Headlines (01 September 2008)

GENERAL

1)Russian Prime Minister Vladimir Putin has said that the G8 does not carry enough weight and influence without the presence of emerging economies like India and China. Without involving them in major decisions, development of the world economy is impossible, Mr. Putin told CNN.

Hindu

CORPORATE / INDUSTRY
 
2)AFTER bringing together diverse firms he controls under the newly formed Avantha Group, Gautam Thapar is now strategising to more than treble the group business from $3 billion currently to $10 billion by 2013. He plans to tap into new businesses such as insurance, extend its existing chemicals business into specialty chemicals and pharma ingredients and build power as the third big revenue pillar besides the engineering and paper businesses.

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3)Gurgaon-based Ranbaxy Laboratories has emerged as the top pharmaceutical company, ahead of Cipla, in terms of market share in the Rs 36,000-crore domestic drug market for July. During the month, Ranbaxy garnered 5.1% market share with a growth of 13.4% in terms of sales, according to stockist sales audit by ORG-IMS. Cipla, which was ranked number two by the audit, had 4.89% market share.

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BUSINESS OF BRANDS

4)CUSTOMERS often confused with similar-sounding names of popular drug brands may soon have a solution. The government is planning to set up a central licensing authority to avoid giving manufacturing approval to similar sounding brand names or brands that have changed their composition.

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MONEY & BANKING

5)Dena Bank will jointly launch a credit card with State Bank of India next month, for which negotiations are in an advanced stage. The Chairman and Managing Director of Dena Bank, Mr P L Gairola, who was in Goa on a two-day visit to attend a managers’ review meet, told presspersons that the bank did not have a strong credit card business despite being in it for over 10 years.

BL

6)Canara Bank will open 100 branches in the country and five overseas during the current fiscal and is targeting to grow by 20 percent in 2008-09. “We will open 100 new branches this year including 28 branches in Punjab, Haryana and Himachal Pradesh,” the Chairman and Managing Director, Mr A C Mahajan, said.

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INSURANCE

7)MONEY flowing into unit-linked insurance schemes – one of the hottest products during the bull run – is slowing down with the downturn in the stock market. Premium from new individual policies during the first six months are marginally lower than what was collected in the corresponding previous period. Despite a negative growth in individual business, the industry has grown by a little over 1% because of group business, a large part of which goes into debt. According to latest premium numbers released by Irda, premium from new policies (85% of which are Ulips) sold to individuals between April and July’08 totalled Rs 16,031 crore. Last year, the industry collected Rs 16,631 crore from new policies sold to individuals in the same period. Dragging the industry growth down is Life Insurance Corporation of India, which has seen a 23% drop in new business premium.

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MARKETS

8)The Indian equity market has made a come back after hitting a low of 12,595 on July 16. The BSE Sensex has gained around 11% since, the best amongst the Bric nations and other leading markets. What helped the market was the fall in oil prices. Though the Indian market still features amongst the second worst performers year-to- date, overseas investors are reworking the ratings accorded to it. A shift in outlook is visible in their reports. It is early days yet, since foreign institutional investors(FIIs) remained netsellers in the Indian equity market in August. With oil prices cooling down, the India interest seems to be rising among foreign invesors. “Oil is India’s biggest concern and hence, with the softening of prices, the market was bound to react,” says an analyst with an overseas brokerage. Moreover, India being a large importer of commodities, the easing of global markets is also seen as a positive for the equity market as op- posed to other Bric countries like Russia, Brazil and China, which depends a great deal on exports of commodities.

FE

9)Foreign pension funds are making a beeline for India despite the turmoil in global markets. More than 40 such funds(endowments and university and family foundations) have registered with the Sebi in the past seven or eight months. The Bombay Stock Exchange’s benchmark Sensex is more than 40 per cent off its peak this year. Yet out of the top 20 global pension funds, more than 15 are investing in India, according to Watson Wyatt. Watson Wyatt estimated global pension assets at $24,932 billion at the end of last year. Even if India were to receive 5 per cent of this, it will mean a boom for Indian markets.

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10)After the Bombay Stock Exchange(BSE), it’s the MCX Stock Exchange (MCX SE) that is now dangling the carrot to attract more members for the currency futures trading on its platform. Promoted by the coun- try’s top commodity exchange, MCX SE has made it almost free for the trading and clearing participants, who choose to register with it before September 6,2008.

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IPO

11)Mattress maker Kurl-on is expanding its horizons by branching into furniture retailing and home furnishing. As a part of its retail expansion, the over four-decade-old company is also mulling to go public soon.

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MUTUAL FUNDS

12)Equity fund managers are planning to trim their cash holdings from a five-year high reached in July as they prepare for a recovery in the stock market in the next three months, a Reuters poll showed. Half of the respondents in the Reuters Asset Allocation Poll conducted from August 22-26 said they would start deploying cash back into shares in three months. Funds on an average held 12.11 per cent of their assets as cash at July-end. A majority of them said the benchmark index, down about 29 per cent this year, would show positive return in three months. More than a tenth expect it to surge 10 per cent or more. “Valuations look attractive,” Mr Tridib Pathak, chief investment officer of Lotus India Asset Management, said. “Overall corporate profit growth is decent and can be expected to be decent.”

BL
 
COMMODITIES
 
13)Gold futures on the national bourses remained firm on the week ended on Friday, as the overseas market prices touched a two week’s high level, lifted by the strength in crude oil prices. Strong physical demand ahead of the festival season in Asia helped yellow metal prices to stay above $830 per ounce. Crude oil prices had a nice rally in the last week; on fear of supply disruption caused by tropical storm Gustav in the Gulf of Mexico. Crude oil prices bounced back from the a weekly low of $112.36 to touch a high of $120.50 per barrel on Thursday.

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REAL ESTATE
 
14)A REAL estate fund of the Swiss financial powerhouse Credit Suisse is likely to invest about Rs 550($125 million) in Provident Housing and Infrastructure, the affordable housing subsidiary of Puravankara Projects, according to sources. The deal may mark the biggest fund action in low-cost housing in India that has gained traction in recent months.

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15)With high interest rates and inflationary pressures slowing down demand, many real estate developers are all set to offer incentives to potential buyers. Ajmera Realty & Infra India Ltd, for instance, has introduced a customised advanced disbursement fund(ADF) scheme for its clients. This is to provide the clients more benefits and to alleviate the concerns prevailing in the market as interest rates on home loans soar.

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COMMUNICATIONS

16)BHARTI Airtel has stolen a march over its rivals in carrying both national and international long distance calls even while state owned BSNL has a larger fibre network in India, Trai data reveals. Similarly, Tata Communications(VSNL) and Reliance Communications (RCom) may have larger international long distance networks(under sea submarine cables), but Bharti’s revenues in this segment are higher than that of its competitors.

ET

17)Norway-headquartered Telenor, the world’s seventh largest telecom company, is planning to enter the Indian mobile services businesses. A high-level team from the company was in India over the last few days and has held talks with several of the new GSM-technology licence-holders for possible majority stakes.

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INFORMATION TECHNOLOGY

18)FOR years Indian IT companies have supplied cost-effective software solutions to US corporates. Due to the slowdown in the US economy, the focus has now shifted to the comparatively less explored European market. Looking at the expertise of the Indian IT firms, states like North Rhine-Westphalia(NRW) in Germany are inviting them to invest there. Small-and mid size Indian IT firms are being invited to set up global delivery centres in NRW by the government and investors of this state.

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19)IBM INDIA has entered into a $450-million total IT outsourcing contract with private insurance player Max New York Life (MNYL), expecting to make major strides into the insurance sector. The technology services behemoth, which has showcased the advantage of total IT outsourcing with telecom major Bharti, is expecting this deal with MNYL to pan out in a similar manner. The deal spread over a period of 10 years will see IBM India providing a complete end-to-end backend IT infrastructure to MNYL.

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INTERNATIONAL

20)Hurricane Gustav threatens to hurt US oil and natural-gas production and refining more severely than hurricanes Katrina and Rita did three years ago. Gutsav, downgraded to a Category 3 storm by the National Hurricane Center in Miami this morning, may strengthen to Category 4 later today and will make landfall as a “major” hurricane. The storm already has shut three-quarters of oil output in the region and refineries operated by Valero Energy Corp, the largest US refiner, and Exxon Mobil Corp., the largest publicly traded oil company. There will be a special trading today at the New York Mercantile Exchange.

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21)Commerzbank AG is close to buying Allianz SE’s Dresdner Bank for about 9 billion euros($13.3 billion) in a deal that would create Germany’s largest bank by customers and branches, surpassing Deutsche Bank AG, two people with knowledge of the matter said.

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22)Four Indian corporate leaders – B K Birla, Keshub Mahindra, C P Krishnan Nair and K P Singh – have joined the league of global czars like Warren Buffett and Rupert Murdoch in a list of the world’s top- 50 septuagenarian business heads compiled by US magazine Business Week.

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