16 June 2008

GENERAL


1)INDIA’S maiden moon mission Chandrayaan-I has reached a major milestone as scientists completed integration of all instruments onto the spacecraft and are aiming to launch it by September 19. Scientists at the Indian Space Research Organisation(ISRO) last week completed the integration of 11 instruments six indigenous and five under international cooperation onto the spacecraft which is no bigger than a typical office cubicle.

Indian Express

CORPORATE / INDUSTRY

2)DECCAN Cements, a Hyderabad cement manufacturing company, is on an expansion drive. The company is investing around Rs 432 crore to add 1.3 million tonne production capacity to the existing 0.7 mil- lion tonne. The company plans to raise Rs 150 crore from internal ac- cruals and the rest from term loans from a consortium of banks that includes SBI, SBH, Andhra Bank and Indian Bank.

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3)THE Nano effect on the auto component sector continues. Now, it is the turn of tyre manufacturer JK Tyres and Industries to set up a greenfield site for tyres for passenger cars, to address the emerging market following the launch of small cars that most major OEMs have announced.

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4)If you thought discounts and offers are restricted only to cars, think again. The slump in the tractor industry in the last fiscal has forced major players to come up with promotional schemes that can boost demand. This is more pronounced as the harvest season is about to end and there is abundant cash available with Indian farmers to buy a tractor.

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MONEY & BANKING

5)Even as financial institutions grapple with the global credit crunch post the sub-prime crisis, Standard Chartered Bank finds itself well positioned to support the growth of companies in Asia, West Asia and Africa. The squeeze in credit has made effective liquidity management critical for companies, and this presents an opportunity for banks such as Standard Chartered.

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INSURANCE

6)Insurance buyers are keeping away from unit-linked insurance plans (Ulips) due to the continues volatility in the stock market. The life insurance industry, which was growing over 100 per cent last year, registered a negative growth for the month of April this year, reporting a decline of 6.77 percent. It gathered a new business premium of Rs 2,780.11 crore in April this year as against Rs 2,982.28 crore in April 2007.

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7)Reliance Life Insurance has set its eyes on the mass market segment. The company will launch the Reliance Super InvestAssure Plan(RSIP), a Ulip with a minimum premium as low as Rs 5000, next week. “The plan offers guarantee contributions in case the customer remain in- vested for atleast 10 years. We are targeting the mass-market as the product has a minimum lower premium. The plan is not ideal for high networth individuals,” said P Nandagopal, CEO, Reliance Life Insurance.

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MARKETS

8)THE spectre of inflation, which many bet would rise to double digit soon, is expected to keep shares of interest-rate-sensitive sectors such as banks and real estate under pressure. Investors fear the Reserve Bank of India(RBI), as part of its efforts to con- tain rising inflation, would resort to make banks’ lending rates dearer. Analysts expect the central bank to hike the cash reserve ratio (CRR) next – the minimum cash that banks need to keep with RBI, after the recent hike in repo – the rate at which banks borrow from RBI for short-term.

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9)MANY investors will now try to figure out how to play at the RCOM counter, with Reliance Industries (RIL) putting a spoke in the wheel of the RCOM-MTN deal. While the outcome is anybody’s guess,investors seem confused on what lies ahead. The stock, which has been trad- ing flat after the RCOM-MTN deal announcement, is likely to enter volatile territory in the coming days without any substantial upswings or downturns, say market experts.

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MUTUAL FUNDS

10)Different times call for different measures and that seems to be re- tail investors and fund houses’ policy at present. Six months after witnessing a huge frenzy, retail investors are now opting for a safer route and have turned towards equity schemes of mutual funds. Joining them are fund managers, who feel that the markets are yet to correct fully and have increased their cash allocations in anticipation of get- ting smart bargains. According to Amfi,inflows into new equity sche- mes(growth and equity-linked saving schemes or ELSS) saw a 145% jump(Rs 12,439 crore) in the first five months of the currentcalen- dar year, compared to the corresponding period last year. The MF industry has mobilised Rs 21,006 crore between January and May through new equity schemes, against Rs 8,567 crores for the corres- ponding period in 2007. Around 26 equity schemes(new fund offerings or NFOs) were launched this year, while during the corresponding period in the last year saw 24 NFOs in growth and ELSS schemes. Paras Adenwala, chief investment officer of ING Investment,Man- agement India, said. “In this volatile market, investors have realised that they can’t risk their money in the volatile markets directly and instead invest through the MF route as MFs are better equipped in the current scenario to give higher returns compared to equity markets.”

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11)Real Estate Mutual Funds, which are expected to be introduced this year, will have two independent valuers, the Chairman, Association of Mutual Funds in India(AMFI), Mr A P Kurian, said. “About two to three funds are ready with their products and are likely to launch during the course of this year. The guidelines mandate that there should be two independent valuers,” he said. The valuers would look at whether the mutual fund has invested at the correct price.

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12)INDIAN Bank is planning to revive its mutual fund arm, In Fund Management to participate in the over Rs 6,00,000 crore market. “We are in the process of reviving the asset management business, the licence for which was surrendered to Sebi a few years ago,” In- dian Bank chairman and managing director MS Sundara Rajan said.

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COMMODITIES

13)THE Indian commodity market is expected to grow by 30% and will reach Rs 74,156 billion ($1.73 million) in volume by 2010, accord- ing to a study by the Associated Chambers of Commerce and Industry of India(Assocham). Assocham found that the Indian commodity mar- ket expanded 50 times in a span of five years from Rs 665.3 billion in 2002 to Rs 33,753 billion in 2007 as people’s participation in such trade continued to grow. “The growth in commodities deriva- tives trading would now grow by about 30% to reach a projected level of Rs 74,156 billion in the next two years,” said Assocham president Sajjan Jindal.

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14)After the sharp decline in early 2008, nickel futures are set for an upward move in the short term. The recent explosion at Apache Energy’s plant in Australia is expected to hit gas supply to mining companies.

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REAL ESTATE


15)Affordable housing, the most neglected segment of the real estate sector, is now attracting large-scale investments from developers as well as private equity funds. While real estate major like An- sals, Omaxe are planning low-budget housing projects in smaller towns and cities across the country, private equity players are firm- ing up huge investment plans. Recognising the potential growth in affordable housing segment, Delhi-based Omaxe Ltd hasformed a new company, National Affordable Housing Infrastructure Ltd, that will invest Rs 80,000 crore to develop 100,000 affordable homes across the country. “While smaller towns and cities will be the primary target of this venture, the first project is expected to come up in Rajasthan or Uttar Pradesh by the end of this year,” said Rohtas Goel, chairman and managing direcor, Omaxe Ltd.

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16)GOLDMAN Sachs, a global financial giant, is striking a Rs 200-crore land deal with realty developer Embassy Group for developing a cor- porate campus on a 9-acre plot at Hebbal in Bangalore. The invest- ment banking, securities and investment management firm is acquiring the land to set up 7 lakh sqft office space, also to be developed by Embassy, taking the total deal size to over Rs 300 crore, sources said. It is believed that Embassy is selling the land close to its own Manyata Tech Park, one of its major developments, located near Hebbal on the way to new Bangalore International Airport.

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17)Nasdaq-listed business process outsourcing firm EXL Services is in talks with real estate companies including DLF, Unitech and 3C for purchasing properties as a move to cut costs on rentals. “If we can own our real estate, we will not have an increase in cost on account of lease-hold improvement and lease rentals that we currently pay. We are already in talks with Unitech and 3C in Noida and DLF in Gurgaon for purchasing the properties,” said EXL chief executive officer and president Rohit Kapoor.

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18)Hyderabad-based Mansani Constructions is introducing an exchange offer facility, which the company claims to be the first in the real estate sector, whereby one can exchange his/her old flat with a new house at Mansani’s Enclave project at Karmanghat on the outskirts of Hyderabad for the same price,according to a press re- lease on Thursday. Mansani has constructed 2 million square feet of living space over a period of 14 years.

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COMMUNICATIONS

19)NETCORE Solutions, a provider of products and services in the messaging and mobile space, plans to provide email services to ordinary mobile phones without global positioning radio system (GPRS), a top company official said. “Presently, it is possible to send and receive e-mails only through blackberry or else one has to activate GPRS services. with our product, it would now be possible for users of ordinary mobile phones to reply, forward and create new emails,” said Netcore Solutions’ chief executive officer Abhijit Saxena.

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BUSINESS PROCESS OUTSOURCING

20)A ship’s journey is complete when it returns home. Having sailed through the Americas, Europe and some parts of Asia-Pacific, Indian BPO companies in recent years have been heading home to dock their businesses. “From a few domestic (BPO) operators in 2003, today the number of players is in housands,”say Mr Anish Zaveri, Associate Director, Sourcing Advisory, KPMG. A strong rupee and recession in the US market(which contributes over two- thirds of total Indian BPO exports) have pushed companies, who were hiterto reluctant to start Indian operations, to look inward. If this momentum continues, the dip in overseas revenues will be offset by the rise in domestic revenues, he says.

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21)Indian business process outsourcing(BPO) companies will approach state governments and prospect to incorporate a curriculum which is more’industry friendly’ in the colleges, according to players in the sector. Ten companies who were part of the Nasscom BPO forum were teaming up to create syllabus including ‘subjects relevant to today’s employment opportunities,’ co-founder of 24/7 Customer, Shanmugam Nagarajan told FE.

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INFORMATION TECHNOLOGY

22)Infosys Technologies, India’s second-biggest software developer, said it plans to raise the share of its revenues from Europe to counter a slowdown in the US, the world’s biggest economy, which fetches it about 60 per cent of its sales.

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INTERNATIONAL

23)SAUDI Arabia may announce an oil output increase at a meeting it will host in Jeddah on June 22 for oil producers and consumers because customers are asking for more crude, an Opec official said on Sunday. There is more demand for Saudi oil from “all over” the world, the Orga- nisation of Petroleum Exporting Countries’ official said in an interview. He declined to comment on the size of the possible increase and denied reports that the Saudi Oil Minister Ali Al-Naimi would make any state- ment on oil production. The kingdom will host the Jeddah summit af- ter oil prices more than doubled in a yearto a record $139.12 a barrel on June 6. Crude oil fell on June 13 to settle at $134.86 a barrel on the New York Mercantile Exchange as al-Naimi said prices were “unjusti- fied.”

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Deccan Chronicle                       www.deccan.com
The New Indian Express             www.newindpress.com