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Stocks start higher; auto, realty lead
26 Mar 2010, 0922 hrs IST, ET Bureau

Topics:

Sensex nifty stocks

MUMBAI: Equities opened on a higher note Friday after ending the March F&O; series on a strong footing. All sectoral indices were trading with gains with automobile and realty stocks leading the way.

“Our markets ended the final day of the March derivative series with flourish on the back of last hour short covering. For the March series, both the benchmark indices put on a whopping 8%. Technically, markets are on a strong footing. If Nifty is able to sustain above 5270 then crossing of January high of 5310 should not be a difficult task and the benchmark can go all the way to 5350. 5187 continues to be immediate support,” said Anagram Stock Broking.

At 9:15 am, National Stock Exchange’s Nifty was at 5285.35, up 0.47 per cent or 24.95 points from the previous close. The index touched a high of 5285.50 and low of 5260.55 in early trade.

Bombay Stock Exchange’s Sensex was trading at 17,638.95, up 80.10 points or 0.46 per cent. The index climbed a high of 17,640.25 after opening at 17,558.85.

US stocks ended flat on Thursday, dropping off earlier highs as a weak US bond auction and global debt concerns continued to weigh on investor sentiment. The Dow Jones Industrial Average was up 5.06 points, or 0.05 per cent, to end at 10,841.21. But the Standard & Poor's 500 Index was down 1.99 points, or 0.17 per cent, at 1,165.73. And the Nasdaq Composite Index was down 1.35 points, or 0.06 per cent, at 2,397.41.

Most Asian equities, barring the Nikkei and Topix, were trading with losses Friday. The Nikkei rose 0.71 per cent, Topix added 0.7 per cent, Kospi shed 0.33 per cent and Straits Times edged down 0.09 per cent.

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Kris era set to mark a turning point for Infosys
26 Mar 2010, 0542 hrs IST, Arati Menon Carroll , ET Bureau

Topics:

Infosys Narayana Murthy Nandan Nilekani Kris Gopalakrishnan

Few people know this but Kris Gopalakrishnan is a compulsive technophile. The CEO and MD of $4.66 billion Infosys Technologies changes his mobile every month and if he could, he'd change his laptop just as frequently. But he doesn't . "That involves company money so it's out of the question," he says with characteristic Infosys-ian prudence. For the 54 year-old , the fix is getting used to a new phone and then having to give it up as quickly.

Change is something Gopalakrishnan willingly embraces but even he didn't anticipate the upheaval that lay in store when he was handed the baton by Nandan Nilekani in June 2007. A global slowdown of unprecedented proportion, wild currency fluctuations, scuttled mega deals, clients under tremendous pressure, MNC competitors biting at the heels and amid all this, the exit of Nilekani himself. Not even in his wildest dreams would the soft-spoken CEO have predicted the rollercoaster ride that his tenure was to be. When Gopalakrishnan first took over the reins, times were actually quite exciting.

The software biggie was a $3 billion company, going on four, it had enjoyed an annual compounded growth rate of 41% under Nilekani's leadership from 2002-07 and had moved on from being a 10,000-employee company to one with over 72,000 professionals. It was also spreading its wings in different directions: revenue from new services like consulting, BPO and infrastructure was gaining ground, it was set to open a new facility in Mexico and four years after its foray into China, it had 700 people working there.

Gopalakrishnan saw his task as carrying the good work forward. With the momentum going, Gopalakrishnan got off to a great start. Revenues in the 2008 fiscal came in at $4.18 billion with a year-on-year growth rate of 35% and Infosys made the highest private sector dividend payout in Indian corporate history. Infosys also snapped up Axon, a British consulting firm, for £407m in August 2008 in the largest overseas acquisition by an Indian IT company . Meanwhile though, the currency environment was getting to be challenging and global economic uncertainties were bubbling. Then slowdown struck.

Third time unlucky?

On the 15 of September 2008 Lehman brothers filed for bankruptcy and the global economy turned upside down. "Everyone was caught completely by surprise. So were we," recalls Gopalakrishnan . Ironically, he adds, the quarter ending September 2008, with 6% sequential growth had been one of Infosys' best. The next few days were a wild scramble ; Infosys was due to announce results and give guidance in less than a month. For the first time in its history, the company had to revise guidance downward. The biggest worry for the company was holding onto its existing customers and making sure it responded to their needs. Not surprisingly, Nilekani and he spent the most of the next few weeks living on aircrafts and client locations.

Closer home, another problem was brewing. Over 19,000 campus offers had been made by Infosys in April 2008; what of them? "After a lot of debate we decided to honour every offer," he says. The grapevine on campus was working overtime with rumours of lay-offs ; was the blue eyed company of India Inc going to bite? "We went the other way," says Gopalakrishnan. But in April 2009, as the slowdown showed no signs of abatement, he had to announce to employees that bonuses, wages, promotions were all frozen.

As deal sizes got smaller, decision making slowed down on the client side and along with it the overall pace of business; did Gopalakrishnan ever feel like this was not what he had bargained for? "I always believe you play with the cards that you're dealt," he says, "besides , the slowdown was affecting every company in the industry, every customer ." Neither was he the only one who'd seen tough times. It was hardly a cakewalk for Narayana Murthy himself to take the company from US$ 140,000 revenue in 1982 to US$ 535 million revenue in 2002 by, as he says, "ensuring that the fledgling Infosys survived during the dark days of business-unfriendly India prior to 1991 and the growing competition from much larger companies" . The booming growth only came post 2000 and even then there was SARS, the dot com crash.

But for the man whose favourite book is Bruce Lipton's The Biology of Belief, a science and spirit saga, unleashing the power of mind over matter was imperative.

Running the "flat" company

As the slowdown worsened, Gopalakrishnan held things together. Then in June last year Infosys started seeing the first signs of stabilisation amongst clients. "Customers in the US and Europe started reviving shelved projects and allocating more funds for technology services," says Gopalakrishnan. The worst seemed like it was behind them. And then came another blow - Nilekani surprised the entire IT industry by announcing that he was quitting his position as co-chairman of Infosys to head the government's unique identification number project.

Until then Nilekani and Gopalakrishnan had shared the burden of the recession's fallout. Gopalakrishnan was now left alone to engage marque clients and was spending less and less time at home. The larger issue was that Nilekani had been the public face of Infosys. According to Jessie Paul, who was global brand manager at Infosys between 1998-2003 , much of this personality-led branding was consciously inbuilt by Murthy. She recalls a time in 2000, pre-US IPO, when Murthy, who was CEO & MD, purposefully placed Nilekani in the limelight so that by the time Nilekani took over the role from him in 2002, people would identify Infosys with him. Nilekani also had a tremendous rapport with several top CEOs, something that his successor is working on building.

Troubles notwithstanding, Infosys came out of the 2009 fiscal with a strong balance sheet with cash and cash equivalents of over US$ 2 billion. But while it preserved its profits and operating profit margins; it had to sacrifice revenue growth; its rivals Wipro and Cognizant were growing faster. "We were as responsive as we could be. We continued our global expansion strategy, we continued to invest in people and in new campuses," says the CEO.

Infy version 2.0?

Some may say that the Infy's biggest transformation will be in the days to come. According to its guidance its fiscal 2010 revenues are expected to decline by 6.7% to 3.1%. And there is a 'new normal' in the IT landscape to be dealt with. In the short term the challenge for Infosys is volatility of currency, in the last two years there have been quarters when the currency movement has been 15-20 %.

Also the rise in protectionism in the US has pushed Infosys to hasten the amount of work it does in emerging markets like the Middle East and Latin America. The larger worries though, he says, are issues like staying relevant to your customers: "The expectations of customers are changing and if you don't keep up they will go to your competitors."

Infy Reset

The genial CEO has twin battles to fight: one on the global front, to lead Infosys to its rightful place amongst global biggies such as IBM and Accenture , and at the same time fight off their growing presence in India. His plan for getting Infosys ready for the next stage involves moving up the value chain and creating a more balanced distribution of revenues.

This includes increasing the share of higher value services like consulting, going big on IP to power future growth, new pricing models, improving efficiency and finding new locations like China and Mexico to take advantage of local labour pools (China now has 2000 employees). He aims to generate around one-third of Infosys' revenues from high-margin new business models like cloud computing platforms; currently business operations (maintenance and infrastructure management) contribute over 60%. "We haven't set a limit to this however because to some extent it is driven by how quickly the market accepts these business models," he says, loath to cast anything in stone in an uncertain world.

Nasscom has projected that ITO-BPO exports in 2010 will increase by 13-15 % but for Infosys the challenge will be to sustain its leadership position among the four top Indian IT firms - TCS, Wipro and HCL. The key will be to sustain its industry leading margins. Will Infosys, under Gopalakrishnan eschew its preference for organic growth for acquisition led growth? "We are open to strategic acquisitions especially in non-English speaking geographies like France and Germany, but remember, 70% of all acquisitions fail. In the services industry especially, you're acquiring people and their capability and if the people walk away then all you're acquiring are tables and chairs," he says.

Change of guard

Going forward, a key challenge will be going from a founder-led firm to a non founder-led firm. As was scripted by Murthy back in 1998 no founder CEO tenure exceeds five years and all founders will step down from operational roles when they turn 60 and leave the board at the age of 65. In six years, practically none of the promoters will be involved in the day-to-day running of the company. "Leadership development is something we are concerned with. We are very concerned with creating longevity for the corporation. And about creating a company that goes beyond generations of leaders," says Gopalakrishnan. Murthy retires from the board next year and two years from now it will be interesting to see if Gopalakrishnan himself makes an exit in favour of the first non-founder CEO.

Without doubt, Infosys has done a great job de-risking management under the present CEO. Firstly, five senior executives Chandra Shekar Kakal, Subhash Dhar, Ashok Vemuri , V Balakrishnan and BG Srinivas now make up the Executive Council (EC) to be mentored and evaluated as potential CEOs. The EC has also made the de-centralised decision making process by taking it one level below the Board and the Infosys Leadership Institute (ILI) is committed to grooming future generations of leaders, having identified 50 senior executives. The challenge for Kris will be to find the kind of perfect core group that the founders made up with their specific skill sets. "Murthy was the visionary and Nilekani followed up by being the institution builder. Kris came in as the solid operations guy. As a combination they were ideal," says a former senior leader at Infosys.

The other challenge for Gopalakrishnan will be creating an Infosys 2.0 that retains the culture and DNA of the present corporation. Infosys has always had a simple rule - the interest of the firm overrides the interest of any individual. "Through continuous reinforcement and having the senior management walk the talk we communicate clearly that while poor performance can be excused, there is zero tolerance for value violation," says the CEO. As Infosys adds between 20,000-30 ,000 people each year, the task will be to have these values transcend the lives of the founders, no mean feat.

Meanwhile, despite all the high voltage drama of the last two years Gopalakrishnan hasn't lost his sense of humour. 2010 will be a great year for Infosys, he says laughing, because 2009 would make any year look good. He is also hoping he'll have more time to read this year. He's ambitiously juggling three books at a time and he's finally getting that new laptop. The Apple iPad has been pre-booked and will be here in May. Just in time to launch his fourth year as CEO and Infosys' 30th birthday.

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India Calling: Indian Americans seek promise in land of heritage
26 Mar 2010, 0337 hrs IST, REUTERS

BANGALORE: Miki Kapoor's parents left India nearly 30 years ago for America, a place that promised tremendous opportunities. Fast forward to 2009 and Kapoor has moved to India -- for the very same reason.

As India emerges on the world stage, Kapoor and many other second-generation Indian Americans are being drawn to the land of their forefathers, looking not only to tap economic prospects, but also to get in touch with their roots and experience India's multiculturalism first hand.

From aspiring actors to professionals armed with Ivy League degrees and entrepreneurs, an increasing number of "returnees" have been making this giant leap over the last few years, at times giving up lucrative careers in the process.

"It was the lure of freedom to pursue what you want to pursue on your own terms that brought me here," said Raj Shroff, a Mumbai-based actor and model.

Shroff, who grew up in Texas, said the decision to move was spurred by his interest in Indian culture, literature, philosophy and music.

"It was just something I felt like I wanted to do and wanted to see first hand, as opposed to just reading about it or seeing it on TV or through a movie. I wanted to live it."

The unparalleled growth in the Indian economy and the arrival of multinational corporations has afforded the opportunities to move for many of these "returnees."

And a globalised and modernised India today has made the adjustment process easier.

The availability of familiar comforts like fast-food outlets such as McDonald's and Pizza Hut, designer labels like Tommy Hilfiger and Louis Vuitton, and a buzzing nightlife in the country's major cities are perks that were unavailable a few years ago.

"This is a really fascinating time to be in India, for a unique time in its history," said Bangalore-based Nandu Madhava.

For Madhava, a Harvard Business School graduate who runs a start-up, India offered several advantages -- a large family, a sizeable talent pool and a better work-life balance.

But while the allure of India may be too good to pass up, the actual transition is not without hurdles.

Often, the parents of the "returnees" were unhappy with their children's decision to move to the country they had left years earlier.

"The first six months I moved here my dad would ask me every time I talked to him: 'So when are you coming back?'" said Meeta Baphna, who moved to India in 2007.

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→ More and more expats returning home to earn a living: Experts

BECOMING AN INDIAN

"India is not an easy place to live. It's not hostile, it's very hospitable... but it's not easy," Goldman Sachs Bangalore Chief Executive Bunty Bohra said.

The work environment in India is different -- the rigid hierarchy, interactions with co-workers and even the infamous concept of Indian Standard Time.

"It's been interesting to see the difference between work culture here and in the States. Time is a very abstract concept and that took a little bit getting used to," said entrepreneur Vaman Kamath.

Kamath, who founded a public speaking consultancy, has found his own way to deal with it: "I just show up on time, but what I've learned to do is have something (else) to do."

However, certain aspects of the Indian work culture, such as taking the time to make business relationships more personal, have led to pleasant surprises like wedding invites.

"Once you get over the need for speed, to get everything done, it actually makes it a lot more enjoyable," said Kapoor, who is in India on a Fulbright scholarship.

India has also taught the "returnees" much more.

"I think I've learned a lot about being flexible and being adaptable," said Kamath.

"India is not about perfection, it is about making the most out of a situation you have been given."

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Rich Indians hunt for big returns in frontier markets
26 Mar 2010, 0700 hrs IST, Shailesh Menon & Nishanth Vasudevan, ET Bureau

Topics:

NRI Rich Indians Frontier Markets Big returns

MUMBAI: Many wealthy Indians are betting on the more risky and lesser known ‘frontier markets’ in search for higher returns. These investors — residents as well as NRIs — feel there’s a greater upside in these markets than emerging economies like India and China which continue to be the preferred destinations for most offshore institutional investors.

According to investment managers, wealthy Indians are putting money into assets of ‘frontier markets’ such Nigeria, Sri Lanka, Turkey, Vietnam, Tunisia and Dubai. Frontier markets are considered to be underdeveloped, illiquid and potentially unstable markets. These markets have been largely ignored by a wider section of global investors because they consider them to be of higher risk.

“Some resident Indian HNIs (high net worth investors) are warming up to opportunities in emerging/frontier market debt and equity assets, as they feel the Indian market has done exceedingly well over the past one year and the emerging/frontier markets that have underperformed may catch up in the next 12 months,” said Amitava Neogi, executive director, Morgan Stanley India Financial Services.

According to a recent Morgan Stanley report, ‘frontier markets’ are trading at cheap valuations and fundamentally good economic health. Several companies in these countries are capable of delivering robust earnings, the report said.

The 12-month average trailing price-to-earnings ratio for frontier markets was 14.5 times compared 20.6 times for the MSCI emerging markets index at the end of 2009. The valuation gap between frontier and emerging markets has only widened since the darkest days of the global credit crisis in 2009.

“Frontier markets are sitting squarely in the sweet spot, featuring all the elements that we seek when looking for equity markets poised to potentially deliver strong performance,” the Morgan Stanley report added.

Some wealth managers said the scale of investments by resident Indians is smaller compared to non-resident because of the lack of major funding options. An Indian citizen can legally remit up to $200,000 (approx Rs 95 lakh) every year for investment under the liberalised remittance scheme introduced by the Reserve Bank of India (RBI) a few years ago. Tax disadvantage (while investing in overseas equities), performance risk and currency risk are the other pitfalls that deter investors from investing in overseas assets.

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“Non-resident Indians and ultra wealthy investors are looking at frontier markets with high-yielding currency (higher interest rates), as they enjoy the flexibility of borrowing from markets with lower interest rates,” Ashish Kehair, head, wealth management, ICICI Securities.

Investors are also looking at new asset classes such as high-coupon debt products, deposits and currency-linked products in markets such as Dubai, Turkey, Sri Lanka, Vietnam and Indonesia. Some months ago, a wealth management arm of a US bank offered a structured product that was designed to take advantage of Sri Lanka’s high interest rates, after the end of the civil war there.

Wealth managers believe frontier markets will emerge as investment hubs of the world after the ongoing fetish for emerging markets. Ukraine, Peru, Colombia, Kazakhstan, Romania, Namibia and Latvia are some of the new investment destinations tha could see investment inflows, they said.

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Bernanke says US economy still needs Fed's help
26 Mar 2010, 0234 hrs IST, REUTERS

Topics:

Washington Ben Bernanke Federal Reserve

WASHINGTON: A modest US economic recovery still warrants the Federal Reserve's ultra-low interest rate policy, but the central bank stands ready to remove stimulus once the expansion looks solid, Chairman Ben Bernanke said on Thursday.

Testifying before the U.S. House of Representatives Financial Services Committee, Bernanke offered a brief overview of the tools the Fed intends to use to reverse the emergency measures taken to grapple with the worst financial crisis since the Great Depression.

"The economy continues to require the support of accommodative monetary policies," Bernanke told lawmakers. "However, we have been working to ensure that we have the tools to reverse, at the appropriate time, the currently very high degree of monetary stimulus."

In response to the crisis, the Fed slashed interest rates effectively to zero. It also embarked on an unprecedented asset purchase program totaling over $1.7 trillion -- buying mortgage debt and Treasury bonds in an effort to push borrowing costs down even further.

Bernanke argued these programs had helped to improve conditions in mortgage markets, which were at the epicenter of a financial meltdown that began when falling home prices spurred a wave of defaults.

He also maintained these purchases did not expose taxpayers to any additional credit risk because the mortgage debt purchased originated with agencies like Fannie Mae and Freddie Mac, which have always had the U.S. government's implicit guarantee.

The Fed chairman emphasized the importance of the central bank's authority, granted by Congress after the crisis was already under way, to pay interest to banks for their excess reserves.

Bernanke said, once economic activity and financial markets were healed, the Fed would like to get outstanding credit to the banking system back to pre-crisis levels, beneath $1 trillion. Total bank credit, sometimes referred to as the Fed's balance sheet, currently stands at $2.3 trillion.

He also cited reserve-draining operations, such as reverse repurchase agreements and a "term deposit facility," that would again provide financial institutions with a monetary incentive not to lend when the Fed decides there is a risk of inflation.

"The use of reverse repos and the term deposit facility would together allow the Federal Reserve to drain hundreds of billions of dollars of reserves from the banking system quite quickly, should it choose to do so," Bernanke said.

A panel of top economists, slated to testify after Bernanke, noted in remarks released before their hearing that this strategy poses some dangers, including exposing the central bank to potential credit risk.

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US companies suddenly shy over China yuan squabble
26 Mar 2010, 0000 hrs IST, REUTERS

BOSTON: Many big US industrial companies are counting on China's economy to drive growth, a bet unsettled by Washington's recent saber-rattling on Beijing's closely managed currency.

But if chief executives are worried, they are keeping awfully quiet about it, which may reflect a fear of being seen as out of touch with American workers at a time when unemployment is near 10 percent, investors and academics said.

The Obama administration next month is due to issue a report that could label China a "currency manipulator." Meanwhile, the U.S. Senate is weighing a bill that threatens to slap new tariffs on some Chinese goods if Beijing does not allow its yuan currency to rise in value from the level it has maintained since the global credit crunch flared in mid-2008.

Either move could prompt China to raise new barriers to its imports of big-ticket U.S. goods like airplanes and railroad locomotives. That would be a heavy blow to major U.S. multinationals, who are counting on Chinese demand to offset continued economic weakness at home and in Western Europe.

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"If it comes down to a trade war with sanctions, which are hard to predict, you'd probably have some unintended consequences," said Peter Klein, senior portfolio manager at Fifth Third Asset Management in Cleveland, Ohio.

United Technologies Corp, the world's biggest maker of elevators and air conditioners, last year generated about 5 percent of its revenue in China, the world's third-largest economy. At an investor briefing earlier this month, Chief Financial Officer Greg Hayes said that given the shaky U.S. and Western European economies, "the one bright spot is China."

Shares of United Technologies, as well as fellow industrials General Electric Co and Caterpillar Inc could all be hurt if the U.S.-China trade soured. Expectations of robust sales to China are already built into share prices, said Klein.

At the same time, U.S. CEOs are reluctant to be perceived as standing up for China, Klein said. "They have nothing to gain from that."

Reuters approached more than half a dozen major companies with significant business in China for this story but all declined to comment.

A decade ago, chief executives of companies from United Parcel Service Inc to State Street Corp spoke out publicly in favour of letting the world's most populous nation into the World Trade Organization.

CHINA'S OPTIONS

Were the United States to impose penalty tariffs on Chinese imports, Beijing would have many possible responses.

"One policy lever the Chinese have, but the Americans do not, is they can restrict the operations of U.S. companies operating in China," said Yasheng Huang, a professor of international management at the Massachusetts Institute of Technology Sloan School of Management in Cambridge, Massachusetts. "There are not that many Chinese companies operating in the United States and the legal processes here are more complicated."

Beijing would also likely target its purchases of American-made capital equipment.

"Airplanes would be an easy target, anything where there's not a lot of shipments, not a lot of customers," said Andrew Bernard, professor of international economics at Dartmouth College's Tuck School of Business in Hanover, New Hampshire.

Tensions between the United States and China over the value of the yuan, which some economists argue is undervalued by as much as 40 percent, are not new. Senators Charles Schumer and Lindsey Graham first introduced legislation proposing tariffs to offset the allegedly low exchange rate five years ago.

But the dispute has intensified in recent weeks, with Beijing contending U.S. lawmakers were trying to make the world's third-largest economy a "scapegoat" for troubles at home. The two countries have set a top-level May meeting to defuse strains.

Nobel Prize-winning economist Paul Krugman also waded into the debate, arguing in his New York Times column that the U.S. should consider slapping a 25 percent tariff on Chinese imports to offset the undervalued currency. link.reuters.com/hyx94j

In another sign of troubled U.S.-China business relations, Google Inc this week shut its mainland Chinese-language portal rather than comply with Beijing's censorship restrictions.

That news drew a lot of attention that China's leaders would likely have preferred to avoid, said Michael Ding, senior China analyst at U.S. Global Investors, a fund company based in San Antonio, Texas, that manages about $3 billion in assets.

"China certainly doesn't want this Google thing to flare up," Ding said. "It doesn't want this embarrassment."

If Beijing wanted to ease tensions with Washington without acting on the yuan, a likely move might be to increase its imports of U.S. products, Ding said.

"China would buy high-tech products, buy lots of agricultural products, buy things that will make (U.S.) voters happy," Ding said.

POPULIST BACKLASH

U.S. unemployment remains stubbornly high after the worst recession since the 1930s, and the memory of the billions of dollars Washington spent to bail out big banks and automakers remains vivid for the American public. Those factors may also make CEOs reluctant to speak out in China's defense.

"The discourse on China has become so sad in this country, they've become a scapegoat for so many of our problems," said Kevin Gallagher, a professor of international relations at Boston University. "You don't want to come out with a press release saying anything in defence of China at this point."

The largest U.S. labour union federation, the AFL-CIO, has long called for the United States to take on China over the value of its currency, and supports the Schumer-Graham bill.

A heavy tariff on Chinese imports would hit major U.S. retailers and electronics companies, from Wal-Mart Stores Inc to Apple Inc, potentially pushing up prices on everything from Chinese-made jeans to laptop computers -- meaning consumers would also feel the pinch.

Even the U.S. Chamber of Commerce, typically a loud voice in defence of business interests, has declined to ride to China's defence. That is in part because of its objections to China's "indigenous innovation" policies, which U.S. companies contend are steering more Chinese corporate purchases to Chinese suppliers and away from foreign companies.

"China is moving in a direction that is inconsistent with international best practice in developing an innovative economy," Chamber senior vice president Myron Brilliant plans to say in a speech in Beijing on Thursday, according to excerpts of his remarks provided to Reuters. "The Chamber does not support an eye-for-an-eye and pledges to resist protectionism in Washington. But China must understand that pressures are mounting, particularly in this election year."

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China pull-out partly for personal reasons: Sergey Brin
25 Mar 2010, 2254 hrs IST, AGENCIES

NEW YORK: Google's pull-out from China was partly motivated by co-founder Sergey Brin's own memories of repression in the Soviet Union, Brin told the Wall Street Journal on Thursday.

Google announced Monday that it was suspending its portal in China, months after suspects hacked into its system in a cyber-attack that originated in China, in part to access the emails of human-rights activists.

Brin, who emigrated to the US from the Soviet Union at the age of six in 1979, said that China's web censorship and suppression of dissidents reminded him of the "totalitarianism" of his youth.

"In some aspects of their policy, particularly with respect to censorship, with respect to surveillance of dissidents, I see the same earmarks of totalitarianism, and I find that personally quite troubling," he said.

Brin, who still takes responsibility for the day-to-day running of Google along with other co-founder Larry Page and chief executive Eric Schmidt, said that the compromises the company had had to make when operating in China had become too big.

After the Summer Olympics of 2008, the country began increasing its web censorship and interference in Google's operations.

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"China was ever-present," he said. "One out of five meetings that I attended, there was some component specifically applied to China in a different way than other countries."

Chinese mainland users are now being re-routed to a site in Hong Kong that is not censored. But users have already complained of limitations to their searches. Results showed up but the websites were still blocked.

Brin says Google's move is still positive, and sends a signal to other countries, such as Australia, which is proposing a system which would filter out information judged objectionable to children.

"One of the reasons I am glad we are making this move in China is that the China situation was really emboldening other countries to try and implement their own firewalls," he said.

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Bond yields steady, seen in tight range
26 Mar 2010, 0953 hrs IST, REUTERS

Topics:

bond markets stocks

MUMBAI: Bond yields were little changed on Friday, and dealers said trade is expected in a tight range through the day on a lack of fresh domestic cues. At 9:15 am, the yield on the 10-year benchmark 6.35 per cent, 2020 bond was at 7.87 per cent, one basis point lower than Thursday's close of 7.88 per cent.

Traders are awaiting a meeting between finance ministry and central bank officials, scheduled for Monday, where they will decide the borrowing calendar for the first half of 2010/11 that begins in April. The RBI said on Thursday it was imperative to curb inflationary pressures fuelled by increased capacity utilisation and rising energy and commodity prices, while the top policy panel said India should aim for an average 5 per cent inflation.

US government debt yields rose on Thursday as demand for Treasuries waned for the third day in a row. A poll on Monday found that 18 of 20 economists surveyed expect another increase in both the repo and reverse repo rates on April 20 when the central bank reviews policy.

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Rupee inches up on share gains; weak dollar
26 Mar 2010, 0935 hrs IST, REUTERS

Topics:

Rupee forex dollar

MUMBAI: The rupee inched up on Friday backed by a firm start to the local sharemarket and tracking the dollar's losses versus major currencies overseas. At 9:16 am the partially convertible rupee was at 45.46/47 per dollar, marginally stronger than 45.49/50 at close on Thursday when it dropped to 45.71, its weakest in nearly 3 weeks.

Dealers said gains in domestic shares was helping. Shares were trading 0.5 percent higher with Reliance Industries and ICICI Bank leading the rise after Asian markets erased some early losses.

Asian currencies were mixed against the dollar on Friday. The index of the dollar against six major currencies was down 0.24 percent. The euro edged up from a 10-month low after euro zone leaders agreed on a safety net for Greece which included the IMF, and the dollar backed off a two-month peak on the yen as Japanese exporters sold into its gains.

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Asian markets mixed in early trading
26 Mar 2010, 0938 hrs IST, AGENCIES

TOKYO: Asian markets were mixed in early trading Friday after renewed worries about Greece's debt problems led to a disappointing finish on Wall Street.

Japan's benchmark Nikkei 225 stock average was up 71 points, or 0.7 percent, at 10,898.16, while Hong Kong's Hang Seng index opened down 62 points, or 0.8 percent, to 20,716.47.

South Korea's Kospi slipped 0.3 percent to 1,686.57 and Australia's main index fell 0.7 percent to 4,853.20.

In Singapore, the benchmark Straits Times index was up 4 points to 2,892.43.

Deflation continued in Japan as February consumer prices released Friday showed a decline for the 12th straight month in February. Core CPI, which excludes fresh food, dropped 1.2 percent from a year earlier.

In New York Thursday, the Dow rose just 0.1 percent, to 10,841.21, after hitting a 2010 high earlier in the day. The market's advance fizzled after European Central Bank's president Jean-Claude Trichet told French television that Europe must take responsibility for its financial problems. That raised concerns about when a rescue for Greece might come.

In currencies, the dollar fell to 92.43 yen versus 92.66 yen late Thursday. It also retreated against the euro, which was trading at $1.3312 from $1.3277.

In oil, benchmark crude for May delivery was up 10 cents at $80.63.

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Buyers question emerging market gain
26 Mar 2010, 0114 hrs IST, REUTERS

LUXEMBOURG: Emerging markets remain an investor favourite for their long-term economic growth prospects, but some investors have begun to question the sustainability of short-term gains.

Too much money is chasing too few assets, the argument goes. A Reuters European Fund Summit in Luxembourg this week heard both sides of the story — reports of huge demand from fund managers on one hand and notes of caution from strategists on the other.

LGT Capital Management went as far as saying that along with gold, government bonds and exchange-traded funds, emerging markets could be heading toward bubble trouble.

“There are some potential bubbles,” said Marcel Schnyder, LGT’s head of multi-asset investment management. “It could happen in gold (if everyone goes in). The same thing in emerging markets.”

The gist of the concern about emerging markets is that there is a huge amount of money flowing toward a limited number of investments. That drives up the price, sometimes beyond a reasonable level.

Such a prospect has made the likes of Banque de Luxembourg not only cautious, but underweight in emerging markets.

“There was so much money going into Asia last year, we thought it might be better to wait for a correction,” said Guy Wagner, the wealth manager’s chief economist.

Asia is not Wagner’s least favorite center of emerging markets. His firm is more underweight in both eastern Europe and Latin America.

LARGE FLOWS

There is little argument that emerging markets have been — and, for the most part, remain — very popular among investors.

Flows into in emerging market funds tracked by EPFR Global hit a nine-week high in mid-March, with all four of the major regional groups posting inflows.

Asia ex-Japan equity funds led the way, taking in a net $730 million for the week ending March 17, while flows into Latin America equity funds hit an eight-week high and EMEA equity funds extended an inflow streak to four straight weeks. There was also evidence of demand on display at the Reuters summit. Manooj Mistry, head of exchange-traded fund structuring at Deutsche Bank, said investments in emerging market ETFs had risen to as much as $3.7 billion from $2 billion a year ago.

Among areas picking up were frontier markets. Deutsche Bank has a Vietnam ETF and Mistry was looking ahead to the possibility of the United Arab Emirates, Indonesia and locally-traded China shares. There were also signs retail investors were beginning to join institutional counterparts in embracing emerging markets. Andrea Favaloro, European head of retail for BNP Paribas Investment Partners and Fortis Investments, said his retail clients were starting to move into riskier assets, particularly emerging markets. “They really realise what is happening there, particularly in Asia and Brazil,” he said. Indeed, BNP/Fortis launched an emerging markets capital protected fund before they unveiled one for US stocks.

TOO HIGH?

The problem with meeting this growing demand is that emerging markets have already grown dramatically and may be showing signs of strain.

MSCI’s main emerging market stocks index doubled during last year’s rally, far outpacing developed markets. But without much notice, they have been wobbling this year.

While developed stocks as measured by MSCI are up 2.8% for the year to date, the emerging market index is barely into positive territory.

It is not the kind of short-term performance that builds confidence in what is widely expected to be a volatile year. “Speaking as a retail investor, I would be cautious,” said Noel Fessey, managing director for Schroders in Luxembourg, who worries that his clients may be assuming they are moving into an automatically rising market.

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S&P 500 sets new highs as China's stocks stumble
26 Mar 2010, 0103 hrs IST, Bloomberg

NEW YORK: The Standard & Poor’s (S&P;) 500 Index has set new highs, while China’s benchmark stock index failed to surpass its August peak, a divergence that makes US equities more attractive, according to Janney Montgomery Scott.

Better-than-estimated earnings and record-low interest rates have helped propel the yearlong rally in US stocks, driving the S&P; 500 to the highest close since September ’08 this week. By contrast, the Shanghai Composite Index stalled after rising to a 14-month high in August.

The Chinese benchmark had risen more during the first part of the global advance that began in March ’09. That, along with a weaker correlation between the two markets, suggests US stocks will be able to continue their outperformance, said Dan Wantrobski, who studies charts of trading patterns and prices to make forecasts at Janney Montgomery.

“The two markets no longer travel in complete lock-step,” Wantrobski, Philadelphia-based director of technical research at Janney Montgomery, wrote in a note to clients on Wednesday. “The US can continue to pull away from the market trends of China and this will continue to boost our relative attractiveness to global competitors.”

The relationship between US and Chinese stocks has diminished. The correlation coefficient using 30 days of data between the S&P; 500 and Shanghai Composite Index has retreated to 0.09 from 0.48 in December and a record 0.67 in March ’07, according to data compiled by Bloomberg. Readings of 1 indicate markets are moving in the same direction by the same amount. It dropped as low as minus 0.04 in 2009.

The Shanghai Composite began recovering from its bear-market low in November ’08, four months before the S&P; 500 sank to a 12-month low and then began the biggest rally since the 30s.

The advance in China lost momentum as the government stepped up measures to cool economic growth and contain inflation. The index has decreased 7.4% this year. The S&P; 500 has risen 4.7% since December 31 as the US economy returned to growth and a record-long slump in earnings ended.

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Sebi lets USE launch currency futures
26 Mar 2010, 0322 hrs IST, Ram Narsinghdev Sahgal, ET Bureau

MUMBAI: Market regulator Securities and Exchange Board of India (Sebi) is learnt to have approved United Stock Exchange’s (USE) application to offer currency futures trading. According to an official familiar with the development, the approval is subject to Jaypee Capital — one of the promoters of the bourse— bringing down its stake to 5% or less from around 15% in six months. USE is promoted by the Bombay Stock Exchange (BSE), Delhi-based broking firm Jaypee Capital and a clutch of government and private banks. An official privy to the development said, “The file was put up with Sebi for approval a few days ago and the exchange has got the nod for commencing currency futures trading.”

Repeated attempts to confirm the development with Gaurav Arora, MD, Jaypee Capital Services, and TS Narayanasami, MD & CEO of USE, were unsuccessful till the time of going to press. Mr Arora is also a director at USE.

The bourse will use BSE’s infrastructure, including its clearing and settlement mechanism, for offering trading in currency futures for which it will pay a fee to the latter. Apart from BSE and Jaypee, shareholders of USE include Federal Bank (6%) and Bank of India (5%) along with other PSU and private banks.

A couple of market players ET spoke with had mixed reactions to the entry of a new player on the scene. J Moses Harding, head-global markets group, IndusInd Bank on debt, currency and equity markets, feels that since USE is a standalone currency exchange, it will take a while for the bourse to reach out to the HNI segment. “HNIs who punt on NSE and commodity exchange MCX (the joint promoter of MCX-SX along with Financial Technologies) get one more asset class to punt on in the form of currencies offered by these two players, giving them an edge. Since no underlying is stipulated for trading in currencies, it is essentially HNIs to whom the new bourse will have to reach out and that will take time,” said Mr Harding.

However, Jamal Mecklai, CEO of Mecklai Financial Services, said the entry of the new bourse bodes well for competition. He added that though the currency futures markets had to fulfil their goals of reaching out to smaller businesses who still use banks to cover their forex risk.

ETIG data shows the combined daily turnover of currency trading on MCX-SX and NSE to be more than Rs 30,000 crore. Currently, Sebi has allowed exchanges to offer four currency pairs for trading which include dollar-rupee, euro-rupee, pound rupee and yen-rupee.

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Oil inches up on bargain hunting
26 Mar 2010, 1037 hrs IST, AGENCIES

SINGAPORE: Oil inched higher in Asian trade on Friday on bargain buying following recent losses stemming from a firmer US dollar, analysts said.

New York's main contract, light sweet crude for delivery in May, climbed 23 cents to $80.76 a barrel.

London's Brent North Sea crude for May was up 21 cents to $79.82 per barrel.

Oil's gains today were helped by some investors buying "around the $80 per barrel mark", said Ben Westmore, a minerals and energy economist with the National Australia Bank in Melbourne.

"We haven't had a lot of further news that's moving the market so I think some of that earlier negative sentiment has been unwound," he added.

Oil prices had been slumping since touching USD 82 a barrel Tuesday as the euro lost ground against the dollar due to concerns over a debt crisis in European Union member Greece.

European Central Bank President Jean-Claude Trichet chided EU countries for failing to tackle Greece's debt and deficit crisis alone, saying that a possible bail-out from the Washington-based International Monetary Fund was a "very, very bad" thing.

A stronger US dollar tends to dent oil demand because dollar-priced crude becomes more expensive for buyers using weaker currencies.

Research firm Capital Economics said it expects the euro to fall further this year.

"The reason we have revised our dollar/euro forecast is that prospects for recovery in the euro-zone have deteriorated," it said in a market commentary.

"The incoming data have been particularly disappointing... It also seems clear that the euro-zone's fiscal problems are going to continue to weigh on growth for a long time to come."

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WTO members pursue Doha despite gaps, no miracles
26 Mar 2010, 0939 hrs IST, REUTERS

Topics:

India Geneva wto Doha Pascal Lamy

GENEVA: World Trade Organization members will continue to seek a deal in the long-running Doha round despite big gaps in positions, but no agreement is likely this year, trade diplomats and officials said on Thursday.

They were talking after key delegations met ahead of a formal "stocktaking" on Friday by all 153 members, for which expectations have been steadily whittled downwards.

While negotiations will continue, it seems clear the call by leaders of the G20 and other groupings for a deal in 2010 in food, industrial goods and services will go unfulfilled.

One conclusion is that all WTO members need to tackle the major areas still dividing them rather than ploughing through complex technical issues as they have been doing in the hope of preparing for a political breakthrough.

"People are fed up and want to make a frontal effort to deal with the key substantive issues which have been kept on the sidelines for the past six months," said the WTO ambassador of a major emerging economy.

"We are in a difficult situation in the round and we'll see whether a change in attitude to provide more trust can help," said the ambassador from a big industrialised country.

FRUSTRATION

WTO Director-General Pascal Lamy told the meeting that negotiations must focus more on substance than process, such as whether discussions are held bilaterally or in large groups.

"The problems we've had are not because of process but because of substance," he said, according to one participant.

Many members felt too much importance had been put on bilateral contacts between the United States and Brazil, India and China, which the U.S. says must do more to open up their markets to foreign businesses.

"The major focus in the new approach would be to move from a situation in which the solution was delegated to a few countries and now it's being recouped by the membership," said another big emerging economy's ambassador. "There's a lot of frustration."

The big issues include the size of tariff cuts on manufactured goods from cars to chemicals, calls by the United States to eliminate tariffs in some industrial sectors, and the extent to which rich countries open their markets for food and cut trade-distorting farm subsidies.

Some members are now talking among themselves of suspending the Doha round, given the stubborn differences dividing rich and poor nations and exporters and importers.

But none will propose it formally because of the political opprobrium that would strike anyone seen as responsible for the failure of Doha, launched in late 2001 to open up global commerce and help poor countries prosper through more trade.

"Suspension of the round was floated but nobody thought it had any advantages," said the industrialised country diplomat.

Some economists and trade experts have argued that the Doha talks should be abandoned and restarted on a new basis as the world has changed so much in the past eight years.

But most members are loath to see what has been agreed so far thrown away, and there are plenty of economists who still argue in favour of a deal.

A study by Jeff Schott and other economists at the Peterson Institute for International Economics in Washington last month said a Doha deal could boost the world economy by up to $283 billion a year.

A new trade deal would also reinforce resistance to protectionism after trade collapsed according to Lamy by 12 percent last year, the biggest drop since World War Two. The WTO will issue detailed 2009 figures and a 2010 forecast on Friday.

But trade is already reviving as the world economy pulls out of the crisis. The CPB Netherlands Bureau for Economic Policy Analysis, whose data are used by the World Bank and European Commission, said on Thursday that world trade volume in the three months to January was 5.2 percent higher than in the previous three months -- the biggest increase since 1991.

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Food inflation at four-month low of 16.22 pc
26 Mar 2010, 0353 hrs IST, PTI

Topics:

New Delhi Pranab Mukherjee Inflation

NEW DELHI: Food inflation fell to its lowest in four months at 16.22% for the week ended March 13, as the pace of price rise for potatoes slowed and other vegetables such as onions became cheaper.

The 0.08 percentage points fall in food prices from the previous week, however, is unlikely to prevent the overall inflation from vaulting to double digits in March from 9.89% in February as high food and fuel prices have started spilling over to non-food items.

During the week, petrol prices rose 16.82%, while diesel turned costlier by 14.99% year-on-year, as the government restored customs on crude and raised excise duty on petrol and diesel.

“Food inflation is likely to soften in the coming months, but fuel and manufacturing inflation could pick up. I expect overall inflation to be around 11% in March,” HDFC Bank economist Jyotinder Kaur said.

The government expects food inflation to fall after the arrival of the rabi (winter) crop in the markets next month.
Finance minister Pranab Mukherjee too has said that food inflation may spread to non-food items over a period, although food prices have started coming down.

During the week, potatoe prices rose by just 5.62% on yearly basis, while onion prices declined 6.64%. As there is an over supply of potatoes in some markets like West Bengal, prices are likely to fall further in the days ahead, analysts said. Prices of fruit showed a rise of 11.06% year-on-year, that of rice 7.42%, pulses 31.68% and milk 15.31%.

On weekly basis, moong and pork turned costlier by 5% each, urad by 4%, coffee by 2% and fruit and vegetables by 1% each. However, masur prices declined 4% while eggs, bajra, condiments and spices and maize by 1% each.

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Corporate ethics rules must for PSUs
26 Mar 2010, 0336 hrs IST, ET Bureau

NEW DELHI: Public sector companies must follow corporate governance norms and business ethics code issued by the department of public enterprises, the Union Cabinet clarified on Thursday.

The decision to bring all the 246 listed and unlisted central public sector enterprises under good governance codes will safeguard the interest of shareholders and ensure transparency in these companies’ operations, a statement issued by the department of public Enterprises (DPE) said.

“The guidelines on corporate governance have been made mandatory and are applicable to all CPSEs,” said the statement.
As per the norms, the number of functional directors should not exceed half of the board’s strength and at least a third should be independent directors. The audit committee of these companies should have a minimum of three directors as members and an independent director should head the committee.

The norms include additional provisions relating to the compliance of guidelines by government-run firms and the formation of a remuneration committee. Remuneration of directors should be disclosed in the company’s annual report.

The corporate governance norms for state-run companies were introduced in June 2007. They were voluntary in nature and were applicable for one year on a trial basis. The present set of norms, however, incorporate newer provisions put in place to tackle new forms of malpractices.

“In the light of the recent events in the corporate world, the continued need for adoption of good corporate governance principles have been reinforced,” the DPE said in the statement.

The role of directors and auditors had come in for scrutiny after the unraveling of the multi-crore Satyam fraud in 2009. The guidelines cover issues like composition of boards of CPSEs, formation and role of audit committees, functioning of the subsidiary companies, disclosures, code of conduct and ethics, risk management and reporting.

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Growth has percolated to all states: Planning Commission
26 Mar 2010, 0333 hrs IST, Amiti Sen, ET Bureau

Benefits of economic growth over the last few decades have reached all states, although in different measures, a Planning Commission analysis of state growth rates during the last five Plan periods reveals. However, differences in the level and rate of economic development across states remain and have again started rising after declining during the Ninth Plan.

There were as many as 10 states, including Assam, Bihar, Chhattisgarh, Gujarat, Jammu & Kashmir, Madhya Pradesh, Maharashtra and Punjab, that were growing below 5% during the Ninth Plan period (1997-2002). But growth rate in these states increased sharply during the 10th Plan (2002-07) except for Madhya Pradesh, which posted a growth rate lower than 5%. Many of these states were expected to build on the momentum and cross into double digit growth in the 11th Plan, but the financial crisis and the slowdown could have halted the progress.

The variability between the rates of growth in different states increased slightly between the Seventh and Eighth Plan, showing that relatively well-off states grew at a faster rate than others. Although in the Ninth Plan, it came down considerably, it has been going up since then, the analysis which is part of the mid-term analysis of the 11th Plan stated.

A considerable difference in rates of growth remained between states at the top and those at the bottom of the pile during the 10th Plan. While states like Gujarat, Delhi, Haryana, Goa and Orissa posted growth rates ranging between 9% and 10.9%, Madhya Pradesh, Punjab, Uttar Pradesh, J&K; and Assam grew at 4.4%, 5.1%, 5.4%, 5.6% and 5.7%, respectively.

States, on an average, recorded sharp growth during the Eighth Plan (1992-97) compared to the previous one (1985-90), which grew further during the 10th Plan after a drop during the Ninth Plan period .

Although during the first year of the Eleventh Plan, growth across states increased sharply, the global economic slowdown decelerated growth in 2008-09. The median growth for states fell to 6.4% during the year compared to 8% in the previous year.According to the Planning Commission, all states seem to have moved up in respect of their growth rates.

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Tier-I capital may exclude hybrid instruments
26 Mar 2010, 0330 hrs IST, ET Bureau

MUMBAI: Quasi-equity instruments, such as perpetual bonds, may be ineligible to meet Reserve Bank of India (RBI) guidelines on capital requirement in future. RBI’s future regulation will be in line with its peers globally to focus more on shareholders capital and retained profits.

“Going forward, the focus will increasingly be on substance over form and on Tier-I rather than Tier-II capital, especially on common equity. This could mean that hybrid instruments may be out of the pool of eligible Tier-I capital,” said RBI deputy governor Shyamala Gopinath at the release of a report on financial stability.

In India, commercial banks are required to maintain a capital adequacy ratio of 9%. In other words, for every Rs 100 that they lend out of deposits, banks need to have Rs 9 of capital. Of this, Rs 6 has to be in the form of core capital while Rs 3 can be subordinated debt, such as preference shares. Core capital is largely equity and retained profits, but some time back RBI had allowed hybrid instruments, such as perpetual bonds, to comprise 15% of a bank’s core capital.

Ms Gopinath said RBI would not revise capital norms immediately, but would adopt a calibrated approach. She said that after the collapse of American Investment Bank Lehman Brothers, the emphasis globally is more on pure equity rather than other capital.

Bankers say that hybrid capital accounts for less than 10% of the total Tier-I capital of banks in India. Internationally the focus is on quality of capital because some of the global giants are heavily leveraged even when it comes to their Tier-I capital. Many may not be able to meet capital requirements if regulators insist on pure equity and reserves,” said a senior executive with a bank.

“The top three issues being discussed today are—quality of capital, liquidity and CEO compensation. On all three areas India has been extremely conservative,” said a senior bank official. While hybrid capital has only recently been allowed, high statutory liquidity and cash reserve ratio requirements have insured liquidity. “The moment an executive enters a bank board, RBI approval is required for compensation,” he said.

RBI will also have more regulations for investment banks to ensure higher level of transparency for financial products sold or brokered by them. Tier-I will also have some form of prudential regulation and supervision to assure appropriate standards for capital, liquidity and risk management. Ms Gopinath said the central bank is working on a lead regulator approach for monitoring and oversight framework for financial conglomerates. It would follow a consultative approach with other regulators including market Sebi and insurance regulator Irda.

Assessing the overall financial stability, the report has concluded that overall the Indian financial markets are sound though it has expressed concerns on the de-concentration of risks from the banking system. She said that disintermediation should be genuine and wherever banks and non-banks are involved, there is clear transparent capture of the risks within the prudential framework.

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Indic blogs: Vernacular is the e-way to go
26 Mar 2010, 1013 hrs IST, Shreya Roy Chowdhury, TNN

Topics:

Indic blog

NEW DELHI: Jyothi Valaboju was prowling the web for sites on education for her kids when she discovered a Telugu internet group. She got chatting. So lively and entertaining was she, that its members suggested she start blogging. The 46-yearold homemaker from Hyderabad needed no further encouragement.

Three years later, Valaboju has emerged a prolific Telugu blogger with five blogs on topics including cookery, music and religion. On a productive day, she makes as many as 10 posts. “I have a blog for every hobby ,” she says.

It started around 2004-05 , speeded up during 2006-07 and broke into full gallop in 2008. Now, the Indic blog — blog in Indian script — has arrived bigtime. It’s not an exclusive playground of the software developers anymore with many ‘lay’ users plunging in. Crosswords in Hindi, film reviews in Telugu and market analysis in Tamil, they are doing it all.

Bhopalbased technical consultant Ravishankar Shrivastava, 50, has translated an entire desktop environment into Chhattisgarhi . And how’s this for epic? The whole of Ramcharitamanas is at ramayan .wordpress.com.

Aggregators gathering Indic blogs report a rapid growth in their number. Number of Hindi blogs, or ‘chitthas’ , with Chitthajagat, swelled from 1,500 to 6,000 in 2008 and is now over 12,000; Thiratti.com started in 2007 with 14 Tamil blogs. It now has 5,100. Founder A Venkatesh estimates there are about 6,400 Tamil and 3,500 Telugu bloggers.

A Bangla aggregator shows over 25,000 blogs, most by Bangladeshis. The numbers forced Indibloggies founder, Pune-based software consultant , Debashish Chakraborty to exclude Indic blogs from the 2008 awards. That category was big enough to deserve a separate one. “Now more people have internet-access and more computers are Indicenabled . The Inscript keyboard , which allows you to type Indic, is popular.

Primary school kids and grandpas can learn typing with Inscript in three weeks,” says Alok Kumar of Chitthajagat, explaining the proliferation.

Blogging hasn’t exactly been a lucrative venture for Indic bloggers although some offer their sites for advertising . “But I get love, respect and appreciation. Many bloggers call me didi or jyothakka ,” says Valaboju. Money, surely, can’t buy those things.

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US cedes ground, India gains in Net race
26 Mar 2010, 0535 hrs IST, Bloomberg

NEW YORK: The US fell two notches to fifth in a ranking of national Internet and phone systems, a sign the country has to boost network spending if it wants to keep up with the likes of Sweden and Singapore.

The US, which ranked first as recently as 2006, also trailed Denmark and Switzerland, according to a report on “network readiness” by France’s Insead business school and the World Economic Forum released on Thursday.

“The US has to be more decisive in taking action,” said Soumitra Dutta, a professor of business and technology at Insead and co-editor of the report. “It’s a global race right now. It’s an issue of speed.”

To keep up, President Barack Obama is spending as much as $16 billion to overhaul the nation’s Internet system, an effort to get Americans connected to broadband networks . AT&T; Inc, meanwhile, is calling on the government to make more airwaves available. Smartphones such as the iPhone are clogging networks, with more people using them to check e-mail and surf the Web.

While the US still ranks ahead of emerging economies, those countries are stepping up their network spending. China is encouraging private investment in the market, and India is holding an auction of wireless spectrum to bolster the industry.

The study compares network readiness using an index based on 68 measures, including government rules, infrastructure and tax rates. The US faces increasing regulation and higher prices for phone and Internet access, hurting its ranking. “If you’re an investor, you want to go somewhere where it’s easier to start the business ,” said Irene Mia, senior economist of the Global Competitiveness Network at the World Economic Forum and coeditor of the report. “It’s important to see whether the government is prioritising the sector.”

China and India, which lead the world in wireless customers, were the top performers in the so-called BRIC markets, which also include Brazil and Russia. China climbed nine spots to 37th, and India leapt 11 to 43rd, helped by network investments and the decreasing cost of using services in those countries. Russia fell six spots from last year to 80th place, and Brazil’s ranking was little changed at 61st.

“There’s a widening gap between the BRICs — China and India are growing so much,” Mia said. Improving networks is “a revolutionary tool in terms of providing better living conditions.” That’s also providing more opportunities for networking companies to tap those markets. Last quarter, Cisco Systems Inc made 11% of its revenue from the

Asia-Pacific region, excluding Japan. Demand in China and India fuelled double-digit growth in the region, the company said, without giving a specific number.

In the US, Verizon Wireless and AT&T; are updating their networks to move toward a fourth-generation technology called long-term evolution, or LTE. That will increase Web browsing speeds on mobile phones and laptops. — Bloomberg

Ericsson AB, Huawei Technologies and Nokia Siemens, the joint venture of Nokia Oyj and Siemens AG, all announced contracts for LTE equipment last year.

High-definition video and faster downloads will drive the need for more airwaves, Sprint Nextel Corp chief executive officer Dan Hesse said on Wednesday at an industry conference. “I talk to my network guys, and it’s like talking to Scotty in the engine room: ‘Hey captain, she’s going as fast as she can,’” he said.

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Dell denies talks on shifting sourcing from China
26 Mar 2010, 0404 hrs IST, Bloomberg

NEW YORK: Dell has denied an Indian government release that chief executive officer Michael Dell discussed shifting procurement from China to a “safer environment” with Indian Prime Minister Manmohan Singh.

“There was no discussion concerning any change in how or from where Dell will source component parts for the computers it manufactures in Asia,” Minari Shah, a Dell spokeswoman, said in an emailed statement on Thursday.

Dell sources “equipment and parts worth $25 billion from China,” Mr Singh told members of Planning Commission on March 23, according to an emailed text of his speech released by Press Information Bureau (PIB) that evening.

“They would like to shift to safer environment with a climate conducive to enterprise with security of legal system,” Mr Singh told the plan panel. “So I think this is an area where there are immense opportunities,” he said in the speech.

The PIB website, where releases of Mr Singh’s official speeches are posted, no longer has a copy of the remarks. The text was removed after officials from the Round Rock, a Texas-based company, contacted the Indian press office, Dell’s Shah said.

Harish Khare, a media adviser to Mr Singh, declined to comment. Mr Dell met Mr Singh the day after Google started routing China-based users to an unfiltered search service on its Hong Kong site, following through on a January 12 statement to end self-censorship of its Google.cn portal. Dell declined comment on March 23 when asked about Google’s decision.

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No Google in Motorola phones shipped to China
26 Mar 2010, 0832 hrs IST, Bloomberg

Topics:

China Google Motorola Handset

HONG KONG: Google Inc’s search engine was removed from a Motorola Inc handset shipped in China, raising concern the US Internet company’s defiance of government censorship will undermine its ties with local business partners.

Motorola no longer includes Google’s search engine in its Zhishang device shipped to China Telecom Corp., David Wolf, acting head of public relations for Asia at the Schaumburg, Illinois-based handset maker, said in an e-mail today. China Unicom (Hong Kong) yesterday said it doesn’t use Google search on its phones, after billionaire Li Ka-shing’s Tom Online Inc. said it stopped using the US firm’s link on its portal.

“If you were partnering with Google in China, your business plans have just fallen apart,” said Bertram Lai, head of research at CIMB-GK Securities in Hong Kong. “You need to scramble and find new partners.” Google’s decision to stop censoring its Chinese service has spurred speculation that advertisers may switch to rival search engines such as that of Baidu Inc. In the US, Go Daddy Group Inc., the world’s largest registrar of domain names, said yesterday it’s refusing to offer new site identities in China, citing increased Internet spying by the government on its citizens.

Unicom, China’s second-biggest wireless carrier, only works with companies that abide by Chinese law, President Lu Yimin had said. The Beijing-based operator is not working with Google currently , he said.

LICENCE REVIEW

Chinese partners for Google’s search operations need to review their business ties as the US company’s Internet service licence in China needs to be renewed soon, said Fang Meiqin, research director at BDA China Ltd., a Beijing-based telecommunications industry consultant . All Internet service providers in China must have their licenses reviewed by the Ministry of Industry and Information Technology in March, though the agency may extend the reviews for some companies into April, Shawn Zhao, Google’s managing counsel for greater China, said last week. China Unicom has declined 14% this year compared with a 15% gain for China Telecom.

Google said in January that it postponed to an unspecified date the sale of two handsets co-developed with Unicom , after the US company said its stand on Internet censorship may lead to its exit from China. Lu denied Unicom was involved in the phones’ development.

UNFILTERED SEARCH

“Unicom has dropped Google from its handset plans because Google no longer operates within China,” Lai, who rates Unicom shares “underperform,” said. “It makes sense for them to make the decision immediately” to avoid the costs of reprogramming handsets to remove Google later, he said. California-based Google, which has partnerships with China Mobile and Sina Corp. said March 22 it began routing China-based subscribers to an unfiltered search service on its Hong Kong site, following through on a January 12 statement to end self-censorship of its Google.cn portal.

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Google finds few allies in China battle
26 Mar 2010, 0452 hrs IST, REUTERS

SAN FRANCISCO/WASHINGTON: Google used Internet freedom as a rallying cry in its confrontation with China.

But the deafening silence from the U.S. corporate arena underscores how Google looks increasingly isolated in its hope of rewriting the rules in the world's largest Internet market by users.

Only GoDaddy.com has followed Google's lead in protesting Chinese policies. The Internet domain name and web hosting company said on Wednesday that it would no longer register domain names in China due to new rules requiring it to collect customers' photos.

The move by GoDaddy -- more famous for risque commercials than an Internet freedom stance -- contrasts sharply with the anemic response from other companies.

Microsoft Corp, Yahoo Inc and others have trumpeted the general principles of Internet freedom, but none have directly echoed Google's call for an end to Web censorship in China. And GoDaddy aside, no other tech company has hinted at a change in business practices in China to protest regulations and restrictions there.

"China is a very important market," said Cowen and Co. analyst Jim Friedland. "What's the incentive for a government or another company to join with Google? There is none and that's why you haven't seen it happen."

Google's difficulty in enlisting allies could hint at the challenges ahead for the world's largest search engine in China, where organizing broad support has in the past proven to be an effective tool for negotiating with the government.

Last summer, a concerted pushback from industry groups and U.S. officials caused China to back off a controversial plan to force PC makers to adopt special "Green Dam" filtering software on computers sold in the country.

But U.S. officials appeared to be taking a hands-off stance this time, calling Google's move a "business decision" in which Washington played no part. The State Department, however, said it would continue discussing Internet freedom with Beijing.

RISKS TO CHINA BUSINESS

Unlike the Green Dam episode, Google's stand on censorship is not a cause with which many tech companies want to be seen publicly identifying.

Many of them have much more substantial businesses and assets, such as factories and warehouses, in China than Google, and thus more to lose. Analysts estimate Google's China business is a modest 1 percent to 2 percent of its $6.5 billion in annual net profit. Similarly, GoDaddy said that China contributes less than 1 percent of the $1 billion in revenue it expects to generate this year.

"The Chinese government and the Communist party have a unique ability to reach out and touch companies in a way that can make it very difficult for them to do business in a market," said a source at a business group who did not want to be identified for fear of ruffling Chinese feathers.

"So foreign companies are very cautious and very circumspect about how they speak out."

Google announced in January that it would no longer censor search results in China, following a sophisticated cyber attack that it traced to the country and that it said was intended to access email accounts of Chinese human rights activists.

This week, after unsuccessful negotiations with the Chinese government to operate an uncensored search engine in China, Google effectively closed Google.cn and re-routed traffic to an uncensored site in Hong Kong.

Google intends to retain some business operations in mainland China, including research and development staff and a sales team, but the government could make conditions tough.

For example, China might not let Google renew its Internet license, which media reports have said expires in a month.

INCREASED ISOLATION

Bobby Chao, a managing director at the China-focused venture capital firm DFJ DragonFund, said Google's public confrontation with China has created a negative brand image among many Chinese, which could jeopardize the company's other business prospects in the country.

"I anticipate to see more and more major market players disassociate themselves with Google," said Chao, noting that handset manufacturers, for instance, might shun Google's Android operating system because of the anti-Chinese image increasingly associated with Google.

U.S. companies have on occasion collectively pushed back against Chinese policies they saw as discriminatory or protectionist.

But trade experts say they pick their fights carefully.

"If China takes a broad action ... then all the trade associations sign a joint letter and complain about it. If it's an action against one company, the reactions are more private," said Alan Wolff, a former U.S. Trade Representative official who now works as a trade lawyer Dewey & LeBoeuf.

In a Wall Street Journal editorial on Thursday, former U.S. representative to the United Nations John Bolton called on the Obama administration to support U.S. businesses in situations like Google's so "they don't have to act alone."

Publicly linking arms with Google could make it more difficult for a U.S. company to do business in China, where staying in the good graces of regulators is crucial.

"There is a barrage of new rules, regulations for foreign companies operating in China. And everybody is trying to figure out what it means," said the former CEO of a Fortune 500 company that has a long history of doing business in China.

"I think people want to kind of see how it impacts me, rather than take sort of a broad position, or industry position," the source said on condition of anonymity.

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Intel Cap invests $23 mn in 3 tech cos
26 Mar 2010, 0307 hrs IST, PTI

BANGALORE: Intel Capital, Intel Corporation’s global investment unit, on Thursday said it has invested $23 million in three Indian technology companies — July Systems, KLG Systel and MCX.

However, the firm did not reveal the amount the three companies have received individually. Funding would come from the $250 million Intel Capital India Technology Fund established in December 2005, Intel Capital said. “This fund invests in Indian technology companies to stimulate local technology innovation and the continued growth of India’s information technology industry,” it said.

July Systems provides mobile internet solutions which enables media brands to publish, distribute, monetise inventory and personalise services for consumers. KLG Systel provides smart grid and energy management and efficiency solutions to power utilities and end-users.

MCX, a leading commodity futures electronic exchange in India, has permanent recognition from the Indian government for facilitating online trading, clearing and settlement operations for futures market across the country. “Intel Capital’s investment in July Systems, KLG Systel and MCX reinforces our commitment towards fostering Indian innovation,” president of Intel Capital and executive vice- president of Intel Arvind Sodhani said.

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China could resume flexible exchange rate: PBOC adviser
26 Mar 2010, 1046 hrs IST, AGENCIES

BEIJING: China could adopt a more flexible exchange rate policy once the global economy is back on a sure footing, a central bank adviser said on Friday, as pressure intensifies on Beijing to let the yuan rise.

In an opinion piece titled "Toying with yuan won't help US", Fan Gang warned a revaluation of the currency would not by itself resolve economic problems in the United States such as high unemployment and a massive trade deficit.

Fan, the only academic member of the People's Bank of China's monetary policy committee, also pointed out that Beijing has domestic factors to consider, such as the need to create jobs in the world's number three economy.

"China may resume a managed float of its exchange rate, particularly if the uncertainty of the overall post-crisis economic situation diminishes," Fan wrote in the English-language China Daily.

"In choosing whether or not to do so, its policymakers may weigh factors ranging from China's international responsibilities to the potential damage of foreign protectionism or even a trade war.

"What is certain, however, is that China's politicians have a domestic agenda just like the Americans. The key element of that agenda is to maintain employment growth," wrote Fan, who is also an economics professor at Beijing University.

His remarks come amid growing international pressure on China to let the yuan -- effectively pegged to the US dollar since mid-2008 -- appreciate.

There have also been differences within China on exchange rate policy.

While the central bank has signalled a more flexible exchange rate could be in the offing, the commerce ministry has been strident in its defense of the current policy, saying repeatedly it was needed to protect Chinese exporters.

Central bank governor Zhou Xiaochuan said early this month that the exchange rate policy was temporary and would be removed "sooner or later" along with other stimulus measures.

But on Wednesday vice commerce minister Zhong Shan rejected US lawmakers' demands for a review of Beijing's rigid currency policy.

US lawmakers on both sides of the political aisle have blamed the allegedly undervalued yuan for the burgeoning trade deficit with China, which soared to nearly 227 billion dollars in 2009.

They have introduced legislation to punish China with trade sanctions and asked US Treasury Secretary Timothy Geithner to label Beijing a "currency manipulator" in a report due in April that could trigger tougher action.

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US lawyers seek consolidation of Toyota suits
26 Mar 2010, 1021 hrs IST, REUTERS

Topics:

US Japan united states San Diego Toyota Motor Corp Product Recall

SAN DIEGO: Lawyers suing Toyota across the United States over cars that have raced out of control lobbied a special judicial panel on Thursday to merge the scores of cases and assign them to one or two courthouses for pretrial proceedings.

Consolidating cases is the first major step for the US legal system in confronting a torrent of personal injury claims, consumer-fraud class actions and other civil litigation in federal courts stemming from unintended acceleration in Toyota vehicles. Toyota Motor Corp faces a potential liability estimated by some lawyers at more than $10 billion as it struggles to contain an auto safety crisis that has tarnished its once-sterling public image and badly dented its sales.

Complaints of runaway vehicles and other safety issues have led to the recall of more than 8.5 million Toyota vehicles worldwide, most for repairs of ill-fitting floor mats and sticking gas pedals the automaker blames for surging engines. Many of the lawsuits suggest the problem is rooted in an as-yet unidentified electronic glitch, which the Japanese automaker has vehemently denied.

Unintended acceleration alone has been linked to more than 50 crash deaths and dozens of injuries in Toyota and its luxury Lexus vehicles under investigation over the past decade. Thursday's hearing in San Diego also presented an early chance for some of the country's top trial lawyers to briefly take center stage in a courtroom packed with their peers as they jockeyed for a key role in legal battles that lie ahead.

A half-hour before the proceedings began in the morning, attorneys were still huddled in negotiations in a corner of the room to decide who and how many among them would get two minutes to address the five-judge panel. "These seconds, these minutes, they're like cigarettes in jail," joked Mark Lanier, a Houston attorney who was one of the lawyers selected to make a pitch.

"The California lawyers are fighting with each other for their two minutes." Kentucky lawyer Stanley Chesley, who argued for transferring all the cases to his home state, site of Toyota's largest manufacturing plant outside Japan, likened the legal scrum to "a cattle call."

CONSENSUS FOR CALIFORNIA VENUE

With legal action swiftly mounting, the US Judicial Panel on Multi-district Litigation was called upon Thursday to combine the federal cases and select one or two judges from around the country to preside over all of them. No decision is expected for at least two weeks.

But Toyota's own attorney and most of the 23 trial lawyers who made presentations urged sending the cases to the US District Court in Los Angeles -- the venue closest to the headquarters for Toyota's US division, A handful argued instead for sending the cases to Louisiana, New Jersey, South Carolina and other states. The majority, including Toyota's lawyer, also said they preferred assigning all the cases to a single judge, rather than splitting the personal injury claims from cases brought on behalf of consumers for diminished resale value of their cars.

They argued that much of the discovery process and underlying issues would overlap. A few disagreed, arguing the litigation was too complex for one judge to handle. By one count presented on Thursday, 138 lawsuits against Toyota have been filed in federal court to date, nearly 60 of them in California, including consumer and personal injury cases.

The number of cases is expected to climb further, driving up the potential cost to Toyota in damages and legal fees. By comparison, drug maker Merck & Co. recently agreed to pay $4.85 billion to settle claims over heart attack deaths blamed for the pain medication Vioxx. About a third of that sum was earmarked for the plaintiff's lawyers, while the defense team earned an estimated $2 billion.

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IMF welcomes Dubai World debt restructuring
26 Mar 2010, 0953 hrs IST, REUTERS

Topics:

Washington Dubai UAE debt INTERNATIONAL MONETARY FUND Dubai World

WASHINGTON: The International Monetary Fund on Thursday welcomed the announcement by Dubai of a $9.5 billion restructuring of its Dubai World conglomerate and property developer Nakheel.

The IMF said it supported the authorities' intention to "find a fair and equitable solution" for all stakeholders.

"A satisfactory conclusion of this process will pave the way for improving overall credit conditions, the investment climate, and economic activity in the Emirate of Dubai and the UAE," the IMF said in a statement.

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UBS to slash 200 jobs in US brokerage unit
26 Mar 2010, 0950 hrs IST, REUTERS

Topics:

united states UBS layoffs

Swiss banking giant UBS AG will slash about 200 jobs in its US brokerage unit, the Wall Street Journal said, citing people familiar with the situation.

The job losses account for nearly 1.2 percent of the brokerage unit's 16,295 employees, the Journal said.

The bulk of the job cuts were announced in the past two days, the paper said.

UBS could not be immediately reached for comment by media.

In the past year, hundreds of brokers have left the bank, taking clients and assets with them. In the third quarter, the most recent data available, U.S. brokerage clients yanked out nearly $10 billion in assets.

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Europe agrees on Greek safety net with IMF role
26 Mar 2010, 0848 hrs IST, REUTERS

Topics:

europe greece debt Currency IMF

BRUSSELS: Euro zone leaders agreed on Thursday to create a joint financial safety net with the IMF to help debt-ridden Greece and to try to restore confidence in their common currency after weeks of wrangling.

Under the accord, Athens would receive coordinated bilateral loans from other countries that use the euro and money from the International Monetary Fund if it faced severe difficulties.

"Europe has taken a big step in the face of a big challenge," Greek Prime Minister George Papandreou told reporters after talks in Brussels, declaring himself satisfied.

But the euro fell to a 10-month low against the dollar because investors took the initial view that IMF involvement suggested the 16-country euro zone was unable to handle its problems alone.

The agreement included no numbers, but a senior European Commission source said the support package would be worth 20-22 billion euros ($27-29 billion) if required in an emergency.

French President Nicolas Sarkozy said the euro zone would put up two-thirds of the money, and the IMF the rest.

Tough terms imposed by German Chancellor Angela Merkel mean the mechanism could be activated only under strict conditions and would require the unanimous approval of the euro zone, giving Berlin a veto.

Greek Finance Minister George Papaconstantinou said the deal removed the risk of default by his country, but he and German officials said no aid was being given to Greece now.

"We don't view this as a miracle cure. It is an important part of the cure, no more," said EU President Herman Van Rompuy.

GERMAN RESISTANCE

Merkel had long resisted offered aid to Greece because of public opposition in Germany and concerns that any deal could face a legal challenge at home.

But shortly before heading to Brussels for an EU summit, she signalled in parliament that she would accept a contingency plan provided the IMF was involved and EU partners agreed to toughen the bloc's budget deficit rules.

"A good European is not necessarily one who offers help quickly. A good European is one that respects the European treaties and national rights so that the stability of the euro zone is not damaged," she said.

At Berlin's insistence, euro zone leaders also called for proposals by the end of the year to tighten the bloc's budget discipline rules, which failed to prevent Greece running up huge deficits and public debt.

The differences over Greece have widened divisions in the EU. European Commission President Jose Manuel Barroso, head of the EU executive, said involving the IMF had been the only way to reach a consensus.

"We have solved this in the European family," he said. "I think this is the right decision at this time to face what is an exceptional problem."

The cost of insuring Greek debt against default fell on news of the agreement, clinched first by the leaders of Germany and France, and the premium investors charge for holding Greek bonds rather than benchmark German bunds narrowed.

But it remained more than double the spread charged on fellow euro zone weaklings Ireland and Portugal, and four times that of Spain.

BANK MOVE HELPS GREECE

The European Central Bank also took a step to support Greece by extending softer rules on collateral so that Athens does not risk a guillotine on its debt at the end of this year.

Under the arrangement, euro zone countries would provide funding for Greece on rigorous conditions recommended by the European Commission and the ECB.

"This mechanism, complementing International Monetary Fund financing, has to be considered ultima ratio (last resort), meaning in particular that market financing is insufficient," the agreement said.

Many details are unclear, such as how the Washington-based IMF and the euro zone would work together in a rescue.

Some euro zone states, notably France, and ECB policymakers have previously opposed IMF involvement, saying such a move would underscore the single currency area's inability to solve the deepest crisis in its 11-year existence on its own.

"If the IMF or some other body exercises the responsibility in lieu of the Eurogroup or instead of governments, it is evidently very, very bad," ECB President Jean-Claude Trichet told France's Public Senat television in an interview.

Trichet had earlier given Athens some good news, announcing that the central bank would extend looser collateral rules, due to expire at the end of this year, into 2011.

Greece was at risk of having its bonds rejected as collateral for refinancing with the expiry of the relaxed rules, potentially triggering an even deeper liquidity crunch.

Athens is still saddled with borrowing costs more than double those of Germany and must borrow some 16 billion euros between April 20 and May 23 alone to refinance maturing debt.

Greece says a standby aid package from the EU will reassure credit markets and avert the need for it to request aid.

Without a fallback mechanism, EU leaders fear Greece's debt problems could spread to other countries in the euro zone including Portugal, Spain or Italy.

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There’s a 50% chance that us will label China a currency manipulator: Nouriel Roubini
26 Mar 2010, 0945 hrs IST, Bloomberg

Topics:

China US united states Currency Yuan Nouriel Roubini

SHANGHAI: The US and China are on a ‘collision course’ over the value of the Chinese currency and investors are underestimating the disruptions for global financial markets, according to Nouriel Roubini.

“The risk of a collision course on China’s currency peg and a wider trade rift between the world’s largest debtor and creditor nations has risen significantly in recent months,” Roubini, a professor at New York University, wrote in a note to clients. “Markets do not seem to be pricing in the potential consequences of the US labelling China a currency manipulator, which could be significant even if both sides avoid taking immediate bilateral actions.”

There is a 50% chance that the US government will label China a currency manipulator, said Roubini, who issued his comments after attending a private meeting for Western delegates with Premier Wen Jiabao at the annual China Development Forum.

Labelling China a currency manipulator would make it easier for companies to seek import duties, US senator Charles Schumer said this week. China will balk at allowing the yuan to appreciate if that happens, Donald Straszheim, director of China research at International Strategy & Investment Group, said on Wednesday.

China’s Shanghai Composite Index fell the most in two weeks on, led by shipping companies, on concern rising trade tensions will hamper the recovery for exports. Yuan forwards declined after China reiterated it won’t yield to foreign calls for currency appreciation to resume.

“The Chinese government will not succumb to foreign pressure to adjust our exchange rate,” Vice-Minister Zhong Shan told reporters during a trip to Washington to meet with US officials and lawmakers. “To force the appreciation of the renminbi will be counterproductive.”

The Treasury department is “seriously considering” labelling China a currency manipulator in an April 15 report, Schumer said on March 23.

China has kept the yuan at 6.83 per dollar since mid-2008 to shield exporters from the global recession and a contraction in world trade.

The nation may post its first trade deficit in six years this month, a shift that may reinforce the government’s reluctance to end the yuan’s peg to the dollar, Standard Chartered Bank said this week. China’s exports surged 46% last month.

China will limit the yuan’s appreciation to 4% over the next 12 months because of a “super cautious” outlook on the global economy, Roubini said in a March 8 interview.

Roubini, who runs his own global economic strategy firm, correctly predicted a “hard landing” for the world economy in 2007 and has become famous for his pessimistic projections.

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SC allows AP order on 4 pc Muslim quota
26 Mar 2010, 0433 hrs IST, ET Bureau

NEW DELHI: The demand for religious quota in jobs and admissions gained legitimacy on Thursday when the Supreme Court leaned in favour of an Andhra Pradesh law providing 4% quota to 14 ‘backward groups’ within the Muslim community. The court, which passed an interim order, referred the adjudication of constitutional validity of the AP law to a Constitution Bench.

The AP move was earlier turned down by the state’s high court for violating the Constitution. The SC interim order, passed by a bench comprising Chief Justice KG Balakrishnan and Justices JM Panchal and BS Chauhan, may now open the floodgates for extending the benefits of reservation to Muslims and Dalit Christians in other states.

The lack of judicial sanction has so far been cited by the Centre to stonewall demands for religion-based quota, which was recommended by the Ranganath Mishra panel.

In a majority judgment of 5:2, the high court had struck down the law arguing that it was ‘unsustainable’ and violative of Articles 14, 15(1) and 16(2) of the Constitution. While Article 14 pertains to the right to equality, Article 15 prohibits discrimination on the basis of race, religion and caste while Article 16 is about equality of opportunity in matters of employment.

The AP order, which mentioned 14 groups within the Muslim community as eligible for quota, had left a fifteenth category unidentified. It had a clause saying that even this unidentified category could be considered for quota benefits. This was put on hold by the Supreme Court.

The only categories now kept outside the quota ambit are Syeds, Pathans, Arabs and Iranis, but they account for less than 10% of the state’s Muslim population. Muslims constitute 9.2% of Andhra Pradesh’s 77 million people.

The apex court bench was in agreement with the argument put forth by Attorney General GE Vahanvati and former AG K Parasaran that quota benefits are extended to socially and educationally backward communities on the basis of their profession and not religion.

It would be social discrimination of the worst kind if on the one hand reservation was given to similarly situated groups within the Hindu community but denied to those in the Muslim community, they argued.

The bench was in agreement with their position that it was not fair to exclude Muslim barber or washerman community from the quota list when the similarly placed Hindu groups were being provided with benefits of reservation.

“If the HC judgment is allowed to be continued, then these backward class groups will be denied the social affirmative action which they need. If identification in the proper sense was to be enforced, then the process could go on for 100 years and they will continue to be deprived of reservation,” the Bench said.

Senior advocate Harish Salve, appearing for T Muralidhar Rao, on whose plea the HC quashed the AP law, argued that the legislation was nothing but a thinly disguised law to further reservation on religious lines. “If the government was serious in providing a push to the backward classes among the Muslim community, then why was it being shy to put the identified groups within the already existing categories of OBC list and giving the social affirmative action a Muslim tag,” asked Mr Salve. The bench countered that argument by asking if the identified groups were socially and educationally backward, then where was the problem in extending reservation to them.

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Washington goes out of the way to woo Islamabad
26 Mar 2010, 0459 hrs IST, ET Bureau

Topics:

Pakistan Islamabad Hillary Clinton Washington al Qaeda

NEW DELHI : The Obama administration has promised a multi-year security assistance package to Pakistan as part of its policy to appease Islamabad.

Addressing a joint news conference with Pakistan foreign minister Shah Mahmood Qureshi in Washington on Thursday, US secretary of state Hillary Clinton said that the security assistance would include military financing as well.

The praise heaped on Islamabad by Ms Clinton ahead of a strategic dialogue between the two nations had given sufficient indication that the US was going all out to woo Pakistan.

The extent to which the US has gone to keep the dialogue atmospherics conducive was evident when its British envoy, Mr Louis B Susman, drove from London to Manchester to make sure that the American airline security would not body-scan the Pakistan foreign minister. Mr Qureshi was on a commercial flight to the US with a stopover in Manchester. According to The Washington Post, the US envoy’s main goal was to “avoid any unpleasantness — including the possibility of the US airline security insisting on body-scanning Qureshi — that might start the US-Pakistan strategic dialogue in Washington off on the wrong foot.’’

Gestures were followed up with promises and even Pakistan’s request for a civilian nuclear deal was not rejected outright by Washington.

The strategic talks are aimed at broadening the existing relationship in return for Pakistan’s action against the Taliban and the Al Qaeda. In this context, the US rolled out security assistance and also discussed long-term military modernisation. But Washington has not yet revealed the amount behind the package.

``I was pleased to inform the foreign minister that our goal is a multi-year security assistance package, including foreign military financing, based upon identified mutual strategic objectives, which would further strengthen our long-term partnership with Pakistan,” Ms Clinton said at the joint press conference.

Even though Washington was cautious on a civilian nuclear deal, a $125 million energy sector aid and millions of dollars of social sector projects was part of the package. It remains to be seen what else the US comes up for Pakistan. Any increase in aid will have to be approved by the US Congress.

On the Pakistani demand for a nuclear deal, Washington, however, remained ambiguous. Ms Clinton called the Pakistani demand for nuclear deal as one of the several complicated issues between Washington and Islamabad. When asked about the deal, she said, “We have a broad agenda, with many complicated issues like the one you referred to. Discussions are continuing through tomorrow. While I will not go into details of our conversation, we’ve said that we will listen to and engage with our Pakistani partners on whatever issues the delegation raises. We’re committed to helping Pakistan meet its real energy needs,” Ms Clinton replied.

Though Pakistan has pushed for the civilian nuclear deal, citing energy shortage, the US agreed to sign agreements for only three thermal power station rehabilitation projects. Other areas where the US will put in money includes upgrading significant road infrastructure in the northwest, trade concessions and improving the agriculture infrastructure.

Pakistan was on the backfoot over the civilian nuclear deal with foreign office spokesman Abdul Basit saying that the success of the ``ongoing strategic dialogue with the US’’ should not be judged in the context of whether Pakistan could get a deal similar to the one obtained by India. “It would be unfair to see this (strategic) dialogue process only in context of a civil nuclear cooperation...To judge the success or failure of our relations with the US or this particular dialogue in that narrow context is not appropriate,” Ms Basit was quoted as saying.

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Pak terror groups threat to all nations: PC
26 Mar 2010, 0452 hrs IST, ET Bureau

Topics:

Pakistan Islamabad US Chidambaram

NEW DELHI: India on Thursday asked Islamabad’s “friends”, particularly the US and the UK to persuade it to close terror malls operating on the Pakistani soil. Home minister P Chidambaram, who gave vent to New Delhi’s irritation with Washington’s approach to terrorism emanating from Pakistan, said that no country will be safe if stern action was not taken against groups like Lashkar-e-Taiba.

“No country is truly safe.... Don’t think that India alone is under threat. Every country is under threat from these groups and the Lashkar-e-Taiba today is like the al-Qaeda, a multi-country group.” That Lashkar has emerged as an important member of a global jihadi network is being conceded by the US.

In an interview to the BBC, Mr Chidambaram said it would be “naive” for Western countries to think that only India faces the threat from Pakistan-based terrorists. “Once you allow these terror groups to train, recruit and be able to build capacity to strike, they can strike in India, they can strike in UK, they can strike in Denmark as they were planning out of the Karachi Project,” he said.

The home minister also said that the civilian government in Pakistan has not moved towards reining in the ISI or the terror groups that are backed by it. “If there is a truly civilian government in Pakistan which can rein in the ISI and direct the army and the ISI to move in and dismantle their terror infrastructure. The camps must be closed. Training must come to an end,” he said.

To a question whether he has seen any movement in that direction in Pakistan, Mr Chidambaram replied in the negative. “Nothing so far,” he said. Asked what could persuade Pakistan to do that, he said, “the UK, the US know the answer to that question better. Certainly, we have not been able to persuade Pakistan. It is Pakistan’s friends, mutual friends, who would have to bring pressure on Pakistan.”

On the Pune attack, the minister said there were intelligence reports about jihadis targeting the town. “Pune was a case where it slipped through the cracks. Pune was a target. There was specific intelligence shared by the Central government with the Maharashtra police and the government. The area, Koregaon park, was under a security cover.

Advisory was given to German Bakery and its manager’s acknowledged the advisory on every single occasion but they did nothing. They did not even take the minimum security precautions. So, it is an unfortunate case that I would say slipped through the cracks. As I said in Parliament, it’s a blot. But the lesson is that when there is intelligence, pointed intelligence and advisories are issued, people must cooperate. Shops, establishments, hotels, malls must take minimal security precautions,” he said.

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Uma Bharti resigns from her own party
25 Mar 2010, 2313 hrs IST, PTI

NEW DELHI: Firebrand Hindutva leader Uma Bharti on Thursday quit the Bharatiya Jan Shakti (BJS), a party she floated four years ago following her expulsion from the Bharatiya Janata Party (BJP). There is talk she may return to her parent party.

Though Uma Bharti has said she was quitting on health grounds, her surprise resignation comes amid speculation she may return to the Nitin Gadkari-led BJP.

Gadkari, the new BJP chief, had earlier expressed his readiness to take back some popular disgruntled party leaders.

Uma Bharti in a letter to her party's acting president Sanghpriya Gautam, who too had walked out of the BJP to join Uma Bharti's Bharatiya Jan Shakti, said she was resigning "in view of the political situation in the country... and (her) state of health".

"Responsibility as the party president and my earnest desire for introspection and contemplation with free mind is putting too much strain on my body and mind," the former Madhya Pradesh chief minister wrote in her letter.

"I am resigning from the party presidentship and relieving myself of all responsibilities," said the 51-year-old who was at the centre of a political row in the BJP.

Uma Bharti was a senior leader of the BJP and was a central minister. She had openly revolted against L.K. Advani in 2004 following which she was temporarily expelled and served a show cause notice.

Her expulsion was revoked later, but in 2005 she was sacked again when she opposed the appointment of Shivraj Singh Chauhan as chief minister of Madhya Pradesh.

In 2006, Uma Bharti floated the Bharatiya Jan Shakti, saying she would revive the Hindu movement in India. However, she received a severe drubbing in the assembly election from her home turf Tikamgarh constituency in Madhya Pradesh.

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SC can't order probe into corrupt acts of politicians: CJI Balakrishanan
25 Mar 2010, 2157 hrs IST, PTI

NEW DELHI: The Supreme Court on Thursday held that it cannot direct probe against politicians facing corruption charges, saying the onus was on investigating agencies.

"This court cannot sit in judgment over whether investigations should be launched against politicians for alleged acts of corruption," a three Judge Bench headed by Chief Justice of India K G Balakrishanan said refusing to direct CBI probe into the alleged disproportionate assets case against Sikkim chief minister Pawan Kumar Chamling.

"If the Supreme Court gives direction for prosecution, it would cause serious prejudice to the accused, as the direction of this Court may have far reaching persuasive effect on the Court which may ultimately try the accused," the bench said in a judgement.

The bench directed petitioner Kungamina Lepcha, an opposition leader, to approach the investigating agencies concerned if he has got any such grievance.

"The onus of launching an investigation into such matters is clearly on the investigating agencies such as the State Police, Central Bureau of Investigation or the Central Vigilance Commission among others. It is not proper for this court to give directions for initiating such an investigation under its writ jurisdiction," the court said.

Questioning the motive behind the petition which was filed at the initiative of persons belonging to a political party, the court said that writ petition cannot be used as an instrument of such partisan considerations.

"However, even if we were to accept the locus standi of the petitioners keeping in mind that allegations of corruption on part of the incumbent chief minister do touch on public interest, this court is not the appropriate forum for seeking the initiation of investigation," the bench said.

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India concerned about US-Pakistan talks on Afghanistan
25 Mar 2010, 2132 hrs IST, IANS

NEW DELHI: India is not bothered so much about Pakistan's hunger for a nuclear deal with the US, but is closely watching the outcome of the strategic dialogue between Islamabad and Washington for any sign of a secret deal on Afghanistan's future.

"We are not worried about Pakistan's pitch for nuclear deal. That won't happen due to Pakistan's proliferation record. But we are closely following the US-Pakistan strategic dialogue, specially on issues relating to Afghanistan," a government source said.
"The situation in Afghanistan is of direct concern to India. Any deal with the Taliban can push that country back into medieval barbarism," the source said.

After the Jan 28 London conference that envisaged reintegration of the Taliban in the political mainstream, concerns have been raised in India's strategic establishment about a hidden deal between the US and Pakistan to the detriment of India's interests in that country.

"They (US) have given Pakistan a veto over the future of Afghanistan. It's a big setback for India," Satish Chandra, a former deputy national security adviser and a former envoy to Islamabad, told IANS.

The ongoing US-Pakistan strategic dialogue, Chandra pointed out, showed that the US was mollifying Pakistan to win its full support for the battle against Al Qaeda in Afghanistan.

On record, the US has lauded India's role in the reconstruction of war-torn Afghanistan and denied there were attempts to marginalise New Delhi in the emerging power play in that country.

But this hasn't cut much ice with strategic experts here.

"Pakistan wants to become the sole spokesperson of the Taliban. Pakistan has eliminated all potential mediators between the Taliban and the US so as to be the sole mediator with the Taliban," says Alok Bansal, a Pakistan expert at the National Maritime Foundation, a think tank. "It's a cause of grave concern for India."

Pakistan was one of only three countries that recognized the Taliban after it seized power in Kabul, the other two being Saudi Arabia and the United Arab Emirates. This was when India, along with Iran and Russia, backed the anti-Taliban Northern Alliance.
Once the Taliban was ousted from power after 9/11, Pakistan covertly took the Islamist militia and Al Qaeda remnants under its wings. At the same time India came out in full support of President Hamid Karzai, re-igniting an India-Pakistan proxy war in Afghanistan.

New Delhi is also concerned about a "multi-year security assistance package" the US has announced for Pakistan that could include cutting-edge weaponry running into billions of dollars.

India has time and again pointed out that the weapons the US has given to Pakistan are used against Indian assets, but Washington has not paid much heed.

"The Taliban is not going to be fought with these weapons. Where are they going to use these weapons?" asked Chandra. He then went on to answre his own question: "Against India."

National Security Adviser Shivshankar Menon has been blunt, saying that giving military aid to Pakistan was like giving alcohol to an alcoholic. Foreign Secretary Nirupama Rao aired these concerns during her trip to Washington this month.

US Secretary of State Hillary Clinton said after talks with Pakistan Foreign Minister Shah Mehmmod Qureshi in Washington Wednesday: "Our goal is a multi-year security assistance package, including foreign military financing, based upon identified mutual strategic objectives, which would further strengthen our long-term partnership with Pakistan."

But she ruled out any mediatory role for the US in resolving the Kashmir dispute and described Pakistan's plea for "non-discriminatory access to energy" - an euphemism for an India-like nuclear deal - as a "complicated issue."

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Investors turn to wealth managers for best bets
25 Mar 2010, 0700 hrs IST, Apurv Gupta & Shailesh Menon, ET Bureau

Topics:

returns investors Wealth managers

MUMBAI: A growing number of investors are turning to wealth managers to decide where to invest their money to generate a decent inflation-adjusted return.

Assuming that an investor has put Rs 1,000 in the stock market for 10 years, yielding an average annual return of 15%, his investment would have multiplied to Rs 4,045 at the end of 10 years. However, taking into account a nominal inflation rate of 10%, the real rate of return would only be an average of 5%. Thus, after adjusting for inflation, the absolute value of his investments at the end of 10 years will only be Rs 1,628.

“So far, a lot of clients were not sensitised to comparing inflation rates and investment returns and tend to largely focus on nominal returns. However, as the high inflation rate continues to make headlines, investors are becoming more worried over how to generate inflation-adjusted returns from their investments,” says Hrishi Parandekar, CEO, Karvy Private Wealth.

While equities and gold figure at the top of the list, many wealth managers are telling investors to allocate a part of their funds into long-term private equity (PE) and real estate assets. Over the past one year, the prices of essential commodities have more than doubled along with the escalating cost of services and education. This has forced many whose income have not kept pace with the increase in prices to dip into their savings to meet major expenses.

Says Sanjay Kumar Maheshka, MD & CEO and member, group corporate strategy, Prabhudas Lilladher Fund Advisors, “The returns are not linked to inflation strictly, but also to other things such as global factors. Returns during financial year 2009 have been bad, the returns in general in the past five years have been far in excess of inflation adjustment.”

Most of the advisors assume a nominal annual inflation rate of 5-6% for working out a long-term plan of their clients’ finances. The wholesale price index (WPI) in India was at a 16-month high at 9.89% in February.

Mr Maheshka says that he expects inflation to fall in the next six months. “We still recommend equities and balanced funds as major asset classes for the investor with a medium-to-long-term perspective. In the short term, a correction in the equity market cannot be ruled out.”Mr Parandekar reckons that the best way to beat inflation will be to take an exposure to equities which, in the Indian scenario, is fundamentally driven by macro-economic growth.

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In theory, an increase in inflation should result in higher corporate revenues and increasing profits. While this may be limited to short-term stock market movements, there is no data to prove that it helps in the long term. Experts say that financial markets are far more complex than this and the best strategy would be to ensure optimal allocation among different assets.

For investors, it is important to look at the real rate of return (after inflation) and not just focus on nominal rates of return. An inflation hedge is an asset that erodes less when prices are on the ascent.

“For an Indian investor, a superior investment choice to protect one’s investment from a hyperinflationary environment is, investing in hard assets such as gold,” said Maneesh Kumar, MD, Burgeon Wealth Advisors.

Wealth managers say that debt is one asset class that an investor should invest in during times of hyperinflation. A fixed income product will continue to give the same coupon payment irrespective of the inflation rate.

“Taking inflation and taxes, money in a savings account yields negative returns for the depositors. From April 1, we are likely to see interest calculated on a daily balance. However, that will not be of much help considering that the savings account rate is 3.5% and that WPI is touching 10%,” Mr Kumar said.

According to wealth managers, the ones who are worried the most are pensioners who depend on fixed income and have to stretch their budget due to high inflation. The only protection they can hope to get presently is from tax-free investment alternatives.

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Foreign funds hint at hiking India allocation
25 Mar 2010, 0052 hrs IST, ET Bureau

Topics:

foreign funds Portfolio investors

MUMBAI: Portfolio investors are positive on the India structural story. Foreign fund managers from GIC, Boston-based Mass Financial, Janus, T Rowe Price, Boston-based Wellington Management, Singapore-based Aberdeen Asset Management and Fidelity, which were recently in India, have indicated that they are looking for the right opportunities to match their India allocation.

Many have gone back to say that they are considering raising their India allocation, said a senior strategist at the India arm of a foreign brokerage. However, how soon this will translate into incremental flows will be difficult to say, he added.

The big fear so far had been that if the US raised interest rates, money would flow out of emerging markets, including India. After the Federal Reserve statement on keeping interest rates low, this is unlikely and viewed as a definite positive for fund inflows.

While most of these funds have been invested in India, with sufficiently large India portfolios, a few names such as that of the US-based pension fund TIAA-CREF are also doing the rounds. TIAA-CREF has been invested in India for more than a decade. The fund is said to be taking a relook at India.

However, equity analysts are concerned that a rise in interest rates by the Reserve Bank of India (RBI) to contain inflationary expectations could act as a dampener and lead to some of these funds adopting a wait-and-see attitude. Also, with a large tranche of Greece’s debt across various maturities coming up for expiry in April, Europe still remains a concern.

“We are very bullish on India over the medium-to-long term. While we are currently overweight on India, we may consider raising India allocations over the year, depending on how the next few months play out,” said Sam Mahtani, director, emerging market equities, at the London-based F&C; Asset Management. “Our key high conviction stock ideas include Jindal Steel and Power, Ranbaxy and Axis Bank,’’ he added.

F&C; has a $ 2.5-billion emerging market portfolio, with India’s share of the pie being $350 million. While the India portfolio is a diversified one, the four key themes include pharma, IT, financial services, and metals and mining.

Foreign institutional investors, or FIIs, have been net buyers of more than $3.2 billion of Indian stocks as on March 22. On a net basis bought $3 billion of shares in March alone.

India has a 0.96% weightage in the overall MSCI (World) universe compared to China, which has a 2.26% weightage. The MSCI India market cap is $233 billion vis-à-vis India’s market cap, which stands at $1.3 trillion. Interestingly, most portfolio investors are underweight on China.

The overall MSCI (World) universe on February 26, 2010, stood at $24.1 trillion, with 87.3% of it being the MSCI developed world and 12.7% the MSCI emerging world. The stance of institutional investors over the past few months has been one of cautious optimism. After the Federal Open Market Committee (FOMC) meeting this month, investors have moved from being risk-averse to a more neutral zone on emerging markets and India.

The perception is that while global liquidity will continue to determine future flows, India is holding out much better than the fundamentals warrant. Currently, most FIIs are marginally overweight on India.

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Stocks to watch: Bharti Airtel, NTPC, IOC, Tata Motors
25 Mar 2010, 0940 hrs IST, ET Bureau

Topics:

Bharti Airtel markets stocks Tata Motors IOC

MUMBAI: Shares of Bharti Airtel will be in focus after Kuwaiti telecom firm Zain approved the sale of most of its African assets to India's top mobile firm for $ 10.7 billion.

Shares of NTPC will witness some action amid reports that the power company was likely to import 14 million tonnes of coal in the coming financial year 2010/11.

Shares of Indian Oil Corporation, BPCL and HPCL may be in focus amid reports that the finance ministry may offer more compensation to state-owned oil marketing companies for selling fuel below cost this year, provided the oil ministry deregulates auto fuel prices and increases cooking fuel prices next fiscal.

Future Group’s Kishore Biyani plans to offload stakes in units not part of those core categories to raise money needed to fund expansion plans. He wants to cap his stake in the non-retail and non-financial services business at 26% and keep 40-45% in the operating companies. His focus will remain on the retail businesses. Biyani and his family own 44.73% in flagship Pantaloon Retail (India) Ltd, the retail shopping chain, and 38.95% in Future Capital Holdings Ltd. Pantaloon Retail houses retail chains and allied businesses such as logistics, distribution and training institutes.

Shares of auto manufacturers are likely to be in action after news that all car makers are planning a 1-3 percent raise in prices from April 1 on account of new emission norms and to offset rising input costs.

Godrej Consumer Products plans to take its Indian brands to Africa in the next one year in a bid to expand and establish its portfolio overseas. Shares of the company may see an upside on this development.

Tata Motors Ltd plans to top its record February sales of 39,205 trucks and buses this month. Commercial vehicle sales are normally buoyant in March, and this year sales have been boosted further by the prospect of new emission regulations being imposed from April, as well as the good performance of export-import, mining and infrastructure sectors. The company is said to be eyeing production of more than 45,000 commercial vehicles in March, up from 29,479 trucks and buses in the same month a year ago.

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Bharti shares rise after Zain approves Africa sale
25 Mar 2010, 1044 hrs IST, REUTERS

Topics:

Sunil Mittal Bharti Airtel Zain

NEW DELHI: Bharti Airtel shares rose more than 3 per cent early on Thursday as it came closer to a $9 billion deal to buy Zain's African assets after the Kuwaiti firm's board approved the sale. ( Watch )

Zain said on Wednesday it would sign the deal in the next few days, confirming what sources with direct knowledge of the matter told Reuters earlier. Bharti is expected to make an announcement as the deadline for exclusive talks between the two companies end on Thursday.

"The reaction of the stock price reflects the deal being done at attractive financing terms. But how Bharti is going to benefit from it will only be known in the next 2-3 quarters," said Deepak Jasani, head of research at HDFC Securities.

Billionaire Sunil Mittal who controls Bharti is desperate to expand into new markets as cut-rate competition in India, the world's fastest-growing mobile market, squeezes margins and clouds its growth outlook.

Bharti, the leading mobile operator in India, has thrived on low incomes and tariffs and a large rural population — characteristics shared by African nations — and wants to replicate its Indian model in the 15 African countries where it is buying Zain's assets. But some analysts have said Bharti is paying a high price for the deal, with enterprise value of $10.7 billion at around 10 times EBITDA, and may be a drag on the Indian firm's earnings.

"We can know whether the valuation was right only after some time. So yes, there are opportunities, but there are also mine-fields and pitfalls ahead. We have to see what comes first," Jasani said.

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At 0400 GMT, Bharti shares were up 1.8 per cent at 312.20 rupees in a weak Mumbai market, having risen as much as 3.2 per cent earlier. The shares, currently valued at about $26 billion, were the second-worst performer among the benchmark components in 2009. In 2010, the shares are down 5 per cent, underperforming the broader market that is down 0.4 per cent.

DUE DILIGENCE OVER, FUNDS IN PLACE

Due diligence for the deal, the second-biggest overseas acquisition by an Indian buyer after Tata Steel's $13 billion purchase of Corus in 2007, has been completed successfully, Zain said on Wednesday.

Bharti, 32-per cent owned by Singapore Telecommunications, would pay $9 billion in cash to Zain, including $700 million to be paid one year after the deal closes. Bharti will also assume $1.7 billion debt on the target firm's books.

The Indian firm said on Sunday it had secured $8.3 billion in loans from a clutch of lenders, led by Standard Chartered, Barclays and State Bank of India. Banking sources said Bharti was getting an attractive interest rate of around 200 basis points over Libor. Standard Chartered and Barclays were advising Bharti on the deal, while Zain was being advised by UBS.

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Tech Mahindra: AT&T'S purchase not to impact Shareholders
25 Mar 2010, 0310 hrs IST, Ranjit Shinde, ET Bureau

AT&T;’S purchase of 8% stake in Tech Mahindra is not likely to impact the Indian company’s shareholders. The management has clarified that it was a one-off deal and there is no likelihood of more such transactions being carried out in the future.

AT&T; has long been a client of Mumbai-based Tech Mahindra, which offers IT solutions to global telecom players. In 2005, Tech Mahindra had entered in a long-term contract with AT&T.; As an incentive, Tech Mahindra offered to sell equity stake to AT&T; as and when the overseas firm achieves a given milestone revenue using Tech Mahindra’s solutions.

Now that AT&T; has achieved such a milestone, it accepted Tech Mahindra’s offer and purchased the stake at a pre-determined price of Rs 162. AT&T; has purchased the stake from Mauritius-based holding company MBT Mauritius. Hence, the deal value of $34.5 million (approximately Rs 160 crore) will reflect in the accounts of MBT Mauritius. After the deal, MBT Mauritius now holds a negligible stake in Tech Mahindra mentions CFO Sonjoy Anand.

AT&T;’s gain from this transaction is enormous given that Tech Mahindra’s stock closed at Rs 910 on Tuesday. This culminates into a whopping six times notional gain for AT&T.;

For Tech Mahindra’s investors, there is not much of a change. At 8%, the stake sale will not trigger the open-offer code. Further, the Tech Mahindra management has indicated that its board composition will not change. This means, AT&T; will not have any representation in its board at least for the moment.

On the operational front, the tie-up between Tech Mahindra and AT&T; is expected to strengthen further. AT&T; now contributes more than 10% to Tech Mahindra’s revenue. The latter grossed Rs 4,493 crore in the four quarters ended December 2009.

A direct equity stake may mean that Tech Mahindra would become a vendor of choice for AT&T; in future. This augurs well for the flagship company of Mahindra group, which is keen on reducing its dependence on the single biggest client BT (earlier British Telecom).

At the current price, Tech Mahindra’s stock trades at 16.5 times its trailing 12-month consolidated earnings. Given its high reliance on a single client and dependence on telecom as a single business vertical, the valuation looks rich at the current price levels and room for further appreciation in the stock looks limited.

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Amrita Sher-Gil: Vivid portrait of her life
26 Mar 2010, 0035 hrs IST, Uma Nair, ET Bureau

This cover could get your juices flowing. Amrita Sher-Gil’s self-portrait as a Tahitian draws you into its maw even as your eyes rest on her lush lips, if not the bulbous breasts. Sher-Gil’s early works often reflected the academic style in which she was trained. However, she also began to experiment with ways of representing the non-western body in paintings such as Sleep (1933), which depicts her younger sister Indira.

She admired Paul Gauguin’s depictions of the South Sea Islands and his stylistically simplified, yet symbolically charged Tahitian nudes. Gauguin’s influence became explicit in Self Portrait as Tahitian (1934), in which Sher-Gil appears naked to the waist, in a three-quarter profile and looking beyond the frame of the picture. This becomes the signature of her own drama.

Artist, curator, organiser, writer and scholar Vivan Sundaram’s two-volume Amrita Sher-Gil: A self portrait in letters and writings is indeed a labour of love that spanned over four decades. Pivotal to this reassessment is Amrita Sher-Gil, one of India’s greatest contemporary artists, whose extensive, varied oeuvre uniquely combines the philosophy of painting with a commentary on Indian socio-cultural milieu.

The first volume opens with a sensitive prologue by Vivan Sundaram, Sher-Gil’s nephew (the book’s editor), who was born two years after his aunt Sher-Gil died. Through a lucid yet lithely drawn narrative Vivan recreates a drama that never lets up. And it is Sher-Gil’s drawings and little pithy notes that unravel the pursuit of a little girl for a fairy and once upon a time tales. The photographs and images of paintings float like little islands of penetrating intents. Sher-Gil’s letters pulsate with insights and intuitive reasonings.

While both volumes have vivacious vignettes of images and paintings, it is clear that her singular glimpses and narrative paintings reflected subtle gradations that assimilated the democratic and affectless aesthetic of contemporary Indian art at a time when the Ravi Varma aesthetic was towering over all else. Vivan’s genius lies in extracting both lineage and evolution of Sher-Gil with a subtle finesse.

Among the many triumphs of the second volume is Sher-Gil’s account of Trends of Art in India. “The art of a country reflects the psychology of its people,” writes Sher-Gil. It is the way she ends the note which holds true today, so many years later in the tide of times. She says that Indian artists have a tendency to present a slavish and senile imitation of fifth rate Western art. She goes on to say that she would like to see India break away and produce something vital, connected with the soil, yet essentially Indian. She ends her note poignantly and passionately.

“There are such wonderful, such glorious things in India, so many unexploited pictorial possibilities, that it is a pity that so few of us have ever attempted to look for them even (much less interpret them). Having eyes, we see not; having ears, we hear not,” she says in anguish.

These two volumes become a landmark biography of the artist, Sher-Gil, written with full access to her archives, to show how Sher-Gil’s apparently patriotic tones are part of a long, complicated fight against a Western emotionalism that existed in India. Obviously, Sher-Gil was passionate above all in her commitment to artistic ideals and absolute in terms of her quest for the Indian idiom. Hence her refusal to adhere to a single style, alternating between figuration and gestural expressionism with equal virtuosity. The subjects she cared to observe and comment upon were rich and varied. Though she looks the picture of sophisticated splendour, her writings and paintings reveal the brain behind the beauty.

“The Indian film producers would do great things if they discover the rich beauty of the rough texture of the earth, the rhythm of the movements found in massive bullocks drawing ploughs, and learn to discard the synthetic substitutes of the studio,” she announced.

The paintings that flow like the ebb and crest of a tide portray her freedom and urge to reflect a classical measure and a raw emotional expressiveness unseen in Indian art: the robust colours; natural, rustic forms and the hamlet aesthetic are dissonant feminine answers to the more popular western forms.

Rare images of her paintings peep out at you. Siesta (1937), best pinpoints Sher-Gil’s genius in balancing emotional satiety and formal daring. The women who sit in tranquil quietude present Sher-Gil’s search for unexplored fields of melancholic beauty and life’s multiple viewpoints and nuanced painterliness interwoven with lucid, banal images. Another image of fascinating import is Camels (1941). The proportion of the camels, their carriage and majestic stance all come into the frame even as she distills the composition with an elegant elusiveness. Equally tensile and mellifluous are her western studies: Church Steeple in Hungary, Winter, and Merry Cemetry. However, it is her South Indian Villagers Going to the Market that keeps you spellbound.

This marvellously engaging epic is both an essential art-historical resource and a dizzying portrait of an age. The books prove beyond doubt that Sher-Gil’s was an art that moved naturally towards the melancholy and tragic, while keeping its eyes fixed firmly on the timeless nature of a beautiful object. Salman Rushdie’s words become an apt epitaph: “She was denied old age, bleak or otherwise, but neither her exuberant, magnificent self, nor the work it made, contained anything for which she needed to apologise. Time has passed, and her art endures.”

As Moraes “Moor” Zogoiby wrote of his mother Aurora: “Even now, in the memory, she dazzles, must be circled about and about. We may perceive her indirectly, in her effects on others ... Ah, the dead, the unended, endlessly ending dead: how long, how rich is their story. We, the living, must find what space we can alongside them; the giant dead whom we cannot tie down, though we grasp at their hair, though we rope them while they sleep.”

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Raza painting fetches Rs 5.48 cr at Christie's sale
25 Mar 2010, 2317 hrs IST, PTI

NEW YORK: An acrylic on canvas painting by veteran artist S H Raza fetched a whopping USD 1,202,500 (Rs 5.48 crore) at a Christie's auction here.

The South Asian Modern and Contemporary Art sale saw 75 of the 91 lots on offer going under the hammer for a total price of USD 8,937,000.

An anonymous bidder bought Raza's 1989 work 'Gestation' in which he presents an arrangement of shapes and earthy colours merging his characteristic horizontal bands with elegant obliques.

The painting had a pre-sale estimate of USD 600,000-800,000.

M F Husain's oil on canvas 'Sita Hanuman' fetched USD 842,500, Akbar Padamsee's oil painting 'Jeune femme aux cheveux noirs, la tete inclinee' realised USD 578,500 while V S Gaitonde's oil work 'Blue Abstract' sold for USD 554,500.

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NGO moves human rights commission against Preity Zinta
25 Mar 2010, 2255 hrs IST, IANS

MOHALI, PUNJAB: After failing to hand over a court summons to Punjab's Kings XI chairperson Preity Zinta and co-owner Ness Wadia over their Indian Premier League (IPL) advertisements, representatives of a local NGO here Thursday approached the Punjab State Human Rights Commission (PSHRC).

In a complaint to PSHRC, Arvind Thakur, who heads Global Human Rights Council (GHRC), alleged Zinta and her bouncers, deployed at Punjab Cricket association (PCA) stadium here, mishandled the protesters and used abusive language.

"Zinta's spokesperson had called us today (Thursday) to the PCA Stadium but he said that she was busy somewhere and could not meet us. Court officials were also accompanying us and we waited for nearly two hours at the PCA but she did not come to receive the summons," Thakur told IANS Thursday.

He added: "We had also gone to the PCA yesterday (Wednesday) but bouncers of Zinta mishandled us and the court officials. They used abusive language and threatened us. Therefore, we have filed a complaint with PSHRC in this regard."

The Chandigarh court Monday issued summons against Zinta and Wadia for using pictures of freedom fighters in their advertisements. The court has summoned Zinta and Wadia April 2.

The summons were issued on a complaint filed by the GHRC.

GHRC had objected to the use of pictures of freedom fighters, including Bhagat Singh and Rajguru, in advertisements of Kings XI Punjab. They said the advertisements had "hurt the sentiments of the people".

Thakur said that now he would not go anywhere to deliver summons and he would apprise the court about the entire issue.

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Indian scriptures bar pre-marital sex: Former CJ
25 Mar 2010, 2141 hrs IST, PTI

BANGALORE: Former Chief Justice of Punjab and Haryana High Court and BJP MP Rama Jois today said Indian scriptures bar premarital sex and Indian society still consider pre-marital sexual relationship not good.

Jois, also a former Governor, in a statement said "the oral observations made by one of the judges of the three-judge bench of the Supreme Court in the context of male and female having sexual intercourse prior to marraige and question posed by the learned judge Who says it is bad? has given rise to counter question: who says it is good".

Quoting from scriptures, he said one of the nine directives of dhrama prescribed by Mahabharata was "Prajanseveshu dareshu" one should procure children only under wedlock which by necessary implication bars pre-marital sexual activity between man and woman, he said.

"The object and purpose of marriage as declared by the Dharmasastras was not merely to satisfy the mutual carnal desire of man and a woman, though it did constitute the basis of the desire for marriage", he said.

Jois also refers to various Indian scriptures that upholds fidelity between spouses, mutual trust and discourages the `discarding attitude' of a spouse to pursue other gains.

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Love Sex aur Dhokha breaks new ground on sex in India
25 Mar 2010, 1940 hrs IST, REUTERS

Topics:

Bollywood India Dibakar Banerjee Love Sex Aur Dhokha

MUMBAI: A new Bollywood film has put the spotlight on changing sexual mores in small-town India, unsettling conservative filmgoers with spy cam footage and pushing the limits of the country's censorship board.

"Love Sex aur Dhokha" (Love Sex and Betrayal) is the latest in a series of avant-garde offerings stripping the film industry of decades of inhibition and dramatically changing the traditional formula of song-and-dance romances and violent revenge sagas.

The film, which opened in cinemas last week with an adults-only rating, has courted controversy with blurred visuals of a naked woman and voyeuristic sequences in its trailers.

Director Dibakar Banerjee says "Love Sex aur Dhokha" is more about a change in attitudes than it is about sex.

He says the film explores the lack of privacy in the modern world -- one where even mobile phones can capture, and broadcast, intimate moments.

"What my camera is doing is that it's recording a story that is changing in front of the camera," says Banerjee. "Earlier, sex used to be behind closed doors but now that is changing."

A decade ago, when a coy couple were about to kiss on screen, the camera would glide to two flowers brushing against each other or birds pecking at each other's beaks. Audiences just assumed the couple had done the deed.

In that sense, Banerjee's film, with a bunch of unknown actors, broke new ground with an extended sex scene which didn't quite escape the censor board's scissors.

But it's the director's use of unconventional cameras -- spy cams, handycams, supermarket security cameras and even underwater ones -- that seems to have won over the critics and drawn comparisons with Hollywood blockbusters "Paranormal Activity" and "The Blair Witch Project".

The story is told from the point of view of the camera, making it almost a character in a plot that interweaves three storylines -- a student who falls in love with his film's lead actress, a shop manager who traps an employee in an infamous MMS scandal and a sting operation on a rock star.

"The film effectively exposes the fat, sexual underbelly that sags out of the middles of this disturbingly prejudiced middle India," critic Mayank Shekhar wrote in the Hindustan Times.

Although critics agree "Love Sex aur Dhokha" marks a big leap for conservative India, it might take more than a few films to change mindsets.

When director Banerjee spoke to his mother about the project, she didn't repeat the name of the film because she didn't want to use the word 'sex'.

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No politics in selling Gujarat tourism: Big B
25 Mar 2010, 1713 hrs IST, IANS

Topics:

amitabh bachchan Gujarat tourism

MUMBAI: There is no politics involved in his being the brand ambassador for Gujarat, Bollywood megastar Amitabh Bachchan has said, reacting sharply to the Left parties opposing his promoting Kerala because he was doing so for the BJP-ruled state.

"I would talk of the Somnath Temple, Gandhigram, the white sands of the Rann of Kutch, old civilisations of Harappa, the Gir lions and their extinction close by and try to entice as many visitors I could to this glorious land (of Gujarat)," Bachchan wrote in the latest blog entry.

In doing so, he said, there was no politics involved. "Where is the connect with the glorification of the present government (in Gujarat)? Nothing! But when you tickle and titillate in order to camouflage fact and detail, you do great disservice to the institutions that flourish and exist there," he wrote.

He termed as "rubbish" the attempt to draw "political connotations" for his work in Narendra Modi-ruled Gujarat.

"You want to stop me from promoting tourism in a state, because you have reason to believe that there are political connotations to the event. This is such rubbish"

Bachchan's reaction comes days after the Communist Party of India-Marxist (CPI-M)-led government in Kerala decided, bowing to pressure from the party leadership, not to make him brand ambassador for Kerala tourism.

"All I shall be doing will be working in a short film that shall highlight the various places of interest in the state (Gujarat), so that it encourages more tourists to visit the region. And that is what I would precisely do when I would be asked to do similar acts in Kerala."

"It is a petty act of cheap convenience to prevent me from doing that, and by pitting me against political connotations and manoeuvres without paying any respect for the actual work that would be done," he said.

He said he had not asked the Kerala government to make him the brand ambassador. "They came with the invitation, I accepted. Now they want to decline it, fine."

He said it was not for the first time he has faced such a situation. "Not the first time such incidents have happened. Invitation to be chief guest at the Goa International Film Festival and when I get there, they decline it. Fine!," he added.

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India's huge opportunity for us: Microsoft
26 Mar 2010, 0534 hrs IST, ET Bureau

His first visit to India was in 1995 when the mobile phone was a rarity in this country. Custom officials curiously inspected his cellphone and even broke down its registration number in the process. Since then, India has undergone a revolution in cellular telephony and has become the second largest user of cellphones after China. India is now on the cusp of another revolution—more and more people are taking to entrepreneurship and fuelling a booming economy. And Birger Steen, vice-president of small and medium business and distribution at Microsoft Corp, doesn’t want to let go this opportunity. On a recent visit to Delhi, Steen met Aman Dhall and shared his views on the SMB market here and why there are no real challengers for India in the short-term. Excerpts:

Is the Indian small & medium business (SMB) market following a particular pattern?

It’s more defining a pattern. You have something of magnitude of nine million people, who will over the next 30 years go from working in traditional paths and migrate into doing businesses in companies. The formal SMB sector in India is world’s largest. In a recession, all sorts of businesses go under but there is one type of company that gets created—that’s a small business. Creative destruction works in that way. Destruction applies broadly, creations happen there.

What is confronting the growth of SMBs?

Infrastructure, infrastructure, infrastructure... That’s what has been a big hurdle in the development of SMBs. In some countries, getting people to starting a venture, the complacency is they don’t want to take risk. You don’t have a chance in Europe. In India, there is a huge appetite among people to start something of their own. If the government proactively supports this sector, it can grow faster.

Which countries can challenge India’s SMB growth in the future?

Mexico has impressed me. They have up to the highest government levels, a very clear appreciation of importance of SMBs. They sponsor a national week every year that is opened by the PM and attended by 100,000 people. The event celebrates small businesses and entrepreneurs in the country. There is a sizeable local market with good underline growth. If I look at our growth charge globally, Brazil is definitely one that challenges India. Over the horizon of some time, however, no country can overtake India in the SMB space.

What are your business targets for India?

In five years from now, there’ll be easily 20 million businesses that will be using IT as part of their every day life in some way. On that assumption, our business in India five years from now should be 10 times from where it is today.

What excites you about your work?

Today, multiple SMBs in the same area are doing businesses with each other. The textile cluster in Tirupur and auto cluster in Pune are two classic examples in India. Around 20 years ago, big companies integrated their workforce in this way internally. Then electronic data interchange arrived between big companies and there was exchange of documents electronically. Very light versions are now being used. That’s the fun about working in this space. You continually make tech and business process that was previously only available to giants of this world, accessible to very small businesses. Pay per usage and in many cases pay very less. You don’t have to pay for hardware. Stuff that was enterprise class, enterprise capacity and enterprise price becomes chopped in to small pieces to be made accessible to small business. This is what happened with the commercial Internet.

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Media landscape here continues to innovate
26 Mar 2010, 0043 hrs IST, Ratna Bhushan, ET Bureau

After a year of declining profits and tightfisted clients, global media consultancy and buying outfit Maxus says it has turned the corner, at least for India. The GroupM network has revised advertising expenditure forecast for India upwards, according to Kelly Clark, worldwide CEO of Maxus, who is currently on an India visit. Clark is a veteran of the WPP, the world’s largest advertising group that owns JWT, MindShare and Maxus, among others. In an interview with ET, he talked about recovery from a tough economic environment and what it will take for Maxus to keep growth momentum ticking. Excerpts:

Is the slump in the advertising industry over? How different was the scenario in India compared to developed markets?

We definitely think we've turned the corner. After a brutal 2009, with major declines in ad expenditures in most markets, we expect a small measure of growth globally in 2010. Of course, there will be stronger performances in high-growth economies. We have revised our advertising expenditure forecast for India upwards—to over 10% this year.

India certainly took some hits last year. But this was much better than the huge declines we experienced in the so-called developed markets. The media landscape in India continues to innovate, which is exciting. Just look at the success of the IPL.

WPP group saw the maximum layoffs last year. How badly was Maxus affected?

We did not have layoffs. The role Maxus plays within GroupM is that we don’t try to replicate what the bigger agencies are doing. Our approach is entrepreneurial. Our size works in a positive way for us. And we want to remain that way.

Are you satisfied with Maxus India’s performance?

Well, in many ways, this is a flagship market for us, with clients like Vodafone and Nokia. But we can do a lot to improve. We need more skill sets in the digital space, integrated mobile marketing, and in a couple of areas in traditional media as well.

There’s a growing belief that media firms are becoming more dominant client partners than creative agencies. What’s your view?

It would be plainly wrong — not to mention arrogant — to claim categorically that media agencies are more dominant partners to clients than creative agencies. Of course, it depends on the client. Some clients rely more on their creative agency. Some rely more on their media agency. And some want both to work as equal partners in an integrated team. But there is no question that media agencies now enjoy many more ‘top table’ relationships with clients these days. This is a result of the significant investments we've made to understand consumers and to exploit opportunities in the rapidly changing media landscape.

In this context, how much does media creativity help?

Creativity is crucial, and it is not the exclusive realm of ad agencies. In our experience, here in India, great clients want creativity and innovative ideas from all their agency partners.

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Reliance’s new thrust on retail business
25 Mar 2010, 0028 hrs IST, Sarah Jacob, ET Bureau

Reliance Retail will soon pilot the retail venture of Office Depot and open the first Hamleys toy store as the Mukesh Ambani-led retailer beefs up its portfolio and expansion plans. Its offerings under the lifestyle umbrella range from books & music, apparel, toys and opticals to jewels and office supplies. ET caught up with Reliance Retail’s president & chief executive-Lifestyle Bijou Kurien for an exclusive interview. Edited Excerpts:

Are the multiple verticals under the Lifestyle division operating profitably?

Both Reliance Time Out, which will grow to 20 stores by 2011, and the relatively smaller-store-sized Reliance Jewels, which will have 50 stores by 2011, broke even last year. Almost half of our 46-odd optical retail stores Vision Express have also broken even. The Marks & Spencer brand has now been repositioned to compete in the mid-market segment in India. We intend to open bigger stores of around 15, 000 to 20, 000 sq ft where merchandise will be extended from apparel to personal care, home ware and accessories. India will also account for a larger sourcing component for Marks & Spencer.

Over a year after joining hands with US-based Office Depot how has the JV progressed?

The Office Depot JV currently operates through a business-to-business relationship where we’ve focused on the small, medium and large office supplies space so far through our joint acquisition of eOfficePlanet, a supplier of office products and services to corporates. We are testing our first retail foray through an Office Depot store in Bangalore.

Has the lifestyle division also set its sights on smaller cities yet?

Reliance Jewels is positioned as a mid-market retailer which doesn’t cater to the everyday low-priced diamond jewellery segment but targets the occasion (wedding, births etc) and adornment-led jewellery segments. Given the fact that the Reliance brand is strong, we’ve positioned some formats such that it can tap into the potential of rural retail without creating a separate brand for smaller markets like Dhanbad and Jamnagar. Vision Express also holds relevance because like jewellery there are few national optical retailers and sight correction is a need that cuts across population strata.

The lifestyle division will also make inroads into smaller cities by co-locating with Reliance Hypermart’s roll out. Classically, hypermarkets are designed in a manner where the area in front of the cash till is allocated for several independent stores. So, in areas such as Rajahmundry and Kolhapur we’ve opted for co-location opportunities for Reliance Jewels and Vision Express with the hypermart. From a cost point of view too, drumming traffic towards independent formats and affordability of standalone rent often becomes a challenge within smaller cities.

How did the discretionary-purchase driven Reliance Time Out perform in a year when consumer sentiment took a beating?

Time Out was the only format within Reliance Retail that grew substantially in the slowdown period. Although, the sheer market size of our offerings is only around Rs 10, 000 crore, as the categories are highly underpenetrated, sales can be strengthened by creating occasions that lend themselves for purchases. This is why we had 200 events across three of our stores within 11 months.

We’ve performed better than competitors because our stores are built on architecting merchandise in line with people’s lives as opposed to being in a purely product-selling mode. Products are just the ambassadors, if you go beyond that by building an exciting store experience then sales don’t get dictated by macro trends. In fact, despite being a discretionary category it clocked 47% like-for-like growth this January.

Time Out corners now also feature within Pantaloon Retail’s Central formats across Bangalore and Ahmedabad. What is the rationale of being present in a rival’s format?

It’s a win-win partnership for both retailers. Central is a premium format where the consumer traffic is relevant to Time Out and the offerings appeal to the audience. Being wants and aspiration-driven, the format’s presence itself drives consumption. From a competitor’s point of view, it offers the option of partnering with a competent player to add to other categories.

Will there be a product overlap given your franchisee agreement with British toy retailer Hamleys?

Given the size of the population, the toy category is fairly underdeveloped in India. If you don’t show toys through large stores, you won’t sell enough of this impulse-driven segment. Most Indian retailers have included toys only as an aspect of multi-category stores so far. Our experience with Reliance Time Out showed that there existed a larger opportunity in having a full-fledged toy store. We will open the first store in Mumbai this month, followed by Chennai.

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Jubilant sets 344.5/share for sale: Source
26 Mar 2010, 1044 hrs IST, REUTERS

MUMBAI: Indian drugmaker Jubilant Organosys Ltd has set a floor price of Rs 344.5 ($7.6) a share for a qualified institutional placement (QIP), a source with direct knowledge of the development said on Friday.

The drug maker is planning to raise up to Rs 5 billion through the offering, the company said in a statement.

Royal Bank of Scotland and Nomura are the arrangers to the issue.

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Bharti shares down 1 pc on BSE
26 Mar 2010, 1027 hrs IST, PTI

Topics:

Bharti Share Bharti Airtel bse Bombay stock exchange Zain Zain Telecom

MUMBAI: Bharti Airtel, the country's largest private telecom company, on Friday fell by one per cent on the Bombay Stock Exchange, a day after the company announced entering into "definitive agreements" with Kuwait-based Zain Telecom to acquire the latter's African assets.

Shares of Bharti Airtel were trading at Rs 310.30 on BSE, down by one per cent over previous close.

"The stock is in consolidation phase after gaining in previous trading sessions. The stock is under pressure as their is no clear picture coming out on the Bharti-Zain deal," SMC Capital vice-president Rajesh Jain said.

On the National Stock Exchange, the stock dipped 1.33 per cent to Rs 310.20.

A total of 1.96 lakh shares of Bharti Airtel changed hands on both the bourses.

"There are some doubts in the minds of investors as their is still no concrete statement regarding the deal. The stock will trade under pressure for a while as it had gained a lot," Jain added.

The two companies had entered into exclusive talks on February 15. Since then the stock has gained nearly 10 per cent to close at Rs 313.75 yesterday.

Bharti Airtel, yesterday, gave a positive indication of having clinched the mega $10.7 billion deal with Zain Telecom.

The company in a statement has said that Bharti is now working with Zain towards finalising the definitive agreements which would address all key terms and findings arising out of the due diligence.

The company added that definitive agreements are expected to be signed soon. Upon signing, the parties will move towards obtaining any required approvals.

With the acquisition, Bharti Airtel will enter the world's fastest growing market in Africa. The two businesses combined will have more than 165 million subscribers with total revenue of $13 billion.

Bharti has valued Zain's African assets at $10.7 billion. The deal is likely to result in Bharti paying out around $9 billion based on the estimated net debt of approximately $1.7 billion as on December 31, 2009.

Bharti Airtel had last week tied up $8.3 billion debt with financial institutions to fund the transaction, while the remaining $700 million would be paid a year later.

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Tata Motors to sell 20 pc in Telcon to Hitachi for $220 mn
26 Mar 2010, 0414 hrs IST, REUTERS

MUMBAI: Tata Motors, India’s largest vehicles maker is selling about 20% stake in its equipment and services unit to Japan’s Hitachi Construction Machinery Co for roughly $220 million, a source with direct knowledge of the deal said.

Telco Construction Equipment Company (Telcon), in which Tata Motors holds 60% stake and Hitachi 40%, supplies a wide range of construction equipment such as excavators, mining shovels and dumpers to the construction and earth-moving sector. Hitachi Construction is Japan’s No. 2 maker of earth-moving equipment. Standard Chartered is advising Tata Motors on the deal. “We have stated our intent to explore options through divestments. As and when these are concluded, we will make the required announcements,” Tata Motors chief financial officer C Ramakrishnan replied when asked about the stake sale.

Last year the company sold shares worth $150 million in group firm Tata Steel and is also looking at selling a stake in its financing unit Tata Motors Finance Ltd. Earlier this week the company, which had a debt of $5.1 billion as on December-end, said it was offering an early conversion to its foreign currency bond holders to help reduce the debt on its balance sheet. Shares of Tata Motors fell 1.87% to Rs 725.25 on Thursday.

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Punters closing in on Welspun Gujarat
26 Mar 2010, 0333 hrs IST, ET Bureau

April futures of Welspun Gujarat witnessed a flurry of activity on Thursday, with open interest doubling to 1.3 crore shares, as the bull cartel rolled over their positions to the current series.

The futures closed at Rs 276.50, at a premium of Rs 2.40 to spot, giving the impression of a bullish outlook on the stock. Dealers tracking the counter say the bull cartel is being led by an operator who specialises in rigging mid-cap stocks. More often than not, he has the backing of “friendly circles.”

Last year, this player was instrumental in vaulting the Ackruti scrip to stratospheric levels, in a co-ordinated effort with “friendly circles”, and spelled ruin for many a bear. He shares his first name with actor Dutt who played the ‘Khalnayak’ in an early 90s Bollywood flick.

Contributed by Santosh Nair & Nishanth Vasudevan.

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Kingfisher Airlines caught in bear-bull fight
26 Mar 2010, 0329 hrs IST, ET Bureau

Shares of loss-making Kingfisher Airlines ended marginally down at Rs 47.95 on Thursday, after the government asked Hindustan Petroleum to invoke the airline firm’s corporate guarantee because of unpaid fuel bills of around Rs 600 crore.

Interestingly, the stock witnessed heavy delivery-based volumes on both exchanges. On the NSE, nearly 23 lakh shares or 55% of the total traded volumes resulted in delivery. In the past six trading sessions (including Thursday), delivery volumes in the stock have been in the range of 37-55%. In a related development, the market-wide position limit for Kingfisher in the derivative segment has already been breached.

It is not clear if the outstanding positions have been built by bears anticipating a downtrend, or by a bull cartel, which is now accumulating the shares to squeeze the short sellers. For passengers flying it, Kingfisher may be the king of good times. But punters in the stock could be in for some turbulent times, depending on which side of the trade they are on.

Contributed by Santosh Nair & Nishanth Vasudevan.

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Buy Praj Industries above Rs 85: Nirmal Bang
26 Mar 2010, 1041 hrs IST, ET Bureau

MUMBAI: Nirmal Bang Securities has recommended investors to buy shares of Praj Industries above Rs 85.

“There has been a spurt in the volume and if the stock breaks the resistance of 85 with good volumes then target can be 89-91 in near term. Stop loss can be placed at 81,” said the brokerage firm.

Shares of the company were trading at Rs 84.30, up 1.2 per cent or Rs 1 on the NSE.

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Post-deal : Stock prices dip initially, rise later
26 Mar 2010, 0920 hrs IST, Reeba Zachariah & Partha Sinha, TNN

Topics:

Bharti India markets stocks Zain

MUMBAI: Short-term scepticism about mergers & acqusitions (M&As; ) by Indian companies prompt Dalal Street investors to sell the stock of the acquiring company, but as the positives from the deal seep, the stock appreciates.

An analysis of $1-billion plus overseas deals involving Indian companies show that although immediately after the deal the stock of the acquiring company had crashed, over the months, most of these deals made investors richer.

In the last three years, there have been nine deals by Indian companies valued at $1 billion or more with Tata Steel's acquisition of Corus topping the table at $13.6 billion (see table). There was also another cross-border deal where Hutchison's stake in Hutchison Essar was bought by Vodafone, a non-Indian company.

While shareholders in Jindal Steel, ONGC, Tata Steel, Tata Motors, GMR Infra and Hindalco have gained since the acquisitions were announced , shareholders are still out of the money in Suzlon's $1-billion buy out of REPower in 2007 and almost evenstevens in deals by Tata Chem, Hindalco and Vodafone.

In case of Bharti Airtelwhich is close to signing a $10.7-billion agreement to buy out Zain's African assets — the stock on BSE has hardly moved since the deal was announced on February 4. From Rs 304 when the deal was first made public, the stock has gained just about 3.3% to its Thursday close at Rs 314.

Merchant bankers and analysts said investors tend to be cautious whenever a large and transformational deal is announced. Such reaction is a function of the size, scale of the deal.

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US healthcare bill drives up small pharma
26 Mar 2010, 0249 hrs IST, Apurv Gupta, ET Bureau

MUMBAI: Shares of mid- and small-sized pharma stocks are a rage on the bourses as investors scrounge for opportunities in a market that has been going nowhere in the past six months. Most stocks in this category have risen 20-50% in the past few sessions, and brokers say a combination of improved sentiment and relative undervaluation is driving up prices. Earlier this week, the US Congress passed the much-debated healthcare bill, a move which market players feel could benefit many low-cost drug makers in India.

“The previous rally in the pharma sector was restricted to large pharma companies, while the second-line names were ignored,” says DD Sharma, senior vice-president (research), Anand Rathi Financial Services, adding “as the financial year is drawing to a close, investors are getting a better picture about the earnings potential of many of the lesser-known names.”

The US Congress discussion named India among the 14 countries that can offer low-cost drugs to reduce healthcare costs. Industry experts say Indian drug makers are expected to post strong growth for the next 7-8 years, mainly from exports, after the US Congress passed the healthcare bill. They add that multinational firms may now be willing to put in more money to buy into India’s formulations companies.

Outside US, India has the largest number of plants that match up to standards set by the US Food and Drug Administration. Many second-line pharma shares are underpriced and available at a price to earnings multiple of between 5 and 10 times their expected earnings for next year, Mr Sharma added.

“I do not think that rally will fizzle out soon; this is the right time to buy shares of companies with proven track record ,” he said. Equity analysts say another reason why investors are finding pharma shares appealing, could be the latest round of interest rate hike.

“The rise in interest rates has resulted in investors shifting to defensive stocks ,” says Sarabjit Kaur Nangra, V-P research, Angel Broking. “As frontline pharma companies are looking expensive, investors are opting for mid- and small-cap stocks. The US healthcare bill added to the sentiment,” she added.

Ms Nangra recommends companies in contract research and manufacturing services (CRAMs) space and advises investors to take a stock-specific approach in the case of generics. In case of generics, there is intense competition, with increased customer-bargaining power and declining price points. The entry of second- and third-tier companies has also added to competitive pressure.

“Pharma is being played as the FMCG story was, in the mid 90s,” says the head of Indian equities with a domestic mutual fund. “For the past 10 years, it has witnessed a growth of 12-13% and we expect them to do better. The playing field for the domestic pharmaceutical companies changed completely with the advent of product patent regime. Many small- and mid-sized Indian pharmaceutical firms are spending on upgrading their manufacturing facilities so as to get them approved by regulatory authorities in US and European countries for contract manufacturing,” he says.

He says that compared to many other sectors, there is earnings visibility in case of mid-cap pharma firms and the market is expected to grow at a rapid pace.

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Table of Contents

Stocks start higher; auto, realty lead

Kris era set to mark a turning point for Infosys Tech

India Calling: More Indian Americans returning home

Big returns: Rich Indians bet on 'frontier mkts'

US economy still needs Fed's help: Bernanke

US companies shy over China yuan squabble

China pull-out partly for personal reasons: Sergey Brin

Bond yields steady, seen in tight range

Rupee inches up on share gains

Asian markets mixed in early trading

Buyers question emerging mkts gain

S&P 500 sets new highs

Sebi lets USE launch currency futures

Oil inches up on bargain hunting

WTO members continue to seek a deal

Food inflation at four-month low

Corporate ethics rules must for PSUs

'Growth has percolated to all states'

Tier-I capital may exclude hybrids

Indic blogs: Vernacular is the e-way

US drops, India gains in net race

Not shifting sourcing from China: Dell

No Google in Motorola China phone

Google finds few allies in China battle

Intel Cap invests $23 mn in 3 tech cos

'China could resume flexible yuan rate'

Lawyers seek Toyota suits consolidation

IMF welcomes Dubai debt restructuring

UBS to slash 200 jobs in US unit

Europe agrees on Greek safety net

'China-US on yuan collision course'

SC allows Andhra's 4 pc Muslim quota

US goes out of the way to woo Pak

'Pak terror groups threat to all nations'

Uma Bharti resigns from her own party

SC can't order probe on politicians

India concerned about talks on Afghan

Investors turn to wealth managers for best bets

Foreign funds hint at hiking India allocation

Stocks to watch: Bharti Airtel, NTPC, IOC, Tata Motors

Bharti shares rise after Zain approves Africa sale

Tech Mahindra: AT&T'S purchase not to impact Shareholders

Amrita Sher-Gil: Vivid portrait of her life

Raza painting fetches Rs 5.48 cr at Christie's

NGO moves HRC against Preity Zinta

'Indian scriptures bar pre-marital sex'

LSD breaks new ground on sex in India

No politics in selling Gujarat tourism: Big B

Birger Steen, V-P, SMB & distribution, Microsoft Corp

Kelly Clark, Worldwide CEO, Maxus

Bijou Kurien, President & Chief Executive-Lifestyle, Reliance Retail

Jubilant sets 344.5/share for sale: Source

Bharti shares down 1 pc on BSE

Tata Motors to sell 20 pc in Telcon to Hitachi for $220 mn

Punters closing in on Welspun Gujarat

Kingfisher Airlines caught in bear-bull fight

Buy Praj Industries above Rs 85: Nirmal Bang

Post-deal : Stock prices dip initially, rise later

US bill drives up small pharma stocks