BSNL dials BlackBerry, Apple for 3G rollout

4 Oct, 2008, 0150 hrs IST,Durba Ghosh, ET Bureau

NEW DELHI: The much sought-after 3G iPhone and BlackBerry may soon be available in the state-owned Bharat Sanchar Nigam Ltd (BSNL) network.

The country's largest telecom service provider, BSNL, is in talks with Apple and BlackBerry to launch the services in India in its own network.

According to BSNL executives, talks with BlackBerry are at an advanced stage and this handset is likely to be available to BSNL's customers by the year-end.

On the other hand, subscribers on the PSU's networks may have to wait longer for access the 3G iPhone as talks with Apple are still lingering in preliminary stage, BSNL executives added.

If BSNL were to tie-up with Apple, the state owned telco would be the third player after Airtel and Vodafone to offer 3G iPhone in India.

However, BSNL will be the first player in the Indian market to offer 3G service on the iPhone. Airtel and Vodafone will only have 3G spectrum if they bag these radio frequencies in the upcoming auctions.

The government has already granted BSNL 3G radio frequencies and the telco is expected to launch high-end services on its 3G network early next year.

"We are in talks with Apple to launch 3G iPhone in our network since we will be the first ones to launch the 3G services here. We are also awaiting the launch of BlackBerry in our network by end of this year,"said BSNL CMD, Kuldeep Goyal.

 

Source: ET

Employers cut jobs by most in more than 5 years

 

Employers cut 159,000 jobs, most in more than 5 years; jobless rate holds steady

WASHINGTON (AP) -- Employers slashed payrolls by 159,000 in September, the most in more than five years, a worrisome sign that the economy is hurtling toward a deep recession.

The Labor Department's fresh snapshot, released Friday, also showed that the nation's unemployment rate held steady at 6.1 percent as hundreds of thousands of people streamed out of the work force for any number of reasons.

The reduction in payrolls was much sharper than the 100,000 cuts economists were forecasting. They expected the jobless rate to be unchanged.

It marked the ninth straight month that the economy has lost jobs. The drop underscores fallout from a long slump in the housing market and a dangerous credit crunch that intensified last month throwing Wall Street -- and the economy -- into chaos.

So far this year, 760,000 jobs have disappeared.

"The economy is now sliding down the slippery slope of recession," said economist Ken Mayland, president of ClearView Economics.

Wall Street appeared relieved the decline in payrolls wasn't deeper. Stock futures were strengthening, pointing to a higher opening. The Dow fell 348 points Thursday amid worries about the broader economy.

Employers cut 73,000 jobs in August, slightly less than the 84,000 initially estimated, according to revised figures. However, the cuts in July turned out to be a bit deeper -- 67,000 versus the 60,000 previously reported.

The 159,000 jobs lost in September were the most since March 2003, when the labor market was still struggling to get back on its feet after being knocked down by the 2001 recession.

Job losses were widespread last month.

Manufacturers cut 51,000 jobs, construction companies axed 35,000 jobs, retailers got rid of 40,000 positions, business services shed 27,000 and financial services slashed 17,000 positions, with securities and investment firms accounting for 8,000 of those reductions. Leisure and hospitality companies also reduced employment by 17,000. That overwhelmed employment gains by the government, in education, health and elsewhere.

Cost-cutting employers are getting rid of workers as companies chafe under a slew of problems related to the economy's slowdown, a painful housing collapse and a dangerous credit crunch.

Companies announcing layoffs in September included Hanesbrands Inc., Hewlett-Packard Co., Schering-Plough Corp., Alaska Airlines and Alcoa Inc.

Friday's employment snapshot is the last before America goes to the polls in November.

Mounting job losses, shrinking paychecks, shriveling nest eggs and rising foreclosures all have weighed heavily on American voters.

The economy is their No. 1 concern. An Associated Press-GfK poll earlier this week showed that likely voters now back Democratic presidential contender Sen. Barack Obama 48 percent to GOP rival John McCain's 41 percent. They believe Obama is better suited to lead the country through the financial turbulence.

To avert even more economic upheaval, Congress is weighing a $700 billion plan to buy bad assets from banks and other institutions to shore up the financial industry. The legislation is urgently championed by President Bush and his top economic generals.

Spooked consumers and businesses have pulled back so much that some analysts fear the economy could stall out -- or even worse -- shrink in the July-to-September quarter. Many predict the economy will contract in both the final quarter of this year and the first quarter of next year, meeting the classic definition of a recession. The economy's last recession was in 2001.

Wage growth for workers is slowing.

Average hourly earnings rose to $18.17 in September, a 0.2 percent increase from the previous month. That was half the pace logged in the previous month and was weaker than the 0.3 percent gain economists were expecting. Over the past year, wages have grown 3.4 percent but paychecks aren't stretching as far because of high food and energy prices.

All the economic and financial fallout has put more pressure on the Federal Reserve to reverse course and cut a key interest rate again on or before its late October meeting. The Fed halted its rate-cutting campaign in June out of fear it was aggravating inflation. Since then, it has opted to hold rates steady. Some analysts believe the conditions have eroded enough to warrant another rate reduction in an effort to revive the economy.

The financial crisis intensified in September, forcing a seismic shake-up on Wall Street.

Lehman Brothers, the country's fourth-largest investment bank, filed for bankruptcy protection. A weakened Merrill Lynch, deciding it couldn't go it alone anymore, found help in the arms of Bank of America. AIG was thrown a financial lifeline. And, the last two investment houses -- Goldman Sachs and Morgan Stanley -- decided to convert themselves into commercial banks to better weather the financial storms. The number of banks that have failed this year are up sharply from last year.

On Friday, Wachovia Corp. said it will be acquired by Wells Fargo & Co. in a $15.1 billion all-stock deal, wiping out Wachovia's previous plan to sell its banking operations to rival suitor Citigroup Inc.

 

Source: Yahoo Biz

Tata Steel to acquire 19.9% stake in Canadian firm

Tata Steel Global Minerals Holdings, an indirect wholly-owned subsidiary of Tata Steel, has entered into a agreement with Canada's New Millennium Capital Corporation (NML), one of the world's largest undeveloped magnetite resources, for a strategic investment.

As per the agreement, Tata Steel would acquire 19.9 per cent of the common shares of the expanded capital base of NML, which controls 9.1 billion tonnes of iron ore, for $22.6 million (Rs 106 crore). It will also buy an 80 per cent equity interest in NML's Direct Shipping Ore project (DSO project) located in the province of Newfoundland and Labrador and the province of Quebec.

B Muthuraman, managing director, Tata Steel, said, "Subject to the establishment of their economic viability, these projects may prove to be a source of the company's raw material requirements. In view of its geographical proximity, Canada is a favourable location to source raw materials for Tata Steel's European operations."

The Tata Steel Group including Corus has a crude steel capacity of 28 million tonnes with an iron ore security of 22 per cent.

The agreement provides exclusivity to Tata Steel in both the DSO project and the LabMag taconite iron ore property located in Newfoundland and Labrador, which is 80 per cent owned by NML and 20 per cent owned by the Naskapi Nation of Kawachikamach.

NML will utilise the proceeds from the private placement to develop the DSO project through a definitive feasibility study to be completed in the second quarter of 2009.

Upon the completion of the placement, Tata Steel would be entitled to two nominees on the board of NML. Tata Steel is also entitled to a right of first refusal in future placement of equity securities conducted by NML and a pre-emptive right in connection with other offerings of equity securities.

Based on historical estimates, the DSP project contains in excess of 100 MT of direct shipping quality ore.

After completion of the feasibility study, Tata Steel will get a 180-day period to acquire 80 per cent equity interest in the joint venture to be set up for developing the DSO project. It will also have a 100 per cent offtake right on the DSO project's iron ore production for the life of the mining operation.

Subject to completion of a positive study, regulatory approvals and project financing, NML expects to produce 4 MT of iron ore products from the DSO project commencing in 2010.

Tata Steel would also have exclusivity to negotiate and settle a proposed transaction in respect of the LabMag project until June 2009.

The LabMag deposit has 3.5 billion tonnes of mineral reserves that contained in 4.6 billion tonnes of measured and indicated resources and 1.2 billion tonnes inferred resources. The companies intend to work together to find an economically viable solution to advance the project.

Earlier India's NMDC had discussed investment in NML but withdrew it due to a long gestation period.

NML would be Tata Steel's third iron ore venture overseas. Last year the company entered into a joint venture with Sodemi, a government-owned mineral development company in Africa, for development of Mount Nimba iron ore deposits in Ivory Coast.

Tata Steel also has a greenfield steel project in Vietnam, which includes a 30 per cent stake in Thach Khe Iron Ore joint stock company.

Source: BS

LIC hikes stake in select blue chips beyond 10%

MUMBAI: Domestic insurance giant Life Insurance Corporation (LIC) has raised its stake beyond 10% in a few blue chip companies even after the insura nce regulator IRDA decided to impose a cap of 10% on the institution's investment in a single company.

While IRDA last week said it would give reasonable time to LIC to adhere to the investment restrictions, that, however, seems to have encouraged the latter to make quick acquisitions in select stocks where it holds less than 10% equity.

The strategy, according to market sources, could be to take advantage of the beaten-down valuations to make some capital gains subsequently when market conditions improve, before bringing the stakes below the prescribed limit.

LIC has made fresh investments in companies like Siemens, PTC India, Tata Power and Cipla in which it now holds more than 10% stake each. Based on Wednesday's closing, the combined value of the institution's additional investments in these companies amounted to nearly Rs 800 crore.

A senior LIC official told ET that the Corporation treats its strategic investments and investments by unit-linked investment plans separately.

While the strategic holdings are not traded, investments by some of the funds could rise or fall. "It's possible that in some companies, the total investment would have crossed 10% in the second quarter because of increased investment by some of the Ulip funds," said the official.

The official said that IRDA norms came in August and some of the investments could have taken place before that.

According to disclosures filed with BSE, LIC bought 97,34,113 shares of Siemens between February 6 and September 5, 2008, resulting in a hike in its stake from 7.7% as on December 31, 2007 to the current 11.3%. The company's shares have tanked nearly 30% in the past one month.

PTC India and Tata Power are the two other notable examples where LIC now holds a little over 10% after acquiring additional shares in September. The stocks of these companies have lost 18% and 12% respectively in one month.

With these latest acquisitions, the number of companies where LIC holds 10%-plus stake has gone up. There are many other blue chip companies, including Tata Motors, Tata Steel, Corporation Bank, Ranbaxy, Cipla, M&M, Maruti Suzuki, Dr Reddy's Labs, MTNL, HPCL Oriental Bank and Reliance Infrastructure where the insurance major holds more than 10% stake over a period of time. LIC would have to eventually reduce its stake in these companies to comply with IRDA guidelines.

 

Source: ET

Banking rivals not behind pulling down our shares: ICICI

Hit by rumours that it is facing acute liquidity crunch, ICICI Bank has said no rival bank was behind the malicious game of hammering down its shares but did not rule out the hand of an enterprising character seeking to enter the banking sector.

"I do not think it is any rival," ICICI Bank CEO and Managing Director KV Kamath told PTI.

On whether it could be the handiwork of some enterprising character who would want to enter the banking arena through such a route, he said, "at this point we have nobody in mind. And this is something authorities (government and market regulator SEBI) would look into".

ICICI Bank has come under a tight bear hug during the year reaching the lowest level of Rs 458 a share on Tuesday from the year's high of Rs 1465 a share on January 14, 2008.

Kamath was responding to queries on speculation that some entity wanting to enter the banking sector could be behind deliberate hammering down of ICICI Bank's shares, particularly at a time when troubled banks are being acquired in America and Europe.

In a round-about manner Kamath said, "I do not think I would like to speculate at this point of time. Our situation is completely different from that of any international player. Our capital is not impaired. There is no challenge to the financial health.

"It is made out to be impaired but nobody is able to demonstrate that," said Kamath, whose statement on Tuesday backed by RBI and Finance Minister P Chidambaram saw ICICI Bank's shares reversing the trend to record 8.48 per cent increase in prices in a single trading session

Source: ET

Key data affirms the India story

Economic indicators for the Indian economy have worsened year-on-year, with the current account deficit widening to $10.72 billion against $6.3 billion for the first quarter of the year, but total direct tax receipts are still at a healthy 30%. The fiscal deficit has reached 87.7% of the target for the year, with seven months still to go. However the government said on Tuesday, it was on target of at least 7.5% growth for 2008-09.

Fund managers and economists that FE spoke with on Tuesday said the scoresheet would still encourage global investors to put their money into the economy. The current account is worse than China's, but better than Brazil and South Africa. Figures released by RBI shows net capital flows were lower at $13.2 billion in 2008-09 than $ 17.3 billion in the first quarter of 2007-08.

The trade deficit, which measures the difference between exports and imports, rose sharply to $31.6 billion in the first quarter of 2008-09, against $ 20.7 billion in April-June 2007-08, largely because of oil imports. The sharp increase in oil imports reflected the impact of the increasing price of the Indian basket of international crude, RBI said.

Other figures released by the finance ministry on Tuesday showed that while direct tax collections were buoyant, the growth rate was hit due to lower-than-expected advance tax collections and also lower collections from personal income tax. The tax is a leading indicator of performance of the corporate sector. The ministry has received Rs 1,48,200 crore from direct tax but this was lower than previous months when the rate was nearly 40%.

Corporate tax collections rose by 34.5% to about Rs 97,500 crore until the end of September. Revenue from corporate taxes increased by 43.5% until the end of August. But advance tax payments by companies until September 15 increased by 20% to about Rs 45,000 crore, almost the same as netted by the exchequer last fiscal in the second phase. Personal income tax collections have risen by 24% to September 30 to Rs 50,522 crore. The finance ministry has a target of Rs 3.95 lakh crore from this tax.

The Centre also faces additional pressure as its expenditure is rising faster than anticipated in an election year. The fiscal deficit is at Rs 1,16,890 crore, just Rs 16,397 crore shy of the full-year figures. The revenue deficit has also shot up to 177.4% of the full fisc target to amount to Rs 97,879 crore in the period. It was 74.9% of the BE a year ago.

 

Source: FE

Bollywood goes on strike, movie shoots cancelled

MUMBAI: More than 100,000 Bollywood and television workers began an indefinite strike on Wednesday, protesting irregular pay and the hiring of non-u nion members, a move that could delay major releases for India's festival season.

Movie stars, including Shah Rukh Khan and Amitabh Bachchan, as well as dancers, writers and technicians heeded a call for an indefinite "non-cooperation" protest in Mumbai, where Bollywood, home to India's prolific movie industry, is located.

"All shoots are off. The producers have not stuck to the terms of the agreement they signed with us one-and-a-half years back," said Dinesh Chaturvedi, general secretary of the Federation of Western India Cine Employees, the umbrella union for Bollywood employees.

"Payments have been delayed by three months, six months, a year. And producers are hiring non-members to save costs. We are not happy to call for this non-cooperation, but we are helpless."

This was the first time in the 50 years of the federation's existence that such a protest had been staged, Chaturvedi said, adding that he was hopeful of an early resolution.

More than 100,000 workers from 22 smaller associations representing everyone from actors to spot boys were involved, said Suprant Sen, secretary general of the Film Producers Guild.

"Talks are going on, but for now all studios are closed." An official at top TV content producer Balaji Telefilms, which has 15 shows on air, said all shoots had been cancelled for the day, while a security guard at Filmistan Studio said the two shoots scheduled for the day there had been cancelled.

The Indian media and entertainment business is forecast to grow at the fastest pace in the Asia-Pacific region, with filmed entertainment expanding at an average rate of about 15 percent to nearly $4 billion by 2012, PricewaterhouseCoopers has estimated.

The industry, which churns out about 1,000 films a year, more than a fifth of which are in the dominant Hindi language, has been making the transition to a more corporate structure in recent years, in terms of finance, production and distribution.

But work conditions and other standards, particularly for junior artistes and daily wage earners, are largely left in the hands of individual producers and broadcasters, said Anil Wanvari, founder of popular portal indiantelevision.com.

"There is some merit to saying wages need to be better, that standards need to be better," he said.

"There are wide discrepancies, and standards, especially in TV where broadcasters have a stranglehold, are still evolving."

There are no estimates for daily losses from the closure of studios that are mostly located in the north of the city.

Producers and broadcasters are hopeful of a quick resolution in the festival season, when advertising on air and movie ticket sales hit a peak.

"It's chaotic ... we've cancelled four shoots for film and television shows," said Anurradha Prasad, spokeswoman for producer and broadcaster BAG Films.

"It will be a big problem if it continues for more than three or four days. Broadcasters don't have a bank of shows, so we will have to resort to repeating shows. We're on tenterhooks."

 

Source: ET

Sharekhan Post-Market Report dated October 01, 2008

 

Sharekhan's daily newsletter October 01, 2008   Index Performance Index Sensex Nifty Open 13,006.72 3,921.85 High 13,203.86 4,000.50 Low 12,697.30 3,861.25 Today's Cls 13,055.67 3,950.75 Prev Cls 12,860.43 3,921.20 Change 195.24 29.55 % Change 1.52 0.75   Market Indicators Top Movers (Group A) Company Price  (Rs) % chg Gainers Videocon Industries 222.85 13.87 Satyam Computer 318.75 7.47 Patni Computer 190.85 7.43 Gammon India 148.00 7.13 JP Associates 118.90 7.02 Losers KSK Energy 222.00 -6.74 Hindustan Construction 71.90 -6.68 JSW Steel 454.65 -5.32 Bajaj Finserv 364.10 -5.18 RCF 47.25 -5.12 Market Statistics - BSE NSE Advances 1,476 724 Declines 1,123 472 Unchanged 73 39 Volume(Nos) 23.65cr 46.15cr  Market Commentary  Volatile but buoyant Led by buying in IT and banking stocks, the Sensex recovered smartly in afternoon and ended firm at 13,056.  The market wiped out a loss of over 163 points incurred in the first half after a strong bout of buying led by information technology (IT)and banking stocks triggered a wide-spread buying.     The Sensex started the day 147 points higher at 13,007 following weakness in Asian indices and crashed to the day's low of 12,697 on relentless selling. While the market recovered thereafter, the Sensex witnessed a sharp turnaround in afternoon as gains in heavyweights, IT, banking and consumer durable stocks propelled it to an intra-day high of 13,204. After gyrating 507 points during the intra-day trades, the Sensex gained 195 points to close at 13,056, while the Nifty ended 30 points higher at 3,951.  The market breadth was positive. Of the 2,672 stocks traded on the BSE, 1,476 stocks advanced whereas 1,123 stocks declined. Seventy three stocks ended unchanged. The BSE IT index led the pack and gained 3.97% followed by BSE Bankex (up 3.23%) and BSE CD (up 2.95%). Satyam Computer Services was the star performer among the heavyweights and the stock soared 7.47% at Rs318.75. Among other major gainers, JP Associates advanced 7.02% at Rs118.90, HDFC Bank jumped 5.26% at Rs1,294, Grasim Industries rose 4.63% at Rs1,765.70 and Tata Power moved up by 4.46% at Rs946.50. Infosys Technologies advanced 4.03% at Rs1,453.90, ICICI Bank gained 3.10% at Rs551.45 and Tata Steel added 3.07% at Rs438.65. However, Larsen & Toubro, DLF and Reliance Industries inched lower. Over 1.23 crore shares of Reliance Natural Resources changed hands on the BSE followed by IFCI (0.81 crore shares), JP Associates (0.71 crore shares), Chambal Fertilisers and Chemicals (0.55 crore shares) and Ispat Industries (0.49 crore shares). European Indices at 17:30 IST on 01-10-2008 Index Level Change (pts) Change (%) FTSE 100 Index 4986.85 84.40 1.72 CAC 40 Index 4055.12 23.03 0.57 DAX Index 5822.30 -8.72 -0.15 Asian Indices at close on 01-10-2008 Index Level Change (pts) Change (%) Nikkei 225 11368.26 108.40 0.96 Hang Seng Index 18016.21 135.53 0.76 Kospi Index 1439.67 -8.39 -0.58 Straits Times Index 2358.91 0.00 0.00 Jakarta Composite Index 1832.50 -13.58 -0.74

 

 

.

__,_._,___

Black Money

India mum over secret bank accounts Germany has revealed that some Indians have allegedly been amassing money with a German bank. However, India is stoic about spilling the beans as it would drag some top brass into the legal net, which may endanger its power at the Centre..                 A VERITABLE Pandora's box of secret information regarding top Indian tax evaders who have secret bank accounts operating in Germany, is awaiting to be opened. It might include some top Indian politicians and businessmen. While the German authorities have offered this information free of cost, surprisingly, neither the Prime Minister's Office nor the Ministry of Finance has shown any interest in getting the details, which may net some big fish. Speculations are rife that the huge amount of money belongs to some powerful Indian politicians, industrialists and stock brokers. The government of India is, however, apprehensive of spilling the beans as it would leak names of high-profile persons holding government offices, which can potentially damage its power at the Centre. The information was obtained by the German intelligence agency, Bundesnachrichtendienst (BND). It has details of more than 700 accounts of LTG Bank run by the crown prince of Liechtenstein, a country, which is considered a tax heaven for the rich and powerful the world over. It is believed that the information with the German government contains records of many Indians who have their accounts with a private bank in Leichenstein, a global hub for rich and famous to park secret funds. Criticising the languid approach of the Indian government towards uncovering this racket, Transparency International (the global civil society organisation leading the fight against corruption) said that the information lying with the German authorities should be obtained at the earliest. It has urged India to take all necessary steps to seek the data that the Germany had offered, free of charge in February 2008. Chairman, Transparency International India, Admiral (retired) RH Tahiliani said, "This money belongs to the people of India and it is possible that it has been tucked away in this distant country by those who have acquired it illegally and are now evading tax. There should be complete transparency and accountability about this money and it is for the government to find this out and inform people." It is pertinent to mention that the German government had offered to provide information about secret accounts to various countries, including India, free of cost. While most of the countries including USA, Finland, Norway, Sweden, Canada, Italy, Britain and other countries had expressed interest in obtaining the data, the Indian government maintained a stoic silence. Transparency International has said that neither the Finance Ministry of India nor the PMO has shown any interest in investigating those Indians, who have deposited their ill-gotten wealth in the secret accounts of that country. It has also raised questions regarding the use of such secret accounts for funding global terrorism. More importantly, it said that people of India have a right to know about the details. It belongs to us and cannot be denied to us for long. It is high time we all demanded what is rightfully ours.  Source: Merinews

 

__._,_.___

 

.

__,_._,___

US okays $700b bailout

US okays $700b bailout

Washington, Sept. 28: US Congressional leaders and the Bush administration reached a tentative agreement on early Sunday on what may become the largest financial bailout in American history, authorising the Treasury to purchase $700 billion in troubled debt from ailing firms in an extraordinary intervention to prevent widespread economic collapse. Officials said that Congressional staff members would work through the night to finalise the language of the agreement and draft a bill, and that the bill would be brought to the House floor for a vote on Monday. The bill includes pay limits for some executives whose firms seek help, aides said. And it requires the government to use its new role as owner of distressed mortgage-backed securities to make more aggressive efforts to prevent home foreclosures. In some cases, the government would receive an equity stake in companies that seek aid, allowing taxpayers to profit should the rescue plan work and the private firms flourish in the months and years ahead. The White House also agreed to strict oversight of the programme by a Congressional panel and conflict-of-interest rules for firms hired by the Treasury to help run the programme. The administration had initially requested virtually unfettered authority to operate the bailout programme. But as they moved toward clinching a deal, both sides appeared to have given up a number of contentious proposals, including a change in the bankruptcy laws sought by some Democrats to give judges the authority to modify the terms of first mortgages. Congressional leaders and treasury secretary, Mr Henry M. Paulson Jr., emerged from behind closed doors to announce the tentative agreement at 12.30 am on Sunday, after two days of marathon meetings. "We have made great progress toward a deal, which will work and be effective in the marketplace," Mr Paulson said at a news conference in Statuary Hall in the Capitol. In the final hours of negotiations, US Democratic la-wmakers, including Representative Rahm Emanuel of Illinois and Senator Kent Conrad of North Dakota, carried pages of the bill by hand, back and forth, from Speaker Nancy Pelosi's office, where the Democrats were encamped, to Mr Paulson and other Republicans in the offices of Representative John A. Boehner of Ohio, the House minority leader. At the same time, a series of phone calls was taking place, including conversations between Ms Pelosi and President George W. Bush; between the treasury secretary, Mr Paulson, and the two presidential candidates, Senator John McCain and Senator Barack Obama; and between the candidates and top lawmakers. Source: deccan.com

 

 

 

 

Govt mulls 26% FDI in multi-brand retail again

The government is re-considering a proposal to allow foreign direct investment of up to 26 per cent in multi-brand retail, a move that will allow global giants like Wal-Mart Stores Inc and Tesco Plc to gain a foothold in India.

Speaking at Assocham's international retail summit, Rakesh Kacker, additional secretary in the department of consumer affairs, said the government would take a decision at an "appropriate time". He did not specify the time-frame.

The move has been in abeyance due to protests from across the political spectrum.

Kacker's comment is at variance with Commerce Minister Kamal Nath's remark on NDTV.com in July that the government is not looking at major reforms in the sector.

At present, 100 per cent foreign investment is allowed only in cash-and-carry businesses, which supply to small businesses. Also, 51 per cent foreign equity is permitted in single-brand outlets, which sell only one particular brand of products.

In 2007, the government had commissioned two studies to find the impact of the organised retail sector on the economy and the farm sector amid protests from a range of political parties against opening multi-brand retail to foreign investment.

The study, by economic think-tank Indian Council for Research in International Economic Relations (Icrier), found that unorganised retailers near malls and superstores experienced a decline in sales and profit in the initial years of the entry of organised retailers. The study found that the impact had weakened over time.

With organised retail constituting only 4 per cent of India's retail market of $309 billion, many international players have an interest in entering the sector and and domestic conglomerates like Reliance Industries Ltd  and the RPG Group have already set up chains of stores.

The retail sector is expected to grow to $590 billion in 2011-12, an 83 per cent increase over 2006-07. Within this period, organised retail is likely to grow at 45-50 per cent a year and quadruple its share in overall retail trade to 16 per cent by 2011-12, according to the Icrier study.

Kacker also said the government was thinking of setting up a single window system for approvals to the retail sector.

Source: Rediff

Indian banks post Rs 410 cr MTM losses

The Indian banking sector saw a mark-to-market losses of around Rs 400 crore due to their investment in instruments of troubled US financial giants like Lehman Brothers and AIG, 75 per cent of which is accounted by ICICI Bank alone.

"In terms of MTM losses of the banking sector including private sector, stood at Rs 410 crore owing to financial crisis in some of financial institutions. Of this, ICICI Bank alone has MTM loss of about Rs 309 crore," a senior Finance Ministry official said in New Delhi.

MTM is based on the market value of underlying securities and keep varying. MTM is a notional loss but it would be reflected in the balance sheet.

Besides, some state-owned banks had exposure in the instruments of these troubled US financial institutions to the tune of Rs 234 crore.

"Exposure of a few public sector banks to credit-linked and floating rate notes of Lehman Brothers and other troubled institutions is about USD 52 million," he said.

In his first reaction after the collapse of Lehman Brothers and the bailout of the largest US insurer AIG, Finance Minister P Chidambaram had said India's financial institutions were on a sound foundation.

As far as PSU banks are concerned, in which the government is a majority owner, he had said they didn't have any 'undue exposure'.

"In fact, many of them have no exposure at all. Whatever exposure they have are in accordance with RBI's prudential guidelines," he said, adding, ICICI Bank had some exposure which it has disclosed.

The London subsidiary of ICICI Bank had USD 80-million exposure in the senior bonds of Lehman Brothers.

ICICI Bank Joint Managing Director Chanda Kochhar had said the investment by the subsidiary constitutes less than one per cent of the total assets of the subsidiary and less than 0.1 per cent of the consolidated total assets of the ICICI Group.

On June 30, 2008, ICICI Bank and its subsidiaries had consolidated total assets of Rs 484,643 crore.

The Finance Minister had said while the country's banking system was reasonably insulated from the global crisis, the credit crunch could have some effect in India as well.

"If there is a credit crunch in the rest of the world, it will, to some extent, impact the credit availability in Indian market. RBI, day before yesterday, took steps to provide liquidity to the banks," he had said

Souce: FT

Three major firms eye 51% in NTPC-BHEL JV

ICICI Ventures, Larsen & Toubro and IL&FS are in the race to acquire a 51% stake in NTPC-BHEL Power Projects (NBPPL) — the 50:50 JV floated to manufacture power equipment and pitch for EPC (engineering, procurement & construction) jobs from the power sector.

Indicating this, the Union minister of state for power, Jairam Ramesh, told ET: "The government intends to hand over the management control of NBPPL to a private strategic investor who will hold 51% stake and impart operational and managerial expertise to the venture. ICICI Ventures, Larsen & Toubro and IL&FS are in the race."

Mr Ramesh was in town to attend a boiler synchronisation ceremony of CESC's Budge Unit-3 (250 mw) on Friday. This unit is slated to be commissioned in a record 30 months and is likely to start commercial generation by June 2009.

Incidentally, NBPPL is incorporated in Noida with an initial equity base of Rs 5 crore and Mr CP Singh has been appointed chairman and MD. Mr Singh was director (engineering) at BHEL prior to this assignment.

Currently, BHEL and NTPC jointly hold 50% stakes respectively in NBPPL.

Once they collectively offload 51% to a private investor, the original twin promoters will hold 24.5% each.
BHEL's chairman and MD, K Ravi Kumar, told ET:

"There are three private firms in the race to acquire a majority stake in NBPPL but we are yet to take a final decision. The idea is to give them a management control."

"We have readied the business plan for NBPPL. According to plans, NBPPL will undertake three broad categories of business and it will be taken up in three phases," said Jairam Ramesh.

NBPPL will be investing Rs 6,000 crore in setting up the power equipment manufacturing units, which when installed will generate 5,000 mw annually by 2013. The capex is likely to be funded through a 70:30 debt equity ratio.
"In the first phase, the NTPC-BHEL JV will vie for EPC jobs for power plants in India and abroad. Under the plans, the EPC jobs will be alternately executed between BHEL and NTPC."

He further added that in the second phase, NBPPL will manufacture critical balance of plant equipment for power units, and in the final phase, it will set up a power equipment manufacturing plant. This plant will have a capacity to manufacture critical components — boilers and turbines.

Source: Economic Times