Indian Economy: News and Discussion

[Singh]

3G reserve prices fixed at Rs 4040 cr

Paving the way for unleashing of next generation mobile telephony, the government on Friday fixed reserve price of Rs 4040 crore for auction of 3G spectrum, a move that would help it garner at least Rs 32,320 crore.

A consensus between Finance Minister Pranab Mukherjee and Telecom Minister A Raja was arrived as the two met Prime Minister Manmohan Singh for the approval of the reserve price, based on which the process of bidding would start soon.

Initially six private operators apart from state owned MTNL and BSNL would be allowed to offer 3G services that enables high speed internet, videos and many other value-added services on mobile phone.

A source close to the development said the issue would now go to empowered group of ministers for fine-tuning and hopefully the programme for bidding and other details would get a nod soon.

Raja had met Mukherjee earlier this week too as the Finance Ministry was suggesting the doubling of reserve price from Rs 2020 crore being favoured by Department of Telecom and hence the two ministries had got engaged in a discussion for consensus.

While the government would get at least Rs 24,240 crore from six operators that are chosen after the bids, MTNL and BSNL would shell out another Rs 8080 crore, source said.

After the issue is cleared by EGOM, the Telecom Ministry will announce the detailed programme for the auction which will include pre-bid conference in the next couple of weeks, source said.

Sources said the auction may start by the middle of August.

The Telecom Ministry had earlier recommended a reserve or minimum price of Rs 2020 crore which was not accepted by the Ministry of Finance who had asked the Telecom Ministry to double it.

The likely contenders for the 3G spectrum may include Bharti Airtel, Vodafone, Reliance Communication, Tatas and a few other new private telecom operators.

Similarly, on the lines of 3G the Government will also auction spectrum for wireless broadband services known as WiMax.

The Telecom Ministry had recommended pan-India reserve price of Rs 1,010 crore for wireless broadband services whereas Ministry of Finance had doubled it in this case too.

Its was, however, not immediately ascertained where this also figured in the discussions with the Prime Minister on Friday.

Sources, however, said there could be a consensus on this also.

3G reserve prices fixed at Rs 4040 cr

 

[Singh]

Paramount signs $1.5 bn deal with Airbus

NEW DELHI: Madurai-based Paramount Airways will buy 10 Airbus A321 aircraft for $1.5 billion. The company has placed the order with French
aircraft manufactures Airbus for operating flights to the Middle East, Africa and Far Eastern destinations, Paramount managing director M Thiagarajan said.

“These overseas destinations will only have first class and business class, a model similar to our domestic operation,” he said. The delivery of first aircraft will be in the fourth quarter of 2010.

The European Central Bank is funding Paramount’s fleet expansion plan.

“Paramount has signed an agreement to buy 10 aircraft at a list price of $90 million each. The airline has option to buy 10 additional aircraft,” Airbus vice president (sales) Miranda Mills told ET.

The company’s plan to add 10 more aircraft in its existing fleet of 5 airplanes comes at a time when most of the domestic carriers are deferring their fleet expansion plans due to the current economic slowdown. Paramount currently operates with five 70-seater Embraer jets.

Paramount plans to operate flights on international sectors soon. The existing guideline by the government allows an airline to fly overseas only after it completes five years of operation in the domestic market and has a fleet size of at least 20 aircraft.“We would complete five years of operation next year. By then we would also have a fleet size of more than 20 aircraft,” Mr Thiagarajan said.

Paramount signs $1.5 bn deal with Airbus- Airlines / Aviation-Transportation-News By Industry-News-The Economic Times

 

[LETHALFORCE]

India-US trade can reach USD 320 bn by 2018

India-US trade can reach USD 320 bn by 2018: CII .:. NewKerala - India 's Top Online Newspaper




India-US trade can reach USD 320 bn by 2018: CII

New Delhi, June 21 : Bilateral trade between India and the US can reach USD 320 billion by 2018, an eight-time increase from USD 42 billion in 2007-08, says a report by the Confederation of Indian Industry (CII).


'Given the right conditions, merchandise trade could rise to USD 320 billion by 2018,' said the report, 'India-US Economic Relations: The Next Decade', released by Commerce Minister Anand Sharma in New York.

The report said US investment in India went up to USD 9 billion in 2007 from 2000, and Indian investment in the US had similarly risen, to stand at USD 3.7 billion.

According to CII, the nuclear agreement reached between the two countries also marks the beginning of a new era in bilateral relationship and opens up various trade avenues like nuclear energy.

'India intends to import 24 reactors in the next 11-15 years, and could create as many as 20,000 new jobs directly and indirectly in the US from nuclear trade,' the report said.

CII said although the US has been India's largest partner in trade, investment and technology, the two countries had to work towards strengthening commercial ties.

The new vision for economic engagement must shift from high-technology trade to frontier technology, trade in goods and services, and investments in infrastructure, it added.

In the services sectors, bilateral trade stood at around USD 20 billion in 2007, the two countries accounting for the volume almost equally, it noted.

While visa restrictions and partial openings of sectors can be a barrier to trade, there are areas such as tourism, logistics, healthcare, entertainment and telecom where trade can be significantly stepped up, CII said.

The chamber also addressed the issue of cooperation on renewable energy and climate change, and expanding partnership in the sectors such as agriculture, science and technology, intellectual property rights, cyber security and higher education.

 

[Rage]

That is an insane amount!

However, it is chastening to remember that trade with the US dropped 23.47% for the first quarter of the calendar year 2009 (Jan-March interval), ofcourse on account of the global recession. To quote Ajai Shahi, Director General of the Federation of Indian Export Organizations, "It (India-US trade) is in line with global change. The recession is worldwide and it cannot be decoupled". Still, sectors like steel and apparels witnessed growth during the period, and the FIEO estimates that US demand could start picking up in the first quarter of 2010.

 

[Singh]

Rio Tinto’s legal switch to India puts pressure on London​

Rio Tinto has hired a team of lawyers in India to try to reduce its annual £60 million legal bill by 20 per cent. The move will send a shudder through Britain’s commercial legal market, which earns billions of pounds a year in fees from big banks and multinationals. The Anglo-Australian miner, with CPA Global, a legal outsourcing group, has recruited 12 lawyers in Delhi to work for it on tasks such as reviewing documents and drafting contracts.

The unit is expected to double in size within a year and will save the company 20 per cent of its annual legal budget, believed to be about $100 million (£61 million). Rio has 100 lawyers worldwide and uses law firms such as Linklaters and Baker & McKenzie for external advice.

It began a shake-up of its legal department as part of cost-cutting that that will lead to the loss of 15,000 jobs. Leah Cooper, Rio’s managing attorney, said: “We took a look at our internal costs and the amount we were spending on outside counsel and saw an opportunity to make significant changes.”

Rio Tinto estimates that its Indian team, which has operated since May 1, will be seven times cheaper than comparable lawyers in London. It said that it had already saved more than $1 million. Other big companies, which can spend from £10 million to £100 million a year on legal costs, are thought to be considering similar arrangements. Senior company lawyers are under increasing pressure to slash spending on outside lawyers. This has led to big law firms being squeezed on hourly rates for even complex work, such as tax.

Rio’s move is a particular blow. While some companies have outsourced standard legal work to India, Rio Tinto is believed to be the first big company to recruit a team of fully qualified lawyers to perform substantive legal work that otherwise would have been done by lawyers in London.

CPA Global is a private Jersey company with a $1 billion turnover. It specialises in trademarks and patents and acts for clients such as Microsoft. It has spent more than $50 million on legal facilities in Delhi and expects to recruit 500 lawyers there in nine months. In two years, it aims for 3,000 lawyers in Manila, New Zealand and South Africa.

Rio Tinto’s legal switch puts pressure on London - Times Online

 

[thakur_ritesh]

though it is looks insane but i dare say it is not far from reality, especially looking at how it has gone by in the past 5 years when the growth of indian merchandise exports were compounding at around 20-25% yoy, except for of course the latter half of last fiscal and the current quarter of this fiscal, but the way the things look today with the things expected to pick up steam post the first half of this year indo-us tarde would do good to maintain the same amount by this fiscal end, hopefully at around 40b usd, and if we can pick up pace and ensure 30% growth rate yoy then the figure looks well with in reach but hopefully during this time period there needs to no other economic melt down. had there been no economic melt down the figure would have been more like 25% yoy growth. two unchartered territories that will significantly add to the tally will be the import of nuke plants, and nuke fuel as also the military hardware and software which help the balance of trade which so far has been clearly to india's advantage.

 

[Singh]

India: Glaxo and Dr Reddy’s Form an Alliance​

GlaxoSmithKline has taken another significant step in building its business in emerging markets by reaching a deal to form an alliance with the Indian generic drug maker Dr. Reddy’s Laboratories. Andrew P. Witty, left, the chief executive of Glaxo, has made growth in emerging markets a top priority for the company and is expanding the company’s reach into generic medicines that can be sold as brands in poorer countries. The new deal, effective immediately, gives Glaxo access to Dr. Reddy’s portfolio and future pipeline of more than 100 branded pharmaceuticals in areas including cardiovascular, diabetes, oncology, gastroenterology and pain management. The first products are expected to reach the market in the second half of the year, and Mexico is likely to be the first country, a Glaxo spokesman said.

http://www.nytimes.com/2009/06/16/b...-GLAXOANDDRRE_BRF.html?scp=46&sq=india&st=nyt

 

[Singh]

India's GDP to average 7.2 pc over next 5 yrs: Economist

India's GDP to average 7.2 pc over next 5 yrs: Economist​

MUMBAI: India's real GDP growth will average at 7.2 per cent over the next five years even as risks to the global economy continue to remain
high, the Economist Intelligence Unit (EIU) has said.

The world's second-fastest growing economy may also see negative inflation for the next 3-6 months triggering expectation of rate cuts by banks, the research arm of London-based Economist added.

"Emerging Asia will be the world's fastest-growing region over the next five years (2010-13), but this mainly reflects a relatively strong growth performance by India and China. The EIU expects India's real GDP growth to average 7.2 per cent over the next five years," it said.

Global share prices have been boosted on expectations that the worst of the global economic meltdown is over, however, a sustainable recovery is distant, it maintained.

"India is likely to see negative inflation for three to six months, making a case for further rate cuts by the central bank. We expect the repo rate to be cut by a further 50 basis points, to 4.25 per cent, in the next few months," EIU Director of Research Manoj Vohra said.

Inflation turned negative 1.61 per cent for the first time in 30 years for the week ended June 6.

He, however, said negative inflation is not a grave concern for India.

There may be more green shoots of recovery in the global economy as fiscal and monetary stimulus packages start to have an impact, but "growth over the next two years will be marked by a high degree of volatility", Vohra said.

There will be a substantial slowdown in quarter-on- quarter growth rates once the stimulus fades, he added.

"Risks to the global economy remain high. The most serious concern is that various stimulus packages being implemented globally will not be sufficient to trigger self-sustaining recovery," the Economist said.

"For India, the biggest risk to growth remains its ballooning fiscal deficit," it added.

It is also possible that there may be a much sharper snap back in growth over the coming months led by aggressiveness of the global macroeconomic response.

It may, however, not be sustainable and would create problems for policy-makers, Vohra said.

India's GDP to average 7.2 pc over next 5 yrs: Economist- Indicators-Economy-News-The Economic Times

 

[youngindian]

S Korean FM heads to India for economic co-op talks

S Korean FM heads to India for economic co-op talks_English_Xinhua



SEOUL, June 22 (Xinhua) -- South Korean Foreign Minister Yu Myung-hwan left for India on Monday for talks on ways to enhance economic ties between the two countries, officials said here.

"Minister Yu will meet with senior Indian officials in New Delhi, including Foreign Minister S.M. Krishna and Commerce Minister Anand Sharma, on Tuesday for talks on a range of bilateral and global issues," a South Korean foreign ministry official said.

The ministers will, in particular, be focusing on the issue of Comprehensive Economic Partnership Agreement (CEPA), on which the two nations are in the final stage of negotiations, the official added.

Yu also plans to pay a courtesy call on Prime Minister Manmohan Singh, who retook the office late last month for a second consecutive five-year term.

Yu is scheduled to wrap up his visit and fly back home on Wednesday.

"The foreign minister's visit to India this time is expected to make big contributions to the strengthening of South Korea-India ties and the government's push for the 'New Asia Initiative,'" the ministry said in a press release.

 

[LETHALFORCE]

India's GDP Growth To Average 7.2% In Next 5 Years

INO.com News - India's GDP Growth To Average 7.2% In Next 5 Years: EIU


India's GDP Growth To Average 7.2% In Next 5 Years: EIU

14 hours ago

(RTTNews) - India's real Gross Domestic Product growth will average around 7.2% over the next five years, despite risks to the global economy continue to remain high, PTI reported quoting London-based, Economist Intelligence Unit or EIU.

The think tank predicted that India might witness negative inflation for the next 3-6 months giving room for banks to slash interest rates further and said the negative inflation was not a serious concern for India. India's inflation turned negative at 1.61% for the week ended June 6, 2009 for the first time in three decades.

Manoj Vohra, Director of Research of EIU, expects the repo rate to be cut by a further 50 basis points to 4.25% in the next few months.

In India, the increase in fiscal deficit was the biggest risk for the economic growth, EIU said, adding that there might be a much sharper snap back in growth over the coming months led by aggressiveness of the global macroeconomic response.

EIU further stated that Asia would emerge as the world's second-fastest growing region over the next five years (200-2013), but this reflects on the strong growth performance by India and China.

 

[Singh]

Michelin to invest Rs 7,000 cr in India​

NEW DELHI: In what would be one of the largest FDI inflows into the country, Michelin & Cie, the world’s second-largest tyre maker, is
looking to invest up to Rs 7,000 crore ($1.48 billion) in India over a 10-year period to make and market radial tyres and tubes in the country.

Incidentally, this development follows the French tyre manufacturer’s announcement to cut 2,900 jobs in France as part of a business reorganisation to focus on higher-margin tyres.

For Michelin, this project comes after a joint venture with Delhi-based Apollo Tyres failed to take off. Apollo Tyres has already given a no- objection certificate (NOC) to Michelin to start its own operations in the country even as the French tyre major continues to own around 8% in it.

A person directly involved in the transaction said the French tyre giant has sought government approval to acquire 100% stake in a new company Michelin India Tamil Nadu Tyres formed in April 2009. This company will set up the proposed greenfield unit, which would absorb investment worth Rs 4,000 crore in the first phase running into 2016.

“The company may ramp up investments by another Rs 3,000 crore after the first phase,” said the person who did not wish to be identified. Michelin has been negotiating with the Tamil Nadu government for procuring land for the project. It wants to set up a plant on 290 acres in an industrial park developed by State Industries Promotion Corporation of Tamil Nadu.

The first phase of the proposed project in Tamil Nadu will provide jobs to around 1,500 people, which may go up to 2,000 after further investment of Rs 3,000 crore is made. Over time, half of the tyres and tubes produced at the plant will be exported.

The slack demand of tyres has impacted all major markets across the globe, especially in the US and Europe where sales have fallen by a third in the past few months.

Tyre sales in India, however, had kept the industry buoyant riding on the back of rising passenger car and two-wheeler sales. Strong demand from the replacement market after a high single-digit growth in FY09 for the 10 crore vehicles plying in India has also helped the tyre market.

In the past, many multinationals companies have announced multi-billion dollar projects for India, but many of them have delayed investment either because of the slowdown or because of regulatory constraints on foreign direct investment (FDI) in the country.

Most recently, Swedish furnishings retailer Ikea decided to postpone its foray into India in the wake of continuing restrictions on FDI in retail sector. There are no such restrictions on FDI in the tyre sector.

Earlier, in 2004, Michelin had picked 14.9% of Onkar Kanwar-led Apollo Tyres for Rs 130 crore through a preferential allotment. The strategic
acquisition was just short of the 15% mark which triggers a mandatory open offer to acquire further 20% of a listed company.

Michelin also entered into an agreement to provide technical assistance to Apollo Tyres for passenger car radials.

It had also announced a separate 51:49 joint venture with Apollo Tyres to manufacture, market, sell and distribute bus and truck radial tyres in a greenfield plant besides importing passenger car radial tyres.

Michelin had also entered into a technology licensing agreement along with development work and technical assistance agreement for bus and truck radial tyres proposed to be manufactured by the JV company.

This venture, in which Michelin was to be the majority stakeholder, was to absorb investments of Rs 322 crore over a period of four years producing truck and bus radials for both Apollo and Michelin brands without any co-branding arrangements. This was struck soon after Apollo Tyres withdrew a proposed technical alliance with Germany’s Continental.

The proposed JV which was to commence production in 2005, was a non-starter and in September 2005 Michelin terminated the agreement and bought out Apollo’s stake in the venture.

At the same time, the other technology licensing and technical assistance agreements were also terminated. At the same time Apollo Tyres furnished an NOC for Michelin to start its own operations or through a separate JV with any other partner in India.

But, Michelin continued to own a minority stake in the public-listed Apollo Tyres. Michelin’s original stakeholding in Apollo Tyres whittled down from 14.9% to 11% as a result of further fund raising done by the Indian company. In the past one year, Michelin has sold shares of Apollo Tyres in the open market.

Most recently, it sold 3.3% in Apollo Tyres for around Rs 50 crore through open market sales and now holds around 8% in the company. Michelin also has a 13-year old wholly-owned entity called Michelin India, a dormant company.

The Indian tyre industry is dominated by local players like MRF, Apollo Tyres, Ceat, JK Tyres and Birla Tyres. The US-based Goodyear also operates a mid-sized tyre firm through an Indian public-listed company.

Rising demand for automobiles has led other major global tyre companies like Yokohama Tyres, Bridgestone and Continental Tires to enter India in the past few years catering to the high-end passenger car tyre market. But Michelin’s proposed venture will be the biggest ever foreign investment in the tyre sector.

Michelin currently has 64 manufacturing units in 19 countries globally. Although most of the units are located in Europe and the US, it also has plants in Mexico, Brazil, Russia, Romania and Poland. In Asia, it has facilities in Thailand, China and Japan.


Michelin to invest Rs 7,000 cr in India- Tyres-Auto-News By Industry-News-The Economic Times

 

[thakur_ritesh]

as has been the case with numerous such predictions which have been way too conservative in their estimates, nothing new with this one either and this kind off becomes laughable when the GoI, and montek singh are going from pillar to post saying that india would in fact do 7.2% this fiscal when the effect of global economic melt down is seen at its worst and things from here are only expected to grow north wards. looking at the performance of the economy in the last quarter of the last fiscal things are clearly on an upwards trend and if 7.2% for the present fiscal looks too far fetched then certainly 6-7% does not look too far from reality. nndian real gdp growth rate would if not more certainly average out at 8-9% for the coming 5 years if there are no more global melt downs awaiting with this time period.

the concern quite clearly is fiscal deficit but then when someone is trying to review the economy by way of direct/indirect tax cuts and by announcing fiscal stimulus packages then this is bound to happen and a much needed evil, or else all the momentum would be lost. the good thing that one can see and hope for is that if the disinvestment process picks up then it will certainly help to fill up the coffers of the state and also root out the incompetency and parasites in the name of PSUs which in most case are a burden on the state. with challenges come opportunities and the government should not shy away from taking certain bold decisions, no matter how unpopular they might seem.

 

[Singh]

India most attractive market for retail investment: Kearney​

Providing good growth potential for global retailers amid the economic slowdown, India has emerged as the most alluring market for investment in the retail sector, surpassing the likes of China, Russia and the United Arab Emirates.

India has been ranked as the most attractive nation for retail investment among 30 emerging markets by US-based global management consulting firm A T Kearney.

According to the entity's Global Retail Development Index (GRDI), India is followed by Russia (2), China (3), United Arab Emirates (4) and Saudi Arabia (5).

India was placed at the second spot last year. Similarly, the other four countries in the top five have improved their ranking, with the United Arab Emirates jumping 16 places from previous year's 20th rank.

Noting that "larger, resilient developing countries sit atop the 2009 GRDI as they are most likely to lead the economic recovery," the report said that India has become the most attractive destination for retail investment for the fourth time in five years.

"In India, slower retail sales are causing Indian retailers to delay expansion plans and restructure their operations. But this has opened the window of opportunity for global retailers and many, including Wal-Mart, Carrefour and Tesco, are continuing expansion plans as Indian consumers grow increasingly affluent, brand-conscience and familiar with global retail formats, the report said.

http://www.business-standard.com/in...market-for-retail-investment-kearney/64656/on

 

[Singh]

NTPC, Coal India to buy mining assets overseas​

MUMBAI
: State-owned utility National Thermal Power Corporation (NTPC) and the largest coal producer Coal India are in advanced stages of
acquiring mining assets in Mozambique, Indonesia and Australia, as the new government firms up plans to meet the growing energy demand.

While NTPC is focussing on Mozambique and Indonesia, Coal India is all set to sign a joint venture agreement with the Mozambique government and has also shortlisted mining firms in Australia and Indonesia, according to top executives from the two companies.

Speaking to ET, Coal India chairman Partha S Bhattacharyya said: “We hope to finalise our overseas expansion deals in Mozambique, Australia and Indonesia in the next three months. Coal India, which produced over 400 million tonne of coal in the previous fiscal, plans to raise its output to 520 million tonne by 2012 and 664 million tonne in the next five years. Its output past year accounted for 85% of the nation’s production. “From overseas assets, we aim to add 50 million tonne per annum by 2020,” added Mr Bhattacharyya.

In order to meet the country’s growing energy demands, NTPC and Coal India (CIL) have been trying to acquire overseas mining assets. Coal India’s overseas venture arm Coal Videsh and its joint venture unit International Coal Ventures are used for the purpose of acquisitions abroad.

International Coal Ventures is a special purpose vehicle (SPV) created by Coal India, SAIL, NTPC, National Mineral Development Corp and others to scout for coal assets abroad. Coal India and SAIL are major stake holders in the SPV.

According to NTPC chairman RS Sharma, “We will finalise merchant bankers for our proposed acquisitions next month.” NTPC has identified two mining assets in Indonesia and two in Mozambique for which due diligence process is in progress. The public sector utility would require about 150 million tonne of coal for its power units, which is mainly supplied by CIL.

Coal India is progressing fast also. “We have received the drafts of contract and the JV agreement from the Mozambique government,” said Mr Bhattacharyya. “We’ll go ahead after examining these documents,” he added. The company’s ventures in Australia and Indonesia are in advanced stages, he said, adding that the company has shortlisted few mining firms in both the countries.”

India’s largest coal producer has also been granted two exploratory coal mining blocks in Mozambique, with reserves of 1 billion tonne. “This project would require a joint investment of around Rs 2,000 crore per 10 million tonne exploration over five years. In this, CIL’s investment share would be in accordance with the nature of JV — it could be in order of 3:1 or 1:1,” said Mr Bhattacharyya.

Further, the coal ministry has proposals to raise the overseas investment limit of CIL beyond Rs 1,000 crore for asset acquisition. The proposal would be soon placed before the cabinet committee, minister of state for coal Sriprakash Jaiswal has said. Being a navratna company, which has to be listed by October 2011, it could invest Rs 1,000 crore for overseas assets.

NTPC, Coal India to buy mining assets overseas- Metals & Mining-Ind'l Goods / Svs-News By Industry-News-The Economic Times

 

[Singh]

PwC to recruit 3,500 in India in 3-4 years​

Indian arm of the global consultancy firm PricewaterhouseCoopers (PwC) will hire 3,500 people in the next three-four years.

"We currently have 6,500 people working for PwC in India and we envisage that this could grow to 10,000 over the next three to four years as the Indian economy continues to grow strongly," Dennis Nally, PricewaterhouseCoopers International Chairman designate said today.

Nally, who is visiting the country after being elected as Chairman of PricewaterhouseCoopers International Network, said India "is a very important strategic market for the global consultancy firm and will become increasingly important for it and international clients over the next few years."

Nally also met the four-member Advisory Board which was formed by its Indian outfit to refurbish its image following involvement of two of its partners in the multi-crore Satyam accounting fraud.

"I... Updated him on the works that the PwC advisory board is focusing on and the progress we have made in our discussion on quality, governance and ethics," said former Cabinet Secretary Naresh Chandra, who is heading the advisory board.

The members of the high-profiled board are former Comptroller and Auditor V K Shanglu, former Chief Election Commissioner B B Tandon and senior partner of PwC's Singapore arm Gautam Banerjee.

PwC to recruit 3,500 in India in 3-4 years

 

[Singh]

Credit Suisse launches algorithmic trading in India​

NEW DELHI: Credit Suisse’s Advanced Execution Services (AES) unit has launched algorithmic trading in Indian equities. With this Credit Suisse
clients can now employ a comprehensive range of AES algorithmic trading strategies for Indian equities, being able to trade more efficiently and achieve best execution.

Since the formation of the AES group in 2001, the bank has pioneered new technology and brought it to as many markets as possible. In Asia Pacific, Credit Suisse AES became the first foreign broker to launch Direct Market Access (DMA) in Malaysia in January 2008 and followed this up by becoming the first foreign broker to offer DMA in the Indonesian market last August. Credit Suisse AES was also among the first foreign brokers to offer DMA in India in September 2008, the company said.

“Sophisticated liquidity-seeking algorithms will help deliver better execution to clients trading Indian equities,” said Brook Teeter, head of AES Sales for Asia Pacific.

Investors will be able to automate their trading strategies and customize the algorithms to serve their objectives. This will help them reduce signaling risk and market impact and to access liquidity at the optimal price.

Algorithms have become increasingly popular globally as investors have sought to trade more efficiently and avoid sharp spikes in volatility while minimizing market impact, particularly given the less liquid market conditions prevalent in many markets over the last 18 months.

One strategy aimed at minimizing this impact is SNIPER, an aggressive and opportunistic liquidity-seeking algorithm developed by Credit Suisse to pick off liquidity as it becomes available at a target price. Usage of SNIPER has more than doubled during the last 18 months, reflecting many investors desire to achieve rapid execution while markets have been volatile.

The AES suite of algorithms also includes traditional algorithmic strategies that seek to divide trading volumes up over time and strategies that seek to trade at the Volume Weighted Average Price of a stock. Additionally, AES offers strategies that seek to minimize implementation shortfall - or the difference between the price at which a client decides to trade and the actual execution cost – such as INLINE and other liquidity-seeking strategies like GUERRILLA.

Credit Suisse launches algorithmic trading in India- Market News-Stocks-Markets-The Economic Times

 

[Singh]

Indian again at the helm of World Wind Energy Association​

AHMEDABAD: WIND seems to be flowing in favour of India as far as the world wind energy affairs are concerned. On Monday, Anil Kane was reelected
as president of World Wind Energy Association (WWEA) for yet another two-year term during the 8th World Wind Energy Conference 2009 held on the picturesque Jeju island, Korea. This is the third consecutive term for Mr Kane as the president. The WWEA has never repeated its president.

In November 2005, Mr Kane was the first Indian to be elected as WWEA president during its general assembly in Australia. WWEA members reelected Kane for two more consecutive terms in October 2007 in Argentinean conference and later, June 2009 in Korean conference unanimously.

Mr Kane will continue to be at the helm of affairs of world’ most powerful body in wind energy with membership base spread across 90 countries. WWEA’s 400 members, from 91 countries, represent a total membership of more than 50,000 members.

WWEA provides a platform for dialogues among the members worldwide and it advises and influences governments and international organisations in policymaking. WWEA also provides international technology transfer.

Mr Kane who was in Korea to attend the conference could not be reached for his reaction. However, in a WWEA media statement, he reaffirmed that under his leadership WWEA will continue to spread awareness of the benefits of renewable energy, with a special focus on developing countries. Also WWEA will continue its efforts to bring together all organisations working in renewable energy," read the statement. Meanwhile, the WWEA general assembly elected the Peter Rae AO, Renewable Energy Generators Australia, as senior vice president.

Through his efforts, Mr Kane brought the prestigious World Wind Energy Conference to India in 2006. The three-day event was organised in November 2006 in Delhi.

Having doctorate in mechanical engineering, 68-year-old Mr Kane has an illustrious profile. Mr Kane has played an active role in industry, government bodies and academia. Besides holding positions in a number of important government committees and boards of companies, Mr Kane chairs the Indian Wind Energy Association. Besides wind energy, he is also known for his role in shaping the ambitious Kalpasar project. The project envisages creation of a gigantic fresh water lake by closing the gulf of Khambhat across Ghogha in Bhavnagar and Hansot in Bharuch district in Gujarat.

Mr Kane has been the vice-chancellor of the Maharaja Sayajirao University of Baroda and holds four Indian patents. He has to his credit 51 research papers published in journals of repute in India and abroad. His stint with the industry is equally elaborate. He has been whole-time director of Suzlon Energy Ltd, whole-time director of Essar Gujarat Limited, president and whole-time director of Finolex Industries and deputy chief executive for corporate affairs and planning with Reliance Industries Ltd. He holds four Indian patents and has over 50 research paper to his credit in Indian and international journal.

Indian again at the helm of World Wind Energy Association- Policy-Economy-News-The Economic Times

 

[Pintu]

Tata Motors reports first annual loss in 8 years- Earnings-News By Company-News-The Economic Times

Tata Motors reports first annual loss in 8 years
27 Jun 2009, 0216 hrs IST, ET Bureau

MUMBAI: Tata Motors posted its first annual loss in eight years and announced more job cuts and plant closures at Jaguar and Land Rover as the worst global recession in more than seven decades slashed demand for the marque brands purchased by the company last year.

Tata, the maker of Indica and Nano cars , posted a consolidated loss of Rs 2,500 crore for the year ended March, while sales slumped 37%. The last time the company had made a loss was in 2000-01, when it experienced a similar demand slump for trucks and its small car , the Indica.

Jaguar and Land Rover posted a loss of Rs 1,777 crore for the year. The deepening recession in the US and UK worsened the demand for luxury vehicles, forcing Tata Motors to cut jobs and consider plant closures. JLR has already shed 2,000 jobs and Tata Motors senior executives warned on Friday that more will be needed.

Ford sold JLR to Tata Motors for about $2.4 billion in June last year. As a result, Tata Motors gained access to complex luxury car technology, two iconic if jaded brands and a distribution system in the world’s wealthiest countries. But it also inherited a high cost workforce, and a market which was witnessing a steep drop in demand for high-end cars. Jaguar sales for the year fell 4% to 47,000 while Land Rover sales crashed 40% to 1.2 lakh units.

“Although domestic demand has started showing signs of revival since January, its too early to call it a recovery. However medium and heavy commercial vehicle sales continue to be weak,” said Ravi Kant, vice chairman of Tata Motors.

Tata Motors shares gained 0.3% to Rs 340.3 and the results were declared after market hours. Even as the company highlighted that new product development and R&D would not be affected over the 16-18 months in JLR, it would further tighten its cost control measures which includes further job cuts at its UK operations. Recently JLR has got approval of 340 mn pounds from the European Investment Bank, but it is still in negotiation with the UK government and private banks for a counter guarantee, pointed out Mr Kant.

C Ramakrishnan, the chief financial officer, said that the company’s cost cutting measures at JLR would help to lower the break-even point going forward. JLR is expected to launch the Jaguar XJ next month in London and the LRX , new small Range Rover soon.


“The financial condition of Tata Motors is precarious and it will need to take urgent action on product development and capital expenditure which would mean that the future growth will hinge on the current array of products that the company has,” says Mahantesh Sabarad, Centrum Broking .

The company’s consolidated total operational income jumped 99% Rs 70, 939 crore during FY 09. However, the results of FY 09 are not comparable from a year earlier, the company said in a statement. Its operating loss was Rs 2821 crore (excluding expenditure transferred to capital and other accounts) compared with an operating profit of Rs 3210 crore a year earlier.

Tata Motors had reported a consolidated net profit of Rs 2167 crore for the year ended March 2008. The numbers for the year ended March’09 are not comparable as the year-ago numbers did not include that of Jaguar and Land Rover. Tata Motors in 2000-01 had reported a loss of Rs 500 crore on a stand-alone basis.

Contrary to expectations, the company management pointed out that their UK pension fund’s fair value was 3.1 billion pounds, as compared to their liabilities of 3 billion pounds, and that was largely due to a conservative approach for investing the pension funds. However, the actuarial net loss of Rs 1457.2 crore related to the pension plans of Jaguar Cars and Land Rover, UK have been accounted in the reserves and surplus of the company, as per the relevant accounting standards, the company said in a statement.

 

[Pintu]

Job losses possible at JLR, Tata warns - Business News, Business - The Independent

Job losses possible at JLR, Tata warns

By Sarah Arnott

Saturday, 27 June 2009

Jaguar Land Rover has lost £281m in the 10 months to March, helping its parent company, Tata Motors, to its first loss in eight years and prompting it to warn there could be further job losses at its British subsidiary.

The Indian group, which paid £1.15bn for JLR in March 2008, recorded an annual loss of 15.1 billion rupees (£189m), compared with 21.7 billion rupees profit in the previous year, as the global automotive industry has been devastated by recession.

In the UK, JLR has been hit hard by collapsing demand for new cars. Global sales are down by 28 per cent compared with June last year. Although sales of Jaguars are slightly up – by 1 per cent – thanks to the introduction of the new XF model, some 35 per cent fewer Land Rovers have been sold.

The company has been asking for government help since before Christmas, claiming its position as a major investor in research and development justifies support. But Lord Mandelson, the Business Secretary, maintains it is up to Tata Motors to provide any help its subsidiary needs. Even JLR’s attempts to secure the necessary government guarantees for loans for green research from the European Investment Bank have stalled. The company says the conditions attached to the guarantees are too onerous to be commercially viable.

 

[Daredevil]

In India, Central Banker Played It Safe

In India, Central Banker Played It Safe

By VIKAS BAJAJ

MUMBAI — The financial crisis has tarred the reputation and ideology of free marketers and central bankers the world over, including Alan Greenspan, the former chairman of the Federal Reserve. But it has had the opposite effect on Yaga Venugopal Reddy, the former governor of the Reserve Bank of India.

While other central bankers are defending and apologizing for how they managed the financial system during good times, here in India, big banks have not sought succor from the government, and the economy is still growing, albeit less rapidly. And Mr. Reddy, with the conservatism he represents, is taking a victory lap. He is widely sought after on the global speaking circuit and sits on the United Nations panel that has proposed fixes for the global financial order. Newspapers here celebrated the recent publication of a book of his speeches, “India and the Global Financial Crisis: Managing Money and Finance,” with fawning coverage.

“If America had a central bank chief like Y. V. Reddy, the U.S. economy would not have been such a mess,” Joseph E. Stiglitz, the economist and Nobel laureate, has said.

Still, Mr. Reddy’s approach is not without controversy.

Some economists assert that under him the Reserve Bank of India blocked critical reforms — including opening the domestic bond market to foreign investors, allowing banks and businesses to trade more freely in currency markets and letting Indian institutions invest freely overseas.

“In the interest of safety, the R.B.I. under Reddy was too skeptical of industry-led innovation and too partial to officially led innovation, because that is the way things have been done around here,” said Suman K. Bery, an economist who was on a government-appointed committee that advocated more aggressive changes.

He said Mr. Reddy and the bank deserved praise for their response to excesses in markets like housing, but that their opposition to easing regulations of the financial system hurt the country.

“Where I do give them credit is they certainly were not in the Greenspan camp that said markets are self regulating,” said Mr. Bery, who is now the director general of the National Council of Applied Economic Research in New Delhi. “They were not afraid to call a bubble when they saw one in urban land.”

Mr. Reddy and his defenders respond that the central bank did a lot to advance financial reforms but resisted changes that could make India more vulnerable to crises.

And many Indian bankers who once chafed under the Reserve Bank of India’s restrictions today sing his praises, saying, in effect, that he saved them from themselves. Most Indian banks are doing reasonably well even though real estate and stock prices have fallen. Analysts estimate the economy will grow 5 to 7 percent this year.

But some often younger and more Western-oriented economists and policy makers assert that India needs to move forcefully to free the economy from government control, which they say would expedite growth.

They advocate lifting restrictions on bank lending and allowing the rupee to float freely against other currencies, for instance, arguing that such moves would make the Indian economy more efficient and force banks to be more responsive to the needs of the people, especially the poor.

The contrasting views highlight a larger debate about how fast India should move on the path of liberalization it embarked on in the early 1990s. Mr. Reddy, who helped shape that path as a senior official in the finance ministry, and much of India’s political establishment favor a moderate pace, placing a high value on stability.

Of course, India is not alone in struggling with such questions.

Many lawmakers in Washington are wary of giving the Fed too much power. Some policy makers blame it for setting the stage for the current crisis by not adequately supervising banks and by keeping money too cheap for too long, allowing bubbles to form in assets like real estate and stocks.

In Europe, leaders in Britain and the Continent are offering competing visions about who should regulate finance and how.

Mr. Reddy is lauded for, among other things, restricting bank lending to real estate developers, increasing the amount of money banks must set aside as reserves, and blocking the use of some derivatives.

Many analysts say that the tight leash he kept on banks, which once earned him the enmity of bankers and corporations, protected the banking system and the broader economy from the excesses that have ravaged the United States and Europe.

“He was a central banker from the old school of central banking,” said Tushar Poddar, an economist at Goldman Sachs in Mumbai. “He will come out in history, in my view, as more positive than negative."

During a recent interview over a breakfast of omelets and semolina porridge, Mr. Reddy, 67, said he had a “vague discomfort” with the notion that markets are always right.

Given that most Indians still live hand-to-mouth, he said, proposals to give freer rein to investors and banks to do as they see fit could backfire as they did in Southeast Asia in 1997 when the collapse of a credit bubble and a run on the Thai baht led to economic calamity in the region.

“We cannot afford to take the kind of risk that other countries can, because of our large population,” he said. “As a smaller emerging market economy, I might not be able to get the type of money that is required to get over a crisis.”

Now retired and living in the southern city of Hyderabad, which is geographically and culturally distant from the power centers of New Delhi and Mumbai, Mr. Reddy has no official role in Indian policy making. But he and his views are respected and shared by many political leaders, bankers and economists here.

He dismisses the calls for greater financial reform, which come from economists and some in the government. To be successful in India, he said, regulators must tailor proposals to fit the “time and context” in which they are working.

Given the crisis and the lively debate about how finance should be regulated, Mr. Reddy said India should think anew about how it should reform and at what pace. “We can’t rush in,” he said, adding, “We have to learn from the rest of the world.”

Right now, he says the government must focus on its fiscal health, invest in infrastructure and improve education, health care and governance. Until India addresses those issues, he said, further financial reforms will not be effective and, in fact, could make it more vulnerable to crises.

Mr. Reddy’s critics say they too want investment in all those areas, but that the wait for those improvements should not hold up needed changes in the financial sector.

“It’s an excuse for not moving,” said Ila Patnaik, a senior fellow at the National Institute of Public Finance and Policy, said about Mr. Reddy’s emphasis on other deficiencies. They “haven’t thought through financial sector reforms,” Ms. Patnaik said. “It would have been a very challenging task to do reforms.”