Headline (13 October 2008)


1)Vowing to work together to overcome the financial turmoil, India and other G-20 countries have said they will use all “economic and financial tools” to ensure the stability of markets as they emphasised the need for international cooperation in the wake of the implications of the crisis.



2)Economists see inflation dipping below the psychological 10% level by end-December and falling further to 7-8% by March next year. How- ever, notwithstanding the declining trend being witnessed presently, they warn that inflation pressures still exist in the economy and the Reserve Bank would continue targeting inflation in the medium term.



3)DUPONT, a science-based products and services company, is set to strengthen its research in India to provide tailor-made crop protection solutions for farmers here. As part of the initiative, the company proposes to unveil a granular formulation of Coragen, a crop protection product, in the Indian market in 2009.



4)The Reserve Bank of India (RBI) has said its inspection of ICICI Bank and its UK subsidiary has not revealed anything to cause alarm. “During our inspection we did not find much difference between what we would have assessed and what they have said…We inspected ICICI Bank’s UK subsidiary as well and there is nothing to worry about,” RBI Deputy Governor V Leeladhar told Business Standard.


5)After slashing the requirement for banks to keep cash with the central bank, the cash reserve ratio(CRR), by 150 basis points, the Reserve Bank of India(RBI) may now go for a reduction in short-term lending rate (repo) by 25-50 basis points to infuse further liquidity into the system, bankers said.



6)IT’S going to be a big week for the Indian economy. All eyes will be on Asian stock markets on Monday morning to see if any recovery is in the offing. India’s stock markets, currently traumatised, are likely to take the cue from Asia. Over the weekend in Washington, finance ministers of the world’s richest countries – the G-7 promised co-ordinated action to unclog the arteries of the world’s money and credit markets. There were no specifics, but increasingly the consensus seems to be veering towards direct injection of capital by governments into stricken banks. The G-20, which includes emerging markets such as India, China and Brazil, later issued a similar statement promising to work together.


7)There was hectic dollar hedging on the stock exchanges last week when the rupee-dollar exchange rate fluctuation was high. On Friday, when the rupee weakened to more than 49 to the dollar, the number of currency futures contracts traded on the National Stock Exchange (NSE) too soared to nearly two lakh contracts. This is the highest number of contracts recorded on any single day on the exchange, since currency futures commenced on August 29.


8)INDIA’S insider trading norms are set to be tightened soon. Capital market regulator Sebi will soon amend its regulations to make frequent buy and sell transactions within a period of six months by an insider illegal, according to sources close to the development. What this implies is that an insider cannot enter into an opposing transaction within a period of six months. In other words, if a company insider has acquired or been allotted shares of his own company, he cannot sell shares of that company for the next six months from the time of purchase or allotment.



9)Amid allegations of over-pricing of initial public offers, the government is planning to set up an ICAI-like body to make it mandatory for companies to get their shares priced by authorised valuers before hitting the capital markets. “Rather than imposing direct or indirect conditions(on IPO pricing), we are working on professional valuation. It will be a new law on Valuation Professionals. We are working on it to get a system where valuation is done,” minister of corporate affairs Prem Chand Gupta said.


10)Alkali Metals Ltd has decided to extend the last date for its initial public offering to October 15 and also cut the price band to Rs 86-103 due to adverse market conditions.



11)Rapidly tumbling stock prices and high volatility have prompted quite a few equity fund managers to stay on the sidelines of the market and hold sizeable cash positions in recent months. A rough cal culation suggests that equity funds put together held a total cash position of Rs 28,000 crore as of end-September.



12)The crude oil and copper futures on the national commodity exchanges on the week ended on Friday slumped by nearly 10-12%, on concern that the deepening financial crisis will push the global economy into a recession, while gold futures prices rose in the last week, after global financial markets collapsed amid growing widening credit crisis. Local prices are heading towards Rs 15,000-mark(per 10 gram) on strong physical demand.


13)Indian black pepper is likely to be in the driver’s seat in the coming days being the cheapest in the world market on decline in prices on the futures market coupled with steep appreciation of the dollar against the rupee.


14)Gold prices, which touched an all time high last week, could witness some correction by November end, an industry official said. “Gold may witness some correction amid high volatility. Gold prices may hover around Rs 12,000-13,000 per 10 grams by November-end,” Bhargav Vaidya, industry expert, said.



15)With the global economic meltdown taking its toll on the Indian real estate sector, renowned international property consultants are taking a cautious approach here and many are going slow on their ex- pansion plans. Although there is a strong buzz that many players will see their business come under pressure on the property management side as demand slows, they have still put on a brave front and are expecting the dust to settle down soon.


16)HAFEEZ Contractor, involved with several landmark real estate developments, is looking at offloading a majority stake in his eponymous and India’s largest architectural design firm, sources said. The Mumbai-based architect is discussing the possibility of divesting upto 74% stake with private equity funds at an enterprise valuation topping $150-million. The earliest foreign investor in the domestic real estate sector, India Real Estate Opportunities(IREO) fund, is among the potential suitors that have had discussions with the architectural design firm, sources added.



17)DESPITE countless efforts and new offers by state-owned BSNL to ramp up wireline penetration in India, fixedlines in India have hit a new low. According to the latest figures from telecom regulator Trai, the fixedline segment has fallen by about five lakh users during the last three months. This comes even as private telecom operators like Airtel, Tata Teleservices and Reliance Communications have been recording positve growth and jointly adding tens of thousands of fixedline subscribers. Over the last 12 months, the fixedline subscribers have declined by close to 12 lakh.



18)DESPITE the grim environment, both Infosys Technologies and Tata Consultancy Services(TCS) have opted for strategies that anticipate a recovery after about two quarters. While TCS will add nearly 12,500 employees of Citigroup Global Services(CGS), Infosys said it would hire about 25,000 people in FY09 and honour all the commitments made at campuses. While 11,000 employees have already joined Infosys this year, another 18,700 are expected to join before the fiscal end, officials said following the announcement of quarterly results on Friday.


19)THE current financial crisis and a bleak outlook for IT spending does not seem to bother HCL Technologies. The country’s fifth-largest IT services player has already raised 400-million pounds loan for UK-based consultancy Axon’s acquisition at a competitive interest rate of 6.5%. Despite analysts saying that HCL’s bid is expensive in face of the current slowdown, the company sees Axon as ‘a lot more strategic now than at any other point.’


20)Cyber-security experts foresee nearly 20 per cent spike in spam messages in the run-up to Diwali, as spammers attempt to cash-in on the festival season to clutter inboxes with spams embedded with trojans, Keyloggers and other malware(malicious software).



21)EUROPEAN leaders raced against the clock on Sunday to clinch a rescue strategy for banks battered by the worst financial crisis since the 1930s, under intense pressure to throw them a lifeline before world markets reopen. At a summit in Paris, the focus fixed firmly on how much state money government could mobilise to buy into banks if needed, and if they would also underwrite lending between banks, paralysed for now by fear and distrust.


22)The UK will launch the biggest rescue plan on Monday to cover Britain’s top banks – RBS, HBOs, Lloyds TSB and Barclays – when these four financial giants ask for a combined 35 billion pound lifeline, says a media report.

Karvy Consultants Ltd www.karvy.com
 www.karvycomtrade.com (Commodities)
KARVY Global Services Ltd www.KARVYGlobal.com
KARVY Realty (India) Limited www.karvyrealty.com
Economic Times www.economictimes.com
The Financial Express www.financialexpress.com
Business Line www.businessline.in
Business Standard www.business-standard.com
The Times of India www.timesofindia.com
The Hindu www.hindu.com
Deccan Chronicle www.deccan.com
The New Indian Express www.newindpress.com

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