Few oil cos may join Dec 2 strike

 
New Delhi: Oil companies have assured the petroleum ministry that key operations pertaining to refineries, petrol pumps and flow of oil and gas from onshore and offshore installations will not get affected, despite the Oil Sector Officers Association's (OSOA) call for indefinite strike in oil PSUs, beginning December 2. The strike has been called to press for higher wages.

 

Chiefs of state-run oil and gas companies including IOC, HPCL, BPCL, ONGC, GAIL and OIL have informed the ministry that the strike called by OSOA was being boycotted by at least 70% of the executives from these companies.

 

"Most oil company officers have decided against joining the stir," said a senior petroleum ministry official.

 

OSOA, which claims to represent 55,000 executives of 14 oil PSUs, on Tuesday announced an indefinite strike despite Delhi High Court's November 17 order restraining it from going on strike till the next hearing in February.

 

Petroleum secretary R S Pandey and heads of oil PSUs said they have drawn up a blueprint of a contingency plan to keep operations running even in the event of the strike. While Hindustan Petroleum was never part of the agitation called by OSOA, executives from Indian Oil, Engineers India and Oil India have since Thursday disassociated from the agitation as they felt it was not right to precipitate the crisis facing the country, the meet was informed.

Officers in gas utility Gail India and Bharat Petroleum had assured that operations would not be allowed to be disrupted because of the agitation. IOC chairman Sarthak Behuria said the Government had given a liberal 40-200% hike in wages and set up an Anomalies Committee to address grievances.

 

"OSOA feels it is a meagre rise but according to me it is a good package," he said ONGC chairman RS Sharma said the strike call was unjust and "the management will take recourse to unpleasant disciplinary steps if they persist".

 

HPCL chairman and managing director Arun Balakrishnan said the proposed wages were fair, given the global economic downturn. Petroleum minister Murli Deora on his part appealed to oil sector officers against such an "irresponsible step" that could disrupt fuel supplies and halt oil and gas production in the country. 
 

 

Govt asks TV channels to show restraint

New Delhi: The government on Friday told news channels that they
should have shown restraint in broadcasting live the movement of
security personnel and commando operations that are currently underway
following the terrorist attacks in Mumbai.

The government put forth this view at a meeting convened by Anand
Sharma, the minister of state for external affairs who currently holds
the additional charge of information and broadcasting, and attended by
representatives of various television channels.

Officials representing the department of internal security and the
ministry of defence at the meeting expressed concern that terrorists
had access to television and Internet and could have benefited from
the strategic information that they gathered from the live broadcast
of operations, said a person who attended the meeting but did not want
to be named.

Responding to this, the broadcasters said everyone (the news channels)
had initially underestimated the magnitude of the operations and that
the local administration, too, did not impose any restriction on the
television crew placing cameras at vantage points, considered too
close to the scene of the attacks. "However, the channels had on
Thursday evening complied with a directive that asked them to move the
cameras a little distance away," the person said.

"We issued an advisory yesterday and everyone complied," said Sushma
Singh, secretary, ministry of information and broadcasting.
The meeting concluded with both sides agreeing to work closer with
each other in similar situations in the future, the person who was
present at the meeting, said.

Sources

OPEC says oil stocks high but might delay cut until December

The world oil market is over-supplied with inventories at their
highest in five years, OPEC officials and Ministers said on Friday,
but a decision to cut output will likely be delayed until December.


OPEC Secretary General Abdalla Salem El-Badri said ahead of a
consultative meeting of the Organisation of Petroleum Exporting
Countries in Cairo on Saturday that the "market is over-supplied."



Against that background, Iran and Qatar's oil Ministers said the
cartel will make a decision on whether to cut output in the face of
tumbling crude prices when Ministers meet in Algeria on 17th
December.



"Here we will prepare some data and maybe the final decision will be
in Algeria," Iran's Gholam Hossein Nozari told reporters on his
arrival in the Egyptian capital for the OPEC meeting.



Qatari Energy Minister Abdullah al-Attiyah also said a decision "will
likely be taken in Algeria" to cut production to shore up prices,
which have slumped to around USD 50 a barrel from a record high of
around USD 147 in July.



"We have to discuss the statistics. We will go to Oran (Algeria). We
are here to talk," Attiyah said.



Ahead of the meeting, OPEC president Chakib Khelil, who is also
Algeria's energy Minister, had downplayed the idea of an output cut
being announced in the Egyptian capital.



"Oil stocks are high... the highest average in the past five years,"
Attiyah said.


Sources

SAIL to complete modernisation and expansion in time

Public sector major, SAIL would ensure timely completion of the
proposed modernisation and expansion projects of SAIL plants to avoid
cost overrun,company Chairman S K Rungta said.


In the background of the "tough phase" through which the steel
industry was passing through, he expressed optimism that SAIL would be
able to withstand the adverse impact of the economic slow down for
which it will adopt feasible measures.



"SAIL would be able to combat the  prevailing steel recession and
chalk-out policies and strategies for all its units", the Chairman
said.



He, however, sounded a word of caution for the steel industry and said
the going might get tougher in the days to come.



Addressing the 345th meeting of the board of directors which ended in
Rourkela on Thursday, the SAIL chairman said, "At this crucial
juncture we need 100 percent contribution from the each member of the
SAIL families".



Altogether, 15 directors including the managing director, of SAIL
steel plant participated in the day-long meeting.


Sources

Ratan Tata visits terrorists-devastated Taj Hotel

Press Trust of India / Mumbai November 29, 2008, 11:48 IST



Tata Group Chief Ratan Tata today visited the Taj Hotel shortly after
three terrorists were gunned down by the National Security Guards in
the fresh gunbattle early this morning to take stock of the land-mark
building.



He was accompanied by senior officials of the Taj Hotel, including
Krishna Kumar, and surveyed the complex that include a heritage block
that was devastated by fires at many places set off during the
gunbattle between ultras and the security guards.

The 529-room Taj Hotel was the centre of deadly 60-hour long militant
attack on the financial capital of India.

After fire erupted from some portions of ground, first and second
floors, at least three fire tenders were pushed in to douse the
flames.

Many prominent business personalities and corporate executives,
including Yes Bank Chairman Ashok Kapur, Sunil Parekh and developer
Pankaj Shah, were killed during the terrorist attack at many points at
Taj and another luxury hotel Oberoi (Trident).

When contacted, Taj spokesperson said "some representatives of hotel
have been allowed to go in but Mr Tata is still outside".

"We must stand together, shoulder to shoulder as citizens of India,
and rebuild what has been destroyed. We must show that we cannot be
disabled or destroyed, but that such heinous act will only make us
stronger," he had said after the terrorists hit Mumbai.

Mumbai attacks: A test for Indian markets

Mumbai: The initial investor reaction to the Mumbai attacks suggests they expect India's traditionally resilient markets to take a bigger hit from this turmoil than from previous episodes in the city's violent history.

With financial and commodity markets shut after gunmen killed 101 people, the only inkling of damage to sentiment came from a rise in India's risk premium on international credit markets and a drop in offshore Indian stock and rupee futures.

The central bank said it would continue auctions to keep cash flowing through interbank lending markets, which seized up after the global financial crisis destroyed Wall Street banks in September.

Mumbai is no stranger to political violence and markets have usually regarded previous bombings and other attacks with a degree of nonchalance. Wednesday's attacks though will put an additional strain on nerves frayed by global financial turmoil and a tide of cash pouring out of Indian assets.

"Everyone is just hoping that it will be one of the short-lived episodes," said ING chief Asian economist Tim Condon.

"People have seen this before although this is on an order of magnitude worse than what we have seen. That makes the usual comfortable assumption less comfortable, this Pakistanisation of Indian financial markets," he said.

The capital markets regulator said the Bombay Stock Exchange and National Stock Exchange will be closed on Thursday as security forces battled militants who held hostages in two luxury Mumbai hotels.

Coming at a time when foreigners have been heavy sellers of Indian assets, the attacks raised fears of a steeper fall in the rupee and a further blow to market confidence.

"Clearly, it will be negative for the sentiment towards India at this point of time, the time when the world is already looking to be highly uncertain in term of its growth prospects," said Joseph Tan, chief Asian economist at Credit Suisse in Singapore.

"When the equity market actually opens, it could probably be opening down as opposed to the rest of Asia."

As traffic ground to a halt in south Mumbai, where the central bank and several financial institutions are located, it appeared the earliest indications of how deep those concerns run would be known only on Friday.

Trading in offshore rupee forwards was thin but suggested the rupee could drop 1.6 per cent within a month, more bearish than Wednesday's pricing of a 0.7 per cent depreciation.

The risk premium for top Indian lender State Bank of India rose. The state-owned bank is a proxy in the debt market for the government, which has no sovereign bonds outstanding.

Credit default swaps, which are insurance-like contracts, on the bank's five year bonds widened 20 basis points to 440 basis points after the attacks.

Indian stock index futures fell 4 per cent in Singapore trade at their weakest, pointing to a likely steep fall in domestic shares. On Wednesday, the 50-share NSE index gained 3.7 per cent. India's main 30-share BSE index ended up 3.8 per cent. The rupee ended trading at 49.48 per dollar.

"As the situation calms down, these attacks might be viewed as an isolated event," said Mumbai-based Amit Khurana, head of equities at the Indian unit of British broker Collins Stewart.

UNFORTUNATE TIMING

When suburban train bombings killed 180 people in Mumbai in 2006, the rupee barely blipped while the Bombay stock index fell 1.8 per cent but then rallied.

There have been four bombings prior to Wednesday's attack this year.

The stock index is already down 55 per cent this year -- Asia's fourth worst performer -- after having seen $13.5 billion of portfolio outflows from a market with a capitalisation of $266 billion.

The rupee figures among the weakest currencies in Asia this year alongside the Indonesian rupiah and Korean won, having dropped 20 per cent against the dollar owing to capital outflows and a withdrawal of foreign credit lines from riskier markets.

"This means that capital outflows will have a greater impact than they did in the past, though history suggests that any reaction to terrorist attacks in Mumbai will only be temporary," Nikhilesh Bhattacharya, an economist with Moody's Economy, said in a note.

Mark Matthews, chief Asian strategist at Merrill Lynch, said this was also the time analysts were downgrading their forecasts for Indian corporate earnings rather dramatically.

"That will continue to be a drag on the market because Indian analysts are behind the curve on earnings relative to the rest of Asia," Matthews said.

Slowing growth and uncertainty about upcoming general elections in 2009 would also weigh down the market, at least until March, he reckons. Merrill predicts the index price-earnings ratio will drop to 9.1 in 2009 from 10.1 now.

Currency analysts expect the rupee will weaken sharply when it opens for trading on Friday, but they also suspect any weakness will be knee-jerk and fleeting and that the central bank will jump to its defence as it always has in volatile spells.

"Such terrorist attacks do not have a lasting impact on the market -- I don't think it will have a lasting impact on India," said Credit Suisse's Tan.

 

 

 

Source: FE

We are in for the mother of all bear market rallies By Barton Biggs

We are in for the mother of all bear market rallies  By Barton Biggs

Published: November 24 2008 16:16 | Last updated: November 24 2008 16:16

Before we all are swept away into total despair, let's take a step back and imagine what could get stocks around the world going up for a while. Bear in mind that I am hedge fund manager, have been wrong on the severity and duration of this panic, and that at this moment I am close to shore. In other words – I have little risk on.

First, let me point out that by definition the bottom of a bear market has to be the point of maximum bearishness. Thus sentiment becomes a crucial indicator.

The systematic work that we do on measuring sentiment (and we monitor about twenty indicators for the US and a dozen or so for other equity markets) show very extreme and in many cases record levels of bearishness. Obviously not every indicator is at an all-time high, and in some the history is short, but the message is powerful. Furthermore there is compelling evidence that investors, hedge funds, pension and mutual funds, and the public are not just talking bearish, they have raised astounding amounts of cash.

I am chastened by the fact that all the data we look at are from the last forty years which was really just one great magnificent secular bull market of wealth creation marked by periodic bears that were buying opportunities. No one knows what levels of pessimism were necessary to spawn the 40 per cent 1929 rally during a massive secular bear market. Nevertheless I've never seen capitulation and despair like this. We must be pretty close to maximum bearishness.

Second, valuations are cheap. There's no point in going into an elaborate dissertation; it's an inexact science. Using the best historic measures, normalised earnings, book value, and free cash flow, stocks around the world are very cheap, but not as cheap in absolute terms or versus interest rates as they were in the 1930s or at the 1974 bottom. Nevertheless, the 4 per cent dividend return on the S&P 500 exceeds the yield on the ten and thirty year Treasury bonds for the first time in fifty years. If emerging market equities, where the growth is, at six to eight times earnings are not cheap I don't know what is.

Third, stock markets have been obliterated and are deeply oversold. Even dead cats bounce. The Dow has had the steepest decline since the 1930s, and the spread between the price and the 200 day moving average at 34 per cent is the greatest since July 19, 1932. The US market is down almost 50 per cent from its highs, Europe is off 55 per cent, and emerging markets, 65 per cent with some unfortunates like Russia off 70 per cent. History shows that even in enduring, secular bear markets there are not just 20 per cent bounces but usually one 30 to 50 per cent rally. We should be due.

As far as the economic fundamentals are concerned, investor and consumer confidence have been ravaged by the sudden violence of the global recession. It is going to be deep and it may be long lasting. The bears say at best it will be like Japan's on-going slow death. At worst, it will be a replay of the 1930s.

I think both these outcomes are highly unlikely. The so-called authorities have learned from the policy errors of the past, and the response this time, while not perfect, has been faster and far bigger. The effects are just beginning to be felt. In fact the stimulus has been unprecedented and there is almost sure to be more on the way beginning with the new Obama Administration. The authorities seem to understand that they have to risk overkill.

And the fabric for economic healing is developing. In the US average hourly earnings are rising at a 3 per cent annual rate and the CPI is probably declining at a 5 per cent rate thanks to the fall in gasoline, fuel, and food prices, so real average hourly earnings are rising at an 8 per cent pace. The savings rate is rising. The sharp collapse in the price of oil while hurtful to parts of the world, is very beneficial to the US, Europe, and Asia. The consumer spending collapse we are experiencing may be short-lived but that doesn't mean a boom is coming either.

Finally, my guess, and it's nothing more than a guess, is that the deleveraging that has caused such heavy selling is two thirds done. In listed equities it may be 80 per cent finished. Hedge fund redemptions are substantial and will continue into next year, but hedge fund liquidity is at a record high and hedge funds' gross exposure and net long is at a record low. Conversely investor liquidity is at a record high. All good contrary indicators.

If I'm bullish why aren't I in there now? Because I would like to see the credit markets unclog and spreads come in more. At the bottom of a panic, the news doesn't have to be good for stocks to rally, it just has to be less bad than what has already been discounted. I want the markets to stop going down on bad corporate and macro-economic news. The fact that it still does shows the bad news has not yet been fully discounted. I have no idea when the next bull market starts, but I do think we are setting up for the mother of all bear market rallies.

The writer is managing partner at Traxis Partners, a New York based hedge fund, and the author of Hedgehogging.

Courtesy: G Bajaj

How credit card companies fleece you

All of us have seen growth in our personal income over the last three
to five years. Resulting temptations to ramp up lifestyles many
succumb to the temptations of offers from credit cards.
Don't give away your card details

Their well-trained marketing personnel attack our un-suspecting
psyche, promising life-time free card and freebies. Temptation to grab
a card and spend proves irresistible. Spending beyond our means is no
problem since we can pay in instalments.

LIC to finalise credit card ally this year
============================

It is the beginning of your personal disaster, unless you are careful
to get out before it gets to your throat. The card companies love such
customers who pay in instalments for their profit flows from fleecing
the unwary customer. Mind you it is a great product if restricted to
judicious use staying within the confines of one's cash flow
capability.

However, delayed or instalment payment turns it into a weapon of mass
destruction.

'Hidden' charges
============

Have you ever bothered to find out how these cards charge you? If you
do, you would resort to alternate methods of funding rather than your
credit card.

Giving auto-debit for your cards may be risky

Hiding behind the respectability of a bank these credit cards charge
usurious rates of interest and most people pay up without realising
that the rate of interest is upwards of 30% per annum.

To illustrate: You ran a modest bill of, say Rs 4,858 in the month of
February. The due date for the payment of this bill is March 25.

Credit card business set for over 30% growth

Of the two cheques issued by you for Rs 2500 and Rs. 2358, only Rs.
2500 was credited to your card, although both were dropped together.
Meanwhile you used the card for the following transactions:

March 4, 2008 Rs. 2731.01

March 18, 2008 Rs. 1499.80.

Your March statement includes an interest of Rs. 239.61 which is a
whopping 59.18% annualised interest rate on your total February bill.


A 'costly' delay
===========

You now wonder how a decent bank can fleece thus. Smarter and still
red in the face you decide to investigate the mode of charges levied
by the card. You realise that your cheque was credited on the 26th
(part-payment), a one-day delay. For this you pay interest for a whole
month.

Banks hiking merchants' fees on card swipes

Nowhere in the credit world is this practice prevalent. If you delay
by one day, you pay interest for one day only. To punish you further,
the delayed payment means you also pay interest on all new purchases.

Some relief on the card
=================

What you thought was free credit is now costing you dear, unknown to
you till you get the next bill. Their rules are equally vague. Try
reading any of them. You also run interest burden till the balance is
cleared by you.

The second cheque lost for no fault of yours results in taking a heavy
toll on you interest burden. Some companies do waive the interest if
you protest, but most don't.

Other surprises include charging you an annual fee even if you card
was issued as lifetime free card. If you protest it will be reversed,
otherwise it is free money for them and if you delay then can earn
interest on that as well.

They also have the audacity to tell you to first pay the bill and
await credit in the next month telling you that non-payment of a wrong
charge could still result in interest being charged for non-payment.

Free credit period
=============

It is in your interest to be a disciplined user of the card to exploit
its free credit for 30 to 50 days. It would be wise to use the card
only when you have the necessary liquidity in your bank account to pay
the bills on time. If you are not in a position to do so, then borrow
direct from banks where the maximum interest is generally not more
than 21%.

Good news for credit cardholders!

Similarly, don't use the card beyond the credit limit in the card, for
such use, even with their permission, would still entail a high
interest. Lastly, avoid the biggest mistake using the credit from one
card to pay the dues of another card. This is normally done by
withdrawing cash in the ATM to pay another card.

Afraid of fraud? Go for chip-based card

Every cash withdrawal is subject to an interest charge at 30% to 50%,
depending on the credit card company.

If at all you get into a trap, then seek counselling immediately,
including legal remedy to protect yourself from bankruptcy.

Remedial measures
==============

If you are victim of credit card over-charges what are your chances of
seeking justice. You could try the following:

1. Write a protest letter to the credit card company. Recently, I did
that with one multinational bank protesting against the charge,
refusing to pay and also indicating that I want the card cancelled
with immediate effect. I got a reply deactivating the card and
withdrawing the charge as well.

Ofcourse you lose the card but that is better than getting into a trap
of being fraudulently charged on the card.

'Rising credit card defaults worrisome'

2. File a case against the credit card company, saying that the
charges are usurious and the policy of charging interest is not fully
explained in the rules. Reproduce the rules from the rule-book and
annex it as part of the petition.

You stand a good chance of winning your case. Some recent decision of
the consumer court has gone in favour of the cardholder. Even if there
is a charge for bounding a cheque, which is disproportionate to the
cost incurred by the bank, you could challenge it.

Control rooms in pipeline to settle credit card disputes

3. Form a credit card users association and then use the strength of
numbers to seek representation before the RBI and the Ministry of
Finance to force the card companies to change the way they charge
interest.

4. Collect all members of the organisation as above and use the
protest that Gandhiji followed - light a bonfire and one by one all
card members can drop their card in the bonfire.

5. The association can also file a public interest litigation in a
court of law to protest the nefarious ways on charges levied by them
and implead RBI and Ministry of Finance as parties in the suit and
seek a direction that RBI and Ministry of Finance must act against the
credit card companies.

6. Last, but not the least, ensure that you don't spend on your credit
card unless you have the money to pay against the bill. Under no
circumstance fall into the trap of paying minimum balance.

 

What Not to Buy in a Bear Market

What Not to Buy in a Bear Market

These days, advisers are eagerly hawking what worked the last time
stocks tanked. Hold on to your wallet.

"Look at how well these investments performed during the 2000-02 bear
market!" This is the line I've been hearing from mutual fund companies
and other investment providers trying to sell me on the superiority of
their products (and get me to put clients into them).

That means I'm being pitched the standouts of the past bear market,
including small-cap and value funds, real estate and metals and
mining.

From the beginning of 2000 to the end of 2002 - when U.S. stock funds
lost 12% a year on average - small-cap funds dropped by 6.5% a year,
and value funds fell by just 2% a year, according to Morningstar. Real
estate and precious-metals funds - two groups that often do well when
the stock market slumps - delivered double-digit annual gains.

Many financial planners I've talked to are buying this pitch hook,
line and sinker and are investing clients in these funds. It's why
your adviser may be showing you pretty graphs nowadays that illustrate
how well his current recommendation stood up to the bear last time.

Weak Theory: This seems like a logical approach, until you realize
that it is based solely on one bear market. It's possible that what
happened once could happen again - but it's far from probable. In
fact, over the past year, while U.S. stock funds are down nearly 13%,
small-cap stock funds are down 14%, value funds 19%. So far, the logic
is failing miserably.

If your adviser is moving you into anything that did well during the
past bear market, not only is she engaging in straw-grasping but she
also doesn't understand the market. By hoping that what did well last
time will do well again, she's engaging in a form of performance-
chasing.

Long View: A much better strategy is to build a portfolio that holds
many different asset classes and stick with it. Once you have a proper
asset allocation, all that's needed is simple rebalancing. This is the
opposite of performance-chasing, since it means that today you
probably have to sell some of your safe bonds to buy risky stocks.

Let me clue you in to something: We advisers have no idea whether the
bear market is nearing the end or still has a long way to go. So don't
let any adviser shift you away from a long-term strategy under the
guise that he knows what's going to do well next year. A quote I often
use by Warren Buffett, "Be fearful when others are greedy and greedy
when others are fearful," particularly resonates now.

The Mole is a certified financial planner and certified public
accountant who - in the interest of fairness - thinks you should know
what goes on behind the scenes in financial planning.

Non-domestic LPG may cost less

Prices may drop by Rs 350 a cylinder.

Richa Mishra

New Delhi, Nov. 23 Both the players and the customers of non-domestic liquefied petroleum gas (LPG) have something to look forward to next month. Public and private players of the product are betting on a significant drop in prices to revive their fortunes, as it would push demand.

In keeping with the prices in the international market, price of LPG sold for non-domestic purpose is expected to dip in December. The international market has seen the biggest drop in LPG pricing by $320 a tonne from $810 a tonne in September-October.

Industry sources told Business Line that the The price of commercial LPG, which is sold in a 19-kg cylinder at over Rs 1,000 a cylinder, is expected to come down by Rs 350. The dip in commercial LPG prices would also mean that the diversion of domestic LPG for commercial use will be reduced to some extent, as the price gap between the two categories would narrow.

Auto gas sector to gain

Due to high prices, the growth in auto gas sector was almost nil in the first six months of the current fiscal. However, the coming six months should be good, industry sources said. The auto gas sector had seen a growth of nearly 40 per cent in last fiscal. However, a robust growth can be expected only next fiscal, industry sources added. Commercial LPG has seen a growth of about seven-eight per cent.

The domestic prices of commercial LPG are reviewed on a monthly basis. In November, the prices increased by a little over 1 per cent, as international prices had seen an upward movement in October and the rupee had depreciated by almost 20 per cent.

While the price of commercial LPG was increased to Rs 1,108.50 a cylinder (Rs 1,095.24 a cylinder in October), that of auto LPG was brought down by 5.34 per cent. Auto LPG prices were revised to Rs 34.38 a litre on November 1 (Rs 36.32). In case of auto LPG, the public sector oil marketing companies are under pressure to keep it at a price lower than the price of petrol in order to make it attractive for the consumers.

"There is a time lag of four to six weeks between the international and domestic LPG prices. The domestic price depends on the Saudi Arabian price and currency value during the month under review," an official explained. In other words, the domestic pricing is based on the formula of M-1 (price of the previous month). Hence, the December price would depend on the international price of November.

The last one week has seen international LPG prices declining after being stable for sometime, even when there was a sharp slide in crude oil and other petroleum products prices.

LPG for non-domestic purpose is meant for commercial markets such as hotels and for auto LPG.

 

Source: HBL

BHEL bags Tata Power project contract

State-run Bharat Heavy Electricals Limited (BHEL) on Monday said it
has bagged Rs 240-crore order for manufacturing and supplying
transformers to Tata Power's power project in Gujarat.
Bharat Heavy gets $265 m contract

The order has been placed by Coastal Gujarat Power Ltd (CGPL), a
special-purpose vehicle (SPV) by Tata Power, for the implementation of
the 4,000 MW Mundra Ultra Mega Power Project (UMPP), BHEL said in a
statement.

"BHEL has won a contract to manufacture and supply transformers to the
4,000 MW Mundra power project," the statement said.

BHEL plans to tie up with L&T for new nuclear orders

The order also includes manufacture and supply of bus-ducts for the
power project. Bus-ducts are designed for connecting the generator to
the main transformer. The generator transformers for the first unit
have to be delivered by February 2010, supplies for the fifth unit
will be completed by June 2011, it said.

In the past, BHEL has supplied transformers to all major utilities in
the country including State Electricity Board, NTPC and Power Grid
Corp.

On the export front, the company has supplied transformers to more
than 20 countries including Greece, Egypt, Libya, Oman, Malaysia,
Saudi Arabia and Zambia.

SBI enters general insurance biz through JV with IAG

Country's largest lender State Bank of India said on Monday that it
has entered into a joint venture with Insurance Australia Group (IAG)
for its foray into the general insurance business.

Under the JV agreement, SBI would hold a 74 per cent stake in the new
entity that would be set up for providing the business, while the
Australian partner would hold the remaining, SBI said in a filing to
the Bombay Stock Exchange.

In May this year, both parties had said they would enter into an
agreement to form a new company for the proposed insurance business.
However, the JV is subject to regulatory approvals, it added.

Last week, the state-run lender had received approval from the Reserve
Bank of India for a JV with European financial services group Societe
Generale for offering

custodial and related services in the country.

Under the agreement SBI would hold 65 per cent equity in the new JV
company, while the remaining 35 per cent would be held by Societe
Generale Securities Services.

State-run insurers -- United India Insurance, New India Assurance,
Oriental Insurance and National Insurance – are the major players in
the general insurance business in the country.

However, private sector insurers, including Bajaj Allianz, ICICI
Lombard, IFFCO-Tokio General Insurance and Reliance General Insurance,
have significantly raised their shares.


Shares of SBI were trading at Rs 1,194 on the BSE, up 0.92 per cent in
the morning trade.

 

Hyundai offers discounts to PSU employees

New Delhi, Hyundai Motors India Ltd on Monday announced a cash
discount scheme for public sector employees. The offer is an extension
of its earlier scheme launched in October for government employees in
response to the implementation of the Sixth Pay Commission.

As per the offer, the company is offering a discount of Rs 17,000 on
its hatchback Santro non-A/C model, Rs 22,000 on Santro GL/ GLS
variant, Rs 10,000 on its premium compact car i-10, Rs 22,000-27,000
on Getz and 31,000 on its sedan Verna. In case of non government
employees, it is an insurance and a three-year warranty on Santro, Rs
3,000-5,000 discount on i10 and Rs 4,000-8,000 discount on Getz
models.

�In view of the fact that the central government owned PSU employees
are due to receive the arrears of their salaries after revision in the
Sixth Pay Commission, the arrears can be utilised as a down payment
for purchase of a car and the revised salary increment will help them
to accommodate their monthly EMIs,� said Mr Arvind Saxena, Senior Vice-
President, Sales and Marketing, Hyundai Motors India.

The company also said that it had extended its government employee
scheme till November end taking in to account the success of the
scheme.

Big industrial houses hold fort in trying times

P K Dey

 

Even as the debate over the effect of the global meltdown on India continues, one section of corporate India is holding the flag of the India story high. The second quarter for the key industrial houses in India has been a tad different from the entire India Inc. While India Inc witnessed a more than 15% slide in net earnings and 30% growth in revenue, the big industrial houses have managed to minimise the slide in earnings and maintain strong revenue growth.

The top 100 industrial houses or business families have seen total sales increase by 36.4% to touch Rs 2.36 lakh crore in July to September 2008, against Rs 1.73 lakh crore in July to September 2007. And in absolute terms, the total net profit of the 100 largest business houses has decreased 2.1% to Rs 20,972 crore in July to September 2008, from Rs 21,429 crore in July to September 2007.

Also while other income of India Inc fell due to tough market conditions, the total other income of the studied houses increased 5% to Rs 5,663 crore in July to September 2008, from Rs 5,394 crore during July to September last year.

"This clearly shows that the industrial houses have managed to work their companies well and build on the synergies and interdependencies that exist within the group. Usually standalone companies do not have this advantage," says Rajesh Majethia, a Mumbai-based equity analyst. And this, he says, has some of the industrial houses get a premium rating in the market place.

Around 11 groups or houses actually clocked a 45% increase in net profit, and this is staggering at a time when there is widespread slowdown. Mention may be made of Hero Group of the Munjals, Adani, Torrent, Sriram Thyagaraj, Lloyds, Alchemie Group and Nava Bharat.

While the Mukesh Ambani-owned group topped the list with sales of Rs 44,804 crore in July to September 2008, the Sanjay Dalmia Group featured at the bottom of the pecking order came last with Rs 359 crore. Of the remaining houses, Tata,Aditya Birla Mgmt Corp, Essar and Jindal Om Prakash had sales exceeding Rs 90,00 crore each.

Mukesh Ambani's company, top in terms of sales, in Jul-Sept 2008 showed a growth of 39.8% and 7.4% in sales and net profit respectively. On the other hand, a significant growth rate in sales was also seen in the case of Murugappa, Ispat-MPK, Welspun, Excel Shroff, Lloyds, Alchemie Group, Sriram Thyagaraj and Apar Group..

Mukesh Ambani's group accounted for 18% or more of the total sales of the top 100 business houses in both the quarters two three month period under study.

The ratio of profit after tax to sales of 100 business houses decreased from 12.37% in July to September 2007, to 8.88% in July to September 2008.

High hopes

•I India Inc witnessed more than 15% slide in net earnings and 30% growth in revenue

•I Total sales of top 100 industrial houses increased 36.4% to touch Rs 2.36 lakh crore in July-Sep 2008

•I Other income of these houses increased 5% to Rs 5,663 crore during July-Sep 2008, from Rs 5,394 crore during July to September last year

 

 

Source: FE