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Core sectors’ growth falls sharply
No downward revision of export target: Nath
New Delhi, September 13
Six core infrastructure sectors, which have direct bearing on economic growth, slumped to 6.3 per cent in July, 2007, as compared to 10.9 per cent in the same month last year, compounding the government’s worry with a slowdown in industrial production.

Ambani brothers outperform Sensex
Mumbai, September 13
As equity markets inch ahead to regain the lost ground since late July, lady luck seems to be favouring the two Ambani brothers with most of their companies scaling new peaks in the past two days that took their collective market value above the pre-meltdown levels.

US economy crisis not to affect India: S&P
New Delhi, September 13
Not all world markets are suffering from the subprime crisis in the USA, as emerging economies like India have largely been spared, said a top official from Standard and Poor’s (S&P) today.

Holding Co norms for banks soon, says RBI
Mumbai, September 13
The banking regulator, Reserve Bank, will soon finalise guidelines for banks creating holding companies for their subsidiary businesses like insurance and asset management, a top RBI official indicated here today.



EARLIER STORIES

 

Reject RIL’s price formula: CPM
New Delhi, September 13
Even before the ink on the gas pricing from Reliance Industries’ (RIL) deep-water block in the Krishna-Godavari basin had dried, the CPM today asked the Manmohan Singh government to reject the recommendations of the Empowered Group of Ministers (EGoM) as it would adversely affect the power and fertiliser industries.

Vice-president and head, CDMA division, Samsung Telecommunications India, Hyunbai Kim ((L), president, value- added services business unit, Tata Teleservices, Pankaj Sethi (C) and senior director, Qualcomm India, Rajamani Ganesh, unveil the new mobile internet handset, "Explore" launched by Samsung in association with Tata Indicom in Kolkata on Thursday.
Vice-president and head, CDMA division, Samsung Telecommunications India, Hyunbai Kim ((L), president, value- added services business unit, Tata Teleservices, Pankaj Sethi (C) and senior director, Qualcomm India, Rajamani Ganesh, unveil the new mobile internet handset, "Explore" launched by Samsung in association with Tata Indicom in Kolkata on Thursday. The handset is priced at Rs 5,499. — PTI

Dollar near all-time low versus euro
Sydney, September 13
The dollar traded near an all-time low versus the euro on signs US economic growth is slowing, suggesting an interest-rate advantage over Europe will narrow.

UB’s open offer for Air Deccan
Mumbai, September 13
Vijay Mallya’s United Breweries Holdings has made an open offer for an additional 20 per cent stake in Air Deccan. The offers comes in the wake of mandatory requirements following UB’s acquisition of a 26 per cent stake in Air Deccan, recently, for Rs 550 crore.

Setback to Ranbaxy in lipitor case
New Delhi, September 13
In a partial setback for Ranbaxy Laboratories in its ongoing patent row with Pfizer over cholesterol lowering drug lipitor, a Canadian court has ruled that it infringed one of the US pharma major's patent.

SEZ: Nath seeks single window facilities
New Delhi, September 13
Union commerce and industry minister Kamal Nath asked the state governments to provide single window facilities and all other promised benefits so that SEZ schemes could fulfil its objectives and is implemented efficiently.

Nod to CIL arm’s expansion
New Delhi, September 13
The government today approved a proposal of Coal India Ltd’s subsidiary to expand production capacity of Nigahi open cast mines from 10 to 15 million tonnes per annum at an estimated cost of Rs 259.4 crore.

Ipca acquires Australian drug firm
Mumbai, September 13
Drug firm Ipca Laboratories today said it has acquired 100 per cent stake in an Australia-based formulation company for an undisclosed amount.

Workshop on compilation of CPI-IW opens
Shimla, September 13
A three-day national seminar-cum-workshop on 'Compilation of Consumer Price Index numbers for Industrial Workers (CPI-IW)' commenced here today.

 

 

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Core sectors’ growth falls sharply
No downward revision of export target: Nath
S. Satyanarayanan
Tribune News Service

New Delhi, September 13
Six core infrastructure sectors, which have direct bearing on economic growth, slumped to 6.3 per cent in July, 2007, as compared to 10.9 per cent in the same month last year, compounding the government’s worry with a slowdown in industrial production.

Concerns within the Congress-led UPA government was quite evident with finance minister P Chidambaram expressing disappointment and commerce minister Kamal Nath asserting that anti-inflationary measures should not be allowed to impact growth.

According to the official data released here today, sluggish output in coal, steel and petroleum refining had a direct negative impact on the overall growth in six core infrastructure sectors.

During April-July 2007-08, growth rate of the six core infrastructure industries of crude petroleum, petroleum refinery products, coal, electricity, cement and finished steel, declined to 6.1 per cent as compared to 8.7 per cent during the corresponding month last fiscal as higher interest rates curbed demand for manufactured goods like automobiles, consumer durables, housing and commercial real estate.

The slowdown in core sector could have a direct bearing on economic growth, as well as indirect adverse effect on other sectors, which use inputs from these industries.

Infrastructure sectors constitute 26.7 per cent of the Index of Industrial Production (IIP), which also registered a fall in growth rate to 7.1 per cent during July this year compared to 13.2 per cent in the same month a year ago.

According to official data released here today, while crude petroleum production dipped by 0.9 per cent in July 2007 from 4.1 per cent, petroleum refinery production decreased to 4.6 per cent from a growth of 12.6 per cent in July 2006.

Coal production registered a growth of 1.1 per cent, a significant decline from the 9.1 per cent growth in july 2006. Electricity generation, cement and finished carbon steel also posted a dip in growth rate.

The finance minister, however, expressed hope that industrial production would gain momentum on rising consumer demand during the forthcoming festival season.

Meanwhile, commerce minister Kamal Nath said it has to be ensured that anti-inflationary measure does not impact growth.

Despite the current slowdown, the commerce minister said he was optimistic that the target of 12 per cent manufacturing growth would be maintained in 2007-08.

On the issue of revising the export target of $160 billion for 2007-08 due to appreciation of rupee against the US dollar, the minister said, “July-August are difficult months as they are monsoon months but we would not revise the export target.”

“We are continuously looking at efforts to see that exports do not decline as they are an important part of the economy,” he added.

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Ambani brothers outperform Sensex

Mumbai, September 13
As equity markets inch ahead to regain the lost ground since late July, lady luck seems to be favouring the two Ambani brothers with most of their companies scaling new peaks in the past two days that took their collective market value above the pre-meltdown levels.

While the market’s benchmark index, BSE Sensex, is still more than 250 points away from its all-time peak of 15,868.85 hit on July 24, after which the downslide began, the shares of the companies belonging to Mukesh and Anil Ambani groups — barring RCom and Reliance Industrial Infrastructure Ltd (RIIL) — are trading above their July 24 levels.

The cumulative market capitalisation of all these companies has soared well past the level recorded on July 24.

Except for RCom and RIIL, all the Reliance shares - Reliance Industries, Reliance Petroleum and IPCL of Mukesh Ambani group and Reliance Capital, Reliance Energy (REL) and Reliance Natural Resources Ltd of Anil Ambani group - have striked their life-time highs in past two sessions.

Reliance Capital has gained about 13 per cent in two days, while six others have gained about two per cent each.

Stocks, other than those of the two Ambani groups, that scaled their peaks, included Grasim Industries, IFCI Ltd, United Spirits, Aptech Ltd, UCO Bank, Jaipraksh Associates and Cental Bank.

Among Anil Ambani group companies, Reliance Capital rose by 5.3 per cent to Rs 1,401 after hitting a peak of Rs 1,408.9, while RComm gained 1.6 per cent to Rs 550.5. RComm’s peak was Rs 592, which was scaled on July 20.

According to the latest available data, RIL’s market cap has grown by about Rs 16,000 crore, while Reliance Capital has gained about Rs 5,000 crore, REL about Rs 2,500 crore, RPL by Rs 7,000 crore, RNRL by about Rs 1,300 crore and IPCL by about Rs 500 crore since July 24. — PTI

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US economy crisis not to affect India: S&P

New Delhi, September 13
Not all world markets are suffering from the subprime crisis in the USA, as emerging economies like India have largely been spared, said a top official from Standard and Poor’s (S&P) today.

“I do not see the US economic problems spreading to other economies. It is more like a decoupling taking place,” said S&P director (portfolio management and strategy) Massimo Santicchia.

In the past, there was very close connection between the USA and the economies of the rest of the world. However, the emerging markets continue to grow today, he added.

The happening in the credit markets could suggest that the downward fall in house prices might actually accelerate, and that would clearly have an impact on consumer confidence and on their willingness to buy items such as houses, cars and consumer electronics.

Santicchia stressed that new linkages were taking place around the world. “Latin America was depended on the US economy earlier, but it is now increasingly looking at Asia,” he said.

Gross Domestic Product (GDP) per head in the developing countries grew by almost 30 per cent from 2003 to 2007, according to the ‘Trade and Development Report-2007’ from the United Nations Conference on Trade and Development (UNCTAD). In contrast, growth per head in the developed world grew by 10 per cent.

“The global growth has been good. Companies outside the USA have contributed 45 per cent to the global cash count. The huge cash reserves of these non-US companies are fuelling this growth story,” Santicchia said.

Earlier, it was the companies from the west which were engaging in Mergers and Acquisitions (M&A). However, it is Chinese and Indian companies that have seen a spur in M&A activities, he added. — UNI

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Holding Co norms for banks soon, says RBI

Mumbai, September 13
The banking regulator, Reserve Bank, will soon finalise guidelines for banks creating holding companies for their subsidiary businesses like insurance and asset management, a top RBI official indicated here today.

"The responses have started coming...The moment the deadline is over, we would consolidate all responses and wherever necessary we would try to modify it," RBI deputy governor V Leeladhar told reporters on the sidelines of Ficci global banking conference.

He, however, did not disclose the timeline for the release of final guidelines in this regard.

"This is for the first time we are going to have a holding company in Indian financial sector. Starting this, we want it in a proper way taking into account all plus and negative points. It is not something which we are going to superimpose on banks," he clarified.

Top banks like ICICI and State Bank of India had recently expressed their intent to create holding companies for their subsidiary businesses of insurance and asset management.

The umbrella holding company could then raise capital for these businesses, which need funds to fuel their growth.

Close on heels of ICICI Bank proposing the model, Reserve Bank floated a discussion paper on the subject and sought feedback, the deadline for which is approaching.

The discussion paper expressed RBI reservations on the holding company structure proposed by banks citing the complexity of regulation. — PTI

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Reject RIL’s price formula: CPM
Tribune News Service

New Delhi, September 13
Even before the ink on the gas pricing from Reliance Industries’ (RIL) deep-water block in the Krishna-Godavari basin had dried, the CPM today asked the Manmohan Singh government to reject the recommendations of the Empowered Group of Ministers (EGoM) as it would adversely affect the power and fertiliser industries.

The EGoM, headed by external affairs minister Pranab Mukherjee, after weeks of deliberations had fixed the gas price to $4.20 dollar per mBtu against $4.33 per mBtu as proposed by the company.

Urging the government to reject the EGoM’s recommendation in “public interest,” the CPM said “such a high price would severely affect the viability of the consumer industries like power and fertiliser, which in turn would hit the common man, specially the farming community because of escalation in cost of power and fertiliser.”

The party’s Politburo in a statement said “RIL formulation for gas price agreed by EGoM is based on the linkage with international price of crude oil and not with the actual cost of producing gas in the country.”

The CPM said the gas price should be based on the actual cost of production and reasonable profit on the same. The pricing cannot be left to the so-called market forces based on import parity only to encourage super profit to the investors, who have been given contract under production sharing contract (PSC).

Pricing not to affect NTPC, RNRL cases

The government has said the approval of price for the natural gas, Reliance Industries (RIL) plans to produce from KG fields, would not affect the outcome of the legal cases NTPC and Anil Ambani firm Reliance Natural Resources Ltd (RNRL) have filed for fuel supplies against RIL.

“The decisions taken in (Wednesday’s) EGoM meeting will be without prejudice to the NTPC vs RIL and RNRL vs RIL court cases, which are at present subjudice,” an official press release said yesterday. — PTI

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Dollar near all-time low versus euro

Sydney, September 13
The dollar traded near an all-time low versus the euro on signs US economic growth is slowing, suggesting an interest-rate advantage over Europe will narrow.

The currency is heading for the longest losing streak since October 2004 as investors increase bets the Federal Reserve will reduce its target rate next week.

Faster wage growth signalled borrowing costs in Europe may rise, while a US government report today will probably show higher unemployment claims.

The dollar traded at 1.3892 per euro in Tokyo from 1.3904 late in New York yesterday, when it declined to a record low of 1.3914. The dollar bought 114.24 yen from 114.25 yen and was at 2.0288 versus the British pound from 2.0291.

Traders added the ECB will raise interest rates to curb rising prices as crude oil advanced to a record high yesterday. — Bloomberg

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UB’s open offer for Air Deccan
Tribune News Service

Mumbai, September 13
Vijay Mallya’s United Breweries Holdings has made an open offer for an additional 20 per cent stake in Air Deccan. The offers comes in the wake of mandatory requirements following UB’s acquisition of a 26 per cent stake in Air Deccan, recently, for Rs 550 crore.

The offer for additional 20 per cent stake in the low cost airline opened Wednesday and would close on October 1, United Breweries said.

The UB-group proposes to acquire over 2.71 crore fully paid up equity shares of the face value of Rs 10 each representing 20 per cent of the equity share capital of Air Deccan, pursuant SEBI regulations.

Around 1,61,680 shares of Air Deccan were allotted pursuant to the exercise of ESOPs on August 20 and August 27.

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Setback to Ranbaxy in lipitor case

New Delhi, September 13
In a partial setback for Ranbaxy Laboratories in its ongoing patent row with Pfizer over cholesterol lowering drug lipitor, a Canadian court has ruled that it infringed one of the US pharma major's patent.

Pfizer said in a statement that the Canadian Federal Court has ruled Ranbaxy's process for making their proposed generic atorvastatin product would infringe the multinational firm's patent covering a crystalline form of atorvastatin — the active ingredient of the drug.

The ruling will prevent Ranbaxy from launching its generic version of lipitor in Canada till the patent expires in July 2016.

Lupin wins patent case

Mumbai: Meanwhile, Lupin Ltd today said it has won a patent litigation in the US on blood pressure drug Altace against King Pharmaceuticals and Sanofi- Aventis, paving the way for the firm to launch the drug's generic version in the American market. — PTI

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SEZ: Nath seeks single window facilities
Tribune News Service

New Delhi, September 13
Union commerce and industry minister Kamal Nath asked the state governments to provide single window facilities and all other promised benefits so that SEZ schemes could fulfil its objectives and is implemented efficiently.

It is also important that SEZ developers do their work at a faster pace so that the space in SEZs is actually made available to the SEZ units, he added.

Highlighting the importance of the EOU scheme, that has played a very important role in last 25 years in creation of manufacturing facilities and generation of employment, Nath informed that pursuant to the discussions with EPCES in various open houses, a number of issues relating to EOUs have been resolved.

This includes implementation of fast track scheme, exemption from bank guarantee, extending the facility of cenvat credit, reduction of basic customs duty to 25 per cent on the DTA sale, simplified procedure of registration at the port.

However, a major issue relating to EOU i.e. removal of the sunset clause, is yet to be resolved and had been discussed with the Prime Minister’s economic advisory council, Nath informed.

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Nod to CIL arm’s expansion

New Delhi, September 13
The government today approved a proposal of Coal India Ltd’s subsidiary to expand production capacity of Nigahi open cast mines from 10 to 15 million tonnes per annum at an estimated cost of Rs 259.4 crore.

“The additional coal production will meet the requirement of third phase of Vindhayachal power plant of NTPC Ltd,” finance minister P Chidambaram told reporters after a meeting of the Cabinet Committee on Economic Affairs. — PTI

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Ipca acquires Australian drug firm

Mumbai, September 13
Drug firm Ipca Laboratories today said it has acquired 100 per cent stake in an Australia-based formulation company for an undisclosed amount.

In a communique to the Bombay Stock Exchange, the company said it has acquired a 100 per cent shareholding in a small formulation registration and distribution company in Australia.

The company has also bought rights to five formulation registered by the Australian company, it said.

Ipca said the undisclosed Australian firm also has a wholly-owned formulation registration and distribution company in New Zealand and presently holds rights for three formulations.

The acquisition would help Ipca in strengthening its existing formulations business in Australia and New Zealand, it added. — PTI

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Workshop on compilation of CPI-IW opens
Tribune News Service

Shimla, September 13
A three-day national seminar-cum-workshop on 'Compilation of Consumer Price Index numbers for Industrial Workers (CPI-IW)' commenced here today.

The workshop is being organised by Labour Bureau, Government of India, for improving the quality and reliability of price statistics in the country.

Inaugurating the workshop, economic adviser to the Himachal Pradesh government, Ashok Rajan, said prices were being utilised for estimating gross domestic product (GDP) of the country and state which had been recognised as important indicators to gauge the pace of developmental activities.

He said the workshop would brush up the concept and methodology being employed for compilation and lead to significant conclusions that would help in improving the quality credibility and usefulness of price statistics.

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BRIEFLY

Kotak Bank
Coimbatore, September 13
Kotak Mahindra Bank plans to increase its branches to 200 by June next year, a senior bank official said today. The bank, which is growing at the rate of 60-70 per cent annually and adding about 35,000 new customers monthly, wants to add 50,000-55,000 new clients per month by the end of this year, Kotak Mahindra Bank said. — PTI

Aricent
New Delhi, September 13
US-based Aricent has acquired DataLinx, a consulting firm in New York, for a value “in the range of $30 million”. Aricent has a global workforce of 7, 500 out of which 5,000 are in India. Aricent will absorb the 400 consultants and developers of DataLinx to develop solutions for telecom service providers, which will be mostly done in India along with other centres. — PTI

Fortis offer
Mumbai, September 13
Fortis Healthcare Ltd has made an open offer to buy an additional 20 per cent stake in Malar Hospitals following its decision to acquire a majority stake in the company. Fortis said the offer is for acquisition of up to 37.18 lakh equity shares of Rs 10 each of Malar Hospitals from its existing shareholders. The shares would be bought at a price of Rs 30 apeice. — PTI

Union Bank
Beijing, September 13
The Union Bank of India (UBI) is opening a full-fledged branch in Hong Kong and plans to have two more representative offices in mainland China. The UBI has received approval from the Hong Kong monetary authority to open a full-fledged branch in Hong Kong. It will have banking operations, including deposit acceptance, lending to trade and corporate, treasury operations and overseas business. — PTI

Powergrid IPO
Mumbai, September 13
The IPO of PowerGrid Corporation of India Ltd (PGCIL) got oversubscribed by 64.23 times by the end of trading hours today, the last date of its issue, according to provisional figures available from the NSE. The IPO has received bids for 36.86 billion shares, including bids for 96.23 crore shares at cut off price. — TNS

Ford India
Chennai, September 13
Ford India has achieved an important milestone as it launched its exports of Ford Fiesta to South Africa from its Chennai plant. The company, which had been exporting vehicle assembly kits to South Africa, clinched the deal to export its first completely built up vehicles. — UNI

Liberty Group
Karnal, September 13
The Liberty Group, with the aim of educating and motivating workers for their development and growth, have conducted a six-month training programme, costing Rs10 lakh. For the purpose, the management has hired the services of N. P. Amoli, director, Foundation for Attitude & Career Empowerment, Chandigarh. Adesh Gupta, CEO, Liberty Shoes Ltd, said the programme focused on attitude, team building, discipline, commitment, responsibility, productivity and emotional empowerment.
— TNS

Idea alliance
New Delhi, September 13
Idea Cellular has joined an alliance of five GSM mobile operators in the Asia-Pacific region to tap each others’ users by offering seamless roaming connectivity. Idea has joined the Asia mobility initiative alliance. — PTI

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