1)With the NSG draft set to be amended because of demands from some member-countries, the government on Sunday held a high-level meeting to analyse the new development and discuss options available to it. External affairs minister Pranab Mukherjee held a hour-long discus- sions with the Prime Minister’s special envoy on nuclear deal Shyam Saran and senior officials of the ministry of external affairs and department of atomic energy on the issue in New Delhi.
2)Planning Commission deputy chairman Montek Singh Ahluwalia has said he expects the country’s GDP growth to be at around 8-8.5% for the year. “The Economic Advisory Council to be at 7-7.8%, whereas the Centre for Monitoring of Indian Economy has pegged it to be over 9%. Hence I see the GDP growth to be at around 8-8.5%,” he said.
3)Cashing in on the realty boom, the Rail Land Development Authority (RLDA) is all set to go ahead with its plans to lease surplus land for commercial development-a project which is estimated to generate revenues of over Rs 4,000 crore in 2008-09.
CORPORATE / INDUSTRY
4)ICICI Ventures-controlled Ranbaxy Fine Chemicals(RFCL) has emerged as a strong contender to buy the speciality chemicals business of Mallinckrodt Baker, a division of healthcare giant Covidien, in a deal which could be valued at around $450 million, industry sources said. This comes after speculation that RFCL was on the trail of a large US acquisition. If the transaction goes through it would be the biggest overseas M&A play for ICICI Ventures, which acquired RFCL about four years back from Ranbaxy Labs for Rs 125 crore.
5)India’s power sector has cornered a lion’s share in the Rs 633,906 crore investment announced by corporates during January-June 2008, industry body Assocham said. Of the investments tracked by the industry body during the first half of calendar year 2008, the energy sector attracted 18.64% at Rs 195,913 crore. Power majors like Tata Power, Sterlite Industries, Jindal India Thermal Power and Lanco Group are among the corporates that have lined up big investments in the sector. The other major sectors attracting huge investments included real estate, steel, retail and telecom.
MONEY & BANKING
6)THE managements of state-owned banks have told the finance ministry that they favour a reduction in the equity stake held by the government in their banks to 26%. The chiefs of major state-owned banks are of the view that by lowering the stake to 26%, the government could fulfil two major objectives. One, the move would help provide a lot of headroom for banks to raise capital. Some banks are hobbled in terms of raising capital to grow their business since a fresh public offering will lead to a dilution of the government’s equity below 51%. The current legislation governing ownership of these banks makes it mandatory for the government to maintain equity holding of at least 51%. Secondly, the government the dominant shareholder in these bank – and also SBI, the biggest lender in the country, can continue to protect their interests with the lower equity threshold. This is because the Companies Act empowers a shareholder with 26% voting rights to block any special resolution.
7)As the spectre of large-scale delinquencies has come to haunt the banking industry in the high interest rate regime, public sector banks have swung into action to prepare counter-strategies to tackle a possible crisis. The banks, which have seen pressure on standard assets in recent times, have become proactive in putting in place various systems to identify accounts that could turn NPA. It is based on the premise that no accounts can turn NPA overnight but takes a certain time to turn sticky. The bankers believe, with proper systems, the non-performing assets can be minimised.
8)Insurance companies will now have more investment options to choose from. After a two-year wait, Insurance Regulatory and Development Authority(Irda) has notified new investment norms that provide more flexibility to insurance companies for parking funds in debt instruments offered by banks and allows more money to flow into initial public offers(IPOs).
9)EXTENDED uncertainty over the direction in global crude oil prices in the near-term may keep Indian equities volatile this week. With the chances of more monetary tightening measures by RBI increasing, and inflation rising to a 16-year high, the market undertone is nervous. Analysts said the government’s increased desperation to bring down inflation before the general election in May next year could trigger monetary tightening measures that could be more than desirable.
10)Trade body Confederation of Indian Industry (CII) has opposed the levy of securities transaction tax(STT) on foreign currency futures, whose trading will start on stock exchanges for the first time in India on August 29. Currently, all market transactions on stock ex- changes are subject to a STT of Rs 17 per Rs 1 lakh.
11)Lavasa Corporation, an HCC Group Company which is developing a hill station spread over 12,500 acres near Pune, is planning to raise further funds for the project through an initial public offering (IPO). The funds to be raised through the IPO would be to the tune of Rs 2,000 crore, or 10% of the total valuation of Lavasa City, which is pegged at Rs 20,000 crore, Rajgopal Nogja, president Lavasa Corporation told FE.
12)State-run Union Bank of India expects to launch its mutual fund business by January next year and is currently working on the share- holders agreement for its proposed joint venture with Belgium-based partner KBC Asset Management NV, a top bank official said.
13)Principal Mutual Fund on Friday said it has mobilised around Rs 834 crore in its recently closed new fund offer Principal PNB Fixed Maturity Plan-30 days Series I. The 30-day scheme, which has two investment plans – regular and institutional – was open for subscription only on August 20,2008, the company said in a press release.
14)Except gold futures, crude oil, silver and copper futures on the national bourses turned higher on week ended on Friday mainly following the firm trend in the overseas markets. Gold futures on MCX finally settled marginally higher following strong crude oil prices. Crude oil spot in the US stayed below $120 per barrel on Friday. The bulls came back with a vengeance in the oil market in the last week, as crude oil prices closed above $121 a barrel on Thursday for the first time in two weeks. While the London gold spot was quoted at $825 per ounce. In the last week gold futures closed at their highest level in almost two weeks, lifted by the dollar’s fall against other major currencies and the strength in oil prices amid rekindled fears about the financial sector. The silver September contracts were up 6.13% to trade at Rs 20,262 per kg over the previous week. Total volume was down to 401 tonne from 507 over the previous week. Open interest was also down from 295 tonnes to 275 tonne.
15)The National Commodity and Derivatives Exchange(NCDEX) is planning to launch futures trading in thermal coal by September 10, the exchange’s Chief Business Officer Unopam Kausik said on Saturday. Initally, the exchange plans to introduce a contract lot size of 100 tonnes and the trading centre will be in Nagpur, Maharashtra, he said.
16)National Commodity and Derivatives Exchange(NCDEX) will soon introduce non-dematerialised form of commodity trading in the country. The new system will bring down transaction costs for participants in commodity trading, Mr R Ramaseshan, MD and CEO, NCDEX Ltd, said.
17)At a time when the domestic demand for houses and flats has slowed down, the NRI investment in real estates is showing an upward trend. In past six months, the NRI investment has grown between 10 and 25 per cent over the previous six months, according to real estate experts.
18)Property development firm Alliance Group has announced the formation of a subsidiary – Capital Land Assets(CLA)-to develop premium residential layouts. “CLA will shortly commence work on a 30-acre layout in Mysore, near the Infosys campus. An additional 15 acres at the same location will be used to develop 100 premium villas,” CMD Manoj Namburu said. CLA proposes to sell villas of 2,400-4,000 sq ft at between Rs 70 lakh and Rs 1.25 crore each. Plots with a similar area will be priced in the range of Rs 24 lakh – Rs 40 lakh.
19)The Gujarat-based Labh Homemakers is planning to invest Rs 200 crore in the realty sector in Kochi in a couple of years. The company’s realty venture in the state called Green City Heritage has begum construction of its first project in Kochi. The project will have 221 apartments.
20)NEW telecom operators seem to be feeling the heat because of the government go-ahead for foreign players to bid for 3G spectrum. The valuations of Essar-owned Loop Telecom, Videocon group’s Datacom Solutions and Unitech Wireless may suffer as most foreign operators are now mulling bidding for 3G spectrum and roping in a minority Indian partner as against picking up a stake in these new licenses.
21)SATYAM, Wipro, Infosys, TCS, Cognizant and HCL Technologies – the Big 6 or acronymed as SWITCH by many – have not seen any new member in their league in the last two years and it looks like they will continue to dominate the club some more time. The gap between these six and those who have not yet touched the magical $1-billion mark is quite wide with no signs of narrowing down.
22)With a view to enhance its global footprint, IT major Zensar Technologies is scouting for acquisitions in Germany or Switzerland and hopes to seal a deal by end-this fiscal, a top company official said.
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