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Saturday, September 12, 2009

Annual Report - Cummins India - 2008-2009





The Directors of Cummins India Limited have pleasure in presenting the
Forty-Eighth Annual Report and the Audited Accounts of the Company for the
year ended March 31, 2009.


During the year under review, net sales turnover was Rs. 32,740,500 ('000)
Rs. 23,307,792 ('000) (Rs. 23,308 million) during the previous earnings
were Rs. 13,424,852 ('000) (Rs. 13,425 million) as during the previous year
(81% higher). Profit after tax was Rs. 4,336,611 Rs. 2,806,910 ('000)
(Rs.2,807 million) for the previous year.

2008-2009* 2007-2008
(Rs. '000) (Rs.'000)


Profit before taxation 5,990,216 3,960,032

Net Profit for the year after tax but 4,336,611 2,806,910
before tax on proposed dividend

Tax on dividend 319,846 154,790

Dividend 1,782,000 910,800

Transferred to General Reserve 433,661 701,728

Balance carried to Balance Sheet 4,955,127 3,154,023

* Financial Results of your Company include figures of the Company's
Service India Limited (CS&S) and Cummins Auto Services Limited (CASL) which
were amalgamated with your Company with effect from April 1, 2008
('Appointed Date').


Your Directors have recommended a final dividend of Rs. 2.60 per equity
share of Rs. 2/- each fully paid-up for the year ended March 31, 2009, in
addition to the interim dividend of Rs. 4/- per share declared on January
27, 2009 and a special dividend of Rs. 2.40 per share declared on December
5, 2008, aggregating to Rs. 9/- per share for the year.

Annual Report - RNRL - 2008-2009




Dear Shareowners,

Your Directors have pleasure in presenting the ninth Annual Report together
with the audited statement of accounts of the Company for the year ended
March 31, 2009.

Financial Results:

The performance of the Company for the financial year ended March 31, 2009
is summarised below:

Particulars A B C D

Total Income 47,141.09 92.94 36,730.65 91.55

Gross Profit before depreciation 7,194.22 14.18 9,269.44 23.10

Less: Depreciation 5.99 0.01 694.64 1.73

Profit before tax 7,188.23 14.17 8,574.80 21.37

Less: Provision for
Current tax 170.06 0.34 1,692.56 4.22

Fringe benefit tax 11.54 0.02 11.60 0.03

Deferred tax liability 19.61 0.04 10.77 0.03

Profit after tax 6,987.02 13.77 6,859.87 17.10

Add : Balance of profit brought from 9,554.27 18.84 2,694.40 6.71
previous year

Profit available for appropriation 16,541.29 32.61 9,554.27 23.81

Appropriations - - - -

Balance carried to balance sheet 16,541.29 32.61 9,554.27 23.81

A = Financial Year ended March 31, 2009 - Rs in Lakh
B = Financial Year ended March 31, 2009 - US $ in million*
C = Financial Year ended March 31, 2008 - Rs in Lakh
D = Financial Year ended March 31, 2008 - US $ in million*

* Rs 50.72 = US $ 1 Exchange Rate as on March 31, 2009 (Rs 40.12 = US$ 1 as
on March 31, 2008)

Financial Performance:

During the year under review, your Company recorded a total income of
Rs.471.41 crore, against Rs 367.31 crore in the previous year, an increase
of 28.34 per cent. Net Profit for the financial year ended March 31, 2009
rose to Rs 69.87 crore from Rs 68.60 crore in the previous year.


Your Directors have not recommended any dividend on equity shares for the
year under review.

Management Discussion and Analysis:

Management Discussion and Analysis of financial condition including the
results of operations of the Company for the year under review as required
under clause 49 of the listing agreement with the stock exchanges, is given
as a separate statement in this Annual Report.

Annual Report - Godrej Industries - 2008-2009




The Shareholders,

Your Directors have pleasure in submitting the Annual Report along with the
Audited Accounts for the year ended March 31, 2009.


Your Company's performance during the year as compared with that during the
previous year is summarized below.

Rs. lac
Year ended March 31,
2009 2008

Sales of products and services 81,624 73,531
Other Income 15,504 10,351
Total Income 97,128 83,882
Total Expenditure other than Interest 86,747 66,787
and Depreciation
Profit before Interest, Depreciation 10,381 17,095
and Tax
Depreciation 2,646 2,547
Profit before Interest and Tax 7,735 14,548
Interest and Financial Charges (net) 6,085 3,776
Profit before Tax 1,650 10,772
Provision for Current Tax 123 492
Profit after Current Tax 1,527 10,280
Provision for Deferred Tax (341) (369)
Profit after Current and Deferred 1,868 10,649
Profit on sale of undertaking, 26 232
extraordinary item (Net of tax)
Net Profit 1,894 10,881
Adjustments in respect of prior years (86) -
Surplus brought forward 32,437 27,321
Profit after Tax available for 34,245 38,202
Your Directors recommend appropriation
as under:
Dividend on Equity Shares 3,997 3,997
Tax on distributed profits 679 679
Transfer to General Reserve 181 1,089
Surplus Carried Forward 29,388 32,437
Total Appropriation 34,245 38,202

The total income increased by Rs.13,246 lac from Rs.83,882 lac to Rs.97,128
lac. The Net Profit for the year was Rs.1,894 lac as compared to Rs.10,881
lac in the previous year.


The Board of Directors of your Company recommends a final dividend of
Rs.1.25 per equity share of Re.1/- each, aggregating Rs. 3997 lac, the same
amount which was paid in the previous year.

Informed Investor, TRF, Pension Funds, Gold

Informed Investor, TRF, Pension Funds, Gold

Sensex, Nifty witness over 3% rise during the week

Indian equities soared 575 points during the week on the back of encouraging global cues, IIP numbers which were in line with market expectation, improving monsoon condition and intense buying interest seen among the investors, boosting the sentiment.

The week began with the Sensex breaching 16,000 mark for the first time in 2009 on renewed buying interest and touched a high of 16,035.50 at close. Both Sensex and Nifty crossed their crucial levels and closed at 15 month highs. Nifty crossed the crucial level of 4,750. The benchmarks continued to trade in the green and thus ended the week with no cheers for market amid volatility.

The week started on a negative note and continued to trade weak for the fourth straight session. However the index snapped four days losing streak and ended on a higher note with sustained buying interest.

The 30 share index, Sensex surged 575.18 points, or 3.66%, to end at 16,264.30 for the week ended Sep. 11, 2009 as compared to last week`s loss of 233.22 points to close at 15,689.12. On the other hand, the broad based NSE Nifty advanced by 149.15 points, or 3.18%, to end at 4,829.55 in the same period.

Index for industrial production (IIP) declined in the month of July 2009 to stand at 6.8% as against 7.8% in the previous month, June 2009. The government announced that it revised the industrial production for the month of June from 7.8% to 8.2%.

Inflation stood at -0.12% for the week ended on Aug. 29, 2009 as compared to -0.21% in the previous week ended Aug. 22, 2009. The official WPI for ``All Commodities` rose by 0.2%. 52 week average inflation for the week ended Aug. 29, 2009 was 3.99%. Inflation was at 12.38% during the corresponding week of the previous year.

Major gainers over the week in the sectoral indices were Metal gained 7.71%, Oil & Gas 4.63%, PSU rose 3.19%, BSE Conusmer Durables climbed 2.57%, and IT went up 2.25%.

FMCG dropped 2.98%, Realty fell 1.18% and Auto lost 0.80% were among the major losers in the sectoral indices over the week.

Leaders in 30-share index were Hindalco Industries (18.07%), ICICI Bank (12.32%), Sterlite Industries (India) (11.25%), Tata Steel (9.07%), and State Bank Of India (8.78%) over the week.

On the other hand Hindustan Unilever (6.28%), Maruti Suzuki India (5.12%), Mahindra & Mahindra (5.10%), DLF (3.79%), and Hero Honda Motors (2.84%) were the major laggards in the Sensex over the week.

Annual Report - HPCL - 2008-2009





On behalf of the Board of Directors, I have great pleasure in presenting to
you the fifty seventh Annual Report on the working of the Company, together
with the Audited Accounts for the year ended 31st March 2009.


FINANCIAL 2008-09 2007-08

Sales/Income from Operations 1,31,802.65 1,12,098.27
Profit before Depreciation, Interest and Tax 5,776.36 2,725.59
Depreciation (981.29) (850.82)
Interest (2,082.84) (766.10)
Profit before Tax 712.23 1,108.67
Provision for Tax
Current Tax (227.60) (166.74)
Deferred Tax (34.29) (202.53)
Taxation of earlier years written back 111.77 408.61
Deferred Tax written back 26.90 -
Fringe Benefit Tax (14.03) (13.13)
Profit after Tax 574.98 1,134.88
Balance brought forward from previous year 7,794.67 6,892.13
General Reserve (57.50) (113.49)
Proposed Dividend (177.78) (101.59)
Tax on distributed profits (30.21) (17.26)
Balance carried forward 8,104.16 7,794.67
Market Sales (including Exports) 25.59 24.47
Crude Thruput:
Mumbai Refinery 6.65 7.36
Visakh Refinery 9.16 9.41
Earnings Per Share 16.98 33.48
Cash Earnings Per Share 46.97 64.55
Book Value Per Share 316.88 311.59


Your Directors, after taking into account the financial results of the
Company during the year, have recommended dividend of Rs. 5.25 per share
for the year 2008-09 as against Rs. 3.00 pet share paid for the year 2007-
08. The dividend for 2008-09, including dividend tax provision will absorb
Rs. 207.99 crores (2007- 08.- Rs. 118.85 crores).


Your Company has achieved sales/income from operations of Rs. 1,31,802.65
crores as compared to Rs. 1,12,098.27 crores in 2007-08.


Your Company has earned gross profit of Rs. 3,776.36 crores as against
Rs.2,725.59 crores in 2007-08 and profit after tax of Rs. 574.98 crores as
compared to Rs. 1,134.88 crores in 2007-08.

Annual Report - BPCL - 2008-2009




The Directors take pleasure in presenting their Report on the performance
of Bharat Petroleum Corporation Limited (BPCL) for the year ended 31st
March, 2009.

Market Review - Sep 12 2009

After a volatile trade, Markets managed to close in green on the back of last hour recovery. Sensex gained 47 points to close at 16264, while Nifty added 10 points to finish at 4829. BSE Mid-cap and Small-cap indices continued to under perform by losing 0.1% and 0.4% respectively. Index of Industrial Production (IIP) for the month of July showed a growth of 6.8% as against 8.2% (revised figure) in the previous month and 6.4% in the same period of last year. On weekly basis, Sensex and Nifty have gained 3.7% and 3.2% respectively. Among the sectoral indices, Metal index and Bankex were the top gainers, putting on 7.7% and 6.7% respectively over the week, while FMCG and Realty indices lost 3% and 1.2% respectively. European markets were up nearly three fourth of a percent, with financial shares extending recent gains and miners rising on global economic recovery hopes. US stock indices futures were flat.

BSE Consumer Durable and PSU indices were the top gainers among the sectoral indices for the day, rising 1.8% and 1.5% respectively. Realty and FMCG indices lost the most, shedding 1.6% and 1.2% respectively. Hindalco surged 6%, becoming the top gainer among the Sensex stocks, followed by ICICI Bank, which gained 2.5%. Sterlite Ind. and DLF lost 2.7% and 2.5% respectively. BSE advance-decline ratio stood at 1:1.6.

FIIs step up buying

Inflow of Rs 574.90 crore on 10 September 2009

Foreign institutional investors (FIIs) bought shares worth a net Rs 574.90 crore on Thursday, 10 September 2009 higher than Rs 247.40 crore on Wednesday, 9 September 2009.

FII inflow of Rs 574.90 crore on 10 September 2009 was a results of gross purchases Rs 2998.50 crore and gross sales Rs 2423.60 crore. The BSE Sensex rose 33.31 points or 0.21% to 16,216.86 on that day.

FII inflow in September 2009 totaled Rs 2,172.10 crore (till 10 September 2009). Foreign funds had bought equities worth Rs 4028.80 crore in August 2009. FII inflow in calendar year 2009 totaled Rs 42,370.60 crore (till 10 September 2009).

There are a total of 1695 foreign funds registered with the Securities & Exchange Board of India (Sebi).

SBI September 2009 futures at premium 2009

Turnover declines

Nifty September 2009 futures were at 4847.60 at a premium of 18.05 points as compared to the spot closing of 4829.55. Turnover in NSE's futures & options (F&O) segment was Rs 61,648.13 crore, much lower than Rs 75,583.39 crore on Thursday, 10 September 2009.

State Bank of India September 2009 futures were at premium at 1933.80 compared to the spot closing of 1920.50.

Tata Steel September 2009 futures were at premium at 470.55 compared to the spot closing of 469.

Unitech September 2009 futures were at premium at 108.95 compared to the spot closing of 108.05.

In the cash market, the S&P CNX Nifty rose 10.15 points or 0.21% at 4829.55.

India Strategy - Sep 12 2009

India Strategy - Sep 12 2009

Weekly Wrap - Sep 12 2009

Weekly Wrap - Sep 12 2009

Weekly Support and Resistance Levels

Weekly Support and Resistance Levels

GM to sell Opel to Magna

The Opel Trust approved the sale of a 55% stake in General Motors Co.'s (GM) units Adam Opel Gmbh and Vauxhall to Canadian car parts maker Magna International Inc. and Russian bank OAO Sberbank in a split decision. The trust - set up by the German government in May to hold a 65% stake in Opel/Vauxhall and oversee the investor search - did not reach a unanimous decision, said chairman Fred Irwin. Dirk Pfeil, who represented the German states with Opel plants on the board, said that he abstained in the vote. The two representatives of GM approved the deal. Chairman Irwin had no voting rights. "This doesn't mean that Adam Opel is saved," Irwin said at a press conference in Berlin. The deal ended months of uncertainty over the fate of GM's struggling European operations.

The German government backed the Magna-led bid for a majority stake in Opel and said that it would provide 4.5bn euros (US$6.5bn) in state-backed guarantees to help Magna restructure GM's European subsidiary. Angela Merkel, Germany's chancellor, whose government threw its weight behind Magna's bid, welcomed GM's decision, saying that the result showed that the government's patience, clarity and decisiveness had paid off. However, Merkel conceded that it would not be an easy way forward for Opel. Negotiations over the Opel sale are expected to continue. The deal still needs European Union approval.

GM will keep 35% of Opel, with employees taking a further 10%. In a crucial move for Detroit, GM and Opel will continue to develop cars and engines together, giving the US auto major continued access to Opel's small and medium-sized platforms needed to compete with the likes of Volkswagen and Toyota. Rival bidder RHJ failed to secure loan guarantees from a German government skeptical of the private equity group's capacity to finance and manage Opel. Magna promises to close no factories in Germany and keep the two Vauxhall plants in the UK going at least until 2013.

IEA raises oil demand forecast

The International Energy Agency (IEA), the energy adviser to 28 developed countries, raised its forecast for global oil demand by nearly 500,000 barrels per day (bpd) for 2009 and 2010. The Paris-based agency cited stronger-than-expected economic data in OECD North America and non-OECD Asia for the upgrade. In its August report, the IEA had revised its oil demand forecast upward by 190,000 bpd for 2009 and 70,000 bpd for 2010. The IEA said that global demand is now expected to average 84.4 million bpd in 2009 and 85.7 million bpd in 2010. Still, the worldwide oil demand for the year 2009 is expected to be 2.2% lower than it was last year.

"Despite these upward adjustments, demand is poised to remain weak in the OECD for the reminder of this year, while the underlying strength of non-OECD demand has been obscured by massive stock building in China," the IEA said in its monthly report. "Moreover, the specter of a double-dip, 'W-shaped' recession, which would undermine oil-demand growth next year, cannot be entirely discounted," it added.

Gold shoots past US$1000/Oz

Gold futures and spot gold both rose above the US$1000 milestone, touching a six-month peak in the process, spurred by persistent weakness in the dollar, concerns about the sustainability of the global economic recovery and worries about inflation. Gold for December delivery, the most active contract, hit an intraday high of US$1009.40 an ounce in electronic trading on Globex. This was the first time a front-month Gold futures contract reached the four-figure mark since late February. The record for gold futures is US$1033.90 an ounce, reached March 17, 2008. Gold has rallied every year since 2000. The Dollar Index, a six-currency gauge of the dollar’s value, declined this week. The US dollar fell to a new yearly low versus the euro and tumbled versus other major rivals, undercut as investors continued to show rising appetite for risk. It was unclear how sustainable the rise above US$1000 an ounce will turn out to be, wrote analysts at Commerzbank in a note to clients. "The last two times when it occurred - in February this year and in March last year - the price increase was only temporary and ended in a massive correction below the US$900-an-ounce level," they said. "Seasonal trends seem to make this less likely though, as physical gold demand typically picks up around autumn and winter time."

Chinese data points to continued revival

A flood of data released by the Chinese government revealed that the economy remains well on the path to recovery. The data also prompted analysts to predict brighter prospects for one of the world's leading economies. China's industrial output rose 12.3% on year in August, the National Bureau of Statistics said today. The gain was wider than a 10.8% year-on-year gain in July and beat expectations for 12% rise, according to analysts. The major surprise came from the jump in bank lending, despite recent hints from Chinese bank regulators that the steep growth in new bank loans would be scaled back in the second half of the year. The People's Bank of China said that banks issued 410.4 billion yuan (US$60bn) in new loans during the month, up from 355.9bn yuan in July. That far exceeded estimates of lending shrinking to 320 billion yuan. China's broad money supply as measured by M2 expanded 28.5% from a year earlier, in line with consensus estimates for a rise of 28.4%.

China's consumer price index (CPI) eased 1.2% year on year, roughly in line with expectations for a 1.3% drop forecast by analysts. The producer price index (PPI) was down 7.9%, matching the poll's forecast. Declining prices gives Chinese central bank more room to keep interest rates at a four-year low. Retail sales rose 15.4% year on year, after rising 15.2% in July, the statistics bureau said today. The gain in retail sales was the biggest for the year after accounting for seasonal distortions caused by the lunar new year holiday. Urban fixed-asset investment for the January-August 2009 period rose 33.0% year on year, picking up for a 32.9% rise in the January-July period. Investment in real estate jumped 34.6% in August, up from a 19.6% rise in July. That compared to a 9.9% rise in property investment in the first half of 2009.

In China, the quickening expansion follows a 4 trillion yuan stimulus package, record lending and a rebound in property investment and sales that have countered a slump in the nation’s exports. Economists anticipate China’s GDP growth will accelerate to a 9.5% pace next year after an 8.3% rate in 2009, according to economists.

The QIP rush continues

Glenmark Pharmaceuticals Ltd. raised about Rs4bn from a QIP issue of shares to institutional investors at Rs221 each. Glenmark was seeking to raise US$75mn with an option to raise additional funds. A company spokesman was quoted as saying that the QIP proceeds would primarily be used to reduce debt. The issue opened on Thursday and closed early Friday morning. Enam and Citigroup were the bankers to the deal.

Bangalore-based maker of medical diagnostic equipment, Opto Circuits India Ltd. raised Rs4bn from qualified institutional buyers (QIBs). The company's QIP issue which opened on September 8 closed late evening on the same day following a huge response from QIBs. The company's QIP committee had fixed Rs186.63 as the floor price per equity share of Rs10 each.

NG Vysya Bank Ltd. successfully completed a QIP of Rs2.3bn. The bank said in a statement that 9,270,455 equity shares of Rs10 each were placed at a price of Rs248.1 per share with QIBs. A preferential allotment of 7,493,478 equity shares will be made to the ING Group, at the same price, which will enable the Dutch parent to maintain their stake at 43.93% in the Indian arm. The total capital raised, from the QIP and Preferential Placement (PP) is around Rs4.15bn. The QIP issue was opened on 7th September and received good demand well above the targeted capital, with a mix of domestic and foreign institutions participating in the process, ING Vysya Bank said. The capital raised will augment the Tier 1 capital of the bank, ING Vysya Bank said. The Capital Adequacy Ratio (CAR) of the bank, which stood at 12.5% as at 30th June will increase to 14.6%, with Tier 1 CAR at 9.6%, it added. The book value post the issue will stand at Rs173.

B.K. Modi buys Wall Street Finance

B.K. Modi acquired a 51% stake in the forex and money transfer firm Wall Street Finance. ADAG Group's Reliance Money exited from the company by selling its entire 36.8% holding in the previous week for over Rs220mn. B.K. Modi announced an open offer for another 20% stake in Wall Street Finance. The entire deal of acquiring 71% stake would be worth about Rs1bn. In a market transaction, Modi-promoted Spice Investments & Finance Advisors purchased over 1.66mn equity shares, representing 14.32% stake in Wall Street Finance at a price of Rs55 per share, in a bulk deal on the BSE. The shares were bought apparently from the promoters Patel Holding and Arif Asgar Patel. In addition, Spice struck an off market transaction to acquire 36.6% from Transways Combines, a unit of Wall Street Finance. Transways had bought the shares from Reliance Money after the firm decided to quit the investment in less than one year after picking up 33.55% stake in October 2008 and hiking it to 36.58% through open market share transactions. Enam Securities was reportedly the merchant banker to the deal.

L&T Finance NCD issue oversubscribed 3.86 times

The public issue of non-convertible debentures (NCDs) of L&T Finance, the financial arm of engineering major Larsen & Toubro, was oversubscribed by 3.86 times. Non-convertible debentures are debt papers which cannot be converted into equity. This was the company's first-ever public issue of 50 lakh secured redeemable non-convertible debentures. The issue comprised Rs5bn debentures with an option to raise another Rs5bn upon over-subscription, aggregating up to Rs10bn. The issue, which has various investment options and yield on redemption of up to 10.5% per annum, started on August 18 and it closed on September 4. Up to 35% of the issue size was reserved for the qualified institutional buyers (QIBs), 35% for the retail investors and the rest 30% for non-institutional investors. In all categories the issue got fully subscribed. The company proposes to list debentures on the National Stock Exchange (NSE) on or after September 17. The funds raised through this issue will be used for various financing activities, including lending and investments, repaying existing loans and deployment in business operations, the company said. The lead managers to the issue are SBI Capital Markets, JM Financial Consultants and Standard Chartered Bank.

Sterlite hikes bid for Asarco

Sterlite Industries Ltd. said it had raised its open offer price for bankrupt US copper miner Asarco by a fifth to US$2.56bn. Sterlite, a unit of India-focused mining company Vedanta Resources Plc, has been locked in a bidding war with Mexican miner Grupo Mexico for the assets of Asarco, which has been under bankruptcy protection since 2005. "After extensive discussions and review, in order to provide full cash payment to asbestos creditors ... Sterlite increased its offer from $2.135 billion to $2.565 billion cash," Sterlite said. The increase was to cover late and subordinated claims and to ensure surplus cash for smooth operations of Asarco, it said. Grupo Mexico acquired Asarco in 1999, but lacks board control due to the bankruptcy. A few days back, a US bankruptcy court had recommended that Grupo Mexico be allowed to take control of Asarco as it was more likely to pay creditors in full. On Thursday, Asarco and Sterlite filed objections to the judge's recommendations that Grupo Mexico regain control of Asarco.

MTNL and BSNL deny being part of Zain deal

MTNL and BSNL issued clarification regarding news items reported on Sept. 8 and Sept. 9 that a Consortium made up of India’s Vavasi Group, regional telecom companies BSNL and MTNL and a Malaysian investor will buy a 46% stake in Kuwaiti telecom firm Zain. The state-run telecom companies clarified that no view has been taken regarding participation in the said consortium as has been reported widely. "However, MTNL and BSNL are always on the look out to explore all types of overseas business opportunities to expand their operations," the statement from the Telecom Ministry said. Vavasi MD Farid Arifuddin said that the group had only initial discussions with BSNL and MTNL, regarding the consortium. Interestingly, the deal is yet to be confirmed by Zain’s top management.

Media reports had said that an Indo-Malaysian consortium is set to buy a 46% stake in Kuwait’s Zain for US$13.7bn. Bard al-Khorafi, whose Khorafi Group holds 20% in Kuwait’s largest phone company, announced at a news conference that they, along with other shareholders, were selling 46% of Zain to a consortium made of Malaysia’s al-Bukhari Group, BSNL, MTNL and an Indian group called Vavasi. In a statement to Kuwait stock exchange, a Khorafi-controlled company National Investments said that BSNL and MTNL were part of a consortium that would pay 2 Kuwaiti dinars a share for the stake in Zain, West Asia’s third-largest telecom operator.

Bharti Airtel denies preliminary pact with MTN pact

Bharti Airtel denied a media report that it had reached a preliminary agreement with South Africa's MTN Group over the US$24bn merger. The report stated that Bharti Airtel was planning to buy a 49% stake in MTN by raising the cash portion of its US$14bn offer. MTN and its shareholders are set to buy a 33% stake in Bharti for about US$10bn, the report stated. The two companies are still in discussions ahead of the September 30 deadline for exclusive talks, Bharti Airtel said. "We would like to categorically deny that any such agreement has been reached between the two companies," Bharti Airtel said in a statement.

Bharti Airtel and MTN have been in merger talks since May for a deal that would create a mobile-services giant with more than 200mn subscribers across Asia, Africa and the Middle East. The proposed US$23bn deal's contours, unveiled in May, involve MTN taking a 25% economic interest in Bharti Airtel for US$2.9bn plus new shares in the South African telco, which is equivalent to 25% of MTN’s existing shares. Besides, MTN shareholders will also get an 11% stake in Bharti Airtel through GDRs that will be listed on the Johannesburg Stock Exchange.

Bharti Airtel will buy 36% of MTN for US$7bn at 86 Rand per share. On an expanded equity base, this will come down to 29%. Bharti Airtel will pick up an additional 20% by subscribing to fresh shares issued by the South African firm.

GSM user base swells by 9.31mn

The GSM-based cellular service providers added 9.31mn new subscribers in August as against the addition of 9.47mn in June, the Cellular Operators Association of India (COAI) said. With this, the cumulative All India GSM subscriber base has now grown to 335.45mn in August (excluding RCOM), up from 325.7mn in July, the lobby group for GSM operators said.

Vodafone Essar added 2.19mn new users in August, taking its total base to 80.87mn while market leader Bharti Airtel saw its total base rise by 2.82mn to 107.99mn. Idea Cellular added 1.54mn new customers, boosting its subscriber base to 50.05mn, while Aircel increased its base by over 1.31mn to 24.42mn. BSNL added 1.36mn new customers, taking its reach to 52.05mn.

Bharti Airtel continues to be the top GSM operator in the country, with a market share of 32.19% followed by Vodafone Essar at 24.11%, BSNL at 15.52% and Idea at 14.92%. The monthly data does not include GSM subscribers of Reliance Communications (RCOM) and Tata Teleservices, who report figures separately. The majority of customers of the two companies use the rival CDMA platform.

August car sales jump 25% yoy

Domestic sales of cars in India were up 25.6% in August on the back of the government's stimulus measures and lower interest rates, data released by the Society of Indian Automobile Manufacturers (SIAM) showed. A slew of new launches have also played a part in bolstering the sales of automobiles. Auto companies sold 120,669 cars during August 2009 compared with the 96,082 cars sold in the same month a year earlier, the SIAM data revealed. Sales of trucks and buses rose by 18.5% from a year earlier to 40,624 units. Motorcycle sales jumped 25.9% to 611,173 units from a year ago level, while scooter sales gained 23.1% at 118,694 units, according to SIAM data. Total two-wheeler sales rose 25.1% to 776,777 units . Three-wheeler sales climbed 22.8% at 39,201 units. Total domestic sales of automobiles were up 24.3% at 1,008,702 units, the SIAM data showed. Total exports were up 6.1% at 149,320 units. Exports of passenger cars rose 37.5% to 40,901 units. CV exports fell by 37.3% to 3,442 units while two-wheeler exports were down -1.9% at 89,856 units.

Inflation nears the flat line

The wholesale price index (WPI) fell for the 13th successive week though the drop was lower at 0.12% for the week ended August 29 against a decline of 0.21% in the previous week, the Commerce Ministry said. However, going by the 0.46% upward revision in WPI for the week ended July 4, the annual rate of inflation is likely to have already moved into the positive zone for the last week of August. Inflation for food articles moved up to 14.8% from 14.5% in the week before. The price indices for primary articles and manufacturing products rose for the week ended Aug. 29, while that of the fuel, power, light and lubricants remained unchanged. Inflation turned negative for the week ended June 6 for the first time since the new WPI series started in 1995. The inflation rate had last turned negative in 1977.

July FDI jumps 55% yoy

For the first time in more than one year, foreign direct investment (FDI) crossed the US$3bn mark on a monthly basis. Total FDI inflows amounted to US$3.48bn in July, up 55% from US$2.25bn a year ago. Cumulative inflows from April-July 2009-10, despite being lower at US$10.5bn compared with US$12.3bn in the year-ago period, were marginally higher than inflows through the portfolio route, which amounted to US$10.35bn over the same period. India in a way did better than China, which witnessed a dip in FDI inflows. In July, China saw FDI plunge 35.7% to US$5.36bn, though in absolute terms, it annually receives far higher FDI than India. The government has scaled down its FDI target for FY10 by US$5bn to US$30bn.

Separately, the Union Government, along with industry body Federation of Indian Chambers of Commerce & Industry (FICCI) is to set up a not-for-profit company dubbed Invest India to facilitate the flow of foreign investment into the country. Invest India will be the first point for FDI into the country, Commerce & Industry Minister Anand Sharma said.

Switzerland displaces US from Top in Global Competitiveness sweepstakes: WEF

Switzerland tops the overall ranking in The Global Competitiveness Report 2009-2010, released by the World Economic Forum ahead of its Annual Meeting of the New Champions 2009 in Dalian. The United States falls one place to second position, with weakening in its financial markets and macroeconomic stability.

Singapore, Sweden and Denmark round out the top five. European economies continue to prevail in the top 10 with Finland, Germany and the Netherlands following suit. The United Kingdom, while remaining very competitive, has continued its fall from last year, moving down one more place this year to 13th, mainly attributable to continuing weakening of its financial markets.

The People’s Republic of China continues to lead the way among large developing economies, improving by one place this year, solidifying its position among the top 30. Among the three other large BRIC economies, Brazil and India also improve, while Russia falls by 12 places. Several Asian economies perform strongly with Japan, Hong Kong SAR, Republic of Korea and Taiwan, China also in the top 20. In Latin America, Chile is the highest ranked country, followed by Costa Rica and Brazil.

A number of countries in the Middle East and North Africa region are in the upper half of the rankings, led by Qatar, United Arab Emirates, Israel, Saudi Arabia, Bahrain, Kuwait and Tunisia, with particular improvements noted in the Gulf States, which continue their upward trend of recent years. In sub-Saharan Africa, South Africa, Mauritius and Botswana feature in the top half of the rankings, with a number of other countries from the region measurably improving their competitiveness.

"The strong interdependence among the world’s economies makes this a truly global economic crisis in every sense. Policy-makers are presently struggling with ways of managing these new economic challenges, while preparing their economies to perform well in a future economic landscape characterized by growing uncertainty. In a difficult global economic environment, it is more important than ever for countries to put into place strong fundamentals underpinning economic growth and development,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, and co-author of the Report added, “Amid the present crisis, it is critical that policy-makers not lose sight of long-term competitiveness fundamentals amid short-term urgencies. Competitive economies are those that have in place factors driving the productivity enhancements on which their present and future prosperity is built. A competitiveness-supporting economic environment can help national economies to weather business cycle downturns and ensure that the mechanisms enabling solid economic performance going into the future are in place.”

The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the Report. This year, over 13,000 business leaders were polled in 133 economies. The survey is designed to capture a broad range of factors affecting an economy’s business climate. The Report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.

The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004. The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars include Institutions, Infrastructure, Macroeconomic Stability, Health and Primary Education, Higher Education and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market Sophistication, Technological Readiness, Market Size, Business Sophistication, and Innovation.

The Report contains a detailed profile for each of the 133 economies featured in the study, providing a comprehensive summary of the overall position in the rankings as well as the most prominent competitive advantages and disadvantages of each country/economy based on the analysis used in computing the rankings. Also included is an extensive section of data tables with global rankings for over 110 indicators.

This year’s Report also includes a number of discussions of selected countries and regions including the United States, the large emerging BRIC economies and the 12 recent accession members of the European Union, providing an in-depth analysis of the issues affecting national competitiveness.

Exports continue to drop, but at a lower pace

India's exports continued to decline in August amid persistent weakness in demand from key overseas markets, Commerce Secretary Rahul Khullar said. However, the drop in merchandise shipments was the least in eight months. Exports dropped 19.7% from a year earlier to US$14.3bn after sliding 28.4% in July, Khullar told reporters in New Delhi. Exports fell 31.3% to US$63.9bn in the five months ended August. 31 compared with a 34.1% decline in the previous four months, he said. "There is a glimmer of hope," Khullar said. "Some products have registered positive growth in August," he added. India's export decline has eased after plunging 33.26% in March. Overseas sales account for about 15% of the Indian economy. Demand for the nation’s gems, engineering goods, leather and drugs continues to be in serious problem with the slumping economies in the US and Europe, two of India’s main export markets, Khullar said. Commerce Minister Anand Sharma has urged exporters to explore new markets in Africa and Latin America to offset shrinking demand in the US and Europe, which account for 40% of the nation’s exports.

Weekly Newsletter - Sep 12 2009

OIL’s well that ends well one may imagine given the spectacular response to the IPO of OIL India. The Oil& Gas index could however seem some pressure while Bankex may show some resilience. Technically, the Nifty looks poised to flirt with the 5000 mark in the coming weeks. The last mile journey may however seem to be filled with resistance.

The next big trigger would be the quarterly results. If flows remain as they are the bull run could gain further momentum. The monsoon worries are as good as over with the deficiencies already being factored in. Inflation will move out of the negative territory probably in the coming week.

The Chinese market which caused some upheaval in recent times is picking pace with the Chinese premier stating that the stimulus measures will stay for now. Given the stupendous rise in the overall market, a correction may set in sooner than later. Else, enjoy the ride.

Weekly Stock Picks - Sep 12 2009

Buy ICICI Bank

Buy L&T


Buy Andhra Bank

Buy Vijaya Bank

Govt announces pre-Diwali freebies

The Government increased dearness allowance (DA) for state employees and dearness relief (DR) for pensioners by 5% with effect from July 1. This will put additional purchasing power in the hands of civil servants to the tune of Rs29.03bn, up to the end of February, after which another installment of DA would kick in.

The Union Cabinet’s decision to increase DA to 27% is in accordance with the accepted formula under the Sixth Pay Commission recommendations. The hike in DA will give more spending power in the hands of over eight million central government employees and pensioners. The additional DA will also help them weather the impact of rising prices. Consumer price inflation is currently in double digits.

The Cabinet also cleared 1% interest subvention for home loans up to Rs 10 lakh. "The 1% subvention would be for the first 12 EMIs (equated monthly installments) on the loans," Information & Broadcasting Minister Ambika Soni told reporters after a Cabinet meeting. The Government said interest rate subsidy scheme was in line with the announcement by Finance Minister Pranab Mukherjee during a debate on the budget for 2009-10 in July. The first 12 installments all loans sanctioned and disbursed during the 12 months from the date of publication of the scheme will be eligible for interest subvention. The scheme will be implemented through scheduled commercial banks and housing finance companies registered with the National Housing Bank.

The Centre also slashed the interest subsidy given to farmers on crop loans by one percentage point to 2% for this fiscal, a move that is expected to bring down burden on the central exchequer by Rs 311 crore. Farmers who have been paying back their credit promptly would continue to get 3% subvention and loans at interest rate of 6%. The Government also revised upwards the target for loan disbursements to the agriculture sector to Rs3.25 trillion for the current fiscal from Rs2.8 trillion a year ago, of which Rs2 trillion is estimated for the loans on crop.

India's industrial output grew by 6.8%

India's industrial output grew by 6.8% in July as against 6.4% in the same month a year ago. The Government revised upwards June figure, from a provisional estimate of 7.8%, to 8.2%. For the first four months of FY10, the industrial production grew by 4.6% compared with 5.6% in the same period a year earlier.

The manufacturing sector, which constitutes around 80% of the index of industrial production (IIP), grew by 6.8% in July against 6.9% in the same month last year. Mining output grew by 9.9% versus 2.8% in July 2008. Output of electricity generation rose by 4.2% during July compared to 4.5% in year-ago period.

Consumer durables sector expanded by 19.8% as against 13.9% in July last year while the Consumer Non-durable sector grew by 5% versus 3.4% in the year-ago period. The overall consumer goods sector registered a growth of 8.8% as against 5.9% in the same month last year.

Capital goods sector clocked a growth of 2% as against a whopping 17.9% in the year-ago period. Basic goods and intermediate goods sector grew by 4.8% and 9%, respectively versus 5.3% and 3% in the corresponding month last year.

As many as 15 out of 17 industry groups registered a positive growth in July. ‘Wool, Silk & Manmade Fibres’ showed the highest growth of 30.4%, followed by 15.2% in ‘Leather & Leather’ and 12.7% in ‘Rubber, Plastic, Petroleum & Coal Products’.

On the other hand, ‘Jute & Other Vegetable Fibre Textiles' showed a negative growth of 23.9% followed by 0.4% in ‘Cotton Textiles’.