Indian Stock News by Experts

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. H...

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, facin...

Weekly Technical Analysis

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Centurion Bank of Punjab: Buy

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Kalindee Rail Nirman: Buy

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Hanung Toys: 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...

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 co...

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 eigh...

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 ...

Reliance Power plans $3.5 bn IPO

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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. ...

Surya Pharma, Marico, SEAMAC, Banking

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Central Bank

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Educomp Solutions

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Monthly Technicals, Weekly Track Report

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Punj LLoyd

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Mphasis

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Reliance Power to raise $ 2.5-3 bn via IPO

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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

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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, ...

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 ...

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, wi...

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 ...

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 th...

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 nea...

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"...

Weekly Newsletter

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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 ...

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....

Sensex soars 727 points on strong FII inflow

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Market rallies for ninth straight trading session

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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 sever...

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

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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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Record rally for seventh day in a row

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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' oversea...

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...

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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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 service...