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Wednesday, February 29, 2012
INDIA: GDP growth near 3-yr low of 6.1%
Posted by Unknown at 8:00 PM 0 comments
State-run Refiners Scale Down Crude Imports from Iran
Diversify oil basket to cut down dependence on Tehran in the event of more sanctions
India's imports of Iranian crude oil are expected to fall further as state refiners reduce their exposure to the country facing US sanctions, even as the shift is being officially explained as a drive to diversify the country's crude basket to avoid offending major oil suppliers such as Iran.
India maintains its declared policy that it will keep buying crude from Iran and maintain friendly relations with it unless there are UN sanctions against the country. But the oil ministry is quietly nudging state refiners to explore new grades of crude oil from Africa and Latin America, which are cheaper and can improve refining margins of complex refineries. State firms said import of Iranian crude oil from term contracts has fallen to 13.1 million tonnes in the current fiscal from about 22 million tonnes in 2008-09, and is expected to decline further in 2012-13 as refiners gradually buy more barrels from other regions. "Diversification of crude basket is must for India's energy security and it is an ongoing thing. We can't put all eggs in one basket," said a government official who did not wish to be identified.The biggest buyer of Iranian crude, state-run MRPL, is also courting new suppliers. "We are talking to various suppliers in Africa and Latin America for long-term supply of crude," a company executive said. Government and industry officials say recent developments in the Middle-East are a matter of concern for a country that imports 80% of its oil requirements. The Middle-East supplied 65% of the 163.6 million tonnes of crude India imported in 2010-11, making the country vulnerable to supply shocks if cargo movement in the region is blocked.
"So far, turmoil in Libya, Syria, Iran, Iraq and Egypt has not adversely affected India. While Libya, Syria and Egypt constituted only about 2% of our total imports, there is no supply disruption from Iran or Iraq," another government official said. State-run refiners are also taking steps to equip their plants to process new grades of crude oil. "We have already started processing high-sulphur crude and are now preparing to process heavier oil sourced from Latin America and Africa," IndianOil Chairman RS Butola told ET.
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Monday, February 27, 2012
Investors of Sterlite, Sesa Resist Merger
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SENSEX PLUNGES 478 POINTS
Street Slips on Spiralling Oil, Profit-booking
After an uninterrupted rise in stocks since January, investors needed an excuse to take home some profits. Higher oil prices offered them the perfect reason to dump stocks, resulting in benchmark indices posting their highest single-day fall in four months.
Till last week, India was the best performer among global markets, and surprisingly even on Monday, when the market tanked, foreign portfolio managers were net buyers.Though Brent crude slipped below $125, snapping five days of gains, after touching 10-month highs, worries persist that tensions between Iran and Israel could lead to supply disruptions.
"The rise in crude oil prices is the single reason for the fall in the markets today. It is difficult to know how long it will persist because these are geopolitical developments," said Nandan Chakraborty, MD-institutional equity research at Enam Securities.
"That said, market has gone up a lot recently and it was waiting for a trigger to take a pause. The market was highly vulnerable to fall and would have fallen for any reason at all," he said. Market could Start Worrying
On Monday, the Sensex dropped 477.82 points, or 2.67%, to close at 17,445.75 while the Nifty fell 148.10 points, or 2.73%, to end at 5,281.20. It was triggered by local institutions, which sold stocks worth Rs 700 crore. Though FIIs bought Rs 330 crore of equities, it was significantly lower than their recent purchases.
Shares of Sesa Goa and Sterlite Industries led the declines in BSE's metal index after the Vedanta group spelt out the terms of the merger between the two companies over the weekend. The index fell 5.6% on Monday on account of profit booking after recent gains. India's benchmark indices have surged 17% between January 1 and February 25.
The rally was driven by $5 billion worth of foreign portfolio inflows after the European Central Bank launched the first round of fund infusion. Indian stocks benefitted as they had underperformed US stocks in 2011. But, with the stock valuation advantage receding after the recent rally, analysts said the market could start worrying more about events that could interrupt the rally.
"There may be multiple reasons — elections, budget, Food Security Bill etc. Some may think that inflation will take longer to soften. You can pick any one... There was no definite reason why the market surged since January, and there is no definite reason why the market should fall now... I don't think Iran will escalate the issue beyond a point," said Anand Tandon, CEO of JRG Securities.
Posted by Unknown at 5:27 PM 0 comments
General strike set to hit nation, may spare city
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Sunday, February 26, 2012
‘Prized Catch’ Ispat Weighs Heavy on JSW
As Ispat's losses mount, analysts blame the haste Sajjan Jindal showed in wrapping up the deal for some of his current financial problems
Steel magnate Sajjan Jindal's financial troubles are spreading. Already burdened by the woes of iron ore sourcing, the Mumbai-based billionaire and promoter of JSW Steel is now realising that his acquisition of Ispat Industries is not quite turning out to be the "prized" catch it was once touted to be.
Jindal had cut the deal for Ispat with brothers Pramod and Vinod Mittal at lickety-split. The . 2,157-crore transaction was sealed in just a week in December 2010, surprising other suitors like Tata Steel. Jindal had then promised shareholders of Ispat that he would revive the loss-making company's fortunes in less than 18 months. He could not keep his word as new problems kept creeping up with Ispat's financials.Already struggling to live up with several "unviable" decisions of Ispat's previous board, Jindal is now finding his hands full with the Maharashtra-based steelmaker's "sticky assets".
"We have made a provision of . 1,292 crore for sticky assets in Ispat," JSW's joint managing director Seshagiri Rao told ET. "These include advances to group companies, receivables, overseas investments and for old power equipment." Vinod Mittal, a director on Ispat board, did not respond to calls from ET.
With Ispat's losses mounting—the company slumped to a net loss of . 1,806 crore in the year to March 2011 and . 308.6 crore in the quarter to December — Jindal is getting ready to loosen his purse strings yet again.
JSW is drawing up a . 2,000-crore plan to turn the clock back at Ispat. The fund injection, via the equity route, would be in a special purpose vehicle (SPV) and not in the steelmaker directly. This will ensure that JSW's stake in Ispat does not rise beyond the current 47%, firewalling Jindal's flagship company from the losses of the acquired entity.
"Ispat's operating profit for every tonne of steel made in the quarter to December was about . 3,600, which is far less than the . 6,500 that JSW Steel earns," said a Mumbai-based analyst. "If JSW's holding goes beyond 50%, then the accumulated loss of Ispat would also have to be accounted for in the consolidated statement. This would reduce JSW's operating profit." JSW posted a consolidated net loss of . 47.9 crore on account of the losses in Ispat. This was after considering . 500 crore as exceptional item on account of a forex loss. Under the turnaround plan, JSW will invest . 700 crore as equity in Amba Coke, an SPV that will sell coke and pellets to Ispat. The SPV will raise . 1,300 crore in debt, insulating JSW from any future concerns on account of Ispat.
Amba Coke, which already has environmental clearances, will bring in cheaper coking coal for Ispat. The SPV was earlier formed with global trading major Stemcor and has a long-term agreement for sourcing coking coal from Australia. The unit will also generate captive power for Ispat, besides sourcing power from JSW Energy. This will bring down Ispat's operating cost.
Analysts blame the haste Jindal showed in wrapping up the deal for some of his current problems. "JSW had been looking for acquisitions in India to scale up and Ispat seemed the perfect fit," said Jagdish Agarwal of Mumbai-based Emkay Global Financial Services. "Since the deal was completed swiftly, some of the items in the due diligence were not captured." The deal was more between Jindal and the Mittal brothers.
Among the pitfalls was the . 104.8-crore worth of raw material that Ispat had procured against aletter of credit. The raw material has been lying in transit overseas with a stevedore since March 2010. Then there were investments, loans and advances aggregating to . 118.4 crore for development of mines, and sales of hot rolled coils worth . 319.4 crore that the purchasers had refused to pay for.
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Guest Column COMPANIES & FACEBOOK Using ‘Likes’ to Measure Brand Value of a Firm
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Govt Prods PSU Banks to Cut Loan Rates by March
BANKS IN A SPOT AS FUNDS STILL COSTLY
Finmin seen trying to revive investor sentiment before close of fiscal year
This has not been communicated in writing, but at a recent meeting, senior ministry officials asked bank chiefs to consider lowering interest rates.
Even after the Reserve Bank of India cut banks' cash reserve ratio (CRR) in January, signalling a reversal in its monetary policy stance, bankers had said it would take a while for lending rates to soften. Since CRR is the slice of customer deposits that banks have to keep as cash with the RBI, a cut in the ratio following repeated rate hikes was perceived as the onset of a dovish monetary policy. But since no bank has lowered returns on deposits since the RBI action, their cost of funds continues to be high. Banks are reluctant to lower deposit rates in February and March because they do not want to miss their annual deposit mobilisation targets.
"It's a Catch-22 situation…Cost of resources has actually gone up for banks," said the chairman of a large commercial bank.
Senior bankers declined to go on record on the matter. However, DK Mittal, secretary, department of financial services, said: "We have suggested banks to bring down rates in whichever sector and to whatever extent possible, and as quickly." The intention, he told ET, "is to create a positive environment and not to interfere with banks' operations".
Ministry officials expressed their views to bankers about a fortnight ago. Following this, Bank of Maharashtra cut its base rate — the minimum rate charged from best customers — by 10 basis points to 10.60% and Central Bank of India lowered home loan rates by 25 basis points across various maturities. Last week, Union Bank Chairman MV Nair told ET that the bank is exploring if there is scope to lower rates in certain categories.
A month before the RBI cut CRR, Union Bank had announced a token rate cut of 10 bps to 10.65%. Sending a Message to Industry, Borrowers
According to Mittal, some rate cuts by banks may help to send across a message to industry and borrowers in general that the "investment environment will turn conducive sooner than expected".
While banks may lower rates in some segments, more meaningful rate cuts can happen once bulk money becomes less expensive. Interest rates on certificate of deposit (CD) — an instrument banks sell to raise bulk deposits — have risen in the last one month. For instance, interest rates on one-year CDs are up to 10.15% from 9.80% a month ago. After the CRR cut, Aditya Puri, CEO of HDFC Bank, had said, "The RBI move enforces that interest rates are on downward trend. But if you want an immediate satisfaction…that would take some time. In general, cost of money should come down first."
Industry circles said the finance ministry is looking at ways to revive investment sentiment, particularly after several economists in the private sector lowered their growth forecast for the year. The central bank too has revised its growth forecast to 7% for this fiscal from 7.6% projected earlier.
Posted by Unknown at 9:35 PM 0 comments
Thursday, February 23, 2012
India loses $20bn/yr to mishaps
Estimate Enough To Feed 50% Of Malnourished Kids, Cellphone Use Top Culprit
New Delhi: India loses $20 billion (Rs 4919 crore approx) due to road accidents annually, which the World Health Organization (WHO) estimates is enough to feed 50% of the nation's malnourished children. Officially, at least 1.34 lakh people died on Indian roads in 2010, while experts claim the figure could be about 1.5 lakh considering the under reporting of such cases.
WHO representative in India Dr Nata Menabde while addressing international road safety experts, including the senior IPS officers at a convention held at College of Traffic Management (CTM) in Faridabad, said there is a dire need to save the vulnerable road users to reduce the huge annual financial loss. She urged that strategies have to be devised to save lives, particularly pedestrians, cyclists and two-wheeler riders besides putting curbs on drunk driving and stricter enforcement of wearing of helmets and seat belts."We need to see how we build our road, investigate properly how accidents occur and police probe these cases. There should be one group or body that should bring all sectors together, and it should announce a plan to reduce fatalities," Menabde said.
International experts felt that the high use of mobiles while driving is increasing the accidents globally. "The chance of accidents increase four-fold in such cases," said Adam Briggs, former chief constable of the UK.
CTM president Rohit Baluja said that to reduce the accidents and fatalities on Indian roads, there is a need to have proper probe to unearth the cause of accidentsEven senior traffic officials from Mumbai, Chennai, Bangalore, Haryana, Rajasthan admitted that the investigators often have little training to probe accident cases. "The usual course of investigation is on predictable lines: bigger vehicle is the culprit, dead is the victim and alive is the accused. We need to find the reasons behind such accidents as it is done in other countries," said Vivek Phansalkar, joint commissioner of Mumbai Traffic Police.
Road accidents reduce in US, increase in India
New Delhi: While the number of road accidents and fatalities has reduced in developed countries such as the US, the UK and Germany between 2008 and 2010 due to financial meltdown, the toll has increased significantly in India. Global road safety experts said the recession is linked to reduced miles travelled by vehicles and that has a direct impact on accidents and deaths. However, in India, the fatalities have increased from 1.20 lakh in 2008 to 1.34 lakh in 2010. TNN
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Tuesday, February 21, 2012
SOUTHERN RECOVERY Cement despatches grow 9.4% in January
Chennai: Cement dispatches—an indicator of construction activity across sectors—recorded a 9.4% growth in January 2012, third straight month of high growth due to low base effect. Dispatches in January 2011 witnessed a meagre 1.1% growth.
Dispatches grew to 20.4 million tonnes in January as against 18.6 million tonnes in the year-ago period. Cement production registered an increase of 10.6% at 20.6 million tones, according to data from the Cement Manufacturers Association and Holcim Group, promoter of ACC and Ambuja Cement. In April-December 2011 cement consumption grew 17% in the western market, 10% in the northern market, 8% in the central region, and 3% in eastern market. Consumption fell 14% in Andhra Pradesh, 8% in Jharkhand, 6% in Himachal Pradesh, and 4% in Bihar. Gujarat recorded a 20% rise in offtake, Punjab and Orissa, 15% each, and Maharashtra witnessed a 14% growth."We are witnessing first signs of growth after a twoyear lull in South India.
Housing demand from Bangalore is strong, while state government-funded projects in Andhra Pradesh are starting out. Tamil Nadu is also seeing growth," said Rakesh Singh, president (marketing), The India Cements, south India's largest cement maker by volume.
Capacity utilization levels in January rose to 82% as against 80% in January 2011.
"This (growth) was due to the low-base effect and a pickup in demand. The low base effect will fade off in February and March. Dispatches during January grew 15.8% in the north, 11.5% in the south and 1.9% in the east," analysts at Anand Rathi Securities said in a note. "In the first half of February, prices have increased by Rs 5 to Rs 15 a 50kg bag in the western, the eastern and the central regions, while they were stable in the north and the south."
Demand in February has picked up and been better than in January. Most dealers expect prices to firm up this quarter, led by controlled supply and a pickup in demand, the note said.
Posted by Unknown at 5:49 PM 0 comments
FII inflow crosses $5bn so far in 2012
Sensex Gains 139 Points To Close At 18,429, Seven-Month Closing High
The rally on Dalal Street, which has added about 3,300 points since the index touched a recent low at 15,136 level on December 20, was also boosted by expectations of rate cuts by the Reserve Bank of India (RBI) and an investor-friendly budget, both the events are scheduled over the next one month.
Talks of announcement of a joint venture in the petrochemicals space, RIL rallied nearly 3% to close at Rs 842. The other sensex stocks that aided the day's gains were BHEL, up 4.8% at Rs 318, ONGC, up 3.7% at Rs 292 and Hindalco Industries, up 3% at Rs 156. Of the 30 sensex stocks, 19 ended higher, 10 were in the red while one closed unchanged.
The day's gains also came on the back of a Rs 1,400-crore net buying by FIIs, taking the year's total net foreign fund inflows through the stock market to over $5 billion.
On Tuesday, consumer price inflation data released by the government showed that it was moderating which further added to investors' expectation that the RBI would cut key policy rates in its next meeting in mid-March. This, in turn would boost the economy's growth, which has slowed down over the last few quarters.
The day's trading also witnessed Kingfisher slide nearly 20% on fears that the struggling private airlines may not get funds to survive. The stock, however, closed 0.8% higher at Rs 27 after hopes surfaced that its lenders may agree to infuse additional funds for its bailout.
In the international market, late on Tuesday, the Dow Jones index in the US crossed the 13,000-mark again after nearly four years (see box).
Among other markets, oil prices continued their northward run up with Nymex crude trading at nearly $105 per barrel. Earlier in the day crude had touched an intraday high at $105.44.
Wall St up on Greek deal, Dow hits 13,000
New York: US stocks rose on Tuesday, with the Dow briefly topping 13,000 for the first time since May 2008, after Greece secured a bailout, but gains were limited as investors had priced in expectations of a deal. The Dow Jones industrial average was up 43 points, or 0.33%, at 12,993 after rising to 13,005. The Standard & Poor's 500 Index was up nearly 5 points, or 0.36%, at 1,366. REUTERS
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