Headlines (03 October 2008)

GENERAL

1)The India-U.S. nuclear deal on Thursday secured the approval of  the US Senate which overwhelmingly voted a bill rejecting all the  killer amendments and paving the way for its implementation.  The  landmark civil nuclear cooperation agreement, entered into between  Prime Minister Manmohan Singh and U.S.President George W Bush  in 2005, secured 86 votes while 13 Senators voted against it.

Hindu

CORPORATE / INDUSTRY

2)INDIAN pharma drug major, Dr Reddy’s Laboratories (DRL) is set to  deepen its presence in the existing markets rather than spread its  wings to new geographies to bolster revenues.  The proposed move  is part of the company’s effort to re-structure its marketing strategies to improve profitability.  “The company will focus on launching products that would help scale up business faster,” said a top  company official.

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MONEY & BANKING

3)The Finance Minister, Mr P Chidambaram, and the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia, have sought to allay  fears on the impact of the worldwide financial meltdown on India’s banks and the economy.  Their views are perhaps based on balance of payments (BoP) data for the first quarter of this fiscal year, put out recently  by the Reserve Bank of India.  The data indicate that Indian banks re-  trived $14 billion from world markets before the crisis started to un-  ravel.

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4)Even as the world financial markets have seen either the total disappearance or the loss of positions of top banks and financial insti-  tutions due to ongoing subprime crisis, it is now time for the Indian  state owned banks and financial institutions to scale heights in global markets.  State Bank of India, the country’s largest bank and  GIC Re, the sole official reinsurer, have improved their global rankings.  SBI with over Rs 7 lakh crore assets has improved its ranking  from 70th to 57th position, according to the latest annual top 1,000  bank list prepared by the UK based leading banking publication The  Banker.

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5)Credit rating agency Crisil, a subsidiary of Standard & Poor’s, has downgraded two state-owned banks-IDBI Bank and Corporation Bank.  The rating agency has revised its outlook on IDBI Bank’s long-term  debt to ‘negative’ from ‘stable’, while reaffirming the ratings at ‘AA+/  FAAA’.  The revision in outlook reflects the pressure on the bank’s earnings profile and its capitalisation levels in a scenario where the operating environment for the banking sector is expected to continue to be challenging, said Crisil on Thursday.

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MARKETS

6)The National Stock Exchange is planning to launch its web-based  application for brokers – called the National Exchange for Automated  Trading on Web (NOW) – that will provide single front-end platform for  trading members to access NSE cash, futures and options segments,  currency derivatives and NCDEX commodity derivatives on the same trading terminal.  Of 1,000 members, 500 have signed up for NOW.  The  exchange first introduced this application during the launch of currency derivatives in August and plans to introduce other products on  this application in the future.

BS

BUYBACK

7)IT major Satyam Computer’s founder and Chairman B Ramalinga Raju said that he will seriously think about increasing promoters’  holding or buying back of stock to enhance value of shareholders.

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COMMODITIES

8)The second power exchange-Power Exchange India promoted by National  Stock Exchange(NSE) and National Commodity & Derivatives Exchange  (NCDEX) will soon be a reality as the Central Electricity Regulatory  Commission(CERC) on October 1 has given all the necessary regulatory  clearances.  In a significant move, CERC has allowed Power Exchange  India to do trading of even 1 MW during its day ahead transactions.  This will pave way for tapping the untapped captive power capacity  of 5,000 Mw across the country.  Already Financial Technologies and  PTC India promoted Indian Energy Exchange is functioning since June 27.  Rupa Devi Singh, CEO told FE on Thursday that the exchange has  already begun its mock trading and after talking to its members is  expected to launch its operations within a week.

FE

9)Supported by lower arrivals in the physical markets, pepper futures  today continued its rising streak on the National Commodity and Derivatives Exchange.  Pick-up in demand for the spice in the spot markets in view of festive season also influenced the future in New Delhi.  Pepper for October contract climbed slightly by 0.4 per cent at Rs  13,989 a quintal on the NCDEX counter.

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10)Jeera futures today climbed on the National Commodity and Derivatives  Exchange on speculative buying by traders, driven by rising export demand and demand in the domestic spot markets.  The most-active October contract, which has gained two per cent yesterday, gathered another  0.70 per cent at Rs 11,147 a quintal on the NCDEX, with a business  turnover of 229 tonnes.

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11)Amid rising domestic demand in the spot markets on account of festive  season, turmeric prices today moved up 0.6 per cent in futures trading.  The most-active October contract traded 0.60 per cent higher at Rs  3,889 a quintal on the National Commodity and Derivatives Exchange  with a business volume of 350 tonnes, while the December contract was up 0.55 per cent at Rs 3,978 a quintal in a turnover of 440 tonnes.

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REAL ESTATE

12)LAST week, at Mumbai’s Grand Hyatt, leading developers were closeted  in an hour-long meeting to discuss ways to counter the slump in home  sales that has persisted for an year now.  What emerged from the meeting revealed the limited options that an Indian developer has.  The builders unanimously agreed to allow the customer to have a greater say in  price negotiations, or in other words, they decided to cut home rates.  The developers agreed to give a 10% to 12% reduction to all consumers.  These discounts will be couched under schemes like interest  cost discount, flexible rates for parking and floor-rise pricing.

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13)DLF, the country’s largest real estate company by market capitalisation, is eyeing more funds from foreign investors including private  equity funds after its share buyback in the next 12 months. The company is going ahead with the buyback at up to Rs 600 for each share,  even though the current price is much lower.  On Wednesday, shares  of the company closed at Rs 345.30 on the NSE.

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BUSINESS PROCESS OUTSOURCING

14)HEALTHCARE BPO firm Omega Healthcare Management Services  plans to add 7,000 employees at its India facilities and anticipates that  its client base will double and revenues grow four-fold by 2012, CEO  Gopi Natarajan said.

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INFORMATION TECHNOLOGY

15)UK-BASED SAP consultancy Axon Group on Thursday said it will recommend HCL Technologies’ 441.1-million pounds buyout offer to its  shareholders, withdrawing its earlier recommendations of Infosys’ 407-million pounds offer.  HCL would now make a formal offer for the acquisition, after which the Axon board would issue its recommendation.

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16)Tata Consulting Services'(TCS) small and medium business (SMB)  unit is all set to tap the global market with its total outsourcing solutions developed in India. The company will market its solutions globally, starting with emerging markets like Latin America(LATA),  Middle East (ME) and Africa is the next 2-3 quarters.

FE

17)Loaded with huge amount of cash, Satyam Computer  said it has  accelerated the hunt for prospective companies that it could acquire globally even if the cost runs into billions of dollars.  Sensing opportunities arising out of the financial crisis trigered by fall of major banks and mortgage giants in the US, Satyam’s founder and Chairman B Ramalinga Raju said in an interview that it is possible  to raise $4-5 billion as war-chest for acquisitions that strategically fit India’s fourth largest IT entity.

FE

18)Technology solutions and engineering design services provider, Infotech Enterprises Limited (IEL), is all set to acquire a German auto engineering company.  “Due diligence of the target company is  on an we are expecting to close the transaction by this December,”  IEL chairman and managing director, BVR Mohan Reddy, told Business Standard.

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INTERNATIONAL

19)The US Senate passed a $700 billion financial-market rescue package loaded with inducements for the House of Representatives to approve the measure, following the House’s rejection of an earlier version.  The legislation, approved last night on a 74-25 vote, authorises the government to buy troubled assets from financial institutions rocked  by record home foreclosures.

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20)UBS will make a small quarterly profit after a year of losses, it said on Thursday, lifting its shares as it signalled it had started to turn  the corner even as the credit crisis engulfs many rivals. UBS’s reputation as an icon of Swiss banking stability was damaged after investments in toxic US assets forced it to make a $42 billion of write-  downs, more than any other bank in Europe, and to slash 7,000  jobs.

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21)The cost of borrowing in dollars in London for three months rose for a fourth day, signalling that banks haven’t started to lend after  the US Senate approved a $700-billion plan to rescue beleaguered financial institutions. The London interbank offered rate, or Libor,  that banks charge each other for such loans climbed 6 basis points to  4.21% on Thursday, the highest since January 11, the British Bankers’  Association said.  The corresponding rate for euros advanced 3 bps to  a record 5.32%.

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22)Mr Warren E Buffett is emerging as the banker of choice to the embattled blue-chip companies of American business.  Mr Buffett, the billionaire investor, has announced that he would invest $3 billion in General Electric, the industrial giant that is also America’s  largest non-banking financial company.  The move comes eight days after he said  he would invest $5 billion in Goldman Sachs.

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23)Crude oil fell more than $3 a barrel as the dollar reached a one-year  high against the euro and US fuel demand dropped to the lowest since  the last recession. Oil has tumbled 11 per cent so far this week as  the euro dropped against the US currency amid signs that Europe’s  economy is slowing.  Fuel use over the past four weeks averaged 19  million barrels a day, the lowest since October 2001, an Energy De-  partment report showed yesterday.  Crude oil for November delivery  fell $3.80, or 3.9 per cent, to $94.73 a barrel at 11:11 a.m on the  New York Mercantile Exchange.
 
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