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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Sensex ends year on a sour note
Mumbai, December 31
Stock markets drew curtains to a highly forgettable 2008 during which investors traversed from delight to distress with the benchmark Sensex shedding Rs 40 trillion. On the last day of the trade in the year, the bellwether index after a buoyant start ended lower by 68.85 points or 0.71 per cent from its previous close on emergence of selling after rating agency Standard & Poor's downgraded some of the Sensex component corporate.

ICICI Bank, LIC Housing Fin cut home loan rates
Mumbai, December 31
ICICI Bank and LIC today announced sharp cuts in housing loan rates. According to a statement issued here, ICICI Bank today said it was slashing its floating home loan rate and benchmark lending rate by 50 basis points each with immediate effect.

ATF prices cut by 6.8 pc
New Delhi, December 31
Owing to decline in crude oil prices globally, the state-owned oil companies passed on the benefit to air travelers by cutting aviation turbine fuel (ATF) prices by 6.8 per cent.



EARLIER STORIES



A man sits on a bench in front of a sign advertising a sale in New York
A man sits on a bench in front of a sign advertising a sale in New York on Wednesday. A report released on Tuesday announced that the US consumer confidence fell to an all-time low in December. — AFP

A Chinese stock investor checks his share prices at a security firm in Fuzhou, southeast China's Fujian province
A Chinese stock investor checks his share prices at a security firm in Fuzhou, southeast China's Fujian province on Wednesday. Chinese shares closed slightly lower to end the year down 65.5 per cent — the steepest annual loss in the market's 18-year history, as the massive plunge has made China one of the worst performing major stock markets this year as the global financial crisis continues to wreak havoc. — AFP

Mobile tariffs may fall in 2009
New Delhi, December 31
The telecom regulator, Telecom Regulatory Authority of India (TRAI), today issued a consultation paper seeking views from telecom operators and other stakeholders on the “Review of Interconnect Usage Charges (IUC)” which could lead to a drop in call charges.

Meltdown hits auto ancillary industry
Chennai, December 31
Threats of layoff and loss of jobs in the coming year is dampening the spirits of workers in the automobile ancillary industry here, as the global recession is slowly making its impact felt on the automobile industry.

Maruti to disclose fuel efficiency info
New Delhi, December 31
Country's largest carmaker Maruti Suzuki today said it would disclose fuel efficiency information of its entire range of vehicles, a norm that Society of Indian Automobile Manufacturers envisaged to bring into effect from January and April.

ONGC acquires UK’s Imperial Energy
New Delhi, December 31
Oil and Natural Gas Corp (ONGC) has taken control of Imperial Energy Plc for £1.3 billion ($1.9 billion) after an overwhelming 96.8 per cent of London-listed firm's total shareholders accepted its takeover offer.

Bajaj brothers reach pact
New Delhi, December 31
Marking the settlement of a six- year-long family empire division dispute, warring Bajaj brothers, Rahul and Shishir today withdrew their petitions from the Company Law Board.

Air passenger traffic slips 10 pc in Nov
New Delhi, December 31
Asia-Pacific carriers saw passenger traffic shrink by 9.7 per cent and freight traffic fall by 16.9 per cent in November due to lower consumer confidence, according to the International Air Transport Association.

Satyam promoters gradually reduce stake
Mumbai, December 31
The promoters of Satyam Computers, currently facing the wrath of shareholders over corporate governance issues, used to own as much as 25.60 per cent equity in the company till few years ago before reducing their stake in phases.

TCS buys Citi Global Services
Mumbai, December 31
IT major TCS today announced it has completed the acquisition of Citigroup Global Services, the India-based captive business process outsourcing company, for $512 million.





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Sensex ends year on a sour note

Mumbai, December 31
Stock markets drew curtains to a highly forgettable 2008 during which investors traversed from delight to distress with the benchmark Sensex shedding Rs 40 trillion.

On the last day of the trade in the year, the bellwether index after a buoyant start ended lower by 68.85 points or 0.71 per cent from its previous close on emergence of selling after rating agency Standard & Poor's downgraded some of the Sensex component corporate.

The 30-share Sensex closed the year lower at 9,647.31, which is less than half of the 20,873.33 points it cloaked on close of January 8.

From over 20,000 points on December 31 last year, the index has plummeted by over 52 per cent at 9,647.31 to close 2008.

Sensex's record high of 21,206.77 points Sensex was posted on January 10 during the intra-day.

In the heat of the global economic crisis, Indian stocks melted with all the Sensex component scrips, barring Hindustan Unilever, suffering massive losses.

While Jaiprakash Associates was the worst loser in terms of share prices, Reliance Industries with Rs 2.25 lakh crore loss in market capitalisation led the total M-cap loss of Rs 40 trillion.

Among the Sensex companies, the major losers which saw their share prices dwindling by over 70 per cent in 2008 are Tata Motors (down 77 per cent), Tata Steel (76.8 per cent), Sterlite Industries ( 74.80 per cent) and Hindalco (73.5 per cent).

In terms of fall in market capitalisation, biggest private sector lender ICICI Bank was the next to suffer the biggest drop with its marketcap shrinking by over Rs 87,200 crore from the past year.

The broader 50-share Nifty of the National Stock Exchange also fell today by 20.35 points to end at 2,959.15.

The small and mid-cap stocks attracted good investment support and closed in the green.

Brokers said institutional investors were today seen picking up selective stocks in a bid to shore up the net asset value of their units at the year-end.

According to provisional data, Foreign Institutional Investors (FII) bought shares worth Rs 214.95 crore in equity and Domestic Institutional Investors were net buyers to the tune of Rs 375.65 crore on December 30.

Despite encouraging global cues, domestic investors seem unwilling to take risk and booked profits at current levels ahead of the third quarter corporate earnings scheduled to be announced in the second week of January.

However Satyam Computer which is in the midst of controversy after its botched up deal to acquire Maytas for $1.6 billion, extended its gains to fourth straight day as it rose 5.95 per cent amid speculations of institutional investors taking over the company.

Bank shares suffered a sharp setback on speculation that the anticipated rate cut could be smaller than expected.

Private sector lending majors ICICI Bank and HDFC Bank were prominent sectoral losers at over two per cent.

Besides Satyam, Ranbaxy rose by 4.43 per cent, Tata Motors 1.89 per cent, Hindalco by 1.87 per cent, M&M by 1.63 per cent Tata Power 1.20 per cent. — PTI

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ICICI Bank, LIC Housing Fin cut home loan rates
Tribune News Service

Mumbai, December 31
ICICI Bank and LIC today announced sharp cuts in housing loan rates.

According to a statement issued here, ICICI Bank today said it was slashing its floating home loan rate and benchmark lending rate by 50 basis points each with immediate effect.

The bank's Floating Reference Rate for home loan has been cut by 0.5 per cent to 13.75 per cent from 14.25 per cent with effect from December 31, it said in a statement. All existing home loan and auto loan customers would benefit, the bank said.

ICICI Bank also added that it was reducing its benchmark lending rate by half a percentage points to 16.75 per cent. With the reduction, the benchmark Advance Rate (I-BAR) will be 16.75 per cent against 17.25 per cent at present, the statement said.

Meanwhile, LIC Housing Finance today said it was reducing interest rates on existing home loans by 75 basis points with effect from Thursday. The company said it would accordingly reduce monthly instalments falling due on January 1, 2009 and payable on February 1, 2009.

LIC Housing Finance has already reduced interest rates from December 17 for new customers. For loans up to Rs 20 lakh and up to five years, the lending rates stand at 9.25 per cent. For loans up to Rs 20 lakh and above five years, LIC Housing Finance has reduced lending rates to 9.75 per cent.

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ATF prices cut by 6.8 pc
Tribune News Service

New Delhi, December 31
Owing to decline in crude oil prices globally, the state-owned oil companies passed on the benefit to air travelers by cutting aviation turbine fuel (ATF) prices by 6.8 per cent.

The oil refining companies have been slashing ATF prices ever since the crude has started downward journey, thus making this eighth straight reduction since September.

Jet fuel rate in Delhi has been cut by Rs 2,234.07 to Rs 30,457.21 per kilolitre effective midnight tonight against Rs 32,691 per kl sold presently, say Indian Oil executives.

ATF prices are now at July 2005 levels and have already triggered a spate of reduction in air fares by some airlines. This is the eighth straight cut in jet fuel prices since the rates soared to an all-time high of Rs 71,028.26 per kl (in Delhi) in August.

In Mumbai, ATF will cost Rs 31,378.78 per kl from tomorrow against Rs 33,719.47 per kl at present.

Since last month, Indian Oil, Bharat Petroleum and Hindustan Petroleum revised jet fuel prices twice a month — on the 1st and 16th — based on the average imported price in the preceding fortnight.

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Mobile tariffs may fall in 2009
Tribune News Service

New Delhi, December 31
The telecom regulator, Telecom Regulatory Authority of India (TRAI), today issued a consultation paper seeking views from telecom operators and other stakeholders on the “Review of Interconnect Usage Charges (IUC)” which could lead to a drop in call charges.

The paper explains elaborately the related information and solicits views from a wide range of stakeholders on the important issues of various charges payable by operators to one another for carriage and termination of domestic and international calls.

According to the present system, an operator in whose network a call originates pays termination charges to another operator where the call terminates.

This means that if one operator’s subscriber calls a subscriber of another operator then the first operator pays termination charges to the other.

IUC are payable for the use of network by one telecom operator to another either for origination, termination or even carriage of call.

At present, termination charges are 30 paise per minute, which the TRAI is seeking to reduce and which may lead to a reduction in call charges.

Issuing the consultation paper, the TRAI said a number of factors had gone into fixing the IUC charges that are currently prevailing.

“It would be now necessary to consider the effects on IUC of increasing competition, growth of subscribers, reduction in tariff, total traffic and its dispersion and also the cost of providing services,” TRAI said.

An official of the regulator said a number of policy and regulatory changes have also happened since the last review of IUC that could have a bearing on one or more of these charges.

The last review of IUC took place in 2006 and since then the telecom scenario in India has changed dramatically.

The issues for consultation would be the review of origination, termination, carriage and transit charges; what should be the method for calculation of mobile termination charge; should fixed and mobile termination cost calculations use the same method; should mobile termination charge be same for all existing and new service providers and for fixed and mobile services and should the termination charge on international incoming calls be fixed, besides others.

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Meltdown hits auto ancillary industry
N Ravikumar
Tribune News Service

Chennai, December 31
Threats of layoff and loss of jobs in the coming year is dampening the spirits of workers in the automobile ancillary industry here, as the global recession is slowly making its impact felt on the automobile industry.

Hundreds of auto ancillary units, located in the industrial estates of the city, have little orders for the coming weeks, while the manufactured goods are not moving out, since the auto majors for whom the ancillaries are being supplied, are reducing their production.

Companies, including the TVS, which supplied major assemblies to auto majors like Hyundai Motors had already announced three-day week and the workers fear a “layoff” situation soon.

The auto ancillary industry is employment intensive, providing jobs to more than five lakh people in the city and most of them are functioning with a single shift, instead of three shifts.

Usually, the payments are done within 30 to 40 days. But, now the payments are pending for more than 70 days, making it difficult for the companies to pay the credits, received to buy raw materials.

Another problem is the reduced price of steel. The auto ancillaries bought steel when the price was high. But, the customers are demanding low prices for finished goods, citing the reduction in steel prices. The auto majors had asked the ancillary units to hold the already manufactured goods and the workers fear the worst in the coming year.

The auto ancillary industry, manufacturing small auto components or machine tools, used to produce about 25,000 tonne of components every month. Now, this has come down to 7,500 tonne in November.

Besides workers in the auto ancillary units, trainees in the automobile sector face loss of jobs due to the economic slowdown. Even, Hyundai Motors is planning to “discontinue” 1,200 apprentice trainees at their manufacturing units in the city.

Out of the total 3,000 trainees, only 1,700 youths, being trained under a state government programme would be retained, since the company wants to cut down the number of workers due to 25 per cent downslide in exports.

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Maruti to disclose fuel efficiency info

New Delhi, December 31
Country's largest carmaker Maruti Suzuki today said it would disclose fuel efficiency information of its entire range of vehicles, a norm that Society of Indian Automobile Manufacturers envisaged to bring into effect from January and April.

"The voluntary disclosure of fuel economy is a proactive measure undertaken by the company in customer interest. The fuel economy figures obtained in tests by premier automobile research institutions emphasize Maruti Suzuki's overall leadership in making highly fuel efficient cars," Maruti Suzuki India (MSI) managing director & CEO Shinzo Nakanishi said in a statement.

The three government approved agencies — ARAI (Automotive Research Association of India), VRDE (Vehicles Research and Development Establishment) and ICAT (International Centre of Automotive Technology) — have tested the entire range of 12 models of the company.

MSI's first car — M800 — has been certified a mileage of 16.1 km per litre, while the highest selling small car model Alto achieved a distance of 18.1 km a litre, the statement said.

The company's latest hatchback A-Star crossed 19.6 km in a litre of petrol, it added.

The other models being tested include Zen Estilo (17.3 km), Wagon R (17 km), Swift Diesel (21 km), Swift Petrol (15.9 km), DZiRE Petrol (15.9 km) DZiRE Diesel (21 km) and SX4 (15 km).

"The Fuel Consumption Consumer Information labels, displayed alongside the car models in the showrooms, would prominently show the test result of fuel efficiency obtained under standard test conditions," MSI said. — PTI

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ONGC acquires UK’s Imperial Energy

New Delhi, December 31
Oil and Natural Gas Corp (ONGC) has taken control of Imperial Energy Plc for £1.3 billion ($1.9 billion) after an overwhelming 96.8 per cent of London-listed firm's total shareholders accepted its takeover offer.

The deadline for the state-owned firm's 12.50 pounds per share offer closed yesterday and 99,241,110 or 96.8 per cent of the shares were tendered, ONGC Videsh Ltd informed the London Stock Exchange.

ONGC chairman R.S. Sharma said the company owed the acquisition to the government support, which has seen OVL in the past seven years increase its number of projects to 39 in 17 countries, from just a single project in Vietnam.

ONGC Videsh Ltd, the overseas arm of the state explorer, needed 90 per cent shareholders to approve its deal, which will result in delisting of Imperial. Imperial will be delisted from LSE after it "squeezes out" the remaining untendered shares by posting them cheques of the offer amount and telling the shareholders that these untendered shares were no longer valid.

Imperial, the Leeds-based firm that has oil producing blocks in Tomsk region of western Siberia in Russia and Kastanai in north-central Kazakhstan, would be the biggest overseas ever acquisition by OVL.

It had paid $1.7 billion to buy a 20 per cent stake in Exxon Mobil Corp's Sakhalin-I field in Russia and $785 million for a stake in the Greater Nile project in Sudan, both in 2003.

OVL will fund the transaction through a combination of loans from the parent company worth $1 billion-equivalent rupee loan. — PTI

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Bajaj brothers reach pact

New Delhi, December 31
Marking the settlement of a six- year-long family empire division dispute, warring Bajaj brothers, Rahul and Shishir today withdrew their petitions from the Company Law Board.

Counsels from both sides informed Board chairman S Balasubramanian that the family dispute has been amicably settled and the share transactions are almost over except for few minor documents, which are yet to be signed.

The Bajaj family feud first hit headlines in 2002, with Shishir alleging his elder brother Rahul of trying to oust him from the chairmanship of Bajaj Sevashram, one of the group holding companies.

This culminated with Shishir group approaching the Company Law Board seeking redressal in March 2003. The board had suggested the warring sides to reach an amicable solution.

Yesterday, Rahul Bajaj bought 29 per cent stake in Bajaj Hindusthan for Rs 265.67 crore through open market transactions as part of steps to the settlement.

Post transfer of shares, Shishir would have 32.47 per cent stake in Bajaj Hindusthan.

On his part Shishir is expected to give up his holding in Bajaj Auto Ltd. — PTI

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Air passenger traffic slips 10 pc in Nov

New Delhi, December 31
Asia-Pacific carriers saw passenger traffic shrink by 9.7 per cent and freight traffic fall by 16.9 per cent in November due to lower consumer confidence, according to the International Air Transport Association.

Airlines in the Asia-Pacific region face the most difficult operating environment with the steep drop in passenger traffic in November, after a 6.1 per cent contraction in October, the Association said in its analysis on passenger and freight traffic across the globe. "While Chinese domestic traffic rebounded after the Olympics, travel to and from international markets continue to decline, reflecting the weakness in both global trade and consumer confidence," IATA said.

The carriers in the Asia-Pacific region, which represent about 45 per cent of the global freight capacity, saw the largest decline than any other geographical area in terms of freight traffic.

"As freight accounts for a larger percentage of revenues for the Asia-Pacific carriers, fourth quarter profits for the region's carriers will be disproportionately (and negatively) impacted by the downturn in the global air freight market," IATA said. — PTI

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Satyam promoters gradually reduce stake

Mumbai, December 31
The promoters of Satyam Computers, currently facing the wrath of shareholders over corporate governance issues, used to own as much as 25.60 per cent equity in the company till few years ago before reducing their stake in phases.

A look at the shareholding pattern of the company over the years reveal that the promoters held 25.60 per cent equity as of March 2001 but reduced their stake every year thereafter.

By March 2002, their stake got reduced to 22.26 per cent and further down to 20.74 per cent as of March 2003.

As per the shareholding pattern, the promoters held 17.35 per cent stake as of March 2004 which went down to 15.67 per cent in March 2005 and 14.02 per cent in March 2006.

The biggest reduction came about in the subsequent year. For, as of March 2007, the promoters' stake went down to single digits at 8.79 per cent.

As of September 2008, the promoters held 8.61 per cent stake which is the latest figure available. The company will file the shareholding pattern for December quarter in the month of January.

Interestingly, foreign institutional investors which used to hold as high as 56 per cent equity in the company as of March 2005 currently hold 46.86 per cent. — PTI

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TCS buys Citi Global Services

Mumbai, December 31
IT major TCS today announced it has completed the acquisition of Citigroup Global Services, the India-based captive business process outsourcing company, for $512 million.

Besides, as per an agreement reached between the two companies, TCS will provide process outsourcing services to Citi and its affiliates worth $2.5 billion over a period of 9.5 years. — PTI

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BRIEFLY

CPI-IW static
Shimla:
All India consumer price index number for industrial workers (CPI-IW) for November remained stationary at 148. In November, the index recorded the maximum increase of 5 points each in Quilon and Madurai centres, 3 each in Mysore, Ernakulam, Bhilwara and Coonoor centres, 2 in 13 centres and 1 point each in 14 centres, an official release of the Ministry of Labour and Employment Bureau said. — PTI

Infosys awarded
Bangalore:
Infosys Technologies has been recognised amongst the top 20 global companies to be listed in the Most Admired Knowledge Enterprises (MAKE) study, 2008. Infosys has won this award for organisational learning for its effort over the last decade to provide an integrated knowledge management solution to meet the knowledge needs of the organisation through content sharing, collaboration and professional networking. — TNS

Motorola to cut 400 more jobs
New York:
Mobile phone maker Motorola will cut 400 more jobs and expects to incur charges worth $189 million related to cost reduction measures in the fourth quarter. Earlier in October, the firm had said it would reduce the workforce by about 1,500 employees, mainly in the Mobile Devices segment. The move would result in pre-tax charges of $104 million in the fourth quarter. — PTI

Northern Railway GM
New Delhi:
Vivek Sahai, an IRTS officer of 1973 batch, has taken over as general manager of Northern Railway, succeeding Shri Prakash, who had earlier taken over the post of Member, Traffic Railway Board. Prior to his appointment as general manager, Sahai was general manager, North-Central Railway, Allahabad. — TNS

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