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Cement companies not to roll back price hike
New Delhi, March 5
Cement makers today turned down the government’s call to rollback the construction raw material’s prices - hiked after a proposal to impose dual excise duty on the product -saying they were not in a position to absorb increase in taxes.

Contractors not to get SEZ sops
New Delhi, March 5
The Finance Ministry has tightened the noose around developers of Special Economic Zones (SEZs) by disallowing tax concessions to their contractors involved in the construction work.


EARLIER STORIES

 

Yen triggered Rout

Passersby watch the BSE ticker in Mumbai on Monday. Passersby watch the BSE ticker in Mumbai on Monday. The week started on an unpleasant note for the stock market as the BSE Sensex tanked 471 points on fears of recession in the world economy and sustained FII pullout. Globally, an across-the-board surge in the Japanese yen is fraying investor nerves in particular. The yen struck a three-month high against the dollar as investors rushed to reverse “carry trade” bets against the currency. — AFP

Rupee loses  34 paise, ends at 10-week low
Mumbai, March 5
In an unprecedented slide of 34 paise in a single session, Rupee today ended at a 10-week low of Rs 44.63/64 a dollar, pulled down by weaker Asian currencies amid fears of sustained FII pullout from equity markets.

M&M board okays PTL bid
Mumbai, March 5
Homegrown auto major Mahindra and Mahindra today said its board has authorised it to bid for a 43 per cent stake in Punjab Tractors Ltd (PTL).However, the company did not disclose details of the bid.

Peak-hour landings may cost more
New Delhi, March 5
In a bid to decongest airspace over three major airports, the government plans to increase charges on airlines which operate flights during peak hours and reduce it during the non-peak timings.

PC rules out corporate  tax cut
New Delhi, March 5
Finance Minister P. Chidambaram today ruled out any reduction in the scheduled rate of corporate taxation “as the effective tax rate in India was 19.2 per cent.

Canara Bank, HSBC, OBC to form life insurance firm
New Delhi, March 5
Canara Bank, HSBC Insurance (Asia-Pacific) and the Oriental Bank of Commerce (OBC) today signed a non-binding MoU to jointly establish a life insurance company in India.
Finance minister P. Chidambaram talks to finance secretary Vinod Rai as union minister of state for finance Pawan Kumar Bansal looks on at the signing of the agreement between Oriental Bank of Commerce, HSBC and Canara Bank, in New Delhi on Monday.
Finance minister P. Chidambaram talks to finance secretary Vinod Rai as union minister of state for finance Pawan Kumar Bansal looks on at the signing of the agreement between Oriental Bank of Commerce, HSBC and Canara Bank, in New Delhi on Monday. — PTI photo

Models display cutout masks of former model Twiggy parade outfits by Australian designers after a show at the Melbourne Fashion Festival on Monday.  Australia’s top designers are parading their autumn/winter collection at the week-long event.
Models display cutout masks of former model Twiggy parade outfits by Australian designers after a show at the Melbourne Fashion Festival on Monday. Australia’s top designers are parading their autumn/winter collection at the week-long event. — AFP

Emaar joint venture buys Singapore firm
Dubai, March 5
A joint venture of Dubai-based Emaar Properties and India’s MGF Group offered to buy 76.08 per cent of Singapore retailer RSH Ltd on Sunday at Sing $1.05 per share. The bid values RSH, the rest of which is owned by Mohamed Ali Alabbar, Chairman of both Emaar and RSH, at Sing $370 million ($242.5 million), the two companies said in a statement.

Bank Account
S&P foresees strong banking growth 

New Delhi, March 5
The banking sector will have abundant opportunities for profitable growth, with minimal downward pressure on pricing or asset quality, notwithstanding the hardening interest rate, a Standard & Poor's report said. As in the past, consumer credit will continue to be the prime driver of credit growth.

A pedestrian walks outside Prime Bank in Islamabad on Monday. The Dutch investment bank ABN Amro Holdings said it had agreed to buy a 93.4-per cent stake in Pakistan’s Prime Bank for Euro 172 million ($226 million).
A pedestrian walks outside Prime Bank in Islamabad on Monday. The Dutch investment bank ABN Amro Holdings said it had agreed to buy a 93.4-per cent stake in Pakistan’s Prime Bank for Euro 172 million ($226 million). — AFP

India high on IBM radar 
New Delhi, March 5
India Inc’s merger and acquisition overdrive is all set for an IT twist this year, involving none other than the world’s largest computer services provider IBM. After spending close to $5 billion for 13 acquisitions in 2006, IBM plans to keep up its “accelerated” pace of acquisitions this year and has earmarked Indian IT space as a key target region.

Cognizant rings Nasdaq bell
Chennai, March 5
Nasdaq today bestowed a rare honour on IT and BPO major, Cognizant Technology Solutions Corporation, as the company rang the Nasdaq opening bell remotely from its techno-complex here today. This was the first time, Cognizant, an US company, remotely opened the bell outside North America and it is the first offshore IT services company to list on Nasdaq nine years ago.

  • Saudi prince buys Bangladesh bank

Video
Indian shares fall to five month low.
(56k)


 




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Cement companies not to roll back price hike

New Delhi, March 5
Cement makers today turned down the government’s call to rollback the construction raw material’s prices - hiked after a proposal to impose dual excise duty on the product -saying they were not in a position to absorb increase in taxes.

The cement industry informed Department of Industrial Policy and Promotion Secretary Ajay Dua that it was not in a position to absorb the additional excise and other levies.

Earlier in the day, Finance Minister P. Chidambaram had said that while government was not resorting to price control, it has to take effective steps to moderate the prices.

Chidambaram, in his Budget speech on February 28, proposed to reduce excise duty on cement by Rs 50 from Rs 400 per tonne if it is sold at Rs 190 per 50 kg of bag, but raise it by Rs 200 per tonne to Rs 600 per tonne if sold at higher prices.

The industry promptly passed on the entire increase to the customers the following day by raising retail price by Rs 12 per bag.

In the meeting with the cement industry, Dua broached the possibility of manufacturers cutting prices, but received no positive response.

Cement has been one of the main commodities under government watch for controlling inflation.

While cement manufacturers are standing firm, steel makers have announced cut in prices.

Earlier during the day, Finance Minister P. Chidambaram said the government was not resorting to price control in the cement sector and invited industry players for talks on duty differential measures announced in the Budget 2007-08.

“We are not reinforcing price control,” he said at a post-budget interaction with FICCI members, while referring to the issue of duty differential proposed for the cement sector.

“The government owes responsibility to the people of India to moderate prices where prices seem to have risen unreasonably. Whether they have risen unreasonably could be discussed. But if they have risen unreasonably, surely the government has obligation to moderate prices,” he said.

He asked cement industry players to discuss the Budget proposal among themselves and with the government as well.

The Budget proposal had also drawn flak from the industry with CII president R Seshasayee expressing doubts over the efficacy of the measure.

Pointing out that moderating inflation is good for all, Chidambaram said opportunity to take profit in the short term should not cloud the thinking that in the long-term price stability is a fundamental feature of a sound economy. — PTI

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But steel-makers bend

Major steel-makers, including SAIL and TATA Steel, have agreed to roll back Rs 300 to 700 per tonne increase in the price of of TMT bars, galvanised steel and HR coils after the government asked them to contain prices to keep inflation under check.

The decision was announced by ministry of steel secretary R.S. Pandey here today after a meeting with steel producers. The new revised prices would be effective from March 1.

He said the rollback was 100 per cent in the case of TMT bars and galvanised corrugated products, items of mass consumption. In respect of HR coils, the producers agreed to reduce the price by Rs 500 per tonne, which was about 50 per cent of the recent hike.

All steel producers had increased the prices of TMT bars by about Rs 300 - Rs. 700 per tonne, of galvanised corrugated products by Rs 300 - Rs. 500 per tonne and that of HR coils by Rs 1,000 - Rs. 1,200 per tonne on Thursday.

Representatives of SAIL, RINL, TATA Steel, Essar Steel, Ispat Group and JSW attended the meeting. The producers agreed to roll back the increase following an appeal from minister for steel, chemicals and fertilisers Ram Vilas Paswan. — TNS

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Contractors not to get SEZ sops

New Delhi, March 5
The Finance Ministry has tightened the noose around developers of Special Economic Zones (SEZs) by disallowing tax concessions to their contractors involved in the construction work.

According to Budget proposals, the 10-year tax benefits under Section 81A of Income Tax Act will be limited to those developers who themselves execute the development work and not to those who only take up civil construction for the SEZs.

What could come as a bolt from the blue for developers is the fact these changes would be applicable retrospectively from April 2000 and valid for assessment year 2000-01 onward.

For checking migration of existing industries to the SEZs for availing of tax sops, the Budget also makes it clear that the tax breaks would be given to the units, which began production from April 2006.

The proposals provided in the Finance Bill, 2007, will impact a large number of promoters who plan to bring in construction and real estate companies as partners. Of the 63 SEZs notified, only six have been promoted by real estate players like DLF, Rahejas and Ansal.

This would also push up the construction cost for the non-real estate promoters of SEZs like Satyam Computers, Wipro, FAB City, Reliance and Biocon.

Most of these promoters had worked out their project costs taking into account tax concessions both for themselves and the contractors.

As the Finance Bill rules out tax breaks for contractors, the overall costs of the SEZs are likely to go up. — PTI

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Rupee loses 34 paise, ends at 10-week low

Mumbai, March 5
In an unprecedented slide of 34 paise in a single session, Rupee today ended at a 10-week low of Rs 44.63/64 a dollar, pulled down by weaker Asian currencies amid fears of sustained FII pullout from equity markets.

In an otherwise one-way trading at the interbank foreign exchange (forex) market, the Indian unit moved in a range of Rs 44.37 and Rs 44.70 during the day as the turmoil on equity markets spilled over to the currency market.

The yen, however, touched a three-month high against the dollar as investors rushed to reverse “carry trade” deals, forex dealers said.

The benchmark indices of Hong Kong, Japan, Singapore, Taiwan and South Korea fell by 2.5 per cent to 4 per cent at close on concerns about economic slowdown across the globe.

Foreign institutional investors (FIIs) have pulled out $ 695 million from equity markets during the initial four sessions of last week.

Meanwhile, India’s foreign exchange reserves rose to a record $193.1 billion on February 23, a $4.2 billion increase from a week earlier.

Meanwhile, the RBI has fixed the reference rate for the US currency at Rs 44.49 per dollar and for the single European unit at Rs 58.53 per euro. — PTI

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M&M board okays PTL bid

Mumbai, March 5
Homegrown auto major Mahindra and Mahindra today said its board has authorised it to bid for a 43 per cent stake in Punjab Tractors Ltd (PTL).

However, the company did not disclose details of the bid.

FMCG company Dabur Group’s promoter, Burman family, and private equity firm Actis who jointly hold nearly 43 per cent stake in PTL are both planning to sell their shares in the company.

M&M would join Hindujas-promoted Ashok Leyland in the race to acquire the stakes.

While Actis holds around 29 per cent, the Burman family’s stake in PTL stands at 14.15 per cent. The valuation of the 43 per cent stake is estimated to be over Rs 1,000 crore. — PTI

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Peak-hour landings may cost more

New Delhi, March 5
In a bid to decongest airspace over three major airports, the government plans to increase charges on airlines which operate flights during peak hours and reduce it during the non-peak timings.

The burden on airlines due to the increase in airport and navigation charges could in turn be passed on to consumers travelling during peak hours.

“We are working on a clear system of incentives or disincentives for airlines operating services during three peak hours in the morning and four in the evening,” Civil Aviation Secretary Ashok Chawla told reporters here.

The airports on which these charges would be effective are Delhi, Mumbai and Bangalore. The peak hours have been identified as 0700-1000 hours in the morning and 1800-2200 hours in the evening.

Chawla, who took over a month ago, indicated that airport and navigation charges could even be doubled during peak hours and halved between midnight and 500 hours.

Chawla said the increase in these charges would be effective from the last Sunday of March, when the summer schedule of airlines begins.

He, however, said the hike in charges would “essentially be a short-term solution”.

Asked about the “grandfather rights” of the airlines to operate in peak hours, the secretary agreed these airlines had a right “but the charges can always be calibrated”. Grandfather rights are those under which airlines operating on peak-hour slots for several years can claim their right on them. — PTI

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PC rules out corporate tax cut
Tribune News Service

New Delhi, March 5
Finance Minister P. Chidambaram today ruled out any reduction in the scheduled rate of corporate taxation “as the effective tax rate in India was 19.2 per cent.

“In no Asian or ASEAN country is the effective rate less than 19 per cent,” he said, even as he sought the cooperation of industry in moderating inflation and “not allowing short-term lure of profit-making cloud its thinking, as a long-term price stability was fundamental for overall stability of the economy.”

Speaking at the national conference of the Union Budget 2007-08, organised by FICCI here, Mr Chidambaram said fringe benefit tax accounted for just 1 per cent of the current effective rate of taxation.

He informed the captains of industry that the method of calculation of tax on ESOPS, as a fringe benefit, would be worked out soon.

“We are prepared to consider whether this benefit should be taxed at the hands of a company or an individual for which the industry’s view would be ascertained,” he said.

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Canara Bank, HSBC, OBC to form life insurance firm
Tribune News Service

New Delhi, March 5
Canara Bank, HSBC Insurance (Asia-Pacific) and the Oriental Bank of Commerce (OBC) today signed a non-binding MoU to jointly establish a life insurance company in India.

Under the proposed agreement, Canara Bank will take a 51 per cent stake in the new company, HSBC 26 per cent and the OBC the remaining 23 per cent.

The new company will have a paid-up capital of Rs 325 crore of which HSBC will contribute Rs 170 crore, Canara Bank Rs 102 crore and the OBC Rs 46 crore

Under the terms of the agreement, HSBC will provide a range of management services, which may include providing executives for senior roles.

The new company will have exclusive access to the customer bases of both Canara Bank and the OBC, and of HSBC in India. This comprises more than 40 million persons and a nationwide network of 3,600 branches.

“The signing of this MoU marks a significant step forward for Canara Bank in terms of creating and delivering value-added insurance products not only to the existing customers but also to the customers and prospects of our partner institutions,” Canara Bank chairman and managing director M.B.N. Rao.

Regional head of Insurance Asia Pacific of HSBC David Fried said :“This is a unique opportunity to expand HSBC’s footprint in one of our major emerging markets and to bring to the partnership considerable insurance experience, product range and our proven bank assurance capabilities.”

OBC chairman and managing director K.N. Prithviraj said “as a part of the proposed JV for life, the OBC will augment the revenue stream on two counts- return on equity after breakeven and commission for premium mobilised.”

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Emaar joint venture buys Singapore firm

Dubai, March 5
A joint venture of Dubai-based Emaar Properties and India’s MGF Group offered to buy 76.08 per cent of Singapore retailer RSH Ltd on Sunday at Sing $1.05 per share.

The bid values RSH, the rest of which is owned by Mohamed Ali Alabbar, Chairman of both Emaar and RSH, at Sing $370 million ($242.5 million), the two companies said in a statement.

Emaar, the largest Arab property developer by market value, and MGF aim to buy the majority stake through their joint venture Golden Ace Pte Ltd, they said.

RSH has 430 stores in 12 countries selling sporting goods and fashion products. It has exclusive retailing rights to European brands, including Zara and Massimo Dutti, in several markets.

“The economies of India, West Asia and Southeast Asia are booming, and in line with the economic growth, the retail sector presents substantial growth opportunities,” Emaar Vice-Chairman Hussain al-Qemzi said in the statement. — Reuters

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Bank Account
S&P foresees strong banking growth 

New Delhi, March 5
The banking sector will have abundant opportunities for profitable growth, with minimal downward pressure on pricing or asset quality, notwithstanding the hardening interest rate, a Standard & Poor's report said.

As in the past, consumer credit will continue to be the prime driver of credit growth. Corporate growth, on the other hand, is expected to remain stable and healthy, though debt leverage has begun to rise, S&P director (Asia ex Greater China, financial institutions ratings) Ritesh Maheshwari said.

The financial profile of the banking industry is adequate and stable, he said, adding that recent banking reforms have tightened operational, prudential, and accounting standards.

The SARFAESI Act, credit information bureau, and corporate debt restructuring mechanism have helped to rein in non-performing assets and improve the credit discipline in the banking system, he added.

Highlighting the strength of the banking sector, Crisil, a subsidiary of S&P, said: "we concluded that the Indian banking sector's resilience to an economic downturn has increased significantly over the past decade

The indepth look at banks liquidity, asset quality, profitability and capitalisation demonstrates that banks are well placed to take advantage of the opportunities that economic growth provides and to take on any challenges that may arise if conditions turn adverse.

Saudi prince buys Bangladesh bank

A Saudi prince is expected to take over Bangladesh's fourth largest bank this month in a $458 million deal that saw repeated delays because of political turmoil, an official said today.

Prince Bandar Bin Mohammad Bin Abdul Rahman would control 93 per cent of Rupali Bank after becoming the highest bidder for the stake held by the government, said privatisation commission chief Abu Solaiman Chowdhury.

The bank was put up for sale last year as part of a deal with the IMF to ease the government out of the banking business because of a long history of major losses led by loan defaults. — Agencies

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India high on IBM radar 

New Delhi, March 5
India Inc’s merger and acquisition overdrive is all set for an IT twist this year, involving none other than the world’s largest computer services provider IBM.

After spending close to $5 billion for 13 acquisitions in 2006, IBM plans to keep up its “accelerated” pace of acquisitions this year and has earmarked Indian IT space as a key target region.

The US-based IT giant is believed to have sounded its investment bankers to scout for potential targets in the country, which could include mostly small-to-mid sized software firms, although it is not averse to acquiring large companies at the right price.

While the company is tight-lipped about its potential targets and investment lined up for inorganic expansion into the country, merchant banking sources close to the development said that the company could strike deals close to a billion dollars in the next few months in the software space.

The company’s acquisitions in 2006 were in the software space, an area where IBM is bullish about growth prospects in future as well.

However, IBM’s potential targets are unlikely to include listed firms as the company considers them as overvalued following the sharp rally in IT stocks over the recent past.

The New York Stock Exchange listed company said, in a communiqué to its shareholders through a regulatory filing last week, that it plans to continue the accelerated pace of acquisitions in 2007.

The company has invested nearly $16 billion in over 60 acquisitions in the past five years, making it the most acquisitive company in the technology space.

A senior investment banker close to the development said that IBM expects its acquisitions to be targeted for accelerating its presence in emerging and high-growth markets, adding that the company is looking for profitable revenue growth opportunities through its acquisitions. — PTI

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Cognizant rings Nasdaq bell
Tribune News Service

Chennai, March 5
Nasdaq today bestowed a rare honour on IT and BPO major, Cognizant Technology Solutions Corporation, as the company rang the Nasdaq opening bell remotely from its techno-complex here today. This was the first time, Cognizant, an US company, remotely opened the bell outside North America and it is the first offshore IT services company to list on Nasdaq nine years ago.

The bell was rung here by Cognizant President Francisco D’Souza in presence of David T. Hopper, the US consul general, Chennai, and the entire management team of the company.

The company and Nasdaq co-hosted two celebrations - one here at Cognizant’s techno-complex and one in New York City at Nasdaq’s MarketSite, 4 Times Square.

Nasdaq re-created the market site opening bell ceremony from Cognizant’s facility in India by displaying the electronic podium and traditionally signing into the market at the event.

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