr till July 13. So far, Piramal Healthcare had conducted the biggest ever buyback programme, wherein it repurchased 4.18 cr shares for about Rs 2,508 cr. — PTI

Helsinki, July 16
Shares in Nokia Oyj fell over 3 per cent on Monday after the company slashed the price of its flagship smartphone, with investors seeing it as a sign of desperation in its battle against Apple Inc and Samsung Electronics Co Ltd.

Analysts also cited caution ahead of Thursday's second-quarter report and short-selling of the stock reached record highs. The results are expected to show a widening loss for the world's second-largest cellphone maker.

Once the world's dominant cellphone provider, Nokia was late to embrace smartphones, and has lost out to Apple and Samsung in the most profitable part of the market.

Nokia halved the price of the Lumia 900 phone in the United States over the weekend, barely three months after its launch, to try and lure customers away from its rivals.

"They are stuck between a rock and a hard place — to drive sales of their devices they are going to have to spend money on marketing and promotions, but at the same time the stock market is demanding they do anything other than spend money," said Ovum analyst Nick Dillon.

Analysts expect Samsung to sell 50 million smartphones in the second quarter, a Reuters poll showed on Monday, compared with Apple selling around 30 million iPhones and Nokia around 10 million smartphones.

Nokia shares were 2.33 per cent lower at 1.476 euros by 1116 GMT, after falling more than 3% earlier in the session and still near a 16-year low of 1.434 euros reached last week.

"I don't think the company will have anything positive to say on Thursday," said Mikael Rautanen, analyst at equity research firm Inderes in Helsinki. "The third quarter will be very difficult ... The fight to survival will continue."

Nokia is expected to report a net loss roughly doubling to 706 million euros ($864.4 million) and burn through more than a billion of cash in just three months, according to a Reuters poll of 38 analysts.

In the three months to June, all three major credit ratings agencies cut Nokia bonds to "junk" while the firm warned twice on profits and said it planned to cut one in five jobs.

PRICE CUT: Nokia is fighting back with its new Lumia phones, which use Microsoft Corp’s untried Windows software. The phones have won some good reviews, but have had relatively little success among consumers who are preferring iPhone and phones running Google's Android software, and slow sales have so far thwarted Nokia's recovery efforts. Nokia has said the price cut was part of its "ongoing lifecycle management" but analysts said it was earlier than usual. — Reuters

Singapore/New Delhi, July 16
The undersea cable unit of Reliance Communications has extended the bookbuilding period for its up to US $1 billion Singapore business trust IPO, sources said, in a deal that has seen a mixed reception from investors despite offering a high yield.

GTI Trust's offer for institutional investors, which opened on July 9, will now close on Thursday, two sources who had direct knowledge of the matter said, instead of Monday as originally planned.

The trading debut for GTI Trust was now set for July 25, the sources said, two days later than the July 23 indicated in a term sheet. The sources declined to be named, as is typically the case in ongoing capital-raising deals.

Reliance Communications, controlled by billionaire Anil Ambani, is looking to raise funds to ease a debt load of $7 billion as of March. It has been unsuccessful in several past attempts to raise money by selling assets.

GTI Trust has indicated a distribution yield of 9.5% to 11.5% for 2013, higher than the yield offered by Singapore-listed Hutchison Port Trust and PCCW Ltd's HKT Trust.

While some investors said they are attracted by the yield, many others, including some who have invested in other Asian business trusts, said they were concerned about the business' growth outlook and the debt at its parent firm.

"The yield is attractive and if there's a 2% or so upside in topline growth you are looking at a return of around 14% on an annual basis. Not bad," said an institutional investor who attended the GTI Trust roadshow but declined to be identified. Another fund manager who is based in Malaysia and invested in recent Singapore IPOs said he is giving the offer a miss. — Reuters

New Delhi, July 16
Mumbai-based agrochemicals producer United Phosphorus Ltd has bought out Dutch pesticides maker Agrichem from a unit of Punjab Chemicals & Crop Protection Ltd.

In a communique to the BSE on Monday, UPL said its "overseas subsidiary has entered into an agreement with SD Agchem Europe, a subsidiary of Punjab Chemicals, to acquire 100% stake in the Dutch firm Agrichem along with all tangible and intangible assets, IPR, product registrations, brands, distribution network and manufacturing facilities”.

UPL, however, did not disclose financial details of the acquisition. "Agrichem will give a new and enhanced market access in European countries. Agrichem has an exciting registrations portfolio with products that will be complimentary to UPL's existing portfolio in Europe," it added.

Agrichem is engaged in producing and marketing of herbicides, insecticides and fungicides registered in several European countries including Holland, Belgium, the UK, France, Germany, Ireland, Denmark, Italy and Switzerland. The firm has a crop protection registration department, in-house R&D and quality control facilities and its own formulation facilities in Holland. — PTI