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Business News
New Delhi February 3:
Leading foreign telecom giants —Telenor of Norway and Sistema of Russia — on Friday asserted that they would take legal measures to protect their investments in Indian operations with one of them speaking of “alternative” plans to quit India.
Telenor is a majority stakeholder in Uninor joint venture with Unitech and Sistema in Sistema-Shyam telecom that offers telecom services under the MTS brand. “Telenor Group wants to be clear that the Uninor operations are continuing. Our intention is to fight to protect our lawful investments in the country. We are looking to the government to arrive at a fair solution. We expect that the intention remains of bringing new competition to India,” Telenor Group said in a statement. Sistema claims to have pumped in over $2.5 billion (about Rs. 12,500 crore) and Telenor has exposure of over Rs. 14,000 crore in Indian services. Both Uninor’s 22 and Sistema-Shyam’s 21 licences have been cancelled as per Thursday’s Supreme Court judgement. Echoing similar sentiments, Russian conglomerate Sistema said in a statement that “it will contest this order by pursuing all available legal remedies. In the meantime, Indian operations will remain business as usual.”
The company claims to have more than 15 million subscribers, employing over 3,500 employees. When asked about quitting India, Telenor president and CEO Jon Fredrik Baksaas told Reuters, “That is one alternative on the table“. Telenor holds 67.25 per cent stake in Uninor while Sistema and the Russian government together have about 74 per cent ownership in the joint venture. “The Norwegian government has announced that they are monitoring the situation and will actively contribute to find solutions to secure Telenor’s investments and presence in India,” Telenor added. According to Trai, joint venture firm of the Norwegian company, Uninor had 36.30 million subscribers by end of December 2011.
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Source :
Punjab Mail Online
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News Date :
February 3
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Mumbai February 3:
Extending gains for the fourth day in a row, the BSE benchmark Sensex on Friday rose by 173 points on sustained buying driven by expectations of a cut in interest rates by the Reserve Bank.
The 30-share Sensex, which had gained 568 points in the last three sessions, advanced further by 173.11 points, or 0.99 per cent, to 17,604.96. Similarly, the National Stock Exchange index Nifty rose by 55.95 points, or 1.06 per cent, to 5,325.85 with blue-chips, led by Reliance Industries and Infosys, recording gains. Brokers said market sentiment remained buoyant on reports that the Reserve Bank of India might slash interest rates in view of slowing food inflation.
Sensex heaviest Reliance Industries rose by 1.10 per cent to Rs 837.75 and second heaviest Infosys gained 0.96 per cent to Rs 2,779.95. The realty sector index gained the most by rising 2.15 per cent to 1,784.17, followed by healthcare index which gained 1.69 per cent to 6,411.72 as Dr Reddys surged 2.16 per cent to Rs 1,670.50 on encouraging quarter earnings. Others on the plus side were Bharti Airtel, Sun Pharma, Tata Consultancy Services, ONGC, Mahindra and Mahindra, Tata Motors, ICICI Bank, Hindustan Unilever, HDFC Bank, BHRL and Cipla.
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Source :
Punjab Mail Online
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News Date :
February 3
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New Delhi February 3:
Internet search giant Google Inc has launched a programme to help women entrepreneurs grow their businesses through an online presence.
The program, 'Women Entrepreneurs on the Web' (WEOW), aims to help women entrepreneurs across India grow their online presence. It would provide women entrepreneurs support on using various web-based technologies in their day-to-day business while increasing the outreach to their customer base. "We are very excited to announce the launch of the WEOW programme in India as a targeted business diversity programme for women entrepreneurs," Google said in a statement.
The programme involves a five-circle approach that starts with building an online presence and moves toward collaborating effectively, connecting with customers and promoting their organisations, besides tracking and optimising their online presence. "We soon realised that they were true entrepreneurs and clearly not afraid to try new things, yet many were unaware of various products that can be used to leverage the full potential of the internet... The large number of women entrepreneurs in India made it a natural decision for us to pilot this initiative here," Google added.
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Source :
Punjab Mail Online
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News Date :
February 3
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New Delhi February 3:
Heavy Industries Minister and former civil aviation minister Praful Patel has been named in a Canadian newspaper report as an intended beneficiary of a bribe supposed to have been given by an Indo-Canadian businessman in an attempt to obtain an aborted contract for supplies to Air India.
Calling the allegations in the report “baseless and false”, Patel sent a letter to the Prime Minister requesting him to get all the documents related to the aborted contract examined by any agency and then convey the factual position to the authorities in Canada to avoid any “embarrassment to the Government of India or to me personally”. Canada’s The Globe and Mail newspaper reported this morning that Canadian authorities were “planning to prosecute” one Nazir Karigar, an India-born Canadian citizen, for alleged violation of the Foreign Public Officials Act, a relatively new law that forbids Canadian citizens from paying bribes abroad. The law applies to bribes as well as “attempted payments”.
The paper claimed that the 64-year-old Karigar was the India representative of CryptoMetrics, a Canada-based high-tech security company aiming to secure a “$100-million contract” to supply facial-recognition security system to Air India — a contract that never fructified. According to the newspaper, Canadian authorities allege that Karigar, who was born in Solapur in Maharashtra, met Patel in “early 2007” along with NCP leader Laxman Dhoble who now happens to be a minister in the Maharashtra government. “Later, Mr Karigar described to others...how he gave $250,000 to Mr Dhoble to pass on to Mr Patel so the minister would use his influence to make the project happen,” the report says.
Patel said the newspaper report was bizarre. “I have no clue as to where such allegations have come from. The news report makes bizarre claims and itself points out at one place that there is no evidence against me having received any money. The only reason I feel compelled to counter such charges is that because such allegations must not go uncontested. I have already informed the Prime Minister about the case. I have not decided at this point whether I would need to take a legal recourse as well,” he said.
Karigar, the report says, also happens to be a childhood friend of Hassan Gafoor, the former commissioner of Mumbai Police who headed the force during the 2008 terrorist attacks on Mumbai. At the time of this contract, Gafoor was serving in Air India as director of security. According to the news report, Karigar used his acquaintance with Gafoor to push his case. Gafoor today sent out an SMS saying “I have no such communication from any Court/Authority (in Canada). Hence, cannot comment. Anyway, I understand that the said project had never even materialised.” Gafoor has been quoted in the newsreport as denying charges of helping Karigar.
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Source :
Punjab Mail Online
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News Date :
February 3
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Mumbai February 3:
The BSE Sensex eased early on Friday as investors took profits after a more than 3 percent rally over the past three days and weighed by caution in Asian markets ahead of the key US jobs data.
At early trade, the main 30-share BSE index was down 0.07 percent at 17,419.11, with 13 of its components in the negative territory. The 50-share NSE index was down 0.19 percent at 5,260.05.
Brokers said continued buying by FIIs on the Indian bourses and encouraging quarterly earnings by some corporates mainly buoyed the trading sentiment but a weak trend on other Asian bourses, capped the gains here. In Asia, Hong Kong's Hang Seng Index shed 0.19 percent and Japan's Nikkei Index by 0.10 percent in early trade Friday.
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Source :
Punjab Mail Online
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News Date :
February 3
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Mumbai February 3:
There is no room for aggressive rate cuts in India in the current situation, Subir Gokarn, a deputy governor of the Reserve Bank of India, said on Friday.
Gokarn said a cut in the interest rates was the next logical step but would depend on other macro-economic factors. The RBI cut banks' cash reserve ratio, or the amount banks have to maintain with the central bank, by 50 basis points to 5.5 percent in its policy review on January 24 but kept its key policy rate unchanged.
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Source :
Punjab Mail Online
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News Date :
February 3
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New Delhi February 2:
Jolted by the Supreme Court’s judgement that cancelled 122 telecom licences issued in 2008, the new operators on Thursday expressed shock over the verdict and indicated that they may file review petition.
The affected companies whose licences are cancelled include Uninor (joint venture between Unitech and Telenor of Norway), Sistema-Shyam (joint venture between Shyam Telecom and Sistema of Russia), Videocon, Loop Telecom, Idea Cellular, Etisalat DB (joint venture between DB Realty and Etisalat of UAE) among others.
Sistema-Shyam, which offers mobile services under the MTS brand and Unitech-Telenor joint venture that provides services under brand Uninor have made huge investments for rolling out the services across the nation. The companies have said that they have been unfairly treated claiming that they simply followed the government process for acquiring licences.
“Sistema-Shyam is still awaiting the full text of the judgement... The company would like to state that being a law abiding organisation, it reserves the right to protect its interests by using all available judicial remedies,” SSTL said in a statement. Uninor expressed shock on the verdict and said, “We have been penalised for faults the court has found in the government process.”
The new licences bundled with 2G spectrum were issued by former telecom minister A Raja in January 2008 for Rs 1,651 crore for a pan-India licence. On this, the government auditor CAG had assumed a presumptive loss of revenue of up to Rs 1.76 lakh crore to the exchequer. According to estimates, cancellation of these licences may free about 500 Mhz of 2G spectrum which may be auctioned by the government.
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Source :
Punjab Mail Online
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News Date :
February 2
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Mumbai February 2:
The BSE benchmark Sensex surged by nearly 172 points in early trade on Thursday on buying by funds and retail investors, driven by encouraging quarterly earnings by corporates and firming trend on the other Asian bourses.
The 30-share BSE index, which had gained over 437 points in the previous two sessions, rose by another 171.72 points, or 0.99 per cent, to 17,472.30, with all sectoral indices gaining up to 1.41 per cent. The wide-based National Stock Exchange Nifty Index moved up by 44.75 points, or 0.85 per cent to 5,280.45 points. Brokers said continued capital inflows by foreign funds following an improvement in the sentiments on better—than— expected third quarter earnings by some corporates and strong sales in January by auto makers, supported the rally.
Also, firming trend on the other Asian bourses following overnight gains in the US stocks also buoyed the sentiments here, they said. In the Asian region, Hong Kong’s Hang Seng Index rose by 1.35 per cent and Japan’s Nikkei Index by 0.87 per cent in morning trade today.
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Source :
Punjab Mail Online
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News Date :
February 2
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London February 2:
A "disappointed" British Prime Minister David Cameron today said he would do "everything he can" to "encourage" India to reconsider its decision to acquire 126 French-made Rafale fighter jets instead of the UK-backed Eurofighter Typhoon aircraft.
"Of course, I will do everything I can, as I have already, to encourage the Indians to look at Typhoon," Cameron told Parliament, a day after India announced that it will opt for Dassault Rafale fighter jets under the biggest-ever military contract that may be worth over USD 10 billion. "The decision is obviously disappointing," Cameron said, insisting that the contract had not yet been awarded to the French firm.
Cameron said the Typhoon, made by a European consortium including British defence company BAE Systems, was "a superb aircraft, with further capability than Rafale and we will try to encourage the Indians to take that view". Earlier, a spokesman for Cameron said Britain would look very carefully at why India opted for Dassault's Rafale jets. "We will want to learn from that," he said.
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Source :
Punjab Mail Online
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News Date :
February 2
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New Delhi February 1:
The BSE Sensex posted their best January rise since 1994, after gaining about 2 percent on Tuesday, as foreign fund inflows showed signs of a revival and investors bet on a monetary easing to rekindle growth in Asia's third-largest economy.
Top lender State Bank of India surged 3.9 percent, propelled by a USD 1.6 billion capital infusion plan, while No.2 ICICI Bank closed 5.9 percent higher after it posted record quarterly profit, powering the main index to its biggest daily percentage gain in three weeks.
Tata Global Beverages jumped more than 10 percent to its highest close in nearly six months, a day after Starbucks Corp, the world's largest coffee company, announced a deal with the Indian company to open cafes in India. The benchmark 30-share BSE index closed 1.96 percent higher at 17,193.55, with all but five of its components closing in the green. The index had slumped 2.15 percent on Monday, snapping a six-session gaining streak. "This is a rally driven by global cues, most importantly the development in Greece," said R.K. Gupta, managing director at Taurus Mutual Fund, referring to hopes of a deal this week to free up the next tranche of aid for Greece.
"But, I don't think this is going to last long. The market will look for triggers after the results season and there are already concerns like deficit building up for the budget." India's finance ministry is expected to present its annual budget in March. India's fiscal deficit during April to December was Rs 3.81 trillion (USD 77.2 billion), or 92.3 percent of the full-year target, government data showed on Tuesday. During the same period in the last fiscal year, fiscal deficit was 44.9 percent of the budgeted target.
The main index rose 11.3 percent in January, its first monthly rise in three, and the best month since September 2010. It was the best January rise for the index since a 19.4 percent rise in 1994. Foreign funds have been net buyers of about USD 2 billion of Indian shares in January, after net outflows of about USD 500 million last year. Shares in State Bank of India (SBI) gained Rs 76.35 to 2,061.60, their highest close since Aug. 23 last year, cheering the federal government move to infuse USD 1.6 billion through a share purchase to shore up the lender's capital base.
However, SBI's Chief Financial Officer Diwakar Gupta said on Tuesday the bank would need to raise funds beyond the USD1.6 billion assured by the government to meet rising demand for loans. Shares in ICICI Bank rose Rs 49.95 to Rs 902.15, their highest close in three months, after the lender widely beat market expectations with a 20 percent rise in its fiscal third-quarter profit.
Energy major Reliance Industries, India's most valuable company and the heaviest stock in the main index, closed 2.8 percent higher at Rs 817.10, rebounding from a 3.1 percent fall in the previous session. The 50-share NSE index gained 2.2 percent to 5,199.25. In the broader market, there were more than two gainers for every loser on total volume of about 756 million shares. World stocks gained on Tuesday encouraged by hopes for a Greek bond deal this week and after European leaders backed a pact that is hoped will tackle the underlying causes of the region's debt crisis.
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Source :
Punjab Mail Online
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News Date :
February 1
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New Delhi February 1:
Setting aside the Delhi High Court judgement on sanction of prosecution in 2G case, the Supreme Court held that filing of a complaint under the Prevention of Corruption Act is a constitutional right of a citizen and the competent authority should take a decision on giving the sanction within a time frame.
If the sanction is not given within four months then it is deemed to have been granted, the two judge bench of the apex court held in a case filed by a petitioner seeking a direction to the Prime Minister for sanction to prosecute the then Telecom Minister A Raja. The bench comprising justices G S Singhvi and A K Ganguly held that the petitioner had the locus standi to seek sanction for Raja's prosecution.
It said sanction should be granted within a time frame and the competent authority shall take action in accordance with the guidelines laid down by the apex court in the Vineet Narain case of 1996. Justice Ganguly, who wrote a separate judgement, agreed with Justice Singhvi and said sanction would be deemed to be granted if the competent authority fails to take a decision within a period of four months. The bench said that right to file a complaint against a public servant under the Prevention of Corruption Act is a constitutional right.
The bench said it was not accepting certain submissions made by the Attorney General in defending the stand of Prime Minister's Office. Following the verdict, while the PMO is in the dock, the Prime Minister's name has been cleared. The court said it was not declaring as ultra vires the provisions of the Prevention of Corruption Act. The apex court had reserved its judgement on November 24, 2010 on the petition filed by the petitioner alleging that there was delay in taking action on his plea seeking sanction to prosecute Raja.
The petitioner, who had made the Prime Minister a party in the case, had initially sought a direction to the Prime Minister to take decision on sanction to prosecute Raja but later on he sought framing of guidelines on the issue as his plea became infructuous with the resignation of the DMK leader as telecom minister on November 14, 2010. He had alleged that there was an "inordinate delay" on part of the Prime Minister in taking a decision on his plea for grant of sanction to prosecute Raja in the scam and his plea was neither allowed not rejected for over 16 months.
The PMO had, however, refuted all the allegations and filed an affidavit before the apex court maintaining that the request for sanction for prosecution of Raja was considered by the Prime Minister and that he was advised that evidence collected by CBI was necessary before taking a decision. The government said as the CBI probe was going on it was necessary to wait for its completion before taking any decision on granting sanction. The petitioner had approached the apex court challenging the Delhi High Court judgement that had refused to pass any direction to the Prime Pinister for taking decision on sanction.
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Source :
Punjab Mail Online
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News Date :
February 1
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New Delhi February 1:
Prime Minister Manmohan Singh announced a massive investment of Rs.1.40-lakh crore by 17 blue chip government undertakings in the forthcoming financial year (2012-13) in a bid to cope with the adverse global economic environment.
Giving away the SCOPE Excellence awards for 2009-10 here, Mr. Singh said “public investment was particularly needed at a time when the country was facing a difficult global environment and looking to domestic drivers of growth.” Union Minister of Heavy Industries Praful Patel presided over the function.
The Prime Minister said that 17 central public sector undertakings (CPSUs) had committed to an investment plan amounting to Rs.1.40-lakh crore in the next fiscal and encouraged other CPSUs to similarly “pay attention to boosting capital investment” and increase their turnover to stave off the adverse global impact on the economy. He hoped that the private sector would work together with the PSUs and complement each other to meet the demands of the country's growing economy which needed huge amounts of investment, particularly infrastructure.
Performance needed to be stepped up in other areas such as mining, coal production, petroleum and gas, he said. He hoped the CPSUs would explore opportunities for acquisition of raw material assets abroad as approved by the Union Cabinet. Expressing dissatisfaction at the 15 per cent share of manufacturing sector in GDP, Dr. Singh hoped the CPSUs would embark on an ambitious expansion plan to target a growth of 12-14 per cent in the manufacturing sector a reality. Underlining the government's commitment for a strong public sector, the Prime Minister said he would remain supportive of those PSUs which needed assistance to become viable again.
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Source :
Punjab Mail Online
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News Date :
February 1
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New Delhi January 31:
Reflecting growing prosperity, India's per capita income grew by 15.6 percent to Rs 53,331 per annum in 2010-11, crossing the half-a-lakh rupees mark for the first time, according to government data.
"The per capita income at current prices is estimated at Rs 53,331 in 2010-11, as against Rs 46,117 for the previous year, depicting a growth of 15.6 percent," said the Quick Estimates of National Income released by the Central Statistical Office (CSO). The growth in per capita income comes on the back of 8.4 percent expansion of the Indian economy during the last fiscal.
Per capita income is the earnings of each Indian if the national income is evenly divided among the country's population of around 120 crore. It is an important indicator of overall prosperity in the country. However, the increase in per capita income at constant (2004-05) prices, after discounting for inflation, was about 6.4 percent in 2010-11. It was Rs 35,993 in 2010-11, as against Rs 33,843 in the previous year.
According to the figures, the size of the economy at current prices rose to Rs 71,57,412 crore last fiscal, up 17.5 percent from Rs 60,91,485 crore in 2009-10. Based on 2004-05 prices, the Indian economy expanded by 8.4 percent during the fiscal ended March, 2011. The GDP at constant (2004-05) prices in 2010-11 has been estimated at Rs 48,85,954 crore, as against Rs 45,07,637 crore in 2009-10, as per the Quick Estimates. The rate of growth in the 2009-10 fiscal stood at 8.4 percent, as per provisional estimates which were also released today.
As per the Quick Estimates, private final consumption expenditure (PFCE) in the domestic market at current prices was estimated at Rs 43,59,792 crore in 2010-11, as against Rs 37,22,036 crore in 2009-10. At constant (2004-05) prices, the PFCE stood at Rs 30,87,047 crore in 2010-11, as against Rs 28,52,301 crore in the previous fiscal.
"In terms of GDP at market prices, the rates of PFCE at current and constant (2004-05) prices during 2010-11 are estimated at 56.8 percent and 58.9 percent, respectively, as against the corresponding rates of 57.6 percent and 59.7 percent, respectively, in 2009-10," the data said.
The per capita PFCE in the domestic market in 2010-11 stood at Rs 36,760 at current prices and Rs 26,029 at constant (2004-05) prices, as against Rs 31,812 and Rs 24,379, respectively, in 2009-10. Gross Domestic Saving (GDS) stood at Rs 24,81,931 crore in 2010-11, as against Rs 21,82,970 crore in 2009-10, constituting 32.3 percent of the GDP at market prices, as against 33.8 percent in the previous year.
"The decrease in the rate of GDS has mainly been due to the decrease in the rates of financial savings of the household sector from 12.9 percent to 10 percent and the private corporate sector from 8.2 percent in 2009-10 to 7.9 percent in 2010-11," the estimates said. Gross Domestic Capital Formation, however, increased from Rs 23,63,670 crore in 2009-10 to Rs 26,92,031 crore in 2010-11. At constant (2004-05) prices, it increased to 19,74,172 crore last fiscal from Rs 18,38,870 in 2009-10.
"The rate of gross capital formation at current prices is 35.1 percent in 2010-11 as against 36.6 percent in 2009-10. The rate of gross capital formation at constant (2004-05) prices is 37.7 percent in 2010-11 as against 38.5 percent in 2009-10," the Quick Estimates said. It further said that the change in stocks of inventories, measured as additions to stocks increased at current prices, stood at Rs 2,54,970 crore in 2010-11 as against Rs 1,74,310 crore in the year-ago period.
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Source :
Punjab Mail Online
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News Date :
January 31
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Mumbai January 30:
The BSE Sensex rose 330 points on Tuesday, regaining much of the lost ground of the previous session, on buying in bluechips such as Reliance Industries and SBI on increased FII inflows and a firm global trend.
The Bombay Stock Exchange 30-scrip Sensex, which had lost 371 points on Monday on profit-booking, spurted 330.25 points, or 1.96% to 17,193.55. The 50-stock NSE index Nifty recovered 111.95 points, or 2.20% to 5,199.25. It had lost 117.40 points in the last session. The most-heaviest on the benchmark, RIL shot up 2.51% after a loss of over 3% yesterday.
State-owned SBI jumped 3.53% on the government's decision to infuse Rs 7,900 crore capital in the bank. Top private lender ICICI Bank surged 5.87% on rise in third quarter earnings. A firm trend in Asian markets and higher openings in Europe amid reports that European leaders have agreed on a treaty to resolve euro-zone debt crisis improved investor sentiment. The banking index gained the most, rising 3.84% to 11,390.70. In the IT sector, Infosys rose 1.38%, Tata Consultancy Services by 1.89 and Wipro by 0.88%.
Bajaj Auto, Mahindra and Mahindra, Hero Motocorp, Tata Motors, Jindal Steel, Sterlite Industries, Tata Steel, Sun Pharma, DLF, Hindalco, Larsen and Toubro and BHEL recorded handsome gains.
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Source :
Punjab Mail Online
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News Date :
January 31
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Mumbai January 31:
State-owned Punjab National Bank Tuesday reported a 5.5 percent increase in net profit at Rs.1,150 crore for the quarter ended Dec 31 as against Rs.1,089.77 crore during the like period of the previous financial year.
Total income stood at Rs.10,435 crore up 30.82 percent during the quarter as compared to Rs.7,976.35 crore in the year ago period, the company said in a regulatory filing. Segment-wise, income from treasury operations grew 35.38 percent to Rs.2,217 crore while income from corporate and wholesale banking grew 48.44 percent to Rs.4,788.29 crore during the quarter.
The retail-banking segment reported earnings of Rs.3,280.38 crore during the period, up 13.3 percent against Rs.2,896 crore in the corresponding period of 2010-11. The bank’s gross non-performing assets increased to 2.42 percent from 2.03 percent in the quarter ended Dec 31, 2011.
The bank’s net profit in the first nine months of the current fiscal showed a rise of 7 percent and stood at Rs.3,460 crore from Rs.3,232.6 crore during the like period of 2010-11. At the Bombay Stock Exchange the shares of the company were 1.84 percent down to trade at Rs.938.30.
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Source :
Punjab Mail Online
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News Date :
January 31
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Chicago January 30:
India, which imports 12 per cent of its oil from Iran, will not scale down its petroleum imports from Tehran despite US and European sanctions against the Islamic republic, Finance Minister Pranab Mukherjee has said.
“It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them,” Mr. Mukherjee told reporters.
Speaking at the end of a two-day visit aimed at wooing U.S. investment, Mr. Mukherjee, on Sunday, said “Some other countries, Saudi Arabia, Nigeria, the other Gulf countries they also contribute but Iran contributes substantially.” “We (India) imports 110 million tonnes of crude per year. We will not decrease imports from Iran. Iran is an important country for India despite U.S. and European sanctions on Iran,” the finance minister said.
India, the world’s fourth-largest oil consumer, is Iran’s second-biggest oil client after China. The U.S. and other Western sanctions have been imposed on Iran’s economy over Tehran’s controversial nuclear programme. U.S. President Barack Obama added to those measures on December 31, last year when he signed into law additional sanctions targeting Iran’s central bank and financial sector.
Indian Ambassador to the U.S. Nirupama Rao last week said that India’s purchase of oil from Iran has dropped slightly in last two years and is expected to drop further given the difficulties New Delhi might have in making payments through banks due to tough sanctions imposed against Iranian banks. Ms. Rao had said India was in touch with the U.S. Government and closely monitoring the developing situation concerning Iran, when asked about the pressure from the U.S. that India needs to reduce its dependency on Iranian oil.
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Source :
Punjab Mail Online
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News Date :
January 30
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Mumbai January 30:
Country’s largest lender the State Bank of India on Monday said the government has approved capital infusion of Rs. 7,900 crore in the bank, a development that will help the lender to increase its business activities.
The capital infusion will “increase the issued capital by the SBI by way of preferential allotment of equity shares to the government to the extent of approximately Rs. 7,900 crore including premium,” SBI said in a filing with the BSE. The Government of India conveyed its approval on Monday, it said. With the capital infusion, the government stake would go up to about 65 per cent. At present, the government of India holds 59.4 per cent stake in the SBI.
The capital infusion by the government will raise tier I capital of the bank to about 8 per cent. As of September, 2011, the capital adequacy ratio (CAR) of the SBI stood at 11.4 per cent. Of this, tier-I capital stood at 7.47 per cent at the end of second quarter against the minimum 8 per cent level desired by the government. It is to be noted that earlier this month, the SBI chairman Pratip Chaudhuri had said the government has approved a capital infusion of Rs. 6,000-8,000 crore in the bank by March 31, 2012.
Last year, the SBI had submitted a proposal to the government for raising Rs. 20,000 crore through a rights issue to fund its growth plans over the next two fiscals. The SBI had raised over Rs. 16,000 crore through a rights issue in 2008. In the last rights issue, the government contribution was in the form of bonds to the bank instead of cash. In 2010-11, the government provided capital support to the tune of Rs. 20,157 crore to public sector banks.
Most of the public sector banks got capital support from the government last fiscal. These banks included the Punjab National Bank, the Bank of Baroda, the Union Bank of India, the Oriental Bank of Commerce, the UCO Bank and the Dena Bank. It is to be noted that Financial Services Secretary D.K. Mittal had said the state-run banks would be requiring about Rs. 3.5 lakh crore by 2021. A committee headed by Finance Secretary R.S. Gujral is working out a strategy for the required capital infusion in public sector banks over a period of next 10 years.
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Source :
Punjab Mail Online
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News Date :
January 30
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Mumbai January 30:
Snapping a six-day rally, the BSE benchmark Sensex on Monday tumbled by 371 points on profit booking at existing higher levels amid a weakening global trend.
The Sensex dropped by 370.68 points, or 2.15 per cent, to 16,863.30 points. The 30-share index had gained over 782 points in the last six trading sessions. The broad-based National Stock Exchange index Nifty lost 117.40 points, or 2.26 per cent, to close at 5,087.30 points with engineering, power and realty stocks plunging up to 5.55 per cent.
A weak trend in the Asian region and lower opening in Europe dampened the market sentiment, brokers said. Market major Reliance Industries plunged 2.71 per cent to Rs. 795.45 ahead of its plan to buyback stocks, while Infosys lost 0.54 per cent to Rs. 2,705.90 on fears the financial turmoil in Europe might hurt earnings. Power equipment maker BHEL led the fall in the sector after posting disappointing quarterly profits. BHEL tumbled 10.41 per cent to Rs. 245.15 and Larsen and Toubro by 5.37 per cent to Rs. 1,307.35.
Among banking stocks, private lender ICICI Bank fell by 4.07 per cent to Rs. 851.95 and state-run State Bank of India lost 2.54 per cent to Rs. 1,990.70. The capital goods sector index suffered the most by losing 5.55 per cent to 9,784.77, followed by the power index which lost 3.54 per cent to Rs. 2,046.81. The realty index fell by 3.10 per cent to 1,650.21 and metal index by 2.85 per cent to Rs. 11,246.38.
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Source :
Punjab Mail Online
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News Date :
January 30
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Chicago January 29:
Pitching for foreign investment in the infrastructure sector which needs one trillion dollars in the 12th five-year plan, finance minister Pranab Mukherjee on Sunday asked the US investors to access the Indian debt market through a mechanism of regulated entities with a sustained long-term interest rate.
Meeting leaders of Fortune 500 companies here, he assured them that India has evolved a transparent and stable regulatory regime in sectors such as electricity, telecommunications, ports, airports, petroleum and natural gas, and a regulator for the coal sector is on the anvil. He told them that India has recently liberalised foreign participation in the debt-equity market by allowing foreign investors to invest in the Indian equity directly.
Seeking a "greater degree of involvement" of foreign investors, Mukherjee said the "debt requirement for the infrastructure sector is very large." He said India had recently evolved a mechanism to enable access to the Indian debt market through infrastructure debt funds which will be regulated entities with a sustained long-term interest rate, long horizon entities like pension and infrastructure and insurance funds.
The extent of foreign participation both through debt and equity in the financing of India's infrastructure has been of the order of around 8 to 10 per cent in the recent past. According to a spokesperson, Mukherjee said that so far foreign participation has been 8 to 10 per cent through debt and equity and now from January 1, 2012 India has allowed qualified foreign investors to invest in Indian equity. Under this major initiative, they can buy stocks of Indian companies.
"So far we are observing that FIIs (foreign institutional investors) outflow of funds in India was higher than the inflow in the previous few months but now recently it has been observed that this trend has also reversed," Mukherjee said. FII investments in India are larger and their withdrawal of funds is also from Indian stock market because many foreign investors go outside India, where rates are lower, for investment because of high interest rates in India.
Now situation is under control and RBI has recently given benefits to the banks by reducing cash-reserve ratio from 6 per cent to 5.5 per cent, which means they have given more equity. Because every bank has to keep money with RBI, more liquidity will be allowed to the banks, the minister said. In infrastructure sector, India needed around one trillion dollars during the 12th five-year plan and out of that 50 per cent has to come from the private sector, Mukherjee said. India will be following PPP -- private, public partnership -- model, he noted.
"At present it is 30 per cent. The private sector participation has been raised to 50 per cent from 30 per cent out of total 1 trillion dollars which we require for infrastructure sector," Mukherjee said. He said that despite world economy not being successful and facing uncertainty, Indian growth fundamentals are quite strong and India is expecting a growth rate of 7-8 per cent. The finance minister said India's GDP growth is domestic demand driven and that external commercial borrowing is within the limits.
He also explained the need for PPP in low-cost energy projects, including new and renewable biofuels and solar energy. PPP represents a commercially attractive opportunity for foreign investors. Nearly the whole infrastructure sector allows FDI to come from the automatic route to the extent of 100 per cent of investment, he said. Besides, Mukherjee said, "we have standardised contract documentation which is required for these projects." "... we have established unique and innovative financing instrument such as a scheme to support viability gap funding for PPP projects," he said.
Mukherjee also spoke about the Delhi-Mumbai Industrial Corridor, for which a huge investment is required. About 6-7 new cities will be set up on this corridor requiring buildings, construction etc. Japan has committed $500 billion in various sectors like transport, metro and technology. Mukherjee said that besides money, India needed technology. "We want to share new technology. We need transfer of technology because money alone will not be sufficient so technology is also required." Mukherjee said US investors should come forward and take benefit of this opportunity.
He said that manufacturing sector should contribute 25 per cent to economy. The New Manufacturing Policy will aim at how to reach that target. Mukherjee also said that India has become 34th country of the Financial Action Task Force to act against money laundering and counter-finance terror activities.
Those present at the meeting organised by the Chicago Council on Global Affairs (CCGA) included CCGA President Marshall Bouton; Stephen Chipman, CEO Grant for Thornton LLP; James A Gordon, President and Founder, Edgewater Funds; Brian Kenney, Chairman, President and CEO of GATX; Jennifer Scanlon, President International and Vice President USG Corporation; Matthew J Shattock, President and CEO of Beam Inc; Gordon Hunter, Chairman, President and CEO Littelfuse Inc; and Rajeev Gautam, President and CEO of UOP LLC - a Honeywell Company.
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Source :
Punjab Mail Online
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News Date :
January 29
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Davos January 29:
Expressing disappointment over impasse in WTO Doha talks for a global trade deal, India, Brazil and South Africa (IBSA) underscored the need for resisting protectionism in the current economic scenario.
“Global economic conditions are challenging, this is almost fourth year of recession. The only way is to engage more and work for a multilateral trade regime,” Indian Commerce and Industry Minister Anand Sharma told reporters here. At the IBSA meeting, on the sidelines of WEF annual event, the trade ministers said that developed countries had caused distortions by high-level of protection in the form of tariffs and subsidies in agriculture.
These distortions “continue to undermine the development prospects of developing countries, especially the least developed among them,” an IBSA declaration said. It said, “The ministers expressed deep disappointment at the current impasse in the Doha Development Agenda negotiations...” The IBSA ministers met ahead of the informal meeting of important WTO members, including India, US and South Africa. Brazilian Foreign Minister Antonio Patriota and Rob Davis of South Africa were also present.
The meeting hosted by the Swiss authorities was also attended by Director General of the WTO Pascal Lamy. US Trade Representative Ron Kirk said, “We need to have a new start and have a beginning towards putting something concrete on the table.... I am hopeful.”
India has mechanism to deal with corruption: Sharma: India asserted that it has the mechanism to deal with issues of corruption and is robust enough to brave the impact of the global financial crisis on the domestic economy. “It is always fashionable to go with the wrong perceptions but India is a rule-governed Republic... We did handle the Satyam scandal effectively. You are talking about 2G but I can name many other Gs. This perception about India has to change.
We have all the mechanism in place to tackle any kind of problems,” said Commerce Minister Anand Sharma. Responding to the issues of corruption raised at a WEF session on ‘How Immune is India?’, an aggressive Sharma questioned, “Has the US not seen the Enron and the UK its News of the World? Let me question whether other countries have got the system to tackle frauds.”
The issues of corruption was raised by BBC commentator Nik Gowing who said, “things like 2G corruption, Anna Hazare and (roll back of) FDI in retail have added to this (negative) perception”.
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Source :
Punjab Mail Online
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News Date :
January 29
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