Headlines (08 October 2008)

GENERAL

1)Forced to move out of Singur in West Bengal, Tata Motors will locate its small car project at Sanand in Gujarat’s Ahmedabad district.  An  agreement between the Gujarat government and the Tata group for the Rs 2,000-crore venture was signed in Gandhinagar on Tuesday, ending  speculation on the relocation of the project that had been marred by  controversy since work began two years ago.

Hindu

ECONOMY

2)Exuding confidence that India will be able to weather the global  financial storm, finance minister P Chidambaram has said economic  growth rate will bounce back to 9% in the next financial year from  a likely 8% in 2008-09.  Admitting that the “storm” in the global  economy will have an “indirect effect” on the Indian economy, he  said, “We can still end this year with a growth rate of 8%.  Iam  confident that in 2009-10, the growth rate will bounce back to 9%.”

FE

3)The Large domestic market will keep fuelling growth of the Indian economy, though at a lower pace, despite financial crisis leaving  the US and Europe reeling under recession, experts have said. While  the Reserve Bank and stock regulator Sebi have announced measures  to improve liquidity in the system, the equity market has suffered painful bruises in India in sync with the global bourses.  But economists  feel, the domestic market, which is much bigger than the exports, would save the day for the economy.

ET

CORPORATE / INDUSTRY

4)Consolidated Construction Consortium Ltd(CCCL), an integrated  construction service provider having projects in the industrial, commercial, residential, and infrastructure space, is mulling entering  into nuclear power projects area. The company will look at entering  this segment as and when it thrown open for private participation,  said R Sarabeswar, chairman and chief executive officer, CCCL.

FE

MONEY & BANKING

5)The rupee retraced intraday losses as banks liquidated long dollar  positions in the last few minutes of trade amid talk that norms on foreign institutional investment may be relaxed further, dealers said.  The Indian unit ended at 47.88 to a dollar today after touching a new over five-year low of 48.14 to a dollar $1 intraday.  On  Monday, it had closed at 47.81.

BS

INSURANCE

6)CONCERNED over the recent downturn in the stock market, life insurance companies have started re-balancing their portfolios which are heavily tilted towards the unit-linked insurance plans(Ulips).  Even  companies which have not witnessed any marked change in investor  demand towards Ulips are trying to find ways to limit the exposure  of their investment products to the stock market.  Bharti AXA, for instance, has offered a new product which does not invest in the stock  market in the first year, but starts investing in the share market  from the second year onwards.

ET

7)Future Generali India Life Insurance has launched two pension products – a traditional product and a ULIP – to cater to both the risk  averse and risk loving customers.  The Future Pension Plan, a traditional product, will provide an option of additional premium contribution, whereas a Future Pension Advantage Plan, a ULIP, has  a wide band to select retirement age group in the industry.

BL

MARKETS

8)Indian equity indices witnessed huge volatility in intraday trade and  ended on a negative note.  The domestic market started the day on  a positive gap, but heavy selling pressure pushed markets into the  negative terrain.  The 30-share Sensex of Bombay Stock Exchange(BSE)  lost 106.46 points, or 0.90%, and ended the day at 11,695.24 points.  The broader S&P CNX Nifty of National Stock Exchange(NSE) ended with gain marginally at 3,606.60 points, adding 4.25 points, or 0.12%.  Dealers said that domestic markets bounced back from Monday’s  lows and opened significantly higher, backed by Reserve Bank of India’s (RBI) strategic move of cash reserve ratio(CRR) cut, by 50  basis points.  However, the markets failed to hold the initial gains  and turned volatile to trade with negative bias as weak sentiments  were not over yet and investors seemed confused.

FE

9)IN A move that could step up capital flows, stemming the stock  market slide and arresting depreciation of the rupee, the government  may allow foreign companies to buy shares from the stock market.  As  of now, only FIIs are allowed to buy shares from the secondary market through stock exchange deals.  The department of industrial policy  and promotion(DIPP) and the finance ministry are now discussing a proposal to allow foreign investors – who usually operate through the FDI window – to access the Portfolio Investment Scheme(PIS)  which is now open only for FIIs.

ET

10)STOCK exchanges can now introduce stock futures and options  only six months after the listing of their underlying shares on bourses.  This decision was announced by Sebi on Monday in an ambiguously-  worded circular, which confused market participants.

ET

MUTUAL FUNDS
 
11)There is a dip in the assets under management (AUM) of the mutual  funds in the wake of the market meltdown in the domestic equity market has not deterred the fund houses from investing in equities since  the beginning of the current calendar year.  The MF industry has made  a net investment at lower levels of the equities to earn higher profits  in the long run when the market goes up. According to Sebi, the mutual  fund (MF) industry has made a net investment of Rs 8,590 crore in  equities between January 1,2008 to September 30,2008.  Giving reasons for the MFs pumping money in a bearish domestic equity market,  Debashish Mohanty, country head, retail channel, UTI Mutual Fund,  said that the fund houses are investing money at the lower level of  the equities market as they can book profits during the market rally  in the long run.

FE

COMMODITIES

12)The pepper futures market on Tuesday bounced back and hit the upper  circuit on good buying support from investors.  Recovery of the stock  market also influenced the pepper futures.  October contract shot up  by Rs 386 to Rs 12,980 a quintal, but still below the spot price for  MG 1 of Rs 13,500 a quintal.

BL

13)Higher global advices and weak equity markets pushed up gold prices  by Rs 340 per ten grams to Rs 13,470 on the bullion market in Mumbai  on Tuesday.  The ongoing auspicious fortnight of Navratras and the fast approaching Diwali festival also lifted the prices of gold, a  dealer said.

TOI

REAL ESTATE

14)The average size of private equity deals in real estate has come  down by an annual 60% to Rs 190 crore as the deteriorating market conditions have forced investors to take smaller exposures. The total PE in-vestments have reduced significantly, while the number  of deals has remained almost stagnant. “While there has been a dip  in the total amount committed in the sec-ond quarter of 2008, the  wait-and-watch strategy adopted by PE funds scouting for opportune  partners will force Indian developers to rework their valuations and  construction timelines and make them more reasonable,” says Cushman & Wakefield India joint MD Sanjay Dutt.  The PE investments in  real estate have been declining since the high of Rs 7,100 crore  registered in the fourth quarter of calendar year 2007.

ET

15)Liquidity crunch, global upheaval and market phenomenon are likely to drive up the real estate prices in the next couple of years, ac-  cording to Mr Lalit Kumar Jain, President, Promoters and Builders  Association of Pune(PBAP).  Talking to presspersons at the PBAP  exhibition, Mr Jain noted that liquidity is bothering developers as  most banks were not lending money to most developers even for construction.  He pointed out that this had severely affected cash flows  and the only source remaining was customers.

BL

COMMUNICATIONS

16)Come 2009, Bharti Airtel customers will no longer be confronted  with multiple bills.  Bharti Airtel, along with IBM and its other IT partners, is working on the concept of a single bill for customers  using its varied services such as mobile, fixedline, internet, DTH  and IPTV.

ET

BUSINESS PROCESS OUTSOURCING
 
17)Spice Televentures Ltd, part of the $1.5 billion Spice Group and  Spanco Telesystems and Solutions Ltd have merged their three domestic BPO entities to form the country’s largest domestic BPO  company in terms of employees.

FE

INFORMATION TECHNOLOGY

18)As Indian software majors are set to announce second quarter results  for the current fiscal, market watchers said that they expected the  global economic slow down and the financial sector crisis to have  spelled a major revenue-impact for the sector.  Analysts have said  that topline growth for the sector would average at around 5% sequentially for the top tier vendors.  The tailwind enjoyed by the sector  in the quarter was the depreciation in the rupee against the dollar,  by over 5% during the July-September period.

FE

19)Despite the global financial meltdown, Hyderabad-based Infotech  Enterprises (IEL) is confident of posting a year-on-year growth rate  of more than 30 per cent.  It is expecting a revenue of Rs 900 crore  in the current financial year as against Rs 674 crore last year.

BS

INTERNATIONAL
  
20)THE Federal Reserve announced on Tuesday a radical plan to buy massive amounts of short-term debts in a dramatic effort to break through  a credit clog that is imperiling the economy. The Federal Reserve, invoking depression-era power under “unusual and exigent circumstances,”  will buy “commercial paper”, a short-term financing mechanism that many  companies rely on to finance their day-to-day operations, such as  purchasing supplies or making payrolls.

ET

21)AUSTRALIA stunned markets with its steepest interest rate cut in 16 years on Tuesday and investors expected that other central banks  would follow suit in a co-ordinated move to combat the global credit  crisis.  The 1% point reduction in the Reserve Bank of Australia’s  benchmark rate was twice as big as expected, underscoring the increasingly strong medicine needed to jolt the world’s financial markets back to health.

ET

22)Crude oil prices rebounded to near $90 a barrel in Asia on Tuesday  but dealers said the underlying trend is lower after deepening global  financial turmoil and falling stocks further raised fears of slowing  energy demand.

Indian Express

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