Headlines (05 September 2008)

GENERAL

1)India’s nuclear waiver is close to being clinched, and indications are the deal may be completed by Friday. After the first day’s talks in the Nuclear Suppliers Group, the second so far, the objections are much fewer and many more countries have come around to having India inside the nuclear tent.

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ECONOMY

2)INFLATION declined for the second week in a row to 12.34% as many food products, including fruits and vegetables, turned cheaper, prompt- ing the government to say that its efforts seem to have started yielding results but the RBI hinted at continuation of its tight monetary policy.

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CORPORATE / INDUSTRY

3)TATA Power has bought a 11.4% equity stake in Australia’s Geodynamics, a geothermal energy company, for A$44.1 million (about Rs 165 crore). The transaction, which will see Tata Power buy 29.4 million equity shares for A$1.50 a share, will increase the Mumbai-based power company’s presence in renewable energy.

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4)CONSTRUCTION firm Patel Engineering(PEL) is close to acquiring a mid-sized coal mine in Indonesia for Rs 100 crore. The mine will be used for PEL’s proposed 1,200 mw power plant in Gujarat. Confirming the development Rupen Patel, managing director of PEL, said, “We have identified few coal mines in Indonesia as buy out targets. Out of it, we will be acquiring one very soon.”

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5)INDIA’S largest apparel exporter, Gokaldas Exports, is setting up new manufacturing units outside its home base in Bangalore as it tries to overcome problems posed by higher operating costs, absence of skilled manpower and notoriously poor infrastructure in India’s tech capital.

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MONEY & BANKING

6)The rupee appreciated against the dollar on the back of foreign institutional investor inflows. The domestic currency opened at 44.45 and fell to 44.54. It then rose to 44.21 and finally ended the day at 44.35/36, against the previous close at 44.43/44.

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7)BANKS may well emerge as the largest issuers of capital in the local markets in the next few years as they strive to meet new global norms and grow their business. According to RBI, banks would need to raise at least Rs 1 lakh crore annually over the next five years if they are to adhere to the new prudential norms prescribed by the Bank for International Settlements (BIS). The capital constraints imposed on banks, partly by the government’s decision not to lower its stake to 51%, would force banks to consolidate for attaining a critical mass, the central bank said. In its latest report on currency and finance for 2006-08, released on Thursday, RBI said if banks were to set aside capital at 12% of their risk-weighted assets as prescribed in the new prudential norms of BIS, popularly known as Basel-II, they would require an additional capital of Rs 5,68,744 crore in the next five years.

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INSURANCE

8)Max Bupa Health Insurance Ltd(Max Bupa), the newly formed joint venture between Max India and UK-headquartered British United Provident Association Ltd(Bupa), expects to roll out its first health insurance policy in about 12-15 months, Mr Analjit Singh, Max India Chairman, said.

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MARKETS

9)SHARES of capital goods and power companies weakened ahead of the Nuclear Supplier Group(NSG) meeting in Vienna, dragging major indices down by over 1% on Thursday. Traders were edgy as the 45-nation NSG opened its two-day meeting on Thursday to consider India’s nuclear co-operation deal with the US. Market watchers said in the short term, the outcome of the deal would be a key trigger influencing sentiment. “The listlessness was due to the uncertainty looming over the NSG outcome. If the proposal doesn’t go through in India’s favour, we could see a downside of another 1,000 points on the Sensex,” said R Sundaresan, executive director, Shardul Securities. Bears targeted index heavyweights, as the 30-share Sensex ended below the psychological 15,000-mark at 14,899.10, down 150.76 points. The broader 50 share Nifty lost 56.25 points to close at 4447.75, down 1.3%.

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10)Gail India’s stock rose by 3.7 per cent to close at Rs 420.55 as the company’s shareholders at a meeting, on Thursday, approved the issue of bonus shares(one share for every two shares held), the announcement for which was made in June.

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11)Light commercial vehicle maker SWARAJ Mazda(SML) shot up by 13.85 per cent to Rs 295.95 a share on reports that Mahindra & Mahindra (M&M) is likely to sell its 14.04 per cent stake in the Punjab-based light commercial vehicle manufacturer.

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12)In a move to safeguard investor interest, the Sebi today asked listed and unlisted companies getting merged to appoint an independent merchant banker each for giving a fairness opinion on the valuation done by valuers.

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IPO

13)SIXTEEN months since grading of initial public offering was made mandatory, the Sebi is reviewing the efficacy of the system. Market intermediaries have long been on the view that unless the rating is linked to price, there is little sense in grading IPOs. The moot point being that there is no correlation between grading and price performance. While people familiar with the development believe it is unlikely that the process would be scrapped, there is a possibility of it being phased out gradually.

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14)DESPITE all the hoopla over disinvestment picking up pace following the Left’s withdrawal of support to the UPA government, only two public sector companies may get listed during 2008-09. These two companies are NHPC and Oil India. Plans were afoot to list around 15 public sector companies, including heavyweights such as BSNL, Rites, Coal India and Cochin Shipyard, but public offers of most of these companies are stuck for various reasons.

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MUTUAL FUNDS

15)Anil Ambani group’s Reliance Mutual Fund, the country’s largest fund house, said today that it has achieved one million Systematic Investment Plans(SIPs) mark. “This is the first time any mutual fund to have crossed this milestone in India in a short span of time,” the company said in a statement. Reliance MF offers SIPs for as low as Rs 100 a month. It has an investor base of over 69.5 lakh people.

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16)Bharti AXA Investment Managers, a joint venture between Bharti Ventures Ltd, AXA Investment Managers and AXA Asia Pacific Holdings launched their equity fund on Thursday. The ‘Bharti AXA Equity’ Fund seeks to generate long term capital appreciation from a diversified portfolio of predominantly equity and equity-related securities including equity derivatives. The new fund offer will close on October 1.

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17)ICICI Prudential MF launched a one-day offer of monthly interval plan, as per information on its web site. ICICI Prudential Interval Fund V-Monthly Interval Plan A will maintain 30-70 per cent of its corpus in money market instruments.

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18)Bharti AXA Equity Fund will be offering investors the option of a daily systematic investment plan(SIP), a first in the industry. Investors can also opt for a daily systematic transfer plan(STP) by investing a lump sum in Bharti AXA Liquid Fund and transfering a specified amount to Bharti AXA Equity Fund on a daily basis.

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COMMODITIES

19)Multi Commodity Exchange launched futures trading in arecanut(red variety), used widely in the preparation of pan masala and gutka. The October contract opened at Rs 119.30 per kg and reached a high of Rs 123 per kg, while the November contract started trading at Rs 118 per kg and rose to Rs 120 per kg.

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20)Gold rebounded on Thursday, rising by almost 2 per cent to move back above $800 an ounce as the dollar eased off an 8-month high against the euro. Bargin hunting and physical buying also boosted prices after the metal had slipped close to its lowest level in nine months on Wednesday following a broad-based dollar rally and weaker oil prices. Gold rose to a high of $814.70 an ounce before easing slightly to trade at $810/811 at 1000 GMT from $800.05/801.65 an ounce late in New York on Wednesday, when it extended consecutive losses to a fourth day.

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REAL ESTATE
 
21)SUCHIR India, a Hyderabad-based real estate company, has tied up with Sri Lanka’s Columbo urban development authority to invest $355 million (Rs 1,550 crore) for constructing two multi-storied towers in Colombo. One of them, a 70-storey building will be the tallest one in Sri Lanka. The other one will be a 40-storied building.

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22)RAKINDO Developers, a real estate master planner and developer, has entered into a contract with Tulip Buildinfra to construct an 18-hole championship golf course at ‘Kovai Hills’, Rakindo’s flag- ship integrated township project near Perur in Coimbatore.

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23)The construction of ‘Sahara City Homes’ Ahmedabad, the flagship project the real estate company of Sahara India Pariwar, is in full swing. The township has obtained approvals from government authorities for construction of residential units. The construction of independent residential units have already commenced.

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INFORMATION TECHNOLOGY

24)Moser Baer India Ltd on Thursday said its wholly-owned photovoltaic subsidiary has raised Rs 411 crore from a clutch of global investors including Nomura, CDC Group, Credit Suisse, Morgan Stanley, IDFC PE and IDFC. Moser Baer has diluted 6.5 per cent stake in the PV business for raising these funds, which would now be utilised for ex- pansion of its solar PV capacity both in crystalline silicon and thin film solar verticals, largely at the Greater Noida.

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INTERNATIONAL

25)OIL prices fell for a fifth straight session on Thursday after a lower-than-expected drop in US gasoline supplies fed beliefs that a cooling economy is curbing fuel demand in the world’s thirstiest consumer. Light, sweet crude for October delivery fell $2.31 cents to $107.04 a barrel on the New York Mercantile Exchange as traders digested the Energy Information Administration report.

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