Illegal VoIP

<DIV><FONT face=Verdana size=2>Internet telephony is great. Download free software, like Skype, get a headset and you can talk to anyone in the world from your PC.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>However, internet telephony, estimated at 200 million minutes a month, has become a battle ground between Internet Service Providers (ISPs) and internet companies backed by India's two largest internet associations. The Internet Service Providers Associations of India (ISPAI) — on one side and the Internet and Mobile Association of India (IAMAI), on the other. The issue is unlicensed use of net telephony — estimated at 100 million minutes a month.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>ISPAI with its members like Worldphone, Webtel, Sify, Net4India is alleging that large MNC players like Skype, Vonage have eaten into their market share by offering unlicenced net telephony illegally. ISPs also allege that voice chat through Google, MSN and Yahoo is resulting in revenue leak for the government and posing grave security concern.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>MSN and Yahoo, however, denies such claims. IAMAI, the association supporting Yahoo, MSN and others, says, that since these companies offer free service there is no question of levying a service tax through licencing.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"We will abide by whatever the government asks us to do. On the service tax front, we don't accrue any revenue as our PC to PC telephony service is free. We offer PC to phone service globally, but not in India as it's not permitted," said Microsoft India country manager (online services business) Jaspreet Bindra.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Internet companies offering chat services also say that security checks are random and they cooperate whenever government ask them to do so. But ISPAI disagrees, saying that it's a grave security risk as call data records under voice chats are not saved by unlicenced providers.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"Apart from the revenue leakage, these sites pose a threat to security as they don't provide surveillance or monitoring. In India, companies like Skype, Vonage, Packet 8, Go2call, Lingo, Impetus, Dialpad and Net2Phone have been offering unlicenced net telephony services, which is mostly illegal. If they don't opt for a licence the government should block them," said ISPAI president Rajesh Chharia.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Vonage refutes these claims. "We have zero revenues from India. Nevertheless, we applied for a licence in March 2006. Moreover, only US and Canada credit cards work on our site so their claims are baseless," said Vonage's India representative Janki Raman. Internet companies claim that since no calls are terminated in India, there is no illegal play.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Meanwhile, ISPs like Worldphone who have taken a licence and pay about 18.36 per cent in taxes alone, say that they are being disadvantaged as more than half of the net telephony market has been captured by illegal players as it's cheaper.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The net telephony market is estimated to be about 200 million minutes per month, at present. Almost half of which is estimated to be captured by unlicenced players. There are an estimated 10 lakh users of which only about two lakh are legal users of net telephony.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"We pay about 12.5 per cent service tax alongwith a 6 per cent tax on our gross revenues. Add to it the cost of maintaining call data records (CDRs), overheads, marketing, reseller/retailer's share and the difference between our and their price becomes 25 per cent. We want a level-playing field," said Worldphone chairman Aditya Ahluwalia.</FONT></DIV>

Illegal VoIP

Internet telephony is great. Download free software, like Skype, get a headset and you can talk to anyone in the world from your PC.   However, internet telephony, estimated…

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Sun Direct to increase rates

<DIV><FONT face=Verdana size=2>After last week's launch of direct-to-home (DTH) service for Rs75 in Tamil Nadu, Sun Direct might hike its monthly subscription, facing pressure from cable television operators.<BR>Sun Direct officials have given an assurance that they will increase the price of subscription by two-thirds to Rs125 per month after the current offer ends this month, said D.G.V.P Sekar, coordinator of the Federation of Cable TV Associations (TFCTA).<BR>Sun Direct is an 80:20 joint venture of Sun TV Networks promoter Kalanithi Maran and Malaysian company Astro All Asia Networks Plc.<BR>When implemented, this would address the concerns of the cable TV operators, Sekar said. Sun TV Network and Sun Direct officials declined to comment.<BR>Cable operators in Tamil Nadu, united in protest against the introduction of the low-priced DTH service by Sun Direct, appeared to have split over the issue of setting up their own facilities to distribute satellite TV channels.<BR>All the associations have expressed willingness to work with the government's proposed distribution arm, Arasu Cable TV Corp. Ltd. They are demanding that Sun should either offer cable TV or DTH, and should not be permitted to offer both.<BR>At present, Sumangali Cable Vision (SCV), a cable TV distribution arm of Sun Group enjoys a near monopoly position in most parts of Tamil Nadu.<BR>Thamizhaga Cable TV Operators General Welfare Association and Tamil Nadu Cable TV Urimayalargal Sangam (Tancus) have decided to set up their own control room to receive and distribute channels in the state.<BR>"We want to protect our interests and don't want to depend on Sun for signals to run our operations," said Kayal R.S. Elavarasu, president of Tancus.<BR>However, TFCTA objects to this move, claiming assets worth Rs50 lakh were destroyed in Nagercoil, a southern district of Tamil Nadu, and a member-run control room was forcibly taken over in Madurai. "We too oppose Sun's entry into DTH service. But, setting up operations through violence is condemnable," said Sekar.<BR>Elavarasu of Tancus rejected these charges, saying infrastructure was set up through voluntary collection from individual cable TV operators.<BR>He added it would close operations when Arasu begins operations, and termed its current strategy a temporary move to protect its interest.</FONT></DIV>

Sun Direct to increase rates

After last week's launch of direct-to-home (DTH) service for Rs75 in Tamil Nadu, Sun Direct might hike its monthly subscription, facing pressure from cable television operat…

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Weekly Technical Analysis

<DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV><FONT face=Verdana size=2> <DIV><FONT face=Verdana size=2><STRONG>VISIT <A href="http://brokersreport.blogspot.com/">http://brokersreport.blogspot.com/</A></STRONG></FONT></DIV></FONT></DIV> <DIV> </DIV>

Weekly Technical Analysis

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Centurion Bank of Punjab: Buy

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Centurion Bank of Punjab: Buy

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Kalindee Rail Nirman: Buy

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Kalindee Rail Nirman: Buy

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Hanung Toys: Buy

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Hanung Toys: Buy

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NDTV: Buy

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NDTV: Buy

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Mayawati - why not Reliance ?

<DIV><FONT face=Verdana size=2>The shutting of Reliance Retail within 24 hours of its launch in Uttar Pradesh has led industry leaders to ask why the company was singled out by Chief Minister Mayawati, who has openly given the nod for similar other ventures, including Spencer's of the RPG group.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Representatives of the industry, intellectuals and common consumers all have been making wild guesses about why Reliance outlets were closed down, which has dealt a big blow to the world's richest Indian Mukesh Ambani's first foray into Uttar Pradesh, which was projected as India's biggest market.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>But the worst hit by the order are around 900 of the 2,000 employees who have been retrenched, while thousands of those who were looking up to the retail sector in general and Reliance in particular as a major source of employment see major disappointment in store.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Reliance Retail alone had projected a potential for providing direct and indirect employment to nearly 50,000 people, according to a highly placed company source. An investment of Rs.80 billion was also projected in the state by Reliance over a three-year span.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>What seems to puzzle all is the "discriminatory attitude" of the government towards Reliance.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"If the government were to be believed that the decision was taken in the larger interest of vegetable growers and small time vendors, then the same should have been applied on Spencer's and Big Bazar, whose operations are no different from Reliance," a company official sought to point out.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"After all, the others too have vegetables and fruits as a component," he said.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"More than 90 percent of our trade at the proposed 300 Reliance Retail stores was non-agri, and vegetables and fruits formed only 8 percent of the retail business," he pointed out.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Meanwhile, Spencer's, Subhiksha and Vishal Mega Mart are already running 56 retail stores across the state, while 21 new ones are in the pipeline.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Industry and commerce representatives feel that if the government really felt that giant retail stores would adversely affect vegetable and fruit vendors then Reliance could have been asked to go ahead with other goods.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>They also wondered why the present government, which believed in dealing firmly with all unlawful activity, had chosen to give in to a minor protest and that too by activists of its rival, the Samajwadi Party.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>They were apprehensive that such an attitude of the government would discourage other prospective investors who otherwise see UP as a major potential state.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Referring to the protests, Punjab Haryana Delhi Chamber of Commerce state spokesman Anil Shukla said: "We have already said in a letter to the government that resistance is a natural response to every change."</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Terming the protestors as protagonists of "middlemen", the letter states: "In case of the retail business too we understand the resistance has come from a handful of people, largely middlemen who account for less than one percent of the society."</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>It added: "Uttar Pradesh has abundant capacity to expand in the field of organized retail. This is the time to welcome businessmen in Uttar Pradesh. The benefits to state and public could be phenomenal and the state could witness new economic growth without having to make any investment; better price for the farmer for his produce, besides throwing open a vast new avenue for employment."</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>A similar letter has been sent to the government by the Confederation of Indian Industry (CII) state chief Deepak Malik, who sought to draw the government's attention to the fact that retail business "could ultimately bring investment to the tune of Rs.40,000 crore (Rs.400 billion) in Uttar Pradesh".</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>While no government official is willing to make a comment, there is also none to either lend an ear to their pleas, they lament.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>A well known Kanpur based industrialist told IANS on the condition of anonymity, "by shutting Reliance, the government has killed the golden goose".</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The state government shut Reliance Fresh outlets in the state in August following protests by the opposition Samajwadi Party.</FONT></DIV>

Mayawati - why not Reliance ?

The shutting of Reliance Retail within 24 hours of its launch in Uttar Pradesh has led industry leaders to ask why the company was singled out by Chief Minister Mayawati, wh…

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BPL Communications licence application under scrutiny

<DIV><FONT face=Verdana size=2>BPL Communication's (the Mumbai-based operator which was bought out by Essar Group) application for a pan India telecom licence has come under the scrutiny of the Department of Telecom for a possible violation of the cross holding norms with Essar's equity in Vodafone Essar Ltd.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>BPL's applications were made in the name of Shipping Stop Dot Com in which BPL Communications holds about 74 per cent stake while the Ruias directly own 9.9 per cent stake through an Essar Group subsidiary. At the same time, the Ruias promoted Essar Group also holds 33 per cent stake in Vodafone Essar, which has presence in all the 22 circles for which BPL has also applied.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>As per the cross holding norms stipulated in the unified access licence conditions, a single company or an individual cannot hold more than 10 per cent equity stake in two different companies in the same circle. The norms also say that promoter company or an individual may not hold even a single share in more than one company in the same circle. "Clause 1.4 (ii) of the unified access licence states that no single company/legal person, either directly or through its associates, shall have substantial equity holding in more than one licensee company in the same service area. Substantial equity means an equity of 10 per cent or more. Also a promoter company/legal person cannot have stakes in more than one licensee company for the same service area. We are going to scrutinize all applications including that of BPL to check if they are consistent with these norms," said a senior DoT official.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>When contacted an Essar Group spokesperson said, "The applications are fully compliant with the DoT norms." Sources in Essar Group added that DoT norms did not apply to BPL since the Ruias had reduced their stake to less than 10 per cent stake in BPL. They also said that there was no common promoter company between Essar Vodafone and BPL and therefore there was no question of any violation.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>However DoT officials said that they would ask the company to give details of the equity structure of Shipping Stop Dot Com including those held by BPL Communications and Capital Global before taking a decision on the application. Earlier a similar controversy had arisen when the Birla Group had alleged that Tata Group was violating cross holding norms by holding more than 33 per cent stake in Idea Cellular even as Tata Teleservices had rolled out a pan India mobile service.</FONT></DIV>

BPL Communications licence application under scrutiny

BPL Communication's (the Mumbai-based operator which was bought out by Essar Group) application for a pan India telecom licence has come under the scrutiny of the Department…

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IFCI soars after short-listing 8 bidders

<DIV><FONT face=Verdana size=2>Shares of IFCI shot up by more than 10% on Friday after a financial daily reported that the public sector term lender has shortlisted eight bidders for the proposed sale of a 26% stake.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The newspaper report says that the list of shortlisted bidders includes the consortiums led by Wilbur L Ross and Shinsei Bank. However, the names of those bidders who have been left out have not been disclosed.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>At 12:56 p.m., IFCI was quoting at Rs98, up Rs5.20 or 5.6% over the previous close. The stock earlier touched an intra-day high of Rs102.45 and a low of Rs94.15. The stock has gained over 18% in the past one week and a whopping 58% in the past one month.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>As many as 10 bidders had submitted bids for acquiring a 26% stake in IFCI. Other members of the consortium led by Wilbur Ross include Standard Chartered Bank, HDFC and Goldman Sachs. Punjab National Bank (PNB) and JC Flowers are part of the consortium led by Shinsei Bank.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Others who had submitted EoIs included Blackstone, IDFC, Kotak Mahindra Bank, GE Capital, Cargill, Newbridge Asia, Natixis and a consortium between Sterlite and Morgan Stanley.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>IFCI sources have been quoted as saying that, at this stage, it would not make sense to reduce the number significantly and therefore impact the competitive pricing of the valuation.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The shortlisted bidders would be informed latest by October 1. A pre-bid conference is scheduled for October 3. Thereafter, the shortlisted suitors would be asked to undertake due diligence.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Requests for Proposal (RFP) would be issued a week later. By November, financial bids would be submitted. The Board would then finalise the name of the strategic investor.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>There is a lock-in period of three years for the entity or the consortium that would be selected. In addition, the bidders should be in the business of financial services with a long-term interest in the institution.</FONT></DIV>

IFCI soars after short-listing 8 bidders

Shares of IFCI shot up by more than 10% on Friday after a financial daily reported that the public sector term lender has shortlisted eight bidders for the proposed sale of …

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Rupee and the IT sector

<DIV><FONT face=Verdana size=2>The hardening rupee has been one of the major focal points of the IT industry of late. A 10% appreciation in the last one year has made a serious dent on the global competitiveness of the Indian IT sector.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Apprehensions that some segments of the IT/BPO business may be flying out of India has made the industry bigwigs somewhat nervous.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>In a bid to combat their growing concerns about the rupee appreciation, some of the industry leaders have even called for slowing down the rate of salary hike in the sector, and of course as expected, others have reiterated their right to peg the salaries wherever they wish. Free market, etc. Thus increasingly, there is a tacit expectation, if not a strident demand, from the sector that the government should manage the appreciation of the rupee better. Never mind its impact on inflation and interest rates.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Well, no harm in having one's expectations and hopes and sending some gentle signals along those lines. But even as those gentle signals are finding their audience, there are certain aspects of the issue everybody connected should take note of.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>From a mere 5% of a $33 billion total Indian exports in 1996-97, today (2006-07) the IT sector accounts for a hefty 25% of the $120 billion total exports from India. This represents a compounded annual growth of 35% for the IT sector over a 10-year period, making IT the fastest growing and the biggest export-oriented sector in the country. Clearly then, if the rupee is getting steadily stronger, the Indian IT sector has had a strong hand in making it so! In short, the IT sector has become a victim of its own success.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>After all, if the IT exports rode on a historically weak rupee, it is only natural that in due course, the forces of international markets will bring about a correction. That's international territory in the financial markets.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>That is how industries and nations grow up and learn to cope, as well as find, develop or invent other strengths to stay afloat in a competitive market. And the Indian IT sector can be no exception to this standard rule. It only stands to reason that after decades of reigning strong, the hardest currencies of yesteryears like the US dollar, the Deutsche mark, the pound sterling, the yen or the French franc give way to currencies of the emerging economies.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>There was a time when the Japanese automakers faced the same problem as the Indian IT sector today, only much worse — namely that of a super hard yen. Their companies would struggle to spend millions in R&D for devising a superior carburettor design that would bring the cost of a car down by $85, only to see a strong yen push the car price up by $300 the next morning. But the Japanese auto industry learnt to cope. That's when they unleashed their Lexuses, Accuras and Infinities into the western world.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Clearly, our IT sector needs to find similar market solutions, rather than seriously expect or hope for a government handholding. You either have a free market or you do not. The sector will have to reduce its dependence on conventional export markets; tap hitherto untapped markets, say, among the rapidly emerging east European countries; negotiate their contracts in rupee rather than dollars; get a lot more India-centric; move up the value chain; draw in work-force from the fringe states to bring about superior wage arbitrage and do a whole lot of other things so that the sector is driven more by quality and value than by the softness of the rupee.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>To illustrate one of the above points, let us see how our IT sector can become more India-centric. Take Cambodia. For tourists visiting Cambodia, the visa is on arrival. And the software and the system installed at the beautiful Siem Reap airport is so advanced that visas for an entire plane load of tourists is cleared in 15 minutes flat. IT is on its best display here, including the computers on the immigration desk taking your picture on the spot. The same is true of the passes issued as you enter Angkor Vat. The column of vehicles at the entry gate moves faster than our vehicles do at most of our Toll Gates.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>During the few seconds a car stops at the entry to Angkor Vat, the tourist's picture is taken and the laminated pass issued for one or three days as required, complete with his or her picture and other details, such as, name, date, time, etc. Don't we have enough and more scope in our own country for our IT sector to address, without worrying excessively about exports? We are a big enough country to do much of our 'exports' out of Bangalore and Hyderabad to a couple of dozen of states within the country.</FONT></DIV>

Rupee and the IT sector

The hardening rupee has been one of the major focal points of the IT industry of late. A 10% appreciation in the last one year has made a serious dent on the global competit…

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Reliance Power plans $3.5 bn IPO

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Reliance Power plans $3.5 bn IPO

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Grey Market - Consolidated, Dhanus, Saamya, Maytas

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Grey Market - Consolidated, Dhanus, Saamya, Maytas

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Market may undergo correction

<DIV><FONT face=Verdana size=2>In the near term, profit taking cannot be ruled out given that the market has witnessed sharp and swift surge over the past few days.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Q2 September 2007 results is the next major trigger for the market. Figures of advance tax suggest that earnings will be decent to strong. Stock specific activity may take place in the near term on the bourses ahead of the earnings-reporting season, based on result expectations. IT bellwether Infosys Technologies kickstarts reporting season on 11 October 2007.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>FII inflow remains robust and inflow may continue in the backdrop of ample global liquidity. A sharp correction, if any, will attract bargain hunters given that domestic liquidity, too, remains strong. Domestic private insurance firms have been channelising money raised through unit linked insurance plans (with a high weightage for equities).</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The market will be keenly watching developments on the political front as the government wants the Indo-US nuclear deal to go through. While the operationaslisation of the Indo-US deal has been put on hold by the government pending the findings of a committee, it cannot be stalled forever. A flashpoint may come sooner or later. The four Communist parties have 60 members of parliament (MPs) in the 545-member lower house of parliament. Prime Minister Manmohan Singh's government could fall or be reduced to a minority if the Left withdraws support.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Yet, analysts reckon that political turmoil arising from nuke deal will not impact India's basic economic fundamentals though some infrastructure projects may get delayed. India's economy is expected to post strong growth for a long period of time mainly due to favourable demographics.</FONT></DIV>

Market may undergo correction

In the near term, profit taking cannot be ruled out given that the market has witnessed sharp and swift surge over the past few days.   Q2 September 2007 results is the next…

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Surya Pharma, Marico, SEAMAC, Banking

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Surya Pharma, Marico, SEAMAC, Banking

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Central Bank

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Central Bank

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Educomp Solutions

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Educomp Solutions

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Monthly Technicals, Weekly Track Report

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Monthly Technicals, Weekly Track Report

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Punj LLoyd

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Punj LLoyd

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Mphasis

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Mphasis

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YES Bank

<DIV><FONT face=Verdana size=2> <DIV><FONT face=Verdana size=2><STRONG></STRONG></FONT> </DIV> <DIV><FONT face=Verdana size=2><STRONG></STRONG></FONT> </DIV> <DIV><FONT face=Verdana size=2><STRONG>TO DOWNLOAD FREE FILE VISIT  <A href="http://brokersreport.blogspot.com/">http://brokersreport.blogspot.com/</A><A href="http://intradayteam.googlepages.com/Omax_Auto_IDBI_280907.pdf"><FONT size=4></FONT></A></STRONG></FONT></DIV></FONT></DIV>

YES Bank

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Pantaloon Retail

<DIV><FONT face=Verdana size=2> <DIV><FONT face=Verdana size=2><STRONG></STRONG></FONT> </DIV> <DIV><FONT face=Verdana size=2><STRONG></STRONG></FONT> </DIV> <DIV><FONT face=Verdana size=2><STRONG>TO DOWNLOAD FREE FILE VISIT  <A href="http://brokersreport.blogspot.com/">http://brokersreport.blogspot.com/</A><A href="http://intradayteam.googlepages.com/Omax_Auto_IDBI_280907.pdf"><FONT size=4></FONT></A></STRONG></FONT></DIV></FONT></DIV>

Pantaloon Retail

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GSK Pharma

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GSK Pharma

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Omax Auto

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Omax Auto

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Reliance Power to raise $ 2.5-3 bn via IPO

<DIV><FONT face=Verdana size=2> <DIV><FONT face=Verdana size=2><STRONG></STRONG></FONT> </DIV> <DIV><FONT face=Verdana size=2><STRONG></STRONG></FONT> </DIV> <DIV><FONT face=Verdana size=2><STRONG>VISIT </STRONG><A href="http://ipoanalysis.blogspot.com/"><STRONG>http://ipoanalysis.blogspot.com/</STRONG></A></FONT></DIV></FONT></DIV>

Reliance Power to raise $ 2.5-3 bn via IPO

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Monthly Investment Picks - October 2007

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Monthly Investment Picks - October 2007

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Alston Power, Dabur India, Saamya Biotech, Wipro, Kotak Mahindra, Reliance Communications, Circuit Systems, Maytas Infra, Ambuja Cements, Pantaloon

<DIV><FONT face=Verdana size=2> <P><STRONG>CLICK FOR DOWNLOAD</STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/TU159AlstomPowerIndiaLtd070927.pdf">Alston Power</A></STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/TU154DaburIndiaLtd.070921.pdf">Dabur India</A></STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/TU260SaamyaBiotechIndiaLtd.070924.pdf">Saamya Biotech</A></STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/TU156WiproLimited070925.pdf">Wipro</A></STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/TU160KotakMahindra070925.pdf">Kotak Mahindra</A></STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/TU153RelianceCommunicationsLtd.07092.pdf">Reliance Communications</A></STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/TU261CircuitSystems070926.pdf">Circuit Systems</A></STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/TU262MaytasInfraLimited070926.pdf">Maytas Infra</A></STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/TU152AmbujaCementsLimited070927.pdf">Ambuja Cements</A></STRONG></P> <P><STRONG><A href="http://intradayteam.googlepages.com/Panta.pdf">Pantaloon</A></STRONG></P></FONT></DIV>

Alston Power, Dabur India, Saamya Biotech, Wipro, Kotak Mahindra, Reliance Communications, Circuit Systems, Maytas Infra, Ambuja Cements, Pantaloon

CLICK FOR DOWNLOAD Alston Power Dabur India Saamya Biotech Wipro Kotak Mahindra Reliance Communications Circuit Systems Maytas Infra Ambuja Cements Pantaloon…

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Brokers Recomendations

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Brokers Recomendations

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Fin Min: No evidence of manipulation in stock mkts and movement orderly; SEBI has not informed the govt on any mkt manipulation

<DIV><FONT face=Verdana size=2>The Finance ministry has no evidence of manipulation in stock market and SEBI has not informed the government on any market manipulation, reports the NW 18, quoting an aide. Finance Ministry says stock market movement are in order.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Earlier today, the ET had reported that the capital market regulator SEBI is keeping tabs on the activity of several players in both primary and secondary market following leads that some of the market manipulators may be operating through front outfits.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The dizzying rise in stock prices over the past few weeks has only fuelled suspicion that some of the old hands who were indicted for their violations in the securities markets may be back at their game.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Sources told ET that one of the central security agencies has alerted the finance ministry on the matter. It has also furnished a list of names of such operators who it feels are active through firms in which they are not directly connected.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Manish Marwah, Nirmal Kotecha and even Ketan Parekh are included in the list. The agency suspects that these operators were active in IPOs of Indowind Energy, Alpa Labs and Puravankara Projects, besides a few other issues. Both Marwah and Kotecha were indicted by SEBI for the manipulation in shares of real estate firm Atlanta.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>It's learnt that SEBI is also tracking the surge in the prices of stocks like IFCI and a few index heavyweights which have contributed to the recent bull run.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Government officials said that the country's intelligence agencies have been on an overdrive naming several players with suspect credentials or who have a track record of manipulating stocks as being active now.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>However, it's been hard for the regulator as well as the security agencies to establish a direct link between cases of stock price manipulation and some of these operators.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>In the past, there have been cases where such agencies have suspected that entities blacklisted by the regulator are playing the market, not just in stocks but also in commodity futures.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>However, there have been times when they were off-target. Given the nature of surrogate ownership, financial layering and benami transactions, any investigation of this nature is painstaking and a strain on the regulatory resources.</FONT></DIV>

Fin Min: No evidence of manipulation in stock mkts and movement orderly; SEBI has not informed the govt on any mkt manipulation

The Finance ministry has no evidence of manipulation in stock market and SEBI has not informed the government on any market manipulation, reports the NW 18, quoting an aide.…

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FDI in retail just a matter of time: FM

<DIV>The government may open the retail sector to foreign investment after convincing stakeholders like small shop owners that their setups are not at threat from big players. "In course of time, their fears will be allayed and it is only a matter of time before the policy is tweaked to allow FDI in retail," Finance Minister P Chidambaram said during an interaction with students of Wharton School of the University of Pennsylvania here, reports ET. Mr Chidambaram's statement comes even as large domestic retail chains are facing opposition from mom-and-pop stores in some states.<BR><BR>Opposition to the opening up of $ 330-billion retail sector has come from various political quarters, and more vehemently from the key UPA ally, the Left parties. In fact, even Congress president Sonia Gandhi had expressed reservations against opening up of the sector. "Experience tells us (organised) retail does not drive them (small retailers) out. They will reorganise themselves and thrive. However, there is genuine fear that has to be allayed," Mr Chidambaram said.<BR><BR>The finance minister added, "We will patiently educate them (mom-and-pop store owners) before they accept retail chains. This (opening retail to FDI) will take a little time."<BR><BR>The government allows 100% foreign direct investment in cash-and-carry and wholesale operations and 51% in single-brand retail. It may be noted that some multinational players like Wal-Mart, who had for long waited for the sector to be opened up, have since joined hands with domestic companies as their cash-and-carry partners.<BR><BR>India has been ranked World No, 1 in the AT Kearney Global Retail Index, 2006, and according to industry estimates, the organized and unorganized retail market will grow to $ 427 billion by 2010 and $ 637 billion by 2015.<BR><BR>"Competition is driving growth in many other sectors: steel, textiles, pharmaceuticals, automobiles, home appliances, packaged food, computer hardware and software, banking and insurance. It is axiomatic that more openness and more competition will benefit the sectors that remain closed or restricted as a matter of policy, and that is the direction in which we would like to move," he said speaking at the Peterson Institute.<BR><BR>India's manufacturing and services sectors face increasing competition from overseas manufacturers and service providers. Far from being overawed or vanquished, Indian business has boldly ventured into other countries and has opened offices abroad, acquired factories and established new facilities, he pointed. "Foreign direct investment has become a two-way street. In 2006-07. While foreign direct investment flows into India were $ 19.5 billion, the outflow of capital amounted to $ 11.9 billion," he said.<BR><BR>Noting the India story is now well known, he said the outlook for the medium term remained extremely positive. "We believe it is possible to sustain the factors that are driving economic growth and consolidate the gains," he said. India's GDP has been growing, on average, at the rate of 8.6% since 2003-04. In particular, 2006-07 was a splendid year that returned a growth rate of 9.4%.<BR><BR>He said corporate balance sheets were now much larger and corporate profits higher, giving Indian businesses the financial muscle to take on new challenges. "Valuations have soared, enabling companies to raise large amounts of equity capital," he said driving home the point on India growth story.<BR><BR>However, he said inflation, particularly in food articles, was a concern. "3.32 % is perfectly acceptable, tolerable. But one component of WPI, primary articles' inflation, was 7.5%. Within primary articles, food is 5.8%. This is a worrying inflation," he said.</DIV>

FDI in retail just a matter of time: FM

The government may open the retail sector to foreign investment after convincing stakeholders like small shop owners that their setups are not at threat from big players. "I…

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Reliance Energy Transmission, the arm of Reliance Energy plunges into interstate transmission

<DIV>Reliance Energy Transmission Ltd (RETL), the transmission arm of Reliance Energy, is set to become an inter-state transmission licensee, with the approval of the PowerGrid Corporation of India (PGCIL) board, reports DNA.<BR><BR>PGCIL selected Reliance Energy as a joint venture partner through international competitive bidding for setting up the transmission lines for the Parbati and Koldam hydro-electric projects in Himachal Pradesh and two projects under the Western Region System Strengthening Scheme-II (WRSS-II) in Maharashtra and Gujarat on a build, own, operate (BOO) basis. These projects would entail an investment of about Rs 3,500 crore. The two companies would sign a letter of intent for the WRSS-II project and a shareholder agreement for a joint venture for the Parbati and Koldam projects soon.<BR><BR>The approval for WRSS-II project, for which RTIL was selected in January 2007, was delayed since there were differences with the provisions and transfer clauses between REL and the government. "Though it was initially conceived to be on a build, own, operate and transfer (BOOT) basis for 25 years, it would now be on a BOO basis," said a source. This implies that the project might not be transferred at the end of 25 years, though RETL would have to seek a fresh licence.<BR><BR>The change was made since PGCIL objected to taking on the liability of buying out the private partner in case of a payment default or any other problem during the construction or developmental stage. "With REL agreeing to execute the projects without any buyout commitments and transfer clauses, the way for the projects was cleared," said a REL executive. PGCIL had selected REL as its partner in December 2005 for the 1,600 MW Parbati-Koldam project.<BR><BR>NTPC Ltd and National Hydro-electric Power Corporation (NHPC) are setting up the projects. Parbati-Koldam Transmission Company would transfer electricity through a 300-km line from Parbati-Koldam to Ludhiana. The project is worth Rs 800 crore. The project is scheduled for completion, matching with the associated generation projects. The power-starved states of the northern region, including the National Capital, would benefit from the transmission system.<BR><BR>The WRSS-II project, scheduled to be commissioned by March 2010, would benefit Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Daman & Diu, Goa and Dadar & Nagar Haveli.<BR><BR>The Rs 2,000-2,500 crore system-strengthening project covers a length of 1,500 km in Maharashtra, Gujarat and parts of Madhya Pradesh and will handle 4,000 MW of power.</DIV>

Reliance Energy Transmission, the arm of Reliance Energy plunges into interstate transmission

Reliance Energy Transmission Ltd (RETL), the transmission arm of Reliance Energy, is set to become an inter-state transmission licensee, with the approval of the PowerGrid C…

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IFCI shortlists 8 bidders for stake sale

<DIV>IFCI has shortlisted eight bidders for the sale of its 26% stake including consortia led by Wilbur L Ross and Shinsei Bank, reports ET. No official communications has yet reached the bidders, according to industry sources. As many as 10 bidders had applied earlier this month. The identity of the bidders that have been left out of the race is not known. Other members of the consortium led by Wilbur Ross include Standard Chartered Bank, HDFC and Goldman Sachs. Punjab National Bank and JC Flowers are part of the consortium led by Shinsei Bank.<BR><BR>"Official communication is yet to reach us. Shinsei Bank is a long term player. JC Flowers is one of the biggest private equity groups investing in stressed assets. And Punjab National Bank is a domestic institution, so there is a natural synergy," a member of the consortium said. Sources at Blackstone and IDFC refused to comment on the matters.<BR><BR>Among others who had submitted EoIs include Kotak Mahindra Bank, GE Capital, Cargill (FS), Newbridge Asia, French bank Natixis and a consortium between Sterlite and Morgan Stanley. Officials at IFCI refused to divulge the names of the shortlisted bidders, but maintained that at this stage, it would not make sense to reduce the number significantly and therefore impact the competitive pricing of the valuation. The markets have been abuzz with the IFCI scrip touching Rs 105 earlier this week. It closed at Rs 92.65 on Thursday, on the NSE.<BR><BR>Asked if speculative stock prices would impact valuation of the 26% stake, sources at IFCI said, "it is possible that there could be wide variation on the valuation amongst the shortlisted bidders." Market sources peg the 26% stake in IFCI between $ 500 million and $ 800 million. Financial bids submitted will need to factor in the second quarter results of IFCI.<BR><BR>Analysts say that valuation of IFCI may suffer, if the share price climbs up because of speculation. "If the bidders feel that the IFCI share price is overvalued, they might not arrive at an optimum value for the 26% stake. This is one of the reasons why Barclays did not finally submit the bid for IFCI," an analyst said. A source at Barclays said, "We found IFCI to be overvalued. Besides, there is only a 26% window. Hence, Barclays decided against submitting the bid after considering it initially."<BR><BR>The bidders will be informed latest by October 1. A pre-bid conference is scheduled for October 3. Thereafter, the shortlisted entities would be asked to undertake due diligence. Request for proposal (RFP) would be issued a week later. By November, financial bids will be submitted. The board would then finalise the name of the strategic investor.<BR><BR>According to conditions set by IFCI, there is a lock-in period of three years for the entity or the consortium which would be selected. IFCI has said that the bidder should be in the business of financial services with a long-term interest in the institution.</DIV>

IFCI shortlists 8 bidders for stake sale

IFCI has shortlisted eight bidders for the sale of its 26% stake including consortia led by Wilbur L Ross and Shinsei Bank, reports ET. No official communications has yet re…

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ICICI raises $ 2 Bn through bond issues abroad

<DIV>ICICI Bank, India's second largest bank, is on a fund raising spree, reports ET. After raising $ 1.5 billion a couple of months back through loan markets, it has now raised another $ 2 billion through a 5-year fixed rate note. This is the single-largest issuance by an Asian bank. With this, the private sector bank has raised $ 6 billion in this financial year against $ 6.5 billion in the last financial year.<BR><BR>The notes were sold under 144A/Reg S format. The bank was able to tap qualified US investors through this route. The money has been raised by the bank's Bahrain branch. The notes have been priced at 237 bps over US Libor or at Libor plus 172 bps. The six-month Libor is currently at 5.14%. From an investor breakdown perspective, 32% of the notes were sold to banks, 53% to fund managers and 15% to pension funds and retail. The issue had an order book of .05 billion and received interest from 250 investors. This is the first major issuance by an Asian bank, post-subprime crisis.<BR><BR>The offer was lead managed by Deutsche Bank, Goldman Sachs and Merrill Lynch. Incidentally, the bank had raised $ 1.5 billion through loan syndication programme a couple of months earlier. The issue has a one-, three-, and five-year tranche, and the five-year tranche was raised at Libor plus 65 bps. In January this year, the bank had raised $ 2 billion under the 144A/Reg S format. It had raised three-year, five-year and upper tier II. The bank had raised $ 750 million under the five year tranche for which it had paid Libor plus 75 basis points.<BR><BR>However, due to the subprime crisis, there has been a widening of credit spreads globally. The bank's earlier January issuance is currently trading at Libor plus around 155 bps. ICICI Bank will use this money to fund the needs of its corporate borrowers. Indian corporates have been on a major overseas acquisition binge, and the move seems to be continuing even on the back of the subprime crisis. This is even as there has been a slowdown of credit in the local markets, though there has been some pick-up in the past couple of weeks. This would also mean that the cost of borrowing for Indian corporates would also go up dramatically.<BR><BR>Earlier speaking at a conference in Mumbai, ICICI Bank's joint MD, Kalpana Morparia said, "Spreads have certainly widened due to credit issues in the US. However, the impact on papers issued by players in emerging markets has been quite moderate. Also, bond offerings by Indian entities in offshore markets have also been modest. However, given the fact that there is a huge interest differential between rupee borrowings and dollar-denominated ones, raising funds from the offshore market still is an attractive proposition." Speaking on the sidelines, Ms Morparia said that the bank would take a call on revising its interest rates in its board meeting in October.<BR><BR>Securitisation could be a route to provide a more effective funding route to banks and finance companies, given the growing need for funds in anticipation of future growth in credit.</DIV>

ICICI raises $ 2 Bn through bond issues abroad

ICICI Bank, India's second largest bank, is on a fund raising spree, reports ET. After raising $ 1.5 billion a couple of months back through loan markets, it has now raised …

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ADAG eyeing cement business, company to use ash generated from power projects as inputs, can set up 45 Mn tn capacity

<DIV>Power-to-telecom business house Reliance Anil Dhirubhai Ambani Group (R-ADAG) plans to enter cement manufacturing by setting up a plant near its 4,000MW coal-fired power project proposed at Sasan in east Madhya Pradesh, reports Mint. The cement plant proposed by R-ADAG will use millions of tonnes of fly ash generated at the power station, billed ultra mega power project for its large capacity, to produce cement. Fly ash is generated while burning coal. Not only is the cost of cement production using fly ash 5-10% lower than the cost using the traditional clinker-based method, it also saves on transportation and disposal of a material seen as environment-unfriendly.<BR><BR>"R-ADAG plan to set up a cement plant near the newly bagged power project at Sasan to utilize the fly ash generated from the project," said a senior government official, who did not wish to be identified.<BR><BR>An R-ADAG executive declined details of the cement project. J.P. Chalasani, director, business development, Reliance Energy Ltd, said, "Our company keeps on evaluating various proposals from time to time." Reliance Energy is the parent of Reliance Power, the company in charge of the Sasan project. Ultra mega power projects are expected to see a major expansion of cement manufacturing capacity in India with cement companies such as Grasim Industries Ltd, Ultratech Ltd, Sanghi Cement Ltd, The India Cements Ltd, Zuari Cements Ltd and My Home Industries Ltd already evincing interest in setting up greenfield cement plants in the vicinity of such power stations.<BR><BR>The size of the R-ADAG cement plant was not immediately known. Going by the amount of fly ash, some 9 million tonnes a year, the 4,000MW power project will generate, the cement plant capacity could be huge. One tonne of cement needs an input of 0.2 tonne of fly ash. "Depending on the amount of fly ash the projected is expected to produce, R-ADAG can put up a capacity of 45 million tonnes per annum (mtpa). But nobody would want to put up such a huge capacity. The impact of R-ADAG's move will depend on the size of the unit," Rupesh Sankhe, an analyst tracking the commodity for ICICI Direct, said. The cost of setting up a 1mtpa cement capacity is up to Rs 400 crore.<BR><BR>The Rs 20,000 crore Sasan project was awarded to Reliance Power after it matched the winning bid for the project after the original winning consortium of Lanco Infratech and Globeleq Singapore was disqualified by a government panel on 25 July for violating terms of the deal. Analysts said by the time the Sasan project goes online, cement capacity in the country may be less beneficial to cement producers, who have enjoyed a 30-34% price rise in different regions in the past year alone. India, the world's second largest cement market with Rs 55,000 crore estimated demand, has a cement manufacturing capacity of 148mtpa. "The power project is expected to come up only after 2012, when the cement supply is expected to outstrip demand," Sankhe said.<BR><BR>E.N. Murthy, secretary general of trade body Cement Manufacturers Association, welcomed the capacity addition. "Around 60% of the cement produced in India uses fly ash. In a situation of supply-side constraint, any additional capacity is good news for the industry," he said.<BR><BR>The government had planned nine ultra mega power projects. While those at Sasan, Mundra in Gujarat, Tilaiya in Jharkhand, Krishnapattnam in Andhra Pradesh, Tamil Nadu's Cheyyur and Orissa's Jharsuguda are on track, others at Girye in Maharashtra, Tadri in Karnataka and Chhattisgarh's Akaltara are yet to take off. Sasan, Tilaiya and Jharsuguda are coal pithead projects and those at Mundra, Krishnapattnam and Cheyyur are based on imported coal.</DIV>

ADAG eyeing cement business, company to use ash generated from power projects as inputs, can set up 45 Mn tn capacity

Power-to-telecom business house Reliance Anil Dhirubhai Ambani Group (R-ADAG) plans to enter cement manufacturing by setting up a plant near its 4,000MW coal-fired power pro…

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Dhanus Technologies Allotment Status

<DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV><FONT face=Verdana size=2><STRONG>VISIT </STRONG><A href="http://ipoanalysis.blogspot.com/"><STRONG>http://ipoanalysis.blogspot.com/</STRONG></A></FONT></DIV>

Dhanus Technologies Allotment Status

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Chidambaram - Outlook positive

<DIV><FONT face=Verdana size=2>"There are of course some risks. Many of them arebeyond our control and, hence, we are compelled to take precautionary measures",says P. Chidambaram</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Following is the text of the address of Finance Minister, Shri P. Chidambaram on India: Economic Growth and Outlook delivered at the Peterson Institute for International Economics in Washington, United States:-</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>1. "I am grateful for the invitation to deliver a talk at the Peterson Institute for International Economics. I understand that one of the objects of the Institute is to promote informed dialogue on international issues. The world is still divided in many ways – developed versus developing, North versus South, and rich versus poor. It is necessary to bridge this divide, and dialogue can do so. Dialogue can promote better appreciation of the issues; dialogue can also anticipate emerging trends.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>2. Let me share with you our recent experience in managing the Indian economy and the outlook for the medium term. The India story is now rather well known, but some aspects bear repetition. In the most recent four year period – 2003-04 to 2006-07 – India's GDP has grown at an average rate of 8.6% a year. In particular, 2006-07 was a splendid year turning out a growth rate of 9.4%. All the indicators are positive. Gross Domestic Capital Formation (GDFC) – that is investment – in relation to GDP is estimated at a little over 35%. Inflation measured by the wholesale price index (WPI) is 3.3%. Foreign exchange reserves stand at over US$230bn. All sectors of the economy are contributing to the growth rate, although we are not entirely satisfied with the performance of the agriculture sector.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>3. It is now three years and four months since the present Government assumed office. The Government has brought greater stability and clarity to the policy environment. In many cases, the policy is backed by law or regulation. In key sectors, Government has ceded authority to independent regulatory bodies.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>4. Government has also remained steadfast on the path of fiscal prudence and discipline. Within weeks of assuming office and before presenting the first budget, we notified the Fiscal Responsibility and Budget Management Act (the FRBM Act). Despite pressure on resources, we have complied with the obligations under the Act. The fiscal deficit for the current year has been budgeted at 3.3 per cent and the revenue deficit at 1.5 per cent, and we believe we are on course to achieve the targets set by the FRBM Act.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>5. What are the factors that are driving economic growth in India?</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>6. Firstly, it is domestic consumption. The annual growth in real consumption expenditure over the past four years has been, on average, 6.3%. With easy liquidity conditions spurring demand for personal loans, and adequate capacity in the manufacturing sector, there has been a consumption boom.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>7. Secondly, rise of investment. The consumption boom that started at the beginning of this decade has triggered an investment boom. Real investment has grown at a robust rate since 2002-03, averaging 17% a year in the past four years. During this period, the contribution of investment to growth has exceeded the contribution of final consumption expenditure. The current investment rate, as a proportion of GDP, is 35.1%, and it is expected to increase in the medium term.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>8. Thirdly, increase in employment. The rate of growth in the labour force that was 1.60% in the previous period of six years accelerated to 2.54 per cent during the period 1999-00 to 2004-05. Thankfully, the rate of growth of employment too accelerated from 1.57% in the first period to 2.48% in the second period. We have, therefore, more persons employed and contributing to the national output. Paradoxically, we also have, in absolute number, more persons unemployed.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>9. Fourthly, increase in productivity of both capital and labour. Rodrick and Subramanian, in an IMF working paper of 2004, pointed out that India seems to have large amount of productivity growth from relatively modest reforms. A more recent paper by Barry Bosworth, Susan Collins and Arvind Virmani (2006) has confirmed this. They have concluded that output per worker grew at 1.3% annually during 1960-80 and total factor productivity (TFP) was barely above zero. In contrast, growth in output per worker nearly tripled to 3.8% during 1980-2004, while TFP increased tenfold to 2%.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>10. The outlook for the medium term is extremely positive. We believe it is possible to sustain the factors that are driving economic growth and consolidate the gains.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>11. There are, of course, some risks. Many of them are beyond our control and, hence, we are compelled to take precautionary measures that will minimise the adverse effects of these risks. The two annual monsoons are always uncertain factors. By and large, the monsoons determine the area under cultivation and the output of food grains and other food articles. As a precautionary measure, we had to import some quantities of wheat last year and again this year. The price of crude oil is an enormous external risk. Since these outrageous prices cannot be fully passed through to the consumers in India, the burden falls largely on the domestic budget and constrains our capacity for investment. The depreciation of the value of the dollar vis-a-vis the rupee has thrown up an unexpected downside risk: it has challenged our exports and our tax revenues, and we may find ourselves in a situation where we need to provide for the consequences of an appreciating currency.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>12. Ladies and Gentlemen! Let me not give you the impression that our work is done. Far from the work being completed, the road ahead is long and difficult. Governing India is, at the best of times, a complex task. During a period of high growth, the task does not become easier, as one may be wont to think. While sustaining high growth is one kind of challenge, the more difficult challenge is spreading the benefits of growth and making it more inclusive.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>13. Despite a marked reduction in poverty, about 26% of the population of India lives in extreme poverty. A larger proportion of the population is affected because of the inadequacy or absence of many public goods and services such as clean drinking water, sanitation, schools, basic healthcare, electricity and roads. Democracy – especially a vibrant and noisy one – offers many seemingly attractive alternative models for the elimination of poverty. We know that many of those have not worked in the past and we shall not repeat those mistakes. We believe that growth is the best antidote to poverty, provided that the growth is broad based and inclusive.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>14. Our government believes that in a developing country growth is an imperative and nothing should be done to affect the process of growth. At the same time, our government believes that it is the duty of the government to provide a measure of economic and social security to the very poor who are, at present, beyond the pale of the market economy. We have, therefore, adopted an ambitious social and economic agenda that extends to matters such as guaranteed wage employment, affirmative action in education, death and disability insurance, health insurance, old age pension, scholarships and education loans, empowerment of women and right to information.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>15. I am aware of the oft-repeated criticism that the growth process has benefited only a small section of the people and, therefore, we must change course. I reject that criticism. It is based on a superficial and ill-informed view of the transformation that is taking place in India. More people are discovering that there are opportunities at the bottom of the pyramid and more people at the bottom of the pyramid are demanding their share of the economic opportunities thrown up by the growth process. For instance, in the last three years, banks have more than doubled the amount advanced as farm loans: the volume has increased from Rs844bn in 2003-04 to Rs2050bn in 2006-07. Who gets these loans? It is farmers who have an average land holding of one hectare, and every year over 5mn new borrowers have been added to the portfolio of banks and given farm loans. In 2006-07, 8.35mn new farmers were brought under the bank credit system.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>16. Take another example. India runs the largest programme of micro credit – a fact that is not widely known. At the end of March 2007, 2.6mn self help groups – nearly all of them 'women only' groups – were credit-linked to the banks. Beginning with consumption credit, an overwhelming majority among them has graduated to production credit. These groups borrow amounts up to Rs200,000 for purposes such as land development, rearing cattle or sheep, poultry, garment making, food processing, manufacture of toys and retail shops. The amount of credit advanced to SHGs at the end of March 2007 was Rs180bn.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>17. More than anything else, it is growth that has allowed the Government to increase public expenditure in sectors such as health and education. In 2003-04, the Central government's budget had allocated Rs70bn for the health sector and Rs70bn for the education sector. In 2007-08, those allocations had grown manifold to Rs143bn for health and Rs286bn for education.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>18. However, outlays do not mean outcomes, and this is our prime concern. There is not yet in place a mechanism that will ensure that the deliverables are indeed delivered or that the public goods and services are of acceptable quality and have reached the intended beneficiaries. Some of the problems are due to poor design of the programme. Besides, there is still too much dependence on the government machinery and an unwillingness to experiment with alternative models like food stamps or school vouchers. There is also, regrettably, a considerable degree of waste and pilferage.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>19. Our best chance lies in encouraging more openness and more competition. An open society and an open polity will eventually embrace an open economy. A revolutionary change has been wrought in the sectors where monopolies were dismantled and the sector was thrown open to competition. Two examples would suffice: one, telecommunications and the other, aviation. Not too long ago, a customer had to register for a landline telephone and wait for many years to be given one. She would have to "book" a long distance call and hope that she could get through within a few hours. And she would have to pay exorbitant rates depending on the "distance" between the caller and the called person. Mobility was a dream; the telephone itself was a nightmare. Mobile telephony is growing at over 5mn new connections every month, and in August this year 7 million new connections were added .</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>20. The air transport sector has witnessed a similar revolution. The entry of private airlines has democratised flying. Many second and third tier towns are now connected by air. Domestic passenger traffic has grown, on average, by 30.5% a year over the last two years. Two green field airports are being built. Two metro airports are being modernised and upgraded, and before that task is over, plans are being drawn up for a second airport in these two metros. Two more metro airports and 35 non-metro airports have been taken up for modernisation and expansion.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>21. Competition is driving growth in many other sectors: steel, textiles, pharmaceuticals, automobiles, home appliances, packaged food, computer hardware and software, banking and insurance. It is axiomatic that more openness and more competition will benefit the sectors that remain closed or restricted as a matter of policy, and that is the direction in which we would like to move.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>22. The competition is not among domestic players alone. India's manufacturing and services sectors face increasing competition from overseas manufacturers and service providers. Many foreign companies have entered the Indian market through imports or local production. Far from being overawed or vanquished, Indian business has boldly ventured into other countries and has opened offices abroad, acquired factories and established new facilities. Foreign direct investment has become a two way street. In 2006-07, while foreign direct investment flows into India were US$19.5bn, the outflow of capital amounted to US$11.9bn.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>23. On August 15, 2007, India turned 60. It is, compared to the United States or many other countries, a young nation. It is also a young nation in another sense. One-third of the population is below the age of 15 years. India is the only large country in the world where the size of the working age population will grow – and will exceed the number of dependent children and old persons -- until 2025, the year up to which projections of population have been made, and perhaps even beyond till 2045. The size of the work force will grow, incomes will grow, savings will grow and investments will also grow. The challenge is to seize the opportunity and turn India into an economic powerhouse.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>24. We are happy that the world is taking note of India and other emerging economies. If the developed countries of the world are serious in their intention to achieve the Millennium Development Goals, they must realize that the goals will not be achieved until they are achieved in India and China. We recognize that as we take our place in the world we have to assume our share of responsibility, consistent with our need and capacity, to make the world a better and safer place.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>25. In the past – and now too – India has accepted responsibilities. For example, though we are an energy deficient country, we have accepted the principle of common and differentiated responsibilities in the area of climate change. At Heiligendamm, the Prime Minister of India made an important statement when he offered that India's per capita CHG emissions would never be allowed to exceed the per capita CHG emissions of developed countries. That statement has been strongly endorsed by Chancellor Angela Merkel. That statement opens the way to find a just and fair agreement on the complex issues concerning climate change.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>26. In the area of non-proliferation, though we are not a signatory to the NPT, we have put substance over form and maintained an impeccable record of non-proliferation. The India-United States agreement on civil nuclear cooperation is premised on that record.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>27. On the economic front, we acknowledge that we share responsibility for ensuring the stability of the global economy. We have maintained fiscal prudence and discipline. We have taken precautionary measures to avoid high-risk financial transactions. We have contained inflation and will always be on alert. We have in place necessary regulations to ensure that capital flows – inward and outward – are orderly.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2></FONT> </DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>28. Much of what has been accomplished – or adopted – in India is not unique to India. Many other countries have done the same and, in this behalf, I can cite the cases of Argentina, Brazil, China, Egypt, Mexico and South Africa. As I said at the beginning of my speech, the world is still divided in many ways. A new division (or is it rivalry?) appears to be on the horizon – between the G 7 countries and the fast growing, emerging economies. Just as we are willing to share responsibility with the developed countries, the G 7 countries must also share responsibility with the emerging economies. That, indeed, would be the most wise and prudent course to make the world a better and safer place."</FONT></DIV>

Chidambaram - Outlook positive

"There are of course some risks. Many of them arebeyond our control and, hence, we are compelled to take precautionary measures",says P. Chidambaram   Following is the text …

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Weekly Newsletter

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Top Stories for week

<DIV><FONT face=Verdana size=2>RBI moves to counter surge in foreign inflows</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>In order to prevent the strong foreign capital inflows from lifting the rupee further up, the Reserve Bank of India (RBI) announced further relaxation in foreign exchange regulations. However, experts feel that the decision may be too little and too late and may not have the desired effect. Given the positive outlook on the Indian economy and corporate profit growth, foreign capital inflows will continue to pour in. So, the RBI will have to resort to a three-pronged approach suggested by former RBI Governor C. Rangarajan i.e. absorb some inflows, allow the rupee to rise a little and discourage some inflows.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>As per the new RBI rules, companies can now spend up to 400% of their net worth to invest abroad, as opposed to 300% till now. They can also pre-pay up to US $500mn of their foreign loans every year, up from US $400mn, and make portfolio investments up to 50% of their net worth, up from 35%. Individuals can now invest up to US$200,000 abroad, double the amount allowed so far, and the aggregate investment limit for Mutual Funds (MF) has been raised from US $4bn to US $5bn.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>In addition, the existing facility of investing up to US$1bn in overseas Exchange Traded Funds (ETFs), as may be permitted by SEBI by a limited number of qualified Indian MFs, would continue. Overall, the scope of foreign companies in which Indians can invest has been widened by the removal of the 10% reciprocal shareholding requirement. So far, Indians could only invest in foreign companies that had commitments in India.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Accordingly, capital market regulator SEBI eased investment norms for MFs. It raised the limit for overseas investment for each MF from US$200mn to US$300mn. In addition, to create a level playing field between new and existing players, the sub-ceiling linked to net assets of a MF house has been dispensed with. The requirement of 10 years of experience of investing in foreign securities for being eligible to invest in overseas ETFs has also been dispensed with. Now, there is only an overall limit of US$5bn for the overseas investments.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Investors can expect more product offerings from the MFs as the investment options have been increased. The new categories of overseas instruments that has been added include ADRs/GDRs issued by foreign companies, IPO and FPOs for listing at recognised stock exchanges overseas, derivatives for purpose of hedging and portfolio balancing. Investors may even get to indirectly invest in real estate abroad by investing in units that have mandates to invest in Real Estate Investment Trusts (REITs) listed in recognised stock exchanges.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Telecom licenses...the queue gets longer</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The list of new companies seeking a slice of India's fast-growing telecom sector just keeps growing. After Parsvnath Developers and Unitech, another real estate player, Indiabulls Real Estate plans to enter this space. The company, part of the Indiabulls Group, applied for licences in 22 circles. Reports also suggested that realty giant DLF is also interested in jumping on to the telecom bandwagon. Meanwhile, white goods giant Videocon Industries applied for telecom licenses for all the 22 circles, except the north-eastern region. A financial daily reported that Videocon was likely to rope in US-based telecom major Verizon Communications as a partner in the proposed telecom venture. The two companies already have a joint venture for national and international long-distance telecom services. The move came just days after the Department of Telecommunications (DoT) said it won't accept new applications for licenses after October 1.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Over the last few weeks, the DoT has received about 160-180 new applications for new universal access service licences and many more could be in the pipeline. However, in view of the paucity of spectrum it may not be possible for the DoT to entertain all the new applicants. Some say the rush for getting new telecom licences is due to telecom regulator TRAI's latest recommendation that the number of players in a circle should not be capped. In addition, TRAI has suggested that the current norm of allocating 2G spectrum based on the number of subscribers should be increased several times before existing players are allocated fresh spectrum. If these recommendations are accepted by the DoT, then several new applicants will be eligible to get spectrum to launch telecom services.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>However, another school of though is of the view that the scramble for telecom licences is aimed at making a quick buck by first getting the licences and then selling the same to overseas players at a hefty premium. To get to the bottom of the matter, the DoT is believed to have set up an agency to establish the actual identities of the promoters and shareholders behind the new applications for telecom services. Telecom Minister, A Raja, on Sept. 24, announced that the ministry will prepare a fresh set of guidelines for grant of licences to new applicants. "I have asked DoT secretary, DS Mathur to form a committee to frame guidelines for grant of licence to new applicants," Raja said.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>India is expected to be the second-largest telecom market in the world with 800 million users by 2015, according to independent estimates. Currently, Indian telecom companies adds around 8mn new wireless subscribers every month. At the end of August, India had 201.3mn wireless subscribers after adding a record 8.31mn users in the month. The growth exceeded the number of subscriber additions in China. </FONT></DIV>

Top Stories for week

RBI moves to counter surge in foreign inflows   In order to prevent the strong foreign capital inflows from lifting the rupee further up, the Reserve Bank of India (RBI) an…

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Where have the bears gone?

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Where have the bears gone?

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Post Market Commentary

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2008 - tough for capital markets

<DIV><FONT face=Verdana size=2>The US sub-prime crisis was on everyone`s mind at the 38th Annual General Meeting of the Indo-American Chamber of Commerce (IACC). At the panel discussion, `Recent Global Developments - Impact on Indian Capital Markets`, industry experts were certain that, the sub-prime crisis will stunt the global economy in the short run, and Indian capital markets had to be watchful. Dr. Rakesh Mohan, Deputy Director of Reserve Bank of India, sounded a note of caution and exhorted Indian capital markets to be on their guard to protect themselves from the recent mortgage crisis.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The panel comprised of renowned entrepreneur, Rakesh Jhunjhunwala - partner, Rare Enterprise, Vallabh Bhansali - chairman, Enam Securities, Andrew Holland- Chief administrative officer, EVP DSP Merrill Lynch, Michael Newbill - Chief of political section, US Consulate. SK Mitra - Executive committee member of IACC chaired the discussion.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Rakesh Jhunjhunwala predicted a slowdown in the Indian software industry and a cut in software spends as a result of slump in the US economy. But the upside, according to him, was a decline in commodity prices in India. He said, ``The US economy was growing at an unsustainable level. The poor are feeding the rich, and the heroin credit supplied to the US consumers has its limit. The world is underestimating the sub-prime crisis. I foresee the problem in the housing market to get worse. The resultant slowdown of the American economy will worsen the crisis.``</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>However, the panelists were optimistic that the crisis can be tided over as the US enjoys the advantages of sound capital markets, rising wages and low inflation. They said that ``India was on a steady wicket`` and the quality of private enterprise is better than in China. The US elections and the forthcoming Olympic Games in China will also be factors that need to be watched out for, to chart a roadmap for Indian capital markets.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Chief Guest and keynote speaker, Dr. Rakesh Mohan, Deputy Governor, RBI said, ``There has been a sustained attention on the sub-prime crisis in the last two months. We really don`t know what will transpire. Given the speed at which the market corrections are taking place, we have to be watchful. We will need to gather more information and knowledge to see what will actually happen in the future.``</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Terming the crisis as a symptom rather than a cause, Dr. Mohan explained the reason behind the phenomenon. He said, ``The accommodative monetary policies resulted in sustained low interest rates, lower inflation levels and volatility encouraging more risk-taking. Many banks set-up Special Investment Vehicles off their balance sheets, and hence had to face liquidity problems when the crisis erupted. But they have to make adjustments now.`` Dr. Mohan emphasised</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Michael Owen, Consul General, Consulate General of USA, too, was optimistic that, increasing wages, sustainable inflation and innovative financial and credit instruments will enable the world economy to post strong growth in the long term.<BR>Overall, the Indian as well as global capital markets will see a tough year ahead, but the long-term should see sustained growth.</FONT></DIV>

2008 - tough for capital markets

The US sub-prime crisis was on everyone`s mind at the 38th Annual General Meeting of the Indo-American Chamber of Commerce (IACC). At the panel discussion, `Recent Global De…

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Rakesh Jhunjhunwala - Markets spring surprises

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Rakesh Jhunjhunwala - Markets spring surprises

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Weekly Close: Beware! this is a 'Bull' Market !!!

<DIV><FONT face=Verdana size=2>Markets continue to be unstoppable..and an interesting part is that its the FIIs who are buying and domestic Institutions who are sellers. Clearly, there is no insider who knows what is going on.. We mentioned last week that this rally was drven by liquidity. Even we have been overwhelmed by the huge flows witnessed. There are many who say .. " See i told you . Markets will hit 17000 many months ago.. and SBI will do 2000 levels of Reliance will do 2500 and so on so forth".. The fact of the matter remains, that it has happened for the turn of events globally. Its a dynamic system and India is integrated. Clearly the two events consisting of UKs guarantee for Northern Rock was one and the large Fed cut another which set the stage which could offset a recession. Please note that this is what the market is hoping that there will be no recession. The market also prices in the possibility that demand in Asia will be the engine of growth. Thus moneyflows have been strongly flowing into India which along with China is expected to do well. Asia has had it really good this quarter in terms of the market performance. Indian Mutual funds have failed to realise the seriousness of this event in the face of political uncertainty and also the same old stuff of "High crude prices", possible higher inflation and high interest cost eating into growth which will only be disappointing.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Of course there is euphoria as well and there are many who expect a CRR cut / SLR cut. In our earlier note we argued that clearly thats not on cards.. given the flush of liquidity. We however do believe that an excuse is building up for a rate cut and that is in a way to soften the rupee. This we believe will not happen before October 30th. The banks are scaling highs on hopes of rate cuts over the weekend. We would be surprised if they did happen.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>It was the FNO expiry week and markets left al the short positions high and dry. it took just 6 trading sessions for the Sensex to cross 17k and with aplomb. Not to be left behind Nifty created its own level and charged upto 5000. The much wanted consolidation leave alone correction is just not coming in.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>HDFC cut the interest on home loans and some other banks followed. SBI has not cut rates as ICICI introduced car loan on floating interest rate. Autos did see some recovery for the week.. but more likely to be driven by anticipated good numbers for the month which will be reported next week.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>We had Greenply which was a flyer this week. The plywood company has been a 4 bagger since our research on it. The company has been expanding and benefits of that are being seen in the bottomline. Demand for Plywood, Laminates and Vineers is seen 18 months post the housing boom and thats been felt. The company now has a particle board plant. Its best to know more from our research note.. Do read</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>We had research on Titan on its performance. This company has been on a roll. The companys jewellery business has been doing well . The valuations may not appear attractive.. but we believe that there is more steam in this one. and the brand is unbeatable. The prescription eyewear will add value we believe.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>We had another research note on Kesoram. This is a cement and tyre company. Both sectors have been doing well. More clarity on succession has brought in the buyers. We are positive here. Look for more gains in this one though the tyre business is where there could be some pressure with higher rubber and crude prices.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>We had new research on Phoenix lamps. a company which we covered much earlier. The company has had a change in ownership. The demand for CFL is exploding and this company is well placed with the largest capacities in that space. Certainly there seems to be value here. However there is lack of clarity on the threat from LED lamps and there are organisations installing those and others who are getting ready to manufacture them.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Apart from our own research we had notes on downgrades and upgrades on Educomp, Colgate, Peronet LNG.. And its all there to read !<BR>Technically Speaking: Sensex seems overbot but important to remember that overbot preiods can last over a long period of time and the momentum may carry it further. Near term consolidation could be expected..as there seems to be some level of MACD divergence in the 60 minutes charts. and thats some hope for the bears sitting with short positions. But all in all.. its best to avoid short positions. 16530 will be the stoploss for long positions and thats a bit far. Nearer stoploss is 17030.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Fundamentally Speaking: Fundamentals have been relegated to the background with the huge liquidity flows. We can probably say that Markets are getting into a nrew range of valuations and stocks will start trading there henceforth unless there is a major accident. Clearly this is a Bull Market. There is value in many mid caps and many of them are headed towards becoming large caps. The way ahead is to focus on growth and value.. and stay invested. Many of our stocks are doing well and that you will find in our recommendations of our research. Its not easy to get in when you believe that the run up has happened. The way to address that is get into stocks where there is still value.</FONT></DIV>

Weekly Close: Beware! this is a 'Bull' Market !!!

Markets continue to be unstoppable..and an interesting part is that its the FIIs who are buying and domestic Institutions who are sellers. Clearly, there is no insider who k…

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Sensex soars 727 points on strong FII inflow

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Sensex soars 727 points on strong FII inflow

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Market rallies for ninth straight trading session

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Market rallies for ninth straight trading session

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Brokerage Calls

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Brokerage Calls

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Ram Setu

<DIV><FONT face=Verdana size=2>The Lord surveyed the Ram Setu and said "Hanuman, how diligently and strenuously you and your vanara sena had built this bridge several centuries back. It is remarkable that it has withstood the ravages of the climatic and geographical changes over centuries. It is indeed an amazing feat especially considering the fact that a bridge at<BR>Hyderabad built by Gammon using latest technology collapsed the other day even before they could stick the posters on its pillars."</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Hanuman with all humility spoke "Jai Sri Ram, it is all because of your grace. We just scribbled your name on the bricks and threw them in thesea and they held. No steel from TISCO or cement from Ambuja or<BR>ACC was ever used. But Lord, why rake up the old issue now." Ram spoke "Well, Hanuman some people down there want to demolish the bridge and construct a canal. The contract involves lot of money and lot of money will be made. They will make money on demolition and make more money on construction. "</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Hanuman humbly bowed down and said "Why not we go down and present our case ? "<BR>Ram said "Times have changed since we were down there. They will ask us to submit age proof and we don't have either a birth certificate or school leaving certificate. We traveled mainly on foot and some times in bullock carts and so we don't have a driving license either. As far as the address proof is concerned the fact that I was born at Ayodhya is itself under litigation for over half a century, If I go in a traditional attire with bow and arrow, the ordinary folks may recognize me but Arjun Singh may take me to be some tribal and, at the most, offer a seat at IIT under the reserved category. Also, a God cannot walk in dressed in a three-piece suit and announce his arrival. It would make even the devotees suspicious. So it is dilemma so to say."</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"I can vouch for you by saying that I personally built the bridge."</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"My dear, Anjani putra, it will not work. They will ask you to produce the lay-out plan, the project details, including financial outlay and how the project cost was met and the completion certificate. Nothing is accepted without documentary evidence in India. You may cough but unless a doctor certifies it, you have no cough. A pensioner may<BR>present himself personally but the authorities do not take it as proof. He has to produce a life-certificate to prove that he is alive. It is that complicated."</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"Lord can't understand these historians. Over the years you have given darshan once every hundred years to saints like Surdas, Tulsidas, Saint Thyagaraja, Jayadeva, Bhadrachala Ramdas and even Sant Tukaram and still they disbelieve your existence and say Ramayana is a myth. The only option, I see, is to re-enact Ramayana on earth and set the government records straight once for all."</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Lord smiled "It isn't that easy today. Ravan is apprehensive that he may look like a saint in front of Karunanidhi. I also spoke to his mama Mareecha, who appeared as a golden deer to tempt Sita maiyya when I was in the forest and he said that he won't take a chance of stepping on earth as long as Salman Khan is around."<BR></FONT></DIV>

Ram Setu

The Lord surveyed the Ram Setu and said "Hanuman, how diligently and strenuously you and your vanara sena had built this bridge several centuries back. It is remarkable that…

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Market Close: Nifty crosses 5K.. Now what ?

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Market Close: Nifty crosses 5K.. Now what ?

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Post Market Commentary

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Post Market Commentary

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Rakesh Jhunjhunwala, Nirmal Jain, Nilesh Shah, Parag Parikh and more

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Rakesh Jhunjhunwala, Nirmal Jain, Nilesh Shah, Parag Parikh and more

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Record rally for seventh day in a row

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Record rally for seventh day in a row

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Emaar MGF files for IPO

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Emaar MGF files for IPO

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SEBI: MFs can now invest in IPOs, FPOs to be listed on foreign bourses; Can also invest in short term deposits in foreign banks

<DIV><FONT face=Verdana size=2>Indian investors looking to invest in overseas markets may soon be spoilt for choice with RBI raising the cap on mutual funds' overseas investment from 4 billion to 5 billion dollars, fund houses like SBI, ABN Amro, Fidelity, Deutsche and HSBC plan to launch global funds soon. They say these funds will invest across various assets abroad.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>While RBI has raised the overall cap, SEBI has enhanced the limit on overseas investment for individual fund houses from 200 million to 300 million dollars. There are 9 such funds available to Indian investors, of which 1 NFO is under way. Most of them invest up to 65% in Indian markets. But five NFOs that recently closed, collected 500 million dollars.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>SEBI yesterday also said that MFs can invest in derivatives listed on recognised bourses. MFs can also now invest in short term deposits in foreign banks and REITs listed on foreign bourses. The overall cap for foreign ETF investment will be $ 1 billion.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>SEBI added that MFs can now invest in IPOs, FPOs to be listed on foreign bourses. MFs can also invest in money market instruments not below investment grade amd also in GSecs not below investment grade.</FONT></DIV>

SEBI: MFs can now invest in IPOs, FPOs to be listed on foreign bourses; Can also invest in short term deposits in foreign banks

Indian investors looking to invest in overseas markets may soon be spoilt for choice with RBI raising the cap on mutual funds' overseas investment from 4 billion to 5 billio…

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Rollover Analysis: Market wide rollover continues momentum with 64% rollover

<DIV><FONT face=Verdana size=2>The positive sentiments in the market could be gauged by a continuing strong underlying trend in the market wide rollovers with a total of 64% open interest getting rolled over to the October series rising from 50% yesterday.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>They still continue to be marginally higher than the average D-1 rollovers of 62% over the last few expiries.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The average rollover cost also picked up marginally to 78 bps from 73 bps yesterday (average of positives).</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>We expect the average rollover cost to shoot up further on the expiry day as the long rollers would come in aggressively to roll their position.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The average rollover cost on the expiry day over the last few expiries stand at 105 bps.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>In Value terms, INR 419 bn worth open position has already been rolled to October series and another INR 270 bn needs to be rolled on the expiry day.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Rollovers in Nifty remained inline with that seen on D-1 of previous expiries with the same rising to 58% from 45% yesterday.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>However in contradiction to the trend seen in previous expiries, the pressure on Nifty roll cost has been easing and the same has risen to -20 bps from -41 bps a few days back.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>This signifies that short rollers have yet not rolled their position. With most of the short positions remaining to be rolled to October, we expect the pressure on Nifty roll cost to rise a bit on the expiry day. 95,804 contracts in Nifty got rolled over today and 26,714 fresh contracts were created in the October series. Current Nifty OI stands at 866,614 contracts, which is 3% lower than D-1 of previous expiry.</FONT></DIV>

Rollover Analysis: Market wide rollover continues momentum with 64% rollover

The positive sentiments in the market could be gauged by a continuing strong underlying trend in the market wide rollovers with a total of 64% open interest getting rolled o…

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Expecting a CAGR of 18-20% over next few years; looking at acquisitions in Europe and US: BHEL

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Expecting a CAGR of 18-20% over next few years; looking at acquisitions in Europe and US: BHEL

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BSE, NSE seek explanation from RNRL

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BSE, NSE seek explanation from RNRL

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Sistema, DLF join the telecom race

<DIV><FONT face=Verdana size=2>Russian conglomerate Sistema has finalised an agreement with Indian telecom services provider Shyam Telelink, the unlisted telecom services arm of the Shyam Telecom group, to acquire 74% in the company. The deal values Telelink at a conservative $114 million.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Simultaneously, Shyam has applied to the Department of Telecom (DoT) for unified access service licences (UASL) to operate networks in 21 Indian states.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Shyam's application comes even as real estate major DLF Ltd today confirmed that it will apply for telecom licences by Friday, the fourth real estate company to have applied for the same purpose. IndiaBulls Real Estate Ltd, Unitech Ltd and Parsvnath Developers are the others. This takes the total number of applicants for telecom licences to 13, including the Reliance Anil Dhirubhai Ambani- backed Swan and Cheetah Telecom, HFCL, Ruia-backed BPL Ltd among others.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The scramble for applicants comes soon after Communications Minister A Raja announced that DoT would not accept any new UASL applications after October 1. Under the terms of the deal, Sistema JS Financial Company, a company listed on the London Stock Exchange, has agreed to acquire 51% in Telelink, which operates a small but well-performing CDMA technology-based wireless network with over 250,000 users in Rajasthan.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Sistema will seek the approval of the Foreign Investment Promotion Board and has rights to enhance its stake to 74%, the maximum that a foreign company can have in an Indian telecomservice provider.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The marks the second time the Russian company is trying to get a foothold in the booming Indian telecom services market. In 2005, Sistema had signed a non-binding agreement to acquire 49% in Aircel (a mobile operator in Tamil Nadu then promoted by NRI businessman C Sivasankaran) for $450 million. The deal fell through even while Sistema was pushing a plan to use part of India's rupee debt to Russia for financing such bilateral projects.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>For Shyam, this marks the second major divestment in its services business – it sold its GSM operation in Rajasthan to Bharti Airtel Ltd in a cash-and-stock deal some years ago.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Industry experts said the key reason for Sistema buying out Telelink rather than applying on its own for a licence is that the latter is already an operator and, therefore, ahead of new applicants in the race for allocation of spectrum.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Sistema is the largest private sector consumer services company in Russia and the CIS. The joint market capitalisation of companies under Sistema Telecom is over $20 billion.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>Experts in the telecom business say that realty companies like Unitech and DLF with their large market capitalisation can raise the resources needed for the telecom business. With start-ups requiring over $5 billion to begin operations, most of them see a large upside in the business which is expected to grow to 500 million subscribers by 2011.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>"We do not have a telecom partner right now, but we are going ahead and applying for licences. A special purpose vehicle will be set up for the venture," a DLF executive said.</FONT></DIV> <DIV> </DIV> <DIV><FONT face=Verdana size=2>The government is currently reviewing the policy on spectrum allocation and grappling with plans for introducing next-generation high-speed mobile services in India. Since telecom licensing norms were changed in 2003 to allow universal access (before this, licences were dependent on the technology being used), the government granted over 97 such licences.</FONT></DIV>

Sistema, DLF join the telecom race

Russian conglomerate Sistema has finalised an agreement with Indian telecom services provider Shyam Telelink, the unlisted telecom services arm of the Shyam Telecom group, t…

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