Govt may allow sugar exports of up to 2.5 mn tonne

The government may allow up to 2.5 million tonne sugar export under the Open General Licence (OGL) scheme in the 2011-12 marketing year ending in October.

Before sugar export was brought under OGL earlier this month, the government had allowed export of 2 million tonnes of sugar in view of higher production.

With effect from May 11, sugar export has been freed by putting it under OGL with no quantitative restriction on the shipments. However, the Commerce Ministry has asked millers to register the export contracts with itself to keep a track on quantity of shipments.

"The Commerce Ministry is looking after sugar exports. It was decided to review exports once its touches two million tonnes. The industry has estimated output at 26 million tonnes and since there has been less lifting of levy sugar, there is scope for allowing additional 5,00,000 tonnes," Food Minister K V Thomas told PTI.

Levy sugar is the sweetener that government buys from mills at subsidised rate for supply through ration shops. It is mandatory for mills to sell 10 per cent of their production to the government at lower rate. Levy sugar quota is allocated to states and union territories for supply via ration shops.

The government has pegged sugar production at 25.2 million tonnes in the 2011-12 marketing year as against the annual demand of 22 million tonnes.

Industry body Indian Sugar Mills Association (ISMA) has estimated sugar production at 26 million tonnes for this year as against 24.3 million tonnes in the last year.

Modi agrees to attend BJP national executive meet

The Bharatiya Janata Party (BJP) on Thursday heaved a major sigh of relief after the disgruntled Gujarat chief minister Narendra Modi decided to participate at the two-day party's national executive meeting which began here from today. Modi, who was reluctant to attend the meet, agreed after party leader and RSS pracharak Sanjay Joshi offered to resign as an invitee on the national executive. Party president Nitin Gadkari admitted that there were differences between Modi and the party. "However, those differences have been sorted out. Modi has talked to me personally and conveyed that he will be attending the two day meet. In the meanwhile, party leader Sanjay Joshi has offered to resign as an invitee on the national executive in the larger interest of the party." Modi, who is attending one function at Udaipir, announced that he would reach Mumbai after 3 pm to participate at the national executive meet.
Further, another disgruntled leader and Rajasthan's former chief minister Vasundhara Raje, who had threatened to resign with her supporters over former home minister Gulab Chand Kataria’s planned yatra in South Rajasthan, was attending the meet.However, from Karnataka comes some more embarrassment for the party. BJP strongman BS Yeddyurappa, who is unhappy over the failure of the party leadership to reinstate him as Chief Minister, has declared that he is not going to Mumbai and all activity at his Bangalore residence this morning indicated that was not an empty threat. On a TV channel, Yeddyurappa said "Advani ji is somehow supporting Ananth Kumar. He should become the chief minister of Karnataka, that is also Advani ji's dream. I have met Advani ji 2-3 times. I explained everything about Karnataka's political situation and what Ananth Kumar is doing backdoor stabbing. I told everything. Even then, they are worried about their own post. They want their own people should become chief minister with respect to states, that is what is happening in Delhi."
Gadkari, who had recently admitted his differences with the Gujarat chief minister Narendra Modi, said the latter has communicated to work shoulder to shoulder for the party's growth. "I welcome him.He has told me he will stand with us shoulder-to-shoulder and work for the party," visibly relaxed Gadkari, adding that Mr Joshi's resignation was "a large-hearted gesture.Joshi's exit however, is seen as a blow for Gadkari -both men are staunchly supported by the party's parent body, the Rashtriya Swayamsewak Sangh (RSS).
In the resignation letter that Joshi sent to Gadkari, he reportedly said he does not want to be the reason for dissent or division in the party. Party insiders believe that Joshi was asked to quit after pressure from the BJP's Gujarat unit, who had said they would follow Modi's lead and skip the meeting.
The resignation of Joshi, an old RSS hand, would be seen as a big setback for Gadkari. Joshi was re-inducted into the party by Gadkari only a few months ago after being in political exile for six years over an MMS scandal. Modi has already skipped a party meet in November, sulking about Joshi's presence and also did not campaign for the party in the crucial UP elections earlier this year because Joshi was given an important charge there.
BJP leader, who did not want to be identified, told Business Standard that the national executive would take up amendment to the constitution of the party to allow Gadkari a second term as president after he completes his current term in December. However, he admitted that there has been opposition from a section of the party including veteran and former deputy prime minister LK Advani.
In recent days, party leaders have challenged several of Gadkari's decisions and forced him to back down on them. He had to go back on his decision to induct Babu Singh Kushwaha into the BJP in UP last year; then came the controversy over supporting the nomination of independent candidate Anshuman Mishra in Jharkhand for the Rajya Sabha. Mr Gadkari was forced to reverse that decision after other senior leaders united against him. While re-inducting Joshi last year, Gadkari had overruled all opposition and today's development will be seen as Mr Modi arm-twisting the party president and getting his way.
Today's development is also seen as a setback for the RSS. It backs Gadkari and had also backed Joshi's re-induction. Today it said this was an internal matter of the BJP. RSS spokesman MG Vaidya said, "The parties which revolve around one person, have these kinds of problems. Did anyone from Delhi know Nitin Gadkari three years back? Now they know him. Every post someone holds is respectable. Zero has no value. But if you put one before it, it is ten. Same way, if you put another zero, it's 100."
The party leaderd admitted that party's projection as a divided house would have gone against it ahead of Assembly elections in Gujarat and Himachal Pradesh scheduled by the end of this year. The BJP rules both those states and must retain them in the run-up to the 2014 General Elections. The National Executive meet would also provide an opportunity to the party to formulate a strategy on the Presidential election due soon, party leader said.

Morgan Stanley, others make $100 mn on Facebook trades

Morgan Stanley and other underwriters have made a profit of about $100 million stabilizing Facebook stock since trading began on Friday, the Wall Street Journal said, citing people familiar with the matter.

Facebook's listing, envisioned as a crowning moment for an eight-year-old company that has become a business and cultural phenomenon, has instead turned into a legal and public relations fiasco for the company and its lead underwriter, Morgan Stanley.

As a lead underwriter, Morgan Stanley would receive the largest chunk of those profits arising from stabilizing Facebook's stock price, the people told the Journal. These profits come on top of millions of dollars of IPO fees, according to the newspaper.

The underwriters made the bulk of the profit in Monday's trading when they bought shares below the $38 offering price, a person familiar with the matter told the WSJ.

Morgan Stanley was in charge of an overallotment of about 63 million shares that can be used to help support Facebook's share price. The underwriters are given the option to buy the overallotment of shares from the company at a discount.

The underwriters bought from Facebook the offering's 421,233,615 shares, but sold into the market 484,418,657 shares, including the overallotment and doing so made the underwriters "short" 63,185,042 shares, the paper said.

Morgan Stanley could not immediately be reached for comment by Reuters outside of regular US business hours.

Petrol price hike: LDF, BJP observe hartal in Kerala

The dawn-to-dusk hartal called separately by LDF and BJP in Kerala to protest the increase in petrol price partially affected normal life across the state today.

Early reports from different districts said shops remained closed in cities and towns and private buses were largely off the roads.

Private vehicles are plying and no violence has been reported from anywhere, police said.

The pro-Left transport sector unions have pledged support to the shut-down call.

Emergency services, healthcare, milk supply and media have been exempted from the hartal.

Oil rebounds above $90 in Asian trade

Oil rebounded in Asian trade today as investors bought into the market after prices fell below $90 a barrel the previous day, analysts said.

New York's main contract, West Texas Intermediate (WTI) crude for delivery in July was up 64 cents to $90.54 per barrel while Brent North Sea crude for July gained 92 cents to $106.48 in morning trade.

Prices had slumped a day earlier as the dollar rallied on eurozone debt worries, making dollar-denominated oil more expensive and denting demand.

WTI crude fell to $89.90 yesterday, its lowest level since October, while Brent tumbled $2.85 to $105.56.

"Prices have stopped sliding because some investors see this low level as a buy opportunity," said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.

He said prices remain under upward pressure because of the threat of supply disruptions in the Middle East and contagion risks arising from the eurozone debt crisis.

"The prospect of supply disruptions is still there. The US and European Union embargoes on Iranian oil will still go ahead as planned despite the current talks," added Shum.

Tough talks aimed at helping resolve the standoff between major producer Iran and the West over Tehran's controversial nuclear programme entered an unscheduled second day Thursday in Baghdad, with both sides still at odds with each other.

Investors' attention also remain focused on the eurozone debt crisis.

EU leaders at a summit overshadowed by fears Greece could leave the euro pledged support Wednesday for Athens, as officials behind the scenes considered the doomsday scenario of an exit.

First test flight of Dreamliner for Air India successful

A new Boeing 787 Dreamliner aircraft, which is to be delivered to Air India, has successfully completed its first test flight in South Carolina, the plane manufacturing company has said.

"The airplane will now be flown to Texas to be painted with Air India's livery before returning to Boeing's South Carolina plant for a mid-2012 delivery," an official statement said.

This is the first Dreamliner built in Boeing's South Carolina plant.

Test pilots Tim Berg and Randy Neville flew the plane successfully during the five-hour test flight.

More than 5,000 Boeing employees watched a live broadcast of the aircraft as it took off from Charleston International Airport.

"This is a proud moment for our Boeing South Carolina team and for Boeing," said Jack Jones, vice president and general manager, Boeing South Carolina.

"In April, we gathered on the flight line to watch this plane roll out of final assembly. Today, we watched as this aircraft successfully completed its first production flight - one step closer to delivering our first South Carolina-built 787 Dreamliner to our customer," Jones said.
Boeing, in a statement, said the production flight test profile tested the plane's controls and systems in a series of scenarios designed to verify the plane operates as designed.
The tests took place in all stages of flight beginning prior to taxi, through final landing and taxi. During the flight, the crew checked the functionality of onboard systems at high and medium altitudes.
They also checked backup and critical safety elements including cabin pressurization, avionics, and navigation and communications systems. In addition, they shut down and re-started each engine during flight, the Boeing statement said.

Gupta trial jury told of "top secret" Buffett deal

The deal that gave Goldman Sachs Group Inc a $5-billion boost from renowned investor Warren Buffet at the height of the 2008 financial crisis was "as top secret as you could get," a leading banker testified on Wednesday at the insider-trading trial of onetime Goldman board member Rajat Gupta.
Gupta is accused of tipping Galleon hedge fund founder Raj Rajaratnam about the deal in an illegal breach of his fiduciary duties.
Separately, a prosecutor told the judge on Wednesday, during a jury break, that a Goldman managing director, David Loeb, provided Rajaratnam with information about Intel Corp, Apple Inc and Hewlett Packard.
Loeb's name also came up Tuesday in evidence to the Manhattan federal court jury hearing the Gupta trial. A key defense argument is that Rajaratnam had sources other than Gupta to provide him confidential company information.
Loeb has not been charged. A Goldman spokesman declined to comment.
Former Goldman banker Byron Trott, a long-time Buffett confidant, told the jury that it was policy within a tightly-knit group of executives who negotiated such deals "never to talk about confidential information in public, or elevators. It was grounds for being fired."
Called to testify by prosecutors on the third day of Gupta's trial, Trott described how the deal was finalized in 30 or 40 minutes on the afternoon of September 23, 2008.
"Warren was not reachable until 2:30 p.m. He told me he promised to take his grandkids to Dairy Queen," said Trott, who left Goldman in 2009 and now runs his own merchant bank.
Gupta, 63, is accused of providing now-imprisoned Rajaratnam with boardroom secrets between March 2007 and January 2009 while he was a director of Goldman and Procter & Gamble.
One of the allegations is that Gupta tipped Rajaratnam, his erstwhile friend and business associate, 16 seconds after the Goldman board approved the Buffett investment, which was just minutes before markets closed at 4 p.m. on September 23, 2008.
That day, Rajaratnam ordered his traders to buy Goldman stock, but the Buffett deal was not made public until about two hours after trading ended, according to trial evidence.
"This was about as top secret as you could get," Trott said of the negotiations that led to Buffett's investment in Goldman.
Gupta, who has pleaded not guilty to five counts of securities fraud and one count of conspiracy, sat at the defense table with his hands folded in his lap, listening to Trott.
"It was a major, major event to Goldman Sachs and to the marketplace. Five billion dollars was not easily found at this time," Trott said, alluding to the lack of liquidity as financial institutions such as Lehman Brothers failed.
In opening statements on Monday, a US prosecutor told the jury that Gupta "threw away his duties" to the companies and their shareholders. The jury includes an executive of a non-profit organization, a psychiatric nurse, a professor and an elementary school teacher.
William George, a director at Goldman since 2002, is also expected to testify for the government, as is the investment bank's chief executive, Lloyd Blankfein. The trial started on Monday and is expected to last about three weeks.
Gupta could be sentenced to prison if convicted. However, any sentence is unlikely to be as long as the 11 years handed to Rajaratnam, who was convicted in the same court a year ago.
The case is USA v Gupta, US District Court for the Southern District of New York, No. 11-907.

© Thomson Reuters

US stocks recover late, euro falls

Wall Street stocks staged a late recovery and the euro flirted with a near two-year low on Wednesday as investors remained on edge about Greece's possible exit from the euro zone, which threatened to deepen the region's debt crisis and hurt an already fragile global recovery.

Nervous investors piled into low-risk US and German government debt, sending their yields lower. The dollar also was favoured as a safe haven by investors.

Each euro zone country will have to prepare a contingency plan for the possibility of Greece's leaving the bloc, three euro zone sources told Reuters, citing an agreement reached by officials.

A scramble for low-risk investments enabled Germany to pay no interest on 5 billion euros in new two-year debt amid the absence of new measures to tackle the region's debt crisis.
"The markets are on edge and sensitive to every possible out-of-control scenario coming out of Europe," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
Europe's leaders were expected to discuss boosting growth at a dinner meeting o n W ednesday, as well as the idea of a joint euro-zone bond. French President Francois Hollande supports the bond plan, but German Chancellor Angela Merkel opposes it.
"Most are expecting no concrete solution out of the meeting, just a few ideas discussed on how to boost growth with no real commitment to carry them out, while Angela Merkel is almost certain to reject any proposal by Francois Hollande in relation to euro bonds," said Craig Erlam, market analyst at Alpari.
Perception of a stalemate between the leader of the euro zone's most powerful member and heads of other bloc countries unleashed selling of their common currency and shares worldwide.
The MSCI world equity index was 1.2% lower at 299.75. It halved an earlier decline after touching its lowest level in about five months.
Wall Street stocks staged a recovery half an hour before the close. A late rise in material shares and gains in Apple helped pare nearly all of the day's losses.
The Dow Jones industrial average ended down 6.66 points, or 0.05%, at 12,496.15. The Standard & Poor's 500 Index finished up 2.23 points, or 0.17%, at 1,318.86. The Nasdaq Composite Index closed up 11.04 points, or 0.39%, at 2,850.12.
The tech sector was a drag on US shares for most of the session. Its weakness was led by personal computer maker Dell Inc, which reported disappointing second-quarter earnings late on Tuesday. Dell dropped $2.59, or 17.2%, to $12.49.
Social networking company Facebook Inc remains a market focus since its stock started trading o n F riday. The stock has been hammered as regulators said they would conduct inquiries into its initial public offering.
Facebook stock snapped a two-day losing streak. It rose $1, or 3.2%, to $32.00, still below its $38 IPO price.
The FTSE Eurofirst index of top European shares finished 2.18% lower at 971.99 after touching a fresh year low at 970.98.
In Tokyo, the Nikkei index closed down 2% at 8,556.60.
The euro fell 0.8% to 1.25850 on the EBS trading platform after touching $1.25453, its lowest level since July 2010.
"The euro is mostly selling off because of the dysfunctional process. We don't know what's going to happen and we don't know what the European leaders want - there is no leadership," said Axel Merk, portfolio manager of the $650 million Merk Hard Currency Fund in Palo Alto, California.
Contagion fears from the fiscal woes in Europe, with encouraging data on new US home sales, strengthened the dollar against most major currencies. The dollar index rose 0.67% to 82.043 after touching 82.221, its highest since September 2010.
Euro zone finance officials prepared contingency plans for a possible Greek euro exit on Monday afternoon, according to euro zone sources, during an hour-long teleconference of the Eurogroup Working Group. A document seen by Reuters detailed the potential costs to individual member states of a Greek exit and said that if it came about, an "amiable divorce" should be sought.
"It's very frightening to hear about this kind of talk, even if it makes sense as a contingency, because the lack of a clear path there continues to be very problematic for banks," said James Dunigan, chief investment officer of PNC Wealth Management in Philadelphia.
The strong German Schatz auction lifted June Bund futures to a fresh contract high at 144.28, up more than 1 point on the day. Benchmark US Treasury yields slipped to 1.73%, within striking distance of the lowest level in at least 60 years.
The United States, like Germany, enjoyed a further drop in borrowing costs when it sold $35 billion of new five-year notes at a yield of 0.748%, the lowest ever at an auction of this maturity.
Signs of a potential deal between Iran and the U.N.'s International Atomic Energy Agency to unblock investigations of suspected work on nuclear weapons in the oil-producing country sent Brent crude below $106 a barrel.
July Brent settled down $2.85, or 2.63%, at $105.56, flirting with its lowest level in five months. US oil futures ended down $1.95, or 2.12%, at $89.90 a barrel after touching its lowest level since November 1.
Spot gold fell for a third straight session but sharply pared its early loss. Bullion prices were last down 0.3% at $1,561.70 an ounce, about $35 above the lowest level so far this year, set a week ago.

© Thomson Reuters

First wiretap played at Gupta insider-trading trial

A New York jury on Wednesday heard former Goldman director Rajat Gupta on a FBI wiretap casually discussing business with Raj Rajaratnam, the now-imprisoned hedge fund founder he is accused of tipping off about boardroom secrets.

The 23-minute phone call on July 29, 2008 has no direct connection to the criminal charges against Gupta, but prosecutors played it to jurors to show the cozy relationship he had with Galleon Group founder Rajaratnam and their investments together.

"By the way, on that I want you to keep, us to keep having the dialogue as to what ... you know how I can be helpful in Galleon International. By the way not Galleon International, Galleon Group," Gupta told Rajaratnam, according to the court transcript of the conversation.

Their discussion begins with Rajaratnam telling Gupta he heard a rumor that "Goldman might look to buy a commercial bank" and Gupta's response is that "this was a big discussion at the board meeting." Investment bank Goldman did not acquire any bank.
The conversation goes on with Gupta seeking career and business advice from Rajaratnam. While the tape was being played to the jurors, Gupta sat at the defense table leafing through the 27-page transcript.
Gupta, 63, is accused of providing Rajaratnam with boardroom secrets between March 2007 and January 2009 while he was a director of Goldman Sachs Group Inc and Procter & Gamble Co. Gupta is also a former head of McKinsey & Co management consultancy.
Galleon had $7 billion under management at its peak and was wound down after Rajaratnam's October 2009 arrest in a broad US crackdown on insider trading.
Part of the wiretap of Rajaratnam's cell phone was also played at his trial a year ago when a jury convicted him of 14 criminal charges. He was sentenced in October to 11 years in prison.
Gupta's lawyers argue that the prosecution's evidence against him is circumstantial and speculative. They say Gupta and Rajaratnam had a falling out in 2008 and Gupta lost all $10 million of an investment in a Galleon fund.
Goldman is key to the trial. William George, a director at Goldman since 2002, is expected to testify for the government on Thursday. The investment bank's chief executive, Lloyd Blankfein, could testify at the trial.
TOP SECRET INVESTMENT DEAL
Gupta is accused of tipping Rajaratnam about a deal that gave Goldman a $5-billion boost from renowned investor Warren Buffet at the height of the 2008 financial crisis, in an illegal breach of his fiduciary duties.
On Wednesday, a leading banker testified that the deal was "as top secret as you could get."
Former Goldman banker Byron Trott, a long-time Buffett confidant, told the jury that it was policy within a tightly-knit group of executives who negotiated such deals "never to talk about confidential information in public, or elevators. It was grounds for being fired."
Called to testify by prosecutors on the third day of Gupta's trial, Trott described how the investment deal was finalized in 30 or 40 minutes on the afternoon of September 23, 2008.
"Warren was not reachable until 2:30 p.m. He told me he promised to take his grandkids to Dairy Queen," said Trott, who left Goldman in 2009 and now runs his own merchant bank.
Prosecutors contend that Gupta tipped Rajaratnam 16 seconds after a conference call in which the Goldman board approved the Buffett investment, just minutes before markets closed at 4 p.m. on September 23, 2008.
Rajaratnam then hurriedly ordered his traders to buy Goldman stock, reaping $840,000 in profits when the stock rose the next day, according to trial evidence. The Buffett investment was not made public until about two hours after trading ended.
Gupta has pleaded not guilty to five counts of securities fraud and one count of conspiracy. The trial started on Monday and is expected to last about three weeks before a jury that includes an executive of a non-profit organization, a psychiatric nurse, a professor and an elementary school teacher.
Separately, a prosecutor told the judge during a jury break that a Goldman managing director, David Loeb, provided Rajaratnam with information about Intel Corp, Apple Inc and Hewlett Packard.
Loeb's name also came up on Tuesday in evidence presented to Gupta's jury. A main defense argument is that Rajaratnam had sources other than Gupta to provide him confidential company information.
Loeb has not been charged. He did not respond to email and phone messages. A Goldman spokesman declined to comment.

© Thomson Reuters

NYSE pitches listing to Facebook after IPO mess: source

Facebook Inc is considering a stock-listing proposal put forward by the New York Stock Exchange, a source familiar with the situation told Reuters, in the wake of a disappointing initial public offering last week on the rival Nasdaq bourse.
Facebook has exchanged phone calls and emails with NYSE Euronext and are considering their pitch, the source said without elaborating on specifics.
The exact details of the NYSE's pitch to Facebook could not immediately be learned. Bloomberg cited a source as saying the proposal involved Facebook switching its listing from the Nasdaq. But NYSE Euronext said it had held no such discussions with the company.
"There have been no discussions with Facebook regarding switching their listing in light of the events of the last week, nor do we think a discussion along those lines would be appropriate at this time," the US exchange said in a statement.
Facebook and the banks that took it public, including Morgan Stanley, face questions over a $16 billion IPO that culminated in a Nasdaq debut plagued by technical glitches. The debut, on May 18, was pushed back half an hour and later led to delays in order confirmations, frustrating traders.
Facebook's shares have fallen more than 15% from their $38 IPO price to a close of $32 on Wednesday.
Tensions have arisen between Facebook and the Nasdaq - the preferred home for most technology companies - since the troubled Friday opening.
Analysts say the NYSE could take advantage of the botched coming-out party as it battles the tech-laden Nasdaq for high-profile IPOs.
Still, switching exchanges so soon after an IPO would be highly unusual, said Morningstar analyst Gaston Ceron. He noted that only a very small number of companies every year switch the exchanges that they are listed on.
"It would sound like a very unusual development if they were to switch so quickly, but then again this is an unusual IPO," said Ceron.
On Wednesday, shareholders filed a lawsuit against the No. 1 social network and its lead adviser, accusing them of hiding the company's weakened growth forecasts ahead of the IPO, which rivals General Motors as the second-largest US debut.
A Facebook spokesman declined to comment. Nasdaq representatives were not immediately available.

© Thomson Reuters

HP to lay off about 27,000, profit slides 31%

Hewlett Packard Co plans to lay off roughly 27,000 employees or about 8% of its workforce over the next couple of years to jumpstart growth and save up to $3.5 billion annually, sending its shares 11% higher.
The company said the layoffs would be made mainly through early retirement and would generate annual savings of $3 billion to $3.5 billion as it exits fiscal year 2014, when the layoffs are expected to the completed.
The world's No. 1 personal computer maker, which employs more than 300,000 people globally, also said on Wednesday that it had a 31% decline in second-quarter profit and a 3% decline in revenue, compared with a year ago.
The results, however, were better than Wall Street expectations.
Layoffs "adversely impact people's lives, but in this case, they are absolutely critical to the long-term health of the company," Chief Executive Meg Whitman said.
"This is broad based," she said in an interview. "By design, it will touch all of HP."
Whitman said a third of the layoffs would be in the United States. The company will take a pretax charge of $1.7 billion in fiscal 2012 related to the layoffs.
Whitman plans to boost spending on research and development, especially in printing and PCs, with the savings from the cost cuts.
Sterne Agee analyst Shaw Wu said the quarter was surprisingly strong for HP, which had missed its own forecast most quarters in the last 18 months and prior to Whitman taking over as CEO.
"Everyone expected a miss, given what Dell said," Wu said. "It looks like HP is regaining its footing."
Dell shares on Wednesday plunged 17% following weaker than expected results and a disappointing revenue forecast spurred fears that global tech spending is weakening faster than anticipated.
HP itself has been trying to move past the internal upheaval that marked 2011, including the departure of two chief executives.
Whitman, a veteran Silicon Valley executive who took the top job last September, has been trying to turn the company around.
Whitman said both business leaders and consumers in Europe were worried about the region's economy, which is hurting HP's business. She warned that the European debt crisis was a big "headwind" the company was facing.
HP reported second-quarter net income of $1.59 billion, or 80 cents a share, compared with $2.3 billion, or $1.05 a share, a year ago. Revenue of $30.69 billion was down 3% compared with the same period last year.
Excluding after-tax costs for amortization, restructuring charges and acquisition-related charges, HP said it earned 98 cents a share, compared with analysts' average estimate of 91 cents, according to Thomson Reuters.
TABLET LAUNCH FOR HOLIDAY
Whitman, who has been at the helm for six months, said the company also plans to launch tablets -- for both consumers and corporations -- later this year.
"We will have a Windows 8 tablet for the holiday," she said.
This would be HP's second attempt in the tablet market. HP killed its previous WebOS-based TouchPad tablet last year after just seven weeks on store shelves, citing poor demand.
Whitman also said HP's acquisition of British software company Autonomy for over $11 billion is facing challenges, and results in the division fell short of HP's expectations.
HP has moved the division under its chief strategy officer Bill Veghte. Autonomy founder Mike Lynch will be leaving the company.
Results from HP's other divisions were also weak.
Sales from the personal systems group, encompassing PCs, were flat with a decline in sales to consumers offsetting revenue from commercial clients.
Revenue from its bread-and-better printing group, which is being merged with the PC group, fell 10% after weak consumer and corporate demand.
"We improved the channel inventory to within an acceptable range," Whitman said on a conference call, referring to the printing group. "However, we continue to face a weak demand environment."
Sales of enterprise servers, storage and networking equipment fell 6%.
HP shares rose to $22.35 after hours after ending down 3.2% at $21.08.

© Thomson Reuters

Asia shares edge up but shaky on Greece risks

Asian shares were steady but remained vulnerable on Thursday amid signs European leaders were unable to deliver meaningful measures to resolve the region's deepening debt crisis.

European Union leaders, at an informal meeting on Wednesday, have been advised by senior officials to prepare contingency plans in case Greece quits the single currency area.

But they also said they wanted Greece to stay in the euro zone while respecting commitments it had made in return for its bailout.

"Uncertainty is back and little sign of eased selling by foreign investors does not bode well for the market," Ham Sung-sik, an analyst at Daishin Securities said of Korean shares.
Investors were also cautious ahead of China's HSBC flash manufacturing PMI number due later in the day, which will help gauge the pace of slowdown in the world's No.2 economy.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.2% while Japan's Nikkei stock average rose 0.4%.
Analysts said that with European leaders at odds over specific schemes to prevent a contagion from political turmoil in Greece and to help stabilise fragile banking systems, it was hard to build positions in risk assets.
"Chancellor Merkel has rejected eurobonds for now, but there are plenty of other alternatives such as bank capitalization programs through the EFSF and looser ECB monetary policy," Barclays Capital analysts said in a research note.
"Yet European policymaking does not seem ready to move in that direction; therefore we prefer to stay in 'risk off' mode," they said.
The European Financial Stability Facility (EFSF) is the euro zone's temporary bailout fund.
The euro eased 0.2% to $1.2563, hovering just above its Wednesday's intraday low of $1.25453, its lowest level since July 2010.
Against the yen, it traded near 99.531, its lowest in more than than three months hit on Wednesday.
The murky outlook for the future of the euro zone has prompted investors to park their money in safe haven assets such as US and German government bonds, the US dollar or cash.
The dollar index on Wednesday rose to 82.221, its highest since September 2010.
Ashraf Laidi, chief global strategist City Index said the index could climb towards 90 later this year, citing potential catalysts such as a mismanagement of a Greece exit from the euro zone, or if Athens and its global lenders remained deadlocked.
US 10-year yields fell to 1.73% on Wednesday, nearing 1.67% set in September, which was the lowest in at least 60 years.
The EU leaders also discussed broad measures to stem the fallout from a winding up or restructuring of bad banks on Wednesday.
Spain announced a 9-billion-euro bailout for troubled lender Bankia, its fourth-largest, on Wednesday, while also seeking ways to help its highly indebted regions meet huge refinancing needs.
US crude futures recovered 0.5% to $90.32 a barrel on Thursday, after ending down 2.1% at $89.90 the previous day when it touched its lowest level since November 1. Brent was up 0.3% at $105.97, after settling down 2.6%.
Asian credit markets remained on the defensive, with the spread on the iTraxx Asia ex-Japan investment-grade index widening by about four basis points early on Thursday.

© Thomson Reuters

NDA opposes petrol price hike, calls for bandh on May 31

Opposing the steep hike in petrol prices and spiralling prices of commodities, NDA has called for a nation-wide bandh on May 31.

NDA convenor and JDU President Sharad Yadav said that all the partners of the opposition alliance have been consulted in this regard.

The alliance will also be talking to other parties for their support to the Bharat bandh.

Rejecting Government's argument that the hike in petrol prices has been done by petroleum companies as the pricing of petrol stands deregulated, Yadav said, "This is an eyewash...We (NDA) are going to observe a Bharat bandh on May 31."

He asked why the hike in petrol prices was not announced when Parliament was in session and why oil companies did so the very next day after the session got over.

"Government has washed its hands off the decision on price hike but in reality it happens only when the Government wants. The Government will also be increasing prices of diesel and LPG after the Presidential elections get over," Yadav said.

The JD(U) chief accused the Government of being a "total failure" in checking prices of essential commodities. "Common people are suffering due to wrong policies of the UPA Government. Prices of commodities are rising uncontrollably making it difficult for an average Indian to make both ends meet," he said.
This Government is pro-rich and not bothered about the poor, he charged.
Yesterday, oil PSUs had increased the price of petrol by Rs 7.50 per litre.

India Q4 GDP seen slowing to 6%: StanChart

Standard Chartered Bank forecasts India's GDP growth slowed to 6% in the Jan-March quarter, down from previous estimates of 6.5-7%. The data is due on May 31.

Weak industrial output numbers, particularly the contraction in March, will have a bearing on GDP, given the weighting of about 20%.

A GDP slowdown to 6% will increase the urgency for authorities to act.

RBI likely to cut repo rate by 25 basis points to 7.75% at its June 18 review, comforted by core inflation below 5%.

ANALYSIS: The rupee short - a trade everyone missed

That the economy wasn’t going to do well in the past year or so was a fact well known. The Eurozone problems and high commodity prices were putting pressure on inflation, interest rates and hence growth. Domestic factors, which could have helped support the economy, were also missing thanks to New Delhi’s policy paralysis.

Thus, selling equities short was a reasonably easy trade, and that’s why it would have yielded limited returns. On the other hand, if the Indian economy was going down the tube, selling the rupee too was an option. That trade turned out to be much smarter than selling equities.  

While the BSE Sensex in the last one year has fallen from 17,993 to 15,965 - a drop of 11 per cent, the rupee has slipped from 45.24 to 56 to the dollar, a drop of nearly 20 per cent. And if you are among the luckier ones to have money stashed up abroad and had sold the Indian market in dollars, then your gain would have been 29 per cent as the Sensex measured in dollar terms has fallen from 404 to 286.

The reason is easy to fathom on hindsight. If the economy is going to be weak, foreign investors (portfolio, direct and debt) are likely to slow down investments or exit partially, which will hurt the currency. With high global commodity prices, rising deficits and high interest rates, the impact on the rupee becomes more pronounced. Besides the macroeconomic issues, the central bank’s opening up of the forex market on futures exchanges has also made it very difficult for the central bank to intervene and control the currency.
The drop in liquidity and the lack of adequate foreign exchange reserves add to RBI’s limitations. Between November 2011 and January 2012, the central bank had pumped in nearly $18 billion (nearly Rs 90,000 crore) in both cash and derivatives markets to support the currency. Even after taking a series of measures to curb speculative flows, the central bank is unable to stop the bloodbath.
The slide in the rupee is a manifestation of the problems in the economy, irrespective of what the FM and PM say. While the crisis in Europe has resulted in investors getting jittery, there is nothing in terms of governance or growth that can give these investors confidence to stay back. Nor is there any hope that things might improve over the next two years, till a new and stronger government takes over.
With the current account deficit touching nearly 4 per cent, and the flow of foreign money down to a trickle, the ground realities do not provide any comfort for going long on the rupee.
Morgan Stanley in its report has said that the rupee is undervalued by around 5-7 per cent, but despite this it will appreciate in the next two years on account of large inflation difference between India and its trading partners.
So from here, it looks like the rupee slide will continue, though at a slower pace.

This is what petrol will cost in the 4 metros

The government had decontrolled petrol price in June 2010 but rates were last increased on November 4, 2011.

This despite oil price rising by 14.5 per cent and 3.2 per cent fall in value of rupee against the US dollar.

Following are the revised prices of petrol in the four metros after the steepest-ever hike in rates.

Cities	Current Price	Revised Price	Increase
Delhi	Rs 65.64 /ltr	Rs 73.18/ltr	Rs 7.54/ltr
Kolkata	Rs 70.03/ltr	Rs 77.88/ltr	Rs 7.85/ltr
Mumbai	Rs 70.66/ltr	Rs 78.57/ltr	Rs 7.91/ltr
Chennai	Rs 69.55/ltr	Rs 77.53/ltr	Rs 7.98/ltr

 

Petrol hike to hit inflation in the short run: PlanCom

Attributing the steep hike in petrol prices to declining value of rupee, Planning Commission on Wednesday said it will have immediate impact on the price situation but things will stabilise in the long run.
"It will have immediate impact on prices, but will not have knock-on impact on prices. This in one time price adjustment. It will not have cascading effect", Planning Commission Member Abhijit Sen told PTI.

In view of the impact of declining value of rupee, which touched Rs 56 to a dollar, the state-owned Oil Marketing Companies (OMCs) raised petrol prices by over Rs 7 a litre.

The hike, he said, "will not even result in 50 basis points (0.5 per cent) increase in headline inflation. This is happening because of rupee depreciation in the recent times".

The retail inflation (Consumer Price Index) for April was 10.36 per cent, up from 9.38 per cent a month ago. The inflation based on movement in wholesale prices (WPI) moved up to 7.23 per cent from 6.89 per cent in March.

Expressing similar opinion, D K Joshi, chief economist Crisil said: "Petrol doesn't have much impact on wholesale price based inflation as it does not have much weight in the index.

"It is not like diesel which is a transport fuel. The impact will be muted. But the increase has been very sharp. I think the WPI inflation will be impacted below 15 basis points", he said.

Jagannadham Thunuguntla, head of research, SMC Global Securities said, "the hike has been quite steep than expected. We can see WPI based inflation in the range of 8-9 per cent".

The price rise, he added, "will benefit the state-run oil marketing companies and their stock prices will increase tomorrow. The government may think of diesel price deregulation following this as Parliament session is over," he said.

Petrol price hike is 'unjust and unilateral', says Mamata

Sharply reacting to the steep hikecin petrol price, West Bengal Chief Minister Mamata Banerjee on Wednesday said her party would not accept it but said her party would not topple the United Progressive Alliance government on the issue.

"It is unjust and unilateral. We think it is an easy option to burden the people. We cannot accept the price hike burden on the people," the chief minister told reporters in Kolkata.

Banerjee, the chief of Trinamool Congress, the second major partner of UPA government, however, said her party would not topple the government like CPI(M) as it would create economic and political instability in the country.

Taking serious exception to Parliament being bypassed, she said "Parliament session ended only yesterday but why was it (price hike) announced today?"

She also said her party was not consulted.

"We have not been consulted on the price hike nor on the prevailing economic situation in the country. Why was there no consultation?" she said.

Petrol price hike evokes mixed reactions from industry

The steep hike in petrol prices evoked mixed reactions with a section of industry saying the move would further burden the comman man even as policy makers and experts felt the increase would benefit the economy in the long run.

Industry body Assocham said the hike would be another blow to the already crippled economy.

"This step will increase inflation and prove a big burden on the common man," the chamber said, adding that an increase in petrol price is not likely to give much relief to the government's swelling fiscal deficit.

The automobile industry too hit out at the price hike, saying the increase would hurt the sector which is already reeling under a slump.

"Petrol cars are not selling as such already. With this record hike, the situation will go from bad to worse," Society of Indian Automobile Manufacturers (SIAM) Senior Director Sugato Sen told PTI.

Planning Commission Member Abhijit Sen said the hike was due to declining value of rupee, which on Wednesday incidentally breached the 56-level against the US dollar.

"It will have immediate impact on prices, but will not have knock-on impact on prices. This in one time price adjustment. It will not have cascading effect" Sen told PTI.

Expressing similar opinion, Crisil chief economist D K Joshi said, "Petrol does not have much impact on wholesale price based inflation as it does not have much weight in the index.

"It is not like diesel which is a transport fuel. The impact will be muted. But the increase has been very sharp. I think the WPI inflation will be impacted below 15 basis points", he said.

Welcoming the petrol price hike, another industry body FICCI said that government should also deregulate the prices of other fuel products like kerosene, diesel and cooking gas.

"Rationalisation of petroleum products prices will provide the necessary incentives for the development of alternative and renewable sources of energy; encourage conservation; and more important improve the fiscal balance," FICCI said.

The chamber said the increase had perhaps become inevitable with the continued slide in rupee value and "it can be mitigated by reduction in taxes both by the central and state governments".

SMC Global Securities, Head of Research, Jagannadham Thunuguntla said the hike would benefit the state-run oil marketing companies.

"The government may think of diesel price deregulation following this as Parliament session is over," he added.

Auto demand to be further skewed towards diesel

With petrol prices hiked again today and fears remaining about price volatility of the deregulated fuel, auto manufacturers in the country are expecting a jump in demand for diesel-driven passenger vehicles.

Oil marketing companies, reeling under huge losses due to high crude price in the international market and the rupee depreciation, raised petrol prices on May 24 by Rs 7.54.

But diesel prices, which are still regulated, were left untouched.

The domestic car market, which sees sales of almost one diesel car for every petrol car sold, will see demand for diesel-powered cars to hit the roof in the wake of the latest rise, say top officials at the country's leading auto makers.

Diesel-driven passenger vehicles, such as cars, sport utility vehicles and multi-purpose vehicles, account for 47 per cent of the domestic market today. Share of petrol-powered cars has been on a declining trend ever since the fuel was deregulated by the government in 2010.

"This is another solid blow to the industry after excise duties were hiked a few months ago. The hike will push overall cost of ownership for the customer and it will definitely have an impact on demand. Growth in April had been on the lower side and there has been no improvement yet," said Pravin Shah, chief executive, automotive division, Mahindra and Mahindra Ltd. He, however, said Mahindra "will not be impacted by the hike" as about 99 per cent of all passenger vehicles sold by Mahindra were powered by diesel engines.

Honda Siel Cars India Ltd will be most affected by the rise since its entire line-up is powered by petrol engines.

Market leader Maruti Suzuki India Ltd, which has five models powered by diesel engines, is expecting a further rise in demand for such vehicles. R C Bhargava, chairman of Maruti Suzuki, told a TV channel: "The hike will further widen the gap between petrol and diesel cars. Something needs to be done to balance the demand for both types of vehicles. May be the government can raise the excise duty on diesel cars or raise the price of the fuel. The government should make it clear to what extent does it want dieselisation of the industry."

Added Arvind Saxena, director (marketing and sales) of Hyundai Motor India Ltd (HMIL), said, "Demand is already under pressure on account of inflation and high interest rates. A hike of such magnitude is good neither for the customer nor for the industry."

Toyota Kirloskar Motor Pvt Ltd (TKM), a joint venture between Japan's Toyota Motor Corp and India's Kirloskar Group, which at present reports around 30 per cent of the 'Etios' and the 'Liva' sales from the petrol variant and half of overall volumes of the 'Corolla Altis' model from the petrol fuel option, is expecting an impact on demand.

Sandeep Singh, deputy managing director (marketing), TKM, said: "The rupee depreciation, coupled with the steep hike in petrol prices, will hit hard the entire auto industry. The government has to take some action, otherwise we would have no option but to pass on the rise in input costs to customers."

The latest price rise would further affect sales of petrol cars, Singh said.

With the cost differential between the two fuels already standing at Rs 25/litre, sales of diesel variants grew 35 per cent in 2011-12. Petrol cars sales fell by 15 per cent in the last financial year, according to industry officials.

While petrol driven cars are available off-the-shelf for diesel cars the wait is more than one month on an average.

P Balendra, vice-president (corporate affairs) of General Motors India, said: "The market was already sluggish and now with the cost of ownership of petrol cars going up, sales will be hit further. We were earlier expecting growth of 8-10 per cent in the current financial year but with this latest development it is possible that sales growth may go negative again."

Auto shares dip, Maruti hits 5-mth low

Shares of automobile companies are under pressure in morning trades on concerns of slowdown in demand for petrol vehicle after the state-owned oil marketing companies raised the price of petrol by a record Rs 6.28 a litre.

“In the short-term, sales will be further impacted while in the long term a negative consumer sentiment will be created which can hurt the growth of the auto industry,” the PTI report suggests quoting Sugato Sen, senior director of Society of Indian Automobile Manufacturers (SIAM).

The hike in petrol price will severely affect the sales of entry level cars, which are mainly petrol driven. This will also, result in inventory pile up of petrol vehicles as more and more consumers will opt for diesel vehicles, added report.

Among the individual stocks, Maruti Suzuki has dipped 3% at Rs 1,117, its lowest level since January. Bajaj Auto, Ashok Leyland and Hero MotoCorp are trading lower by 1-2% on the Bombay Stock Exchange.

Munjal Showa soars on robust Q4 results

Munjal Showa has soared 8% to Rs 85.85, extending its previous day’s 6% rally after reporting a healthy 85% year-on-year (y-o-y) jump in net profit at Rs 24 crore for the fourth quarter ended March 2012. Net sales grew 13% at Rs 404 crore on y-o-y basis.

EBITDA (earnings before interest, taxes, depreciation, and amortization) margins improved almost 200 basis points from 7.42% to 9.31% during the recently concluded quarter.

The board of auto parts and equipment maker has recommended a dividend of 150% or Rs 3/- per equity share of Rs 2/- each for the year ended March 31, 2012.

As many as a combined 149,465 shares have already changed hands on the counter so far, against an average less than 50,000 shares that were traded daily in past two weeks on the NSE and BSE.

Markets erase morning gains

Markets have turned volatile and slipped to the day's low. The Sensex is flat at 15,943. Nifty is unchanged at 4,832.
"Trend is down on charts; whereas near term index is expected for a technical bounce; therefore one could buy Nifty at dips with a strict stoploss of 4780 target / resistance expected would be 4890 / 4950 / 4980," said Ravi Nathani, Technical analyst, Nsetoday.com.
Asian markets are in the red. Nikkei is down 0.6% at 8,499. Hang Seng has dropped 0.5% at 18,682. Shanghai Comsposite is down 0.3% at 2,356.
BSE oil & gas index 1% at 7,523. Bankex and PSU indices are up marginally. However, BSE realty index has slipped 1% at 1,537. Auto, consumer durables, IT and power sectors are also showing some weakness.
ONGC has added 3% to Rs 251. HDFC is the top contributor on the Sensex's upmove. The stock is up 2.6% at Rs 652. Gail, Bharti Airtel, HDFC Bank are also in green.
Meanwhile, Maruti Suzuki is down 2.3% at Rs 1,124. Tata Power, Sun Pharma, Bajaj Auto and TCS are down 1-2% each.
BSE market breadth is neutral. Out of 1,831 stocks traded, 880 shares have advanced hwile 861 shares have declined.

Welspun India surges on Open Offer at Rs 54 per share

Welspun India has frozen upper circuit of 5% at Rs 49.60 after promoters of the company proposed to make an open offer to acquire additional 23.17 million shares of the company at price not exceeding Rs 54 per share.

“Krishiraj Trading Limited along with Welspun Mercantile Limited (Acquirer), being promoters of Welspun India Limited proposes to acquire 23.16 million shares, representing 26% of the expanded share capital at price of Rs 54 per share,” the company said in a filing to the stock exchange.

On May 24, 2012, the Acquirer, proposed to place a purchase order with Prime Broking Company to acquire up to 5 million fully paid up equity shares of the company, representing up to 5.61% of the current voting share capital, at a price not exceeding Rs 54/- per equity share.

This is mandatory offer made by the acquirer, as it proposed to acquire more than 5% of the current voting share capital in one financial year.

A combined 37,887 shares have changed hands on the counter till early noon deals and there are pending buy orders for 52,364 shares on the NSE and BSE.

Mahindra & Mahindra taps Korean arm to crack China

Mahindra & Mahindra is finding it tough to exorcise the ghosts of failed Chinese ownership at its South Korean car unit Ssangyong as it looks to push the brand into China's auto market, the world's largest.
At the same time, the car, tractor and truck maker, the core part of the Rs 80,000 crore diversified Mahindra Group, will take its own rugged sport utility vehicles (SUVs) elsewhere, to emerging markets such as Brazil and South Africa - though it is developing engines to be used across both brands.
Mahindra's muscular jeeps have for decades been a favourite in India's rural hinterland, and its tractors work fields from Arizona to Zimbabwe. Cracking the Chinese market with Ssangyong would mark the next frontier for a company that has used booming domestic growth to fuel its global ambitions.
"China is a high priority for Ssangyong, but not for Mahindra," said Pawan Goenka, president of Mahindra's automotive and farm equipment sectors and chairman of Ssangyong, which the Indian company bought for $460 million in March last year.
Ssangyong Motor Co, which trails far behind Korean rivals Hyundai Motor and Kia Motors but is popular in Russia, was close to bankruptcy under its Chinese owners SAIC Motor Corp when Mahindra stepped in to buy a 70% stake.
The Indian firm started importing Ssangyong cars into China late last year, but has had "limited success" in a market that is slowing and which regards Ssangyong as a premium brand, Goenka said in an interview at Mahindra's headquarters in central Mumbai.
"An important hurdle we faced was the 'ghost of the past' at Ssangyong. They were clearly badly bitten by SAIC."
"It's said that SAIC did not do justice to Ssangyong. And there's an apprehension, a feeling, a concern that we may be a repeat of the same. To remove that concern has taken time. And I can't say it's gone 100%," he added. "That has been a little harder than we thought.
Goenka declined to say how many cars Ssangyong sold in China, but said the total lagged expectations. "The ramp-up has not been as we'd expected," he said. "If Ssangyong was a very strong brand in China, then clearly the market slowdown would not have affected us as it has."
"There is an action plan that includes brand building and pricing and what kind of product tinkering we do; whether there is a specific requirement of product the Chinese customer would want," he said.
The Ssangyong project is a career-defining initiative for Goenka, who spent 14 years at General Motors before joining Mahindra almost two decades ago.
Ssangyong, which makes the Korando and Rexton SUVs and the Chairman luxury marque, sold 114,000 vehicles in the year to end-March, exporting two-thirds of its production. Goenka expects sales to increase to 125,000 cars this year, and has set a target of 160,000 for 2013.
He said plant capacity could probably be increased to 180,000-200,000 vehicles at minimal extra cost. "It will take us to 2014 until we sweat the assets fully. That's very important," he said, noting depreciation as a part of Ssangyong's revenue was above the industry norm as the assets are under-utilised.
Ssangyong made a loss of around $80 million in 2011, three times bigger than its 2010 loss, but it was offset by unlocking working capital tied up in the company.
"As of now we have no plans (to take Mahindra to China)," said Goenka. "We are entering China through Ssangyong. Once that is successful, then we will evaluate whether it makes sense to bring Mahindra products there.
"Once the volume picks up, and we reach a certain economic level, then we will look at manufacturing in China," he said, adding that all new vehicle platforms will be shared by Ssangyong and Mahindra cars. "Together we are developing next-generation transmissions, which is a fairly expensive program that neither Mahindra nor Ssangyong could justify doing on their own."
BRAZIL IN FOCUS
With a shipment of 600 jeeps to the former Yugoslavia in 1969, Mahindra became India's first car exporter. In market value, Mahindra & Mahindra is about half the size of Tata Motors, which owns the Jaguar and Land Rover brands. Today, Mahindra and its subsidiaries sell more than a quarter of their passenger car and commercial vehicles outside India.
The auto unit - which contributed around two-thirds of Mahindra Group revenue in the year to March 2011, and 86% of net profit - assembles and sells its own-branded tractors in the United States and Australia, and exports cars and commercial vehicles to Africa, Europe and South America.
"For Mahindra, Brazil is a big focus market," said Goenka, who plans to take the company's Scorpio jeep and new XUV 500 sport utility to that market soon. Goenka played a major part in developing the popular Scorpio, and drives a white XUV 500.
One market where Mahindra does not sell its passenger cars is the United States. It was forced to suspend its entry plans by a long-running legal dispute with a former distributor. That was settled in March, and Mahindra, but not Ssangyong, should be heading into the market shortly.
"We will soon be making our plans known as to what we plan to do in the United States," said Goenka. "The US is turning around, its auto industry is in better shape than many other markets. The love for large SUVs and pick-up trucks is back, which is good for us."
While Ssangyong won't be part of any planned assault on the US market, the brand last month entered South Africa in conjunction with the Mahindra distribution network there, and could soon use its parent company to enter other markets.
"We have three distribution companies, in South Africa, Australia, and Italy. They do nothing but sell Mahindra vehicles, so they could sell Ssangyong also," Goenka said.
India's biggest SUV manufacturer saw its car sales grow 15% in the year to end-March, well ahead of the industry's 2.2% overall growth. In response to rising demand, Goenka said Mahindra will spend around 30 billion rupees on a new 250,000-vehicle factory in India.

© Thomson Reuters

Petrol to cost Rs 7.54 a litre more, highest ever hike

In the steepest ever increase, petrol rates were today raised by a massive Rs 7.54 per litre, the first hike in rates in six months.

Petrol price in Delhi has been hiked by Rs 7.54 per litre to Rs 73.18 a litre with effect from midnight tonight, state-owned oil companies said in separate but identical press announcements.

This is the steepest hike in petrol price ever, the previous high being Rs 5 per litre. Oil firms had twice raised rates by Rs 5 per litre - on May 15, 2011 when prices in Delhi were hiked from Rs 58.37 a litre to Rs 63.37 per litre and on May 24, 2008 when rates were raised to Rs 50.56 a litre.
The government had decontrolled petrol price in June 2010 but rates were last increased on November 4 last year. This despite oil price rising by 14.5 per cent and 3.2 per cent fall in value of rupee against the US dollar.
Petrol in Mumbai will cost Rs 78.57 per litre as against Rs 70.66 a litre, at present. In Kolkata, the increase will be Rs 7.85 per litre to Rs 77.88 per litre and Chennai saw rates going up by Rs 7.98 to Rs 77.53 per litre.
Yesterday, Oil Minister S Jaipal Reddy had stated that the depreciation in rupee had necessitated an immediate increase in fuel prices.
But rates of diesel, kerosene and cooking gas have not been revised as a high-power ministerial panel headed by Finance Minister Pranab Mukherjee and having representatives of key UPA allies like TMC and DMK, hasn't met for almost a year now.
Price of diesel, kerosene and cooking gas were last raised in June last year.
"If rupee depreciates by one against the US dollar, our oil companies lose Rs 8,000 crore (annually)," Reddy had said yesterday. "Rupee yesterday dipped (to an all-time low of) Rs 55 (to a US dollar). Last year it was Rs 46. This translates into a loss of Rs 72,000 crore (on account of rupee depreciation) this year."
State-owned oil firms, which had in the fiscal ending March 31, 2012 lost Rs 4,860 crore on petrol sales, were currently losing Rs 6.28 per litre on petrol. After including 20 per cent VAT, the desired increase in petrol price in Delhi came to Rs 7.54 a litre.
The losses on petrol are besides Rs 512 crore per day that oil firms lose on selling diesel, domestic LPG and kerosene. Diesel is currently sold at a loss of Rs 15.35 a litre, kerosene at Rs 32.98 per litre loss and oil firms lose Rs 479 on sale of every 14.2-kg domestic LPG cylinder.
The three firms had together lost Rs 138,541 crore in revenue in 2011-12. This year they are projected to lose a record Rs 193,880 crore.
During 2011-12, petrol prices were revised five times in order to bring domestic prices in line with prices in the international market. Of these, rates were hiked on three occasions and lowered on two other. The last revision in rates on December 1 was a reduction of Rs 0.78 per litre to Rs 65.64 a litre.
"Thereafter, due to domestic market conditions, it has not been possible to change selling price of petrol in line wtih international prices," Indian Oil Corp (IOC), the largest oil retailing firm in the country, said in a statement.
IOC along with Bharat Petroleum and Hindustan Petroleum lost Rs 4,651 crore in revenue since the last revision.
"Given the losses being incurred, the company is compelled to increase the price of petrol by Rs 6.28 per litre (excluding VAT/Sales Tax) with effect from midnight of May 23/24," the statement said.
"This excludes losses already suffered till date during current financial year, i.E., 2012-13, which would require an additional increase of around Rs 1.50 per litre in selling price of petrol for balance part of the year."
With government not allowing oil firms to raise fuel prices due to political considerations, the state-owned companies had demanded that petrol be made a regulated product temporarily and losses on it be made good through cash subsidy support from the exchequer.
Alternatively, excise duty on petrol of Rs 14.78 a litre should be reduced by an amount equivalent to the current loss on the fuel sale. Simultaneously, states should also reduce the rates of Sales Tax, which vary from 15 per cent to 33 per cent (Rs 10.30 to Rs 18.74 per litre).
But with none of this happening, they raised the rates.

Economic Survey emerges a bestseller

Even as the investor mood is down and India’s growth has slowed down, a government document that showcases the health of the economy is giving competition to the works of Dan Brown, Jhumpa Lahiri, Jeffrey Archer, Lance Armstrong, Walter Isaacson and many other star writers. Last week, leading online retailer, Flipkart, classified 'Economic Survey 2011-12’ as a bestseller. At present, it’s showing as a 'top new release’ on the site. The 'Survey’, as is popularly referred to, is part of the mainstream now. And, it is printing and selling much more than before.

While the finance ministry printed 6,000 copies of the Survey this year in its own press, it gave the franchise to Oxford University Press (OUP) for printing the rest as per demand. Estimates suggest that Oxford has already printed around 18,000 copies of the Economic Survey this year. There could be reprints in the coming months too. In the previous year,  OUP had printed approximately 13,000 copies of the Survey, it is learnt. Official figures from OUP are not available.

The 'Economic Survey’, that is released every year by the Ministry of Finance ahead of the Union Budget, is usually popular with students especially those taking the civil services exam. But with the growing interest in the Indian economy, the profile of those buying the 'Survey’, anchored by the chief economic advisor to the finance ministry (currently Kaushik Basu who’s on leave from  Cornell University where he’s a professor of Economics), has changed over time, pointed out retailers. Multinational companies, embassies, entrepreneurs, researchers and policy makers, along with students, figure prominently in the list of buyers.        
Ankit Nagori, Vice-President, Categories, Flipkart, told Business Standard, the Economic Survey has been doing extremely well on the site over time. “In fact, we have sold over 10 per cent of the total books that Oxford University Press has printed – making it one of our recent bestsellers,” he added. Originally priced at Rs 350, the online retailers are offering a discount of anything between 20 and 25 per cent on it.
According to Narasimha Jayakumar, COO (E-commerce), HomeShop18.com, Economic Survey 2011-12 was among the bestsellers at the time of launch. He attributed the rise in demand for titles like the Economic Survey to the economic awareness of readers. “Indians now want to stay abreast on policy decisions, to know how it will impact the overall investment culture in the country,” he added. Jayakumar said most of the orders were being placed by foreign embassies as well as from multinational companies operating in India.
Landmark, another book chain operating both offline and online, is not too much into government books, but has already sold out more than 300 copies of the Survey it had stocked at the time of launch, a company representative said.
Jain Book Agency (JBA), a specialist in government books and publications based in New Delhi, is also out of stock when it comes to the Economic Survey. A store representative said it sold in good number just after the launch in March and April. JBA is now waiting for re-prints.       
The Economic Survey is described as a flagship annual document of the ministry of finance, and it reviews the developments in the Indian economy over the past 12 months across sectors. It also offers the prospects of the economy in the short to medium term. As a reviewer said, “anyone who is keen on facts and is numbers driven will get good insights from this book on country's progress...”

Govt raises interest rate on GPF to 8.8% for 2012-13

In a move which will benefit millions of employees, the government has hiked interest rate on contributions to General Provident Fund (GPF) and other similar funds to 8.8% for 2012-13.

The interest rate on such funds was 8.6% during December 2011-March 2012 period, while it was 8% for April-November 2011.

"It is announced ... that during the year 2012-13, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8.8% per annum," the Finance Ministry said.

The benefit of increased interest rate will be available to subscribers of Contributory Provident Fund (India), All India Services Provident Fund, State Railway Provident Fund and General Provident Fund (Defence Services).

Contributors to Indian Ordnance Department Provident Fund, Indian Ordnance Factories Workmen's Provident Fund, Indian Naval Dockyard Workmen's Provident Fund, Defence Services Officers Provident Fund and Armed Forces Personnel Provident Fund will also benefit from the move.

Rate of interest on GPF is generally fixed after taking into consideration the average secondary market yields on government securities of similar maturity.

Rupee breaches 56/dollar, despite RBI action

The rupee slumped to a new record low of 56 to the dollar on Wednesday weighed down by global risk aversion, with the Reserve Bank of India's intervention earlier in the day seen as too mild to prevent further falls.

At 12:40 p.m., the partially convertible rupee was at 55.98/99 per dollar, after hitting a new record low at 56, sharply below its Tuesday's close of 55.39/40.

The euro stayed pinned near recent four-month lows while domestic stocks were down more than half a percent.

Rupee-dollar fluctuation a scam, alleges BJP

A rapidly sliding rupee, rising inflation, burgeoning prices of essential commodities and another dose of price rise due to the rise in petroleum products would  be covered extensively in the economic resolution of the BJP's national executive at its two day meeting slated to begin here on Thursday. In fact, BJP national secretary Kirit Somaiya has alleged that the  current rupee-dollar fluctuation is a major scam that needs to be investigated by  an expert group at par with special investigation team. Somaiya ridiculed the Central government's argument that the fluctuation was due to external factors such as the Euro zone crisis.

Somaiya told Business Standard, "It requires a thorough inquiry and study why the rupee is falling to hit a new low of 56.19 to dollar on Wednesday noon. When oil prices are not rising so rapidly, when there has been a bumper crop and when there have not been major increase in imports, why rupee is falling?"  He asserted that the national executive would deliberate this issue and demand probe.

The BJP would also take up the issue of deposits of Indians in three major Swiss banks and the possibility of their transfer to the country in the next few weeks. "BJP will certainly demand the names of those depositors who have parked their money in three Swiss banks. We suspect in the present economic conditions these money will be transferred to India.  These depositors are expected to earn huge profits amid falling rupee," Somaiya said. He added that the BJP would also demand for disclosure of names of those Swiss banks.
On scams and its fall out, Somaiya said the they have been a route cause of inflation affecting the Indian economy. He alleged that due to various scams the government system has been completely paralysed. "It is quite ironical that the government was not doing enough to curb inflation. Another dose of price rise is expected after the much debated prices of petroleum products are increased in a due course of time," he added.
According to Somaiya, the government needs to explain why prices are rising when there has been a bumper crop and there was no space for its storage. " It is really sad that inflation is expected to go double digit soon despite a world acclaimed economist Manmohan Singh is the Prime Minister who is accompanied by senior leaders like finance minister Pranab Mukherjee and home minister P Chidambaram. The party will discuss the issue threadbare and look into possible solutions," he informed.
Meanwhile, party's national executive member, who did not want to be identified, said the political resolution would cover issues like rising naxalite menace and the government's failure in its handling, the alleged injustice meted out against states by the Central government, government's inept handling of terrorism and the fiasco over the establishment of National Counter Terrorism Centre.

MCA orders scrutiny of Reebok India's books

The Corporate Affairs Ministry today ordered a scrutiny of the books of accounts of sportswear maker Reebok's Indian arm over complaints of an alleged Rs 870-crore fraud.

"We have ordered an enquiry under section 234 of the Companies Act, which is a non-invasive scrutiny. The Registrar of Companies (RoC) has been asked to submit its report in three days. Based on the report, we will order further scrutiny," a senior MCA official said.

The official said the enquiry was ordered on the basis of a complaint from an investor.
Under the Section 234 of the Companies Act 1956, the RoC can call for information or explanation from a company.
When contacted, the Adidas Group said: "We are given to understand that our criminal complaint has been registered for investigation by the Indian law enforcement authorities...We shall continue to cooperate with the authorities in their investigation of the matter."
MCA's move comes on the heels of the Gurgaon Police having formed a special investigation team to look into the alleged Rs 870-crore fraud case filed by Reebok India Co against its former MD Subhinder Singh Prem and COO Vishnu Bhagat.
Yesterday, Reebok India had filed an FIR with the Gurgaon Police in which it said it will also incur a restructuring cost of Rs 487 crore to remedy the consequences of the "criminal and fraudulent" acts of its formers top executives.
Earlier this month, Adidas group had announced that it had uncovered commercial irregularities to the tune of 125 million euros in its subsidiary Reebok India and Prem and Bhagat were sacked. It had also announced plans to close one- third of around 900 Reebok stores as part of a restructuring strategy.
Reacting to the development, Prem had initiated legal action against the global giant for defamation and unfair termination of his services.

REC posts higher quarterly profit at Rs 762 cr

Rural Electrification Corp today reported nearly 9% increase in net profit at Rs 762.69 crore in the fourth quarter ended March.

The power sector lender had a net profit of Rs 700.26 crore in the year-ago period.

According to a regulatory filing, the company's total income in the March 2012 quarter increased to Rs 2,867.02 crore from Rs 2,306.33 crore in the same period a year ago.
REC's consolidated net profit rose about 10% to Rs 2,838.66 crore for the full year ended March 2012. In the comparable period, the same stood at Rs 2,584.89 crore.
The consolidated net profit is after taxes, minority interest and share of profit from associates.
The company's consolidated total income went up to Rs 10,553.62 crore in the last financial year compared to Rs 8,532.20 crore in the year-ago period.
On a standalone basis, REC net profit jumped nearly 9% to Rs 2,817.03 crore in the year ended March 2012 from Rs 2,569.93 crore.
Total income climbed to Rs 10,509.07 crore from Rs 8,495.26 crore.
All the annual figures are audited.
Shares of the company fell 2.22% to end the day at Rs 169.75 on the BSE.

Auto industry fumes over petrol price hike

The automobile industry has hit out at the petrol price hike saying the increase will hurt the sector which is already reeling under a slump.

"Petrol cars are not selling as such already. With this record hike, the situation will go from bad to worse," Society of Indian Automobile Manufacturers (SIAM) Senior Director Sugato Sen told PTI.

In the short-term, sales will be further impacted while in the long term a negative consumer sentiment will be created which can hurt the growth of the industry, he added.
Expressing similar sentiments, General Motors India Vice President P Balendran said: "Earlier, the industry was expecting a growth of 8-10 per cent this fiscal but I will not be surprised if we are in the negative territory due to fuel price hike and high interest rates as the market continues to be sluggish."
This will result in inventory pile up of petrol vehicles as more and more consumers will opt for diesel vehicles, he added.
Describing the latest price hike as a "disaster", Maruti Suzuki India Managing Executive Officer, Marketing and Sales Mayank Pareek said: "This will further increase the skew between petrol and diesel vehicle demand, which is already very wide. This will severely affect the sales of entry level cars, which are mainly petrol driven."
Last year, the petrol segment declined by 16.2 per cent as the demand shifted to diesel vehicles. Now there will be more demand for diesel cars after the price hike but most of the manufacturers are running on full capacity for diesel vehicles, he added.
Pareek said the overall impact of the price hike would further dent growth of the automobile industry.
Hyundai Motor India Ltd Director Marketing and Sales Arvind Saxena said: "Demand is already under pressure on account of inflation and high interest rates. A hike of such magnitude is neither good for the customer nor for industry."
Passenger car sales in India witnessed the slowest growth during April in 10 years at 3.4 per cent as customer sentiment remained low due to post-Budget price hikes and high interest rates, affecting the entry-level segment most.
As per SIAM figures, domestic passenger car sales stood at 1,68,351 units in April 2012 compared to 1,62,813 units in the same month last year.
In the fiscal 2011-12, car sales in India grew by just 2.19 per cent which was the slowest since 2008-09.

GTL reports Rs 246 cr net loss in Jan-Mar quarter

Telecom network services firm GTL Ltd today reported a net loss of Rs 246.22 crore for the quarter ended March 31, 2012.

The company had reported a net profit of Rs 48.46 crore in the same quarter last year.

Consolidated revenue from global operations also declined 27% to Rs 565.63 crore for the quarter as compared to Rs 775.20 crore in the corresponding quarter last year, the company said in a filing to the BSE.

On a yearly basis, the revenue of the company for the period ended March 31, 2012 (nine months) stood at Rs 1,866.94 crore as against Rs 3,942.16 crore (15 months) last year.
The net loss for nine months stood at Rs 459.07 crore while the company had reported a net profit of Rs 210.63 crore for the 15-month period last year.    
Financial year 2010-11 ended for the company on June 30, 2011.
The company's total expenses amounted to Rs 566.69 crore for the quarter as against Rs 649.21 crore in the same period last year.

Channels bet on soccer, tennis, golf, as cricket becomes too expensive

Driven by rising viewership of sports besides cricket, and the exorbitant prices attached to acquiring cricketing series, Indian sports broadcasting channels are ramping up future focus on non cricketing segments.

The list includes channels like ESPN Star, Neo and Ten. The argument is that not only is it too costly to bid for and get broadcast rights for a cricket series, the advantage is that it’s is now easier to get returns on a non-cricketing sports series for advertisers.

Neo Sports, which describes itself as a ‘general sports entertainment and cricketing channel’ says it has undertaken steps to consciously become a five-sport channel as opposed to just a cricket focused broadcaster.
“What you see now is a conscious part of our plan over the past two years. As rights for other sports properties were unlocked we bid for and acquired them,” said Prasanna Krishnan, CEO, Neo Sports.
As part of the strategy, Neo has created its ‘Summer of Sports’ platform, focused on the Copa America-a soccer event, the French Open and the Davis Cup-tennis events, World Series Hockey and the US Golf PGA Tour.
The other reason Krishnan uses for explaining the need to look at other sports is that cricket has become too exorbitant.
A case in point is the Star deal with the Board for Control of Cricket in India (BCCI). Rupert Murdoch-controlled Star India bid for and won the global territories broadcasting rights for Rs 3851 crores for the six year period between July 2012 and March 2018.
In the said period 96 matches are to be played. Simply put then, Star India paid an average of Rs 40 crore per match. The price broadcast reflects in the advertising rates as well.
“The current advertising rate for a high profile cricket series is about Rs 3.5 lakhs per second, not even remotely comparable with the Rs 10,000 per second charged for a tennis, football or gold event,” said an executive with a media planning agency.
Add to this is the fact that an average cricket event garners viewership of about 100 million people.
“This is now comparable now to a Fifa World Cup or even an English Premier League (EPL), which have garnered viewership of 42 million and 60 million over the past couple of years respectively,” said an ESPN spokesperson.
ESPN broadcasts the Grand Prix Formula One races and the English Premier League, both of which have found niche urban audiences.
“It is in fashion now to support a Manchester United, Chelsea or Arsenal. Also the fact that the recent Formula 1 race took place in Noida with the added benefit of a local face in Narayan Karthikeyan added traction,” said the ESPN spokesperson.
Ten Sports has a monopoly in wrestling with the WWE, along with some properties in soccer like the domestic iLeague.
“Such has been a gain in other sports that the viewership of a French Open is now comparable with that of a non India Test Series,” said Krishnan of Neo Sports. The interest has also meant that the advertising rates for non-cricketing sporting events have also risen by 20 per cent.
“This is largely attributable to their low base, but yes, there has been a spike in event-to-event advertising rates, with international soccer leading the charge,” said the executive from the media planning agency.

Airtel, Vodafone eye enterprise biz

Recently, Bharti Airtel demarcated its enterprise offerings with a special name called Airtel Business. The company claims that this will resonate their work in business segment.

Yet another telecom giant Vodafone which is a relatively late entrant into enterprise space, expanded its offerings to fixed line services couple of months back. “There is a lot of interest in our fixed line business,” claimed Naveen Chopra, director of enterprise and carrier business of Vodafone India.

These telecom operators with strong consumer businesses, claim to have an edge in their enterprise offerings as well, with their integrated play across segments. Established consumer branding also helps these telecom majors gain acceptance in consumer business as well.
“An enterprise is made up of employees who are in the end, the consumers. Now, only a small percentage use BlackBerry, but ahead more will. The product suite is now more in the hands of the employees,” said Najib Khan, chief marketing officer of Airtel.
As more and more enterprises go for connectivity offerings which go beyond fixed lines, voice and high speed connectivity within the office, these players will have a bigger pie to play on. “We can unleash the potential with technological solutions. Like sales force automation and field force automation, we can offer connectivity anytime and anywhere, along with voice,” said Khan.
Benoy C S, director of telecom practice at Frost & Sullivan believes that entry into a mature market like enterprise business offers these players with stable revenue. “Enterprise market has lesser amount of churn than the consumer business. Everyone looks at incremental revenue and allows to monetise network capabilities to the maximum.,” he said. He expects other telecom operators who are strong in the consumer business to enter enterprise segment, as a part of natural progression.
Chopra says that the enterprise business was the natural next step for Vodafone. And that it is the layer that sits on the strengths of the existing consumer business to offer solutions to the enterprise customers. “Standalone enterprise business players find it tough to operate as they don't play in the complete total telecommunications domain.” he said.
The suite of services to enterprises include machine to machine (M2M) solutions, leased lines, MPLS virtual private networks, office wireline voice, co-location amongst others. The size of all these offerings in the enterprise segment account to around Rs 68,000 crore per annum.
Airtel and Vodafone also have highly efficient licenced technologies which will leveraged for enterprise consumers too. Airtel has already made its plans clear to target businesses as a part of its 4G services on LTE platform, that it currently offers in Kolkata and Bangalore. Vodafone India too has 3G Solutions for Business.
Both these companies have now set their sights on small and medium sized businesses (SMB) as well. “This business is growing one-and-a-half times faster. SME is under-served but they are also spread across the country. We have zonal offices in 60-70 cities and there is a lot of infrastructure on the ground to help us reach out to them effectively.” said Chopra.
Khan says that businesses from SMBs is growing at 20 per cent year-on-year. “We are targeting the top 30,000 of around 100,000 SMBs. The adoption is faster with medium sized businesses for managed services and cloud services,” he said.