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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

OilMin favours market-based fuel pricing
New Delhi, May 20
Petrol prices may be raised by about Rs 2 per litre
and diesel rates cut by Rs 0.30 a litre if a proposal
to free auto fuel prices from state control is
approved by the incoming Cabinet.

A customer exchanges money at a currency exchange centre in Dubai on Wednesday.
A customer exchanges money at a currency exchange centre in Dubai on Wednesday. The United Arab Emirates is the second-largest Arab economy. It has withdrawn from Gulf Arab plans for monetary union, possibly paralysing a project that has faced hurdles for almost a decade. — Reuters photo

NCDEX, MCX to launch wheat futures today
New Delhi, May 20
Futures trading in wheat will resume tomorrow on leading commodity exchanges NCDEX and MCX, while it will start on NMCE next week.

Yahoo!, Google still
hiring in India

New York, May 20
Global majors like Microsoft, Yahoo! and Google may have decided to trim their workforce worldwide to cope with the economic turmoil, but these entities do have openings in India.

Apple warns of electric shocks from iPod, iPhone
New York, May 20
Technology giant Apple has warned of possible small and quick electrical shocks from the headphones while using iPods and iPhones.

Grupo Mexico rivals Vedanta's bid for Asarco
New York, May 20
Competing with Vedanta Resources, Grupo Mexico has come up with a $1.6 billion reorganisation programme for regaining control of its bankrupt firm Asarco. Americas Mining Corporation (AMC), the Grupo Mexico arm, which owns Asarco, presented the plan of reorganisation for the firm last week at a bankruptcy court in Texas.

BSNL to appoint consultants for
overseas foray

New Delhi, May 20
Country’s largest public sector telecom company, BSNL is likely to appoint a panel of consultants soon to guide it through various overseas business acquisition plans.


A shopper picks up a bag at a luggage shop in Tokyo on Wednesday.
A shopper picks up a bag at a luggage shop in Tokyo on Wednesday. Japanese economy shrank by 4 per cent in the first three months of 2009, as the country continues to experience the jitters of the global financial turmoil. The world's largest economy has contracted for the fourth straight quarter amid plunging profits and declining corporate earnings. — AFP photo

EARLIER STORIES



Air France KLM chief executive officer Pierre-Henri Gourgeon ( C), Delta Air Lines CEO Richard H. Anderson (L), and KLM president Peter F. Hartman are seen during a joint press conference on Wednesday.
Air France KLM chief executive officer Pierre-Henri Gourgeon ( C), Delta Air Lines CEO Richard H. Anderson (L), and KLM president Peter F. Hartman are seen during a joint press conference on Wednesday. Delta Air Lines Inc., Air France and KLM signed a deal to combine two separate joint venture agreements into one to create a more integrated trans-Atlantic powerhouse that they said will generate $12 billion in annual revenue. — AP/PTI photo

Allocate 1.5 pc of GDP to stimulate demand: Assocham
New Delhi, May 20
Industry body Assocham today said the government should provide another stimulus package to the economy, allocating Rs 72,000 crore or 1.5 per cent of the GDP for stimulating demand through various fiscal measures.

Gold demand down 83% in Q1
New Delhi, May 20
Gold demand in India, the world's largest consumer, declined by 83 per cent in the first quarter of 2009 due to depreciating rupee and gloomy economic conditions, the World Gold Council has said.

Rupee surges by 31 paise
Mumbai, May 20
The Indian rupee surged further by 31 paise to 47.47/48 against the dollar today on fairly good sales of the US currency by exporters in the face of sustained capital inflows into equity and despite the downward trend in the equity market.

Marks and Spencer chairman Sir Stuart Rose speaks to the media outside Marks and Spencer's flagship store in London during the launch of their "penny sale", on Wednesday. Marks and Spencer chairman Sir Stuart Rose speaks to the media outside Marks and Spencer's flagship store in London during the launch of their "penny sale", on Wednesday. British clothes-to-food retailer Marks & Spencer launched a "penny bazaar" on Wednesday in celebration of its 125th birthday. — AFP photo

Carmakers eye rural market
Chandigarh, May 20
The booming rural economy is now attracting various carmakers. Hit by the slump in sales in the urban areas, most car manufacturers are now taking the country roads to jack up sales.

 





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OilMin favours market-based fuel pricing

New Delhi, May 20
Petrol prices may be raised by about Rs 2 per litre and diesel rates cut by Rs 0.30 a litre if a proposal to free auto fuel prices from state control is approved by the incoming Cabinet.

The Oil Ministry has prepared a draft Cabinet note on freeing petrol and diesel prices from government control, after which they will be linked to international movements.

"The draft note is ready. It will be put to the new Petroleum Minister when it takes over next week and if he approves, it will go to the Cabinet for consideration," a top Petroleum Ministry official said.

With international crude oil prices hovering between $50 and $60 a barrel, ministry feels it is the right time to free petrol and diesel prices from government control.

According to the proposal, state-run Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum will be given freedom to fix rates of petrol and diesel till the time crude oil stays below $75 a barrel.

If it breaches this mark, the government will step in to protect the interests of consumers, he said.

"At current crude rates, oil companies incur a loss on petrol sales but make marginal profit on diesel. So, if pricing is freed, petrol price will go up by Rs 1.99 a litre while diesel rates will come down by Rs 0.32 a litre," he said.

With price deregulation, the three fuel retailers were estimated to lose Rs 20,600 crore in the fuel sales this fiscal, the official said.

Reliance had shut all of its 1,432 petrol pumps in 2007 as it could not compete with subsidised rates of state-run retailers.

Last month it symbolically reopened a couple of outlets but is waiting for price deregulation before it begins full fledged retailing. — PTI

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NCDEX, MCX to launch wheat futures today

New Delhi, May 20
Futures trading in wheat will resume tomorrow on leading commodity exchanges NCDEX and MCX, while it will start on NMCE next week.

"We will launch wheat futures contracts tomorrow. June to November 2009 contracts will be available for trading," a spokesperson of leading agri-commodity bourse NCDEX told PTI.

MCX chief executive officer Joseph Massey said the exchange would commence trading in wheat futures from May 21.

However, NMCE chief operating officer Anil Mishra said the exchange would launch futures trading in wheat from next week as it is still working with stakeholders.

"We will launch wheat contracts next week. We will not want to rush. We still need to discuss with our stakeholders," Mishra said.

The commodity market regulator Forward Markets Commission (FMC) today approved the wheat futures contracts submitted by all the three national exchanges — NCDEX, MCX and NMCE. The FMC lifted the ban on May 15 and it took five days to vet the contracts.

According to FMC director Anupam Mishra, "A member can trade up to 30,000 tonnes of wheat on the commodity exchange, while a client can have exposure to up to 6,000 tonnes."

He further said a month before the expiry of contract, both member and client can trade up to 10,000 tonnes and 2,000 tonnes respectively. The upper circuit has been fixed at 4 per cent, he added. — PTI

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Yahoo!, Google still hiring in India

New York, May 20
Global majors like Microsoft, Yahoo! and Google may have decided to trim their workforce worldwide to cope with the economic turmoil, but these entities do have openings in India.

Interestingly, the companies are cutting jobs in India too, even as they have hiring plans in the country.

For instance, software giant Microsoft recently said it would create employment opportunities in tune with the growth of the Indian economy.

The announcement came from its CEO Steve Ballmer amid the firm proceeding with 5,000 job cuts worldwide, including 55 employees in India. The workforce reduction in the country would be completed in the next 18 months.

Few months ago, search engine giant Google unveiled plans of trimming as many as 200 jobs in sales and marketing operations worldwide.

Nonetheless, the firm is hiring for about 20 positions in engineering operations, finance and software engineering, among others.

Internet entity Yahoo! too would be slashing its employee strength as part of its efforts to bring down costs. At the same time, the company has over 100 vacancies in India, according to its website.

Steve Ballmer noted that Microsoft would continue to hire and create employment opportunities in line with the recovery and growth of the Indian economy.

"We had said that we would lay off about 5,000 people. We are filling other jobs. We are mostly through that process globally and there is still some work to do." — PTI

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Apple warns of electric shocks from iPod, iPhone

New York, May 20
Technology giant Apple has warned of possible small and quick electrical shocks from the headphones while using iPods and iPhones.

According to the company, people could experience the electrical shock when they are using headphones to listen to these devices in areas where the air is very dry.

"It's possible to receive a small and quick electrical (static) shock from your ear buds while listening to iPod or iPhone," Apple said in a statement posted on website. The possible static shock could be experienced in iPod, iPhone and their accessories.

"When using headphones in areas where the air is very dry, it is easy to build up static electricity and possible for your ear to receive a small electrostatic discharge from the headphones. Receiving a static shock from a pair of ear buds does not necessarily indicate an issue with the iPod, iPhone, or ear buds," the statement noted. iPod is a high-end music player while iPhone is a touch screen phone with advanced features.

Apple pointed out that this condition is not limited to Apple hardware and static can potentially build up on almost any hardware and could be discharged using any brand of ear buds.

Apple said the condition is similar to dragging one's feet across a carpet and receiving a static shock by touching a door knob.

Instead of the static charge building up on one's body, the charge accumulates on the devices that the ear buds are connected to.

Likewise, the firm pointed out that instead of the static build up discharging through your finger when you touch a door knob, it discharges through the ear buds. — PTI

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Grupo Mexico rivals Vedanta's bid for Asarco

New York, May 20
Competing with Vedanta Resources, Grupo Mexico has come up with a $1.6 billion reorganisation programme for regaining control of its bankrupt firm Asarco. Americas Mining Corporation (AMC), the Grupo Mexico arm, which owns Asarco, presented the plan of reorganisation for the firm last week at a bankruptcy court in Texas.

In its reorganisation plan AMC has offered $1.6 billion with a cash component of $1.3 billion, Grupo Mexico said in a statement.

Grupo Mexico claimed that its bid is superior to the $1.7-billion offer of Vedanta Group firm Sterlite Industries whose bid had a cash component of $1.1 billion. AMC said the plan has been endorsed by the creditors of Asarco.

After creditors of the firm give their approval to one of the competing plans to acquire Asarco, the bankruptcy court has to take the final call and award the controlling rights of the firm.

Sterlite, the Indian subsidiary of London-listed Vedanta Resources, has been negotiating the Asarco deal since last year.

It had initially offered $2.6 billion for buying the assets of the ailing company, which has been bankrupt for over four years now. — PTI

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BSNL to appoint consultants for overseas foray
Tribune News Service

New Delhi, May 20
Country’s largest public sector telecom company, BSNL is likely to appoint a panel of consultants soon to guide it through various overseas business acquisition plans.

BSNL, with a view to establishing itself as a global player in the telecom sector is aiming at expanding its area of operations.

Reports suggested that in its bid to establish its footprint abroad, the company is looking for consultants for mergers and acquisitions, strategic partnerships, acquiring telecom licences outside India.

The state-run firm, which so far concentrated only on the Indian market, has decided to expand overseas.

This especially, as the State-run company has a cash surplus of over $10 billion and would use part of these resources for its overseas forays.

So far of the two state-run telecos, MTNL has been the only one which has been bidding for licences abroad.

In its bid to establish itself as one of the credible telco of the country, BSNL has already been moving on its overseas expansion plans.

It has already set up a separate international business division to explore telecom opportunities abroad and the appointing of consultants would be a step further.

The PSU, he said, has already received in-principle board approval to enter the global market and would be bidding for new licences for fixed line and basic mobile services Tunisia. The licences, initially for 15 years, include national and international long-distance services.

Like some of the other Indian telecom operators, BSNL is also trying to look at Africa for expansion. Last year, Bharti Airtel and Reliance Communications entered into negotiations with the South Africa-based telecom giant MTN to expand in the African continent, but talks failed.

Earlier this year, Tata Communications announced plans of expanding operations in Africa through acquisitions, joint ventures, and new projects, and in January increased its stake to 56 per cent in South African fixed-line operator Neotel.

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Allocate 1.5 pc of GDP to stimulate demand: Assocham

New Delhi, May 20
Industry body Assocham today said the government should provide another stimulus package to the economy, allocating Rs 72,000 crore or 1.5 per cent of the GDP for stimulating demand through various fiscal measures.

"Manmohan Singh-led government's top priority should be to initially earmark 1.5 per cent of the national GDP in stimulating demand as part of its third stimulus package to the nation in 2009-10," Assocham said.

Earmarking 1.5 per cent of the GDP would mean Rs 72,000 crore burden on the government as it would have to slash personal income tax, corporate tax, excise and customs duties and other levies, the chamber said.

The government had announced two stimulus packages in the last fiscal to help the Indian economy impacted by global economic crisis.

The chamber further said the prevailing industrial reality is that there is production but little buyers. "There is no purchasing power with them (buyers)," it said.

Demand stimulation can be possible by making adjustments in the existing direct and indirect tax structure and increasing purchasing power of consumers, Assocham president Sajjan Jindal said. India's GDP is estimated at over $1 trillion. — PTI

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Gold demand down 83% in Q1

New Delhi, May 20
Gold demand in India, the world's largest consumer, declined by 83 per cent in the first quarter of 2009 due to depreciating rupee and gloomy economic conditions, the World Gold Council has said.

Gold demand fell by 83 per cent to 17.7 tonnes during January-March 2009 compared to the year-ago period.

"Total demand in India, traditionally the world’s largest gold market, declined significantly under pressure from record rupee prices and a major deterioration in the domestic economy," World Gold Council (WGC) said in a statement while releasing the 'Q1 2009 Gold Demand Trends' report.

However, total demand for gold worldwide rose 38 per cent to 1,016 tonnes valued at $29.7 billion in the first quarter of 2009.

The figures in the report compiled by metal consultancy GFMS for WGC showed a record investment in exchange-traded funds (ETFs) across the globe with demand soaring 540 per cent to 465 tonnes valued at $13.6 billion.

It said investment demand for gold, which includes ETFs and bars and coins, was the major source of growth in the quarter, reaching 596 tonnes, up 248 per cent.

"Fears of future inflation and ongoing financial uncertainty saw investors continue to flock to gold in the first quarter of 2009, seeking out its proven wealth preservation qualities," WGC said.

The report also said impact of recession on consumer discretionary spending continued to take its toll on both jewellery and industrial demand.

Gold jewellery demand was down by 24 per cent, with most countries suffering a decline as consumers responded to the high and volatile gold prices, which reached record levels in some countries, compounded by difficult economic conditions.

However, China bucked the trend by recording a positive growth of three per cent in jewellery demand, WGC said.

"The shift in the balance of demand that we have witnessed this quarter, where the gold price has risen despite a severe drop in jewellery and industrial demand, perfectly demonstrates the robust nature of gold's fundamental supply and demand dynamics," World Gold Council CEO Aram Shishmanian said.

Jewellery demand is unlikely to return to more positive territory in current market conditions. But the demand will grow as consumer confidence and purchasing power returns, he added. — PTI

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Rupee surges by 31 paise

Mumbai, May 20
The Indian rupee surged further by 31 paise to 47.47/48 against the dollar today on fairly good sales of the US currency by exporters in the face of sustained capital inflows into equity and despite the downward trend in the equity market.

Rupee sentiment was also bolstered by the encouraging growth outlook after the
Congress-led UPA's decisive victory in the general elections, raising hopes of a
stable government.

The domestic currency has gained 4.62 per cent in the four-day winning streak on consistent portfolio inflows.

Foreign institutional investors have bought shares worth $2,083 million so far in the current month.

In active trade at Interbank Foreign Exchange (forex) market, the rupee hovered in a range of 47.46 and 47.95 after resuming weak at 47.90/91 a dollar from its previous close of 47.78/80 a dollar. — PTI

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Carmakers eye rural market
Ruchika M. Khanna
Tribune News Service

Chandigarh, May 20
The booming rural economy is now attracting various carmakers. Hit by the slump in sales in the urban areas, most car manufacturers are now taking the country roads to jack up sales.

Though the auto sales have picked up during April (after a period of de-growth), most car manufacturers now say that the real growth can be achieved only by wooing the rural customers.

While sales improved by 15 per cent for Maruti Suzuki in April 2009, Hyundai Motors saw its sales improve by 11 per cent and Honda Seil by seven per cent, as compared to April 2008.

Manufacturers, however, say that in order to achieve sustainable growth they will have to increase their rural penetration.

Talking to TNS here today, on the sidelines of the launch of Ritz car, R S Kalsi, chief general manager, sales, Maruti Suzuki, said they were targeting to increase the volume of sales in rural areas from the present nine per cent to 12 per cent.

“We have witnessed a 100 per cent growth in our rural market’s share in the last fiscal. From 4.5 per cent of sale in rural areas, it went up to nine per cent last year. Thus, we are now recruiting 2,500 sales executives for rural areas, besides opening new dealerships and sales and service centres,” he said.

Hyundai Motors, too, has realised the potential of the rural market and has launched special marketing incentives for the rural areas of Punjab and Andhra Pradesh.

The company is presently running a month-long campaign across 50 small towns in the two states in the form of road shows to attract rural consumers.

“With a good agriculture growth, the agrarian economy is growing. We are targeting rural consumers in a big way,” said Rajiv Mitra, head, corporate communications, Hyundai Motors.

Other players like General Motors and Tata Motors are also wooing the customers by giving special discounts and launching attractive schemes.

While GM is advertising aggressively in rural areas and offering three-year free service, maintenance and spare parts, Tata Motors is wooing people with a lucky draw scheme, wherein one buyer of a car is refunded all money back in a day.

Honda Seil Cars, too, is targeting the smaller towns and cities by opening new dealerships and sales and service centres, said a company spokesman.

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BRIEFLY

Arun Tadanki is Yahoo! India MD
New Delhi:
Internet search major Yahoo! on Wednesday appointed Arun Tadanki as the managing director of its India operations. The position was lying vacant since August 2007 when the previous MD of the company George Zacharias left the firm to pursue his own entrepreneurial interests. Tadanki will be responsible for expanding and consolidating business in India as well as sub-continental Asia, West Asia and Africa, Yahoo! India said. — PTI

Wal-Mart to open first store in Amritsar
New Delhi:
Bharti Wal-Mart Pvt Ltd, the joint venture between Bharti Enterprises and the US-based Wal-Mart Stores Inc, will open its first cash-and-carry store in India next week. The joint venture's first store, to come up in Amritsar, will be inaugurated by Punjab Chief Minister Parkash Singh Badal, a source familiar with the development said. The company had last year announced that its cash-and-carry stores would be opened under the brand name of 'BestPrice Modern Wholesale' and each store would have a size of 50,000-1 lakh square feet. — PTI

Tata Motors plans Rs 4,200-cr issue
New Delhi:
Tata Motors, which needs to refinance early next month a bridge loan worth $2 billion taken for purchase of Jaguar and Land Rover, is planning to raise Rs 4,200 crore (about $884 million) worth of fresh debt. The fresh debt would be be raised through sale of non-convertible debentures in four tranches, credit rating agency Crisil has said, while assigning its top-grade credit rating for the debenture programme backed with a SBI guarantee. — PTI

Union Bank freezes home loan rate at 8 pc
Mumbai:
Public-sector lender Union Bank of India has freezed interest rates for new home loans up to Rs 50-lakh at eight per cent for one year. The scheme will be applicable for loans taken upto September 30, 2009, Union bank said in a press release issued here today. After one year, the rate will go back to floating rates till the loan is fully repaid, the bank said. — PTI

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