Inflation rises to 5.43%
India's inflation, based on the Wholesale Price Index (WPI), rose to 5.43% in the week ended December 16 owing to a rise in the prices of manufactured products, the Government said on Friday. Economists had been looking for a reading of around 5.28%. Inflation was 5.32% in the previous week and 4.62% in the year-ago period. The WPI rose by 0.05% to 207.8 from 207.7 in the previous week. The index for Primary Articles (weight: 22%) declined by 0.1% to 211.8 from 212.1 in the previous week. The index for Fuel, Power, Light & Lubricants (Weight 14.23%) remained unchanged at its previous week's level of 322.6. The index for Manufactured Products (Weight 63.75%) rose by 0.2% to 180.8 from 180.5 in the previous week. Meanwhile, the Government revised upwards the inflation rate for the week ended October 21, from a provisional figure of 5.41% to 5.61%. The final WPI for the same period stood at 208.8 compared to the preliminary level of 208.4.
Govt mulling FDI in select areas of retail
Foreign investors could get a new year's gift from the Government. The bounty could come in the form of FDI in various areas of the organised retail. According to newspaper reports, the Commerce & Industry Ministry is preparing a detailed policy on further liberalisation of the retail sector. The official announcement on the same is likely to come before the budget. The Government is considering allowing 51% FDI in retailing of sports goods, electronics goods and building equipment, the papers report. Since there are no small manufacturers or retailers in these areas, the Government might permit FDI in both the front-end and in the back-end operations. Also on the anvil is a plan to allow multi-brand outlets in these areas. What is not clear, however is that whether the Government will allow FDI in these areas through the automatic route or through the Foreign Investment Promotion Board (FIPB). Another caveat is that the Government will have to get the green signal from the Left parties before going ahead with any such move.
Govt awards LOI for two UMPPs
The Government awarded the Letters of Intent (LOI) for awarding the first two Ultra Mega Power Projects (UMPPs) to the successful bidders, namely Tata Power Co. Ltd. and Lanco Infratech Ltd. Union Power Minister Sushil Kumar Shinde handed over the LOI to the consortium of Globeleq Singapore Pte. Ltd and Lanco Infratech Ltd. for Sasan UMPP in Madhya Pradesh while Tata Power bagged Mundra UMPP in Gujarat. Bids for these projects were received earlier and the successful developers were selected on the basis of lowest quoted tariff. The process of selection of successful developer for other UMPPs namely, Krishnapatnam (Andhra Pradesh) and Tiliaya (Jharkhand) is expected to be completed by April 2007. Request from Jharkhand for an UMPP is also under consideration. The Government of India has envisaged a capacity addition of 100,000 MW to meet its mission of ‘Power For All by 2012’. Achievement of this target requires the development of large capacity projects at the national level to meet the requirements of a number of states. The Government is working together for the development of 9 UMPPs through tariff-based competitive bidding.
No pulling out from Singur: Ratan Tata
Despite the controversy surrounding land acquisition in Singur, the Tata Group will not take a backward step on the proposed one-lakh car project, said Ratan Tata, the chairman of the group. The issue snowballed into a political hot potato, with Trinamool Congress leader Mamta Banerjee going on a hunger strike (which she ended later in the week) and the BJP backing her opposition to the proposed car factory. But notwithstanding the local resistance and political pressure, Ratan Tata has made it clear that the group intends to go ahead with its plans for the new plant in West Bengal. "I think the West Bengal government has been very steadfast in its support of the project and I think it would be wrong for us to say that we will pull out and go," he told NDTV 24x7 in an interview, to be telecast on Saturday at 10 pm.
Anil Ambani confirms interest in Hutch Essar
Reliance Communications Ltd. (RCL) officially confirmed that it is interested in buying Hutchison Telecommunication International Ltd.'s (HTIL) 67% stake in Hutchison Essar, a joint venture between the Essar Group and HTIL. "RCL, as part of its overall growth strategy, is continuously examining several organic and inorganic growth opportunities. Hutch Essar is one such situation," Anil Ambani, Chairman of RCL said. "A potential combination of this nature could create compelling value for all shareholders of RCL." Ambani said that his company has exclusive financial support from leading international banks and financial institutions to acquire Hutch Essar. "Frankly, we have lost count of how many private equity players have lined up behind us," the junior of the two Ambani brothers told a news conference in Mumbai. "The vast majority of the top 10 players are with us." RCL will need funds to fend off competition from Vodafone, the world's largest mobile-phone company, and Essar Group, which controls a 33% stake in Hutch Essar, India's fourth-largest wireless company. According to reports, Vodafone and the Ruias of Essar Group have put forward their indicative prices which value Hutch Essar between US $16.5bn and US $18bn. This is substantially lower than the US$21bn sought by HTIL. Essar has the first right of refusal, or the right to be first offered the option of buying HTIL's stake in Hutch Essar.
S&P affirms Reliance ratings
Standard & Poor's (S&P) affirmed its long-term foreign and local currency ratings on Reliance Industries Ltd. (RIL) at 'BBB', indicating investment grade. The affirmation reflects RIL's dominant competitive position, the relatively stable medium term prospects for its core refining and petrochemical businesses, and an overall moderate financial profile of the company, the global credit rating agency said in a statement. The ratings, with stable outlook, factor in the likelihood of timely completion of its ongoing projects, specifically the new refinery at Jamnagar. It is also underpinned by the expectation that RIL would pursue its non-core businesses, specifically the retail foray, in a phased-out manner, as an accelerated investment strategy can weigh on the company's overall credit p rofile, S&P said.
The ratings remain constrained by RIL's exposure to highly cyclical industries, large capital commitments in its refining, exploration and production businesses, and uncertainties in developing its reportedly large gas reserves, it added.
Dr. Reddy's wins nod for generic Zofran
Dr. Reddy's Laboratories Ltd. announced that the USFDA had granted final approval for it's Abbreviated New Drug Application (ANDA) for Ondansetron Hydrochloride Tablets, in 4mg, 8mg, 16mg and 24mg strengths. As the first company to file an ANDA containing a paragraph IV certification for this product, the company has been awarded a 180-day period of marketing exclusivity, Dr. Reddy's said. The company will commence the shipment of this product shortly, it added. Dr. Reddy's Ondansetron Hydrochloride Tablets are the AB-rated generic equivalent of GlaxoSmithKline's Zofran tablets, a product indicated for the prevention of nausea and vomiting associated with cancer treatment. The brand product has annual IMS sales (June 2006 MAT) of about US$639mn. "With six product introductions to date in the current year, we are making good progress in building a sustainable base generics business with potential upsides in the US in the medium term," said G.V. Prasad, Vice-Chairman and CEO of Dr. Reddy's.
Wockhardt launches Ondansetron injection in US
Wockhardt Ltd. said that its US subsidiary launched Ondansetron injection, the first working day after the patent for the product expired on Dec. 24. Ondansetron is the generic version of GlaxoSmithKline's Zofran injection and is used in controlling nausea and vomiting following cancer chemotherapy. It is the largest selling anti-emetic product in the world. Sales of Zofran injection in the US during the 12 months ended Sept. 30, 2006, were US$628mn. According to the online magazine Drug Topics, Zofran was the 20th most expensive brand-name drug used in hospitals in the US in 2005, with total costs of US $839.26mn. Ondansetron injection is manufactured at the USFDA-certified sterile formulation plant at Waluj in Aurangabad. Wockhardt has two other sterile formulation plants approved by USFDA in India and the UK. "This is Wockhardt's eighth product approval from USFDA in 2006 and the third injection product in the US market," said Wockhardt Chairman Habil Khorakiwala. "We now market 15 products in the US, with 10 of them launched during 2006."
Indian Hotels buys Amalgam Foods
Indian Hotels Co. Ltd. said that Residency Foods & Beverages Ltd. (RFBL), an associates company, has picked up 80.6% stake in Kochi-based Amalgam Foods & Beverages Ltd. (AFBL) for Rs 180mn. Residency Foods is an existing associate company of Indian Hotels with interest in the food & beverages business. The acquisition has been made by Residency Foods in a related line of activity, namely foods. Residency Foods is an unlisted company in which Indian Hotels holds a 25% stake. Amalgam Foods is part of the Rs2.5bn sea food exporter Amalgam Group and has a portfolio of frozen ready-to-eat products under the Sumeru brand. The company is currently selling its products through 2,000 outlets across the country.
Bajaj Hindusthan FY06 net up 36% yoy
Bajaj Hindusthan Ltd. reported a 36% increase in net profit at Rs1.91bn for the financial year ended September 30, 2006. The company's net profit during 2004-05 stood at Rs1.4bn. Total revenue stood at Rs14.87bn for the year 2005-06 versus Rs8.55bn in the previous year, registering a growth of 74%. The company has recommended a dividend of 60%. Bajaj Hindusthan's sugar sales volume increased 57% during the year to 720,798 tons. "The results could have been much better but for higher cane prices, lower recoveries due to earlier start of the crushing season and the Government's ban on exports, which impacted the domestic sugar realisations," Chairman and Managing Director, Shishir Bajaj said. He said that the expansion of the company's subsidiary Bajaj Hindustan Sugar and Industries Ltd. (BHSIL) was on schedule and crushing was expected to start at 40,000 tons crushed per day (TCD) in the next crushing season.
Japanese industrial output hits new record
Japan's industrial production rose to a new record in November, buoyed by increased demand for it's cars, consumer electronics, liquid crystal displays and game consoles in the global market. Factory output rose by a seasonally adjusted 0.7% from a month earlier. The average estimate of economists was for an increase of 1%. The industrial production index climbed to 108.6, the highest ever as measured by the 2000 base year. The rise followed a 1.6% gain in October from September. Year-on-year, output rose 4.8% in November, the 16th consecutive month of increase. Manufacturers' output - the core component of production - is expected to rise a further 0.7% in December but would slip 0.8% in January. The trade ministry maintained its assessment on industrial output, saying that it is on a rising trend. Despite a rebound in production and shipments, the inventory index rose a sharp 1.4% from the previous month to 97.2 in November, an all-time high. Record production, combined with recent reports that showed rising inflation and a drop in the jobless rate, may prompt the Bank of Japan to hike the lowest interest rates among Group of Seven (G7) countries as soon as next month. Central bank Governor Toshihiko Fukui and his policy board are scheduled to conclude their next rate meeting on January 18.
Taiwan quake affects undersea cables
Telecom and Internet services across South East Asia was badly affected after a major earthquake hit southern Taiwan on Dec. 26. The quake, measuring 7.1 on the Richter scale, damaged at least eight undersea fibre-optic cables that connect Asia with the rest of the world. The damage to the undersea cables disrupted voice as well as data traffic and hit business in the region. However, by the weekend, most telecom operators recovered most of their voice services and Internet access. China Network Communications and PCCW said they have normal voice services. Japan's Softbank Corp. said 83% of its affected 152 corporate lines had recovered. The improvement in telecom services was due to operators rerouting traffic overland to Europe, then to the US, or via Southeast Asia to the US. Repairing the broken submarine cables may take two to three weeks.
Apple under scanner for stock options grant
Shares of Apple Computer fell on renewed concerns over the company's stock-option granting practices. A California legal publication said that CEO Steve Jobs had hired a lawyer to represent him in federal inquiries and that some officials may have falsified documents. London-based Financial Times reported that CEO Steve Jobs was handed 7.5mn stock options in 2001 without the required authorization from the Apple's board. The FT report said that records purported to show a full board meeting had taken place to authorize the stock options were later falsified. The story didn't say who falsified the report. Jobs later surrendered his options before they were exercised, implying that he did not gain any direct benefit from them, FT reported. A spokesman for Apple said that the company had handed over the results of its previously announced internal probe to the Securities and Exchange Commission (SEC).
IBM, Siemens bag mega IT deal
International Business Machines (IBM) and Siemens announced that they had won a US $9.3bn deal to modernize the German military's technology. The 10-year project, codenamed Herkules, foresees the modernization of the computers and communication networks for the German armed forces. According to a statement from the military, that covers more than 140,000 computer workstations, 7,000 servers, 300,000 telephones and 15,000 mobile phones. Siemens Business Services and IBM's German unit jointly will hold 50.1% of a company being founded with the German government, named BWI Informationstechnik, to carry out the project. The federal government will hold the remaining 49.9%. IBM will be responsible for modernising the data centres, while SBS will take care of PCs, servers and phone systems at more than 1,500 locations around Germany.
Pfizer wins Viagra copycat case in China
Pfizer won a trademark case in China blocking drugmakers in the Middle Kingdom from copying its Viagra impotence pills' blue diamond shape. A Beijing court ordered the three companies to pay a US$38,000 fine to Pfizer, stop producing the blue, diamond-shaped pills and print a public apology in a Chinese legal newspaper. This is the second intellectual property victory in China this year for New York-based Pfizer. In June, the same court sided with Pfizer in overturning a 2004 decision by China's patent and trademark office that had invalidated Viagra's patents. Pfizer has a separate lawsuit filed in China that would block companies from using Viagra's Chinese name. Viagra is one of the world's most copied drugs, according to the World Health Organization (WHO). Viagra was used by 23mn men and had worldwide sales of US $1.6bn last year.