bgyan newsletter - 27 october - 09 november, 2010

8/8/2019 BGyan Newsletter - 27 October - 09 November, 2010

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B-Gyan

Weekly Newsletter

27 October 2010 – 9 November 2010

Power & Energy | Finance | FMCG | IT & Telecom | Manufacturing



B-Gyan Newsletter 27.10.2010-09.11.2010 1

POWER & ENERGY

Dual pricing of Diesel ruled out The Petroleum Minister, Mr Murli Deora, ruled out dual pricing of diesel, saying that the

Government was instead working on a subsidy mechanism for petroleum products. He mentioned

that the success of the petrol price deregulation had to be seen before thinking of the same for

diesel.

The Government deregulated petrol prices both at the refinery gate and at the retail level with

effect from June 26. But diesel prices were not deregulated.

<http://www.thehindubusinessline.com/2010/11/02/stories/2010110252710100.htm>

________________________________________________________________

Power Grid FPO subscribed 1.72 timesThe follow-on public offer (FPO) of the state-run transmission firm Power Grid Corporation of India

was subscribed 1.72 times by 16:00 IST on day two (November 10). The FPO garnered bids for

144.62 crore shares against 84.17 crore on offer.

The FPO is priced in the ` 85-90 per share band. The last day of bidding for qualified institutional

buyers is 11 November, while for non-institutional, retail and employees is 12 November 2010.

The Power Grid FPO is part of the government's plan to raise ` 40,000 crore in the fiscal year ending

March 2011 by disinvesting part stakes in state-run firms. Power Grid will use the funds raised from

the FPO for part funding capex plan.

<http://www.indiainfoline.com/Markets/News/Power-Grid-FPO-subscribed-1.72-

times/3389776544>

________________________________________________________________

ONGC eyeing Exxon stake in Angola oilfieldIndian state-run explorer Oil and Natural Gas Corp is examining a proposal to buy US energy major

Exxon Mobil's holding in an oil block in Angola. India is keen to source more crude oil from Angola on

firm basis, and has also expressed interest in acquiring oil and gas assets in that country. Besides,

India is looking at sourcing liquefied natural gas (LNG) too from Angola, which is setting up a 5.2

million tonne a year LNG facility.

<http://www.domain-b.com/companies/companies_o/ONGC/20101101_angola_oilfield.html>

________________________________________________________________




Reliance Power will buy equipment worth $2.2 billion from GE; signs$8.3 billion deal with Shanghai ElectricAnil Ambani-led Reliance Power Ltd will purchase equipment worth $2.2 billion (about ` 10,000

crore) from General Electric Co of the US, under a deal backed by a $5-billion line of credit from the

Export-Import Bank of the US.

In the biggest deal yet between a Chinese and private Indian company, Reliance Power also

announced that it has given a $8.3-billion contract to Shanghai Electric Group Co Ltd (SEC) for supply

of 36 coal-fired thermal power generation units, spare parts and related services over a 10-year

period. This takes the total deal size between Reliance Power and the Chinese power equipment

maker over the past couple of years to $10 billion.


<http://www.domain-

b.com/companies/companies_r/rel_power/20101101_shanghai_electric.html>

________________________________________________________________

ONGC-led consortium bidding for Australian fieldA consortium of India's top state-run energy firms, led by exploration giant Oil and Natural Gas Corp

(ONGC), is in talks to acquire a 25-per cent stake in Australia's Advent Energy for around $1 billion,

according to a report.

<http://www.domain-b.com/companies/companies_o/ONGC/20101103_australian_field.html>

________________________________________________________________

Petroleum Ministry seeks ` `̀ ` 5,000 cr more for oil cos.The Petroleum Ministry has sought from the Finance Ministry an additional ` 5,000 crore for

compensating the public sector oil marketing companies (OMCs) for selling fuels below the market

price during April-September 2010.

The Petroleum Ministry wants the Finance Ministry to shoulder at least 50% of the total under-

recovery. It had sought ` 15,000 crore from the Finance Ministry to compensate the three public

sector oil companies for the first half of the current fiscal. The Finance Ministry has paid only ` 10,000 crore towards this.


________________________________________________________________




FINANCE China hikes bank reserves in move to cool lending

Chinese banks were ordered to set aside more reserves on Wednesday in a new move to curblending as Beijing tries to cool rising inflation. The Central Bank's order came on the eve of

Thursday's release of figures that are expected to show inflation surged past 4 percent in October,

above the government's 3 percent target. September inflation was 3.6 percent.

Consumer prices are especially sensitive in a society where poor families spend up to half their

incomes on food. Rising incomes have helped to offset price hikes, but chronic inflation erodes the

value of savings and raises the prospect of unrest.

<http://economictimes.indiatimes.com/news/international-business/China-hikes-bank-reserves-in-

move-to-cool-lending/articleshow/6902005.cms >

____________________________________________________________________

No Need for Capital Controls on Portfolio Flows

There is no need for India to introduce capital controls on portfolio flows and foreign direct

investment levels are not very volatile, a top Indian policy maker said on Wednesday.

Many fear a US Federal Reserve move to buy $600 billion more in government bonds by June 2011

will lead to a surge of "hot money" inflows to emerging markets such as India, South Korea and

Brazil. The debate could have negative repercussions for this week's Group of 20 meeting in Seoul,

and with many emerging countries willing to retaliate; a meaningful outcome to the currency and

global imbalance debate now looks a little bleak.

<http://www.businessworld.in/bw/2010_11_10_No_Need_For_Capital_Controls_On_Portfolio_Flo

ws.html>

____________________________________________________________________

RBI moves to ease banks' liquidity pressure

To ease the persistent funds crunch the banking system is facing, the Reserve Bank of India on

Tuesday reintroduced measures that were announced late last month. The RBI has allowed banks to

temporarily maintain lower statutory liquidity ratio (a percentage of deposits that have to be

compulsorily invested in government securities). It also decided to open a second window daily for

banks to borrow funds for over a month.

The RBI had announced these measures on October 29 for a three-day period. Finding no

improvement in the liquidity situation, on October 31, it extended the measures up to November

4.The latest round of liquidity-easing measures will be in force till December 16.





Yuan revaluation to top agenda, but can hurt India

Having given a send-off to the US President, Mr Barack Obama, today, the Prime Minister,

Dr Manmohan Singh, will be with him again on November 11 in Seoul, this time for the G20 Summit.

However, unlike in Delhi, where there was an overall commonality of purpose, in Seoul Dr Singh

could find it harder to go along with the US.

This is because the Summit, in spite of claims to the contrary, has just one agenda: To force China to

revalue the Yuan so that its exports become costlier.

However, since India has emerged a major importer from China of a whole range of goods, not the

least of which is power generation equipment, India would be loathe to see the Yuan appreciating

because that would make imports costlier for it.


____________________________________________________________________

Govt mops up ` `̀ ` 17,000 crore through divestment this fiscal

The government has already mopped up more than ` 17,000 crore through disinvestment in the

current financial year and is on course to achieve the ` 40,000 crore target by fiscal year-end, a key

official said on Wednesday. Next in the line for disinvestment in the current fiscal is Manganese Ore

India Ltd, followed by Hindustan Copper Ltd, Shipping Corporation of India Ltd, Indian Oil

Corporation and Steel Authority of India Ltd, he said.

Of this, 10 per cent dilution in government stake in IOC and five per cent in SAIL would be the "majorcontributors" for meeting the target. The government last month raised ` 15,200 crore by selling 10

per cent stake in Coal India. Earlier in the fiscal, it had raised ` 1,000 crore each from share sale of

SJVN Ltd and Engineers India Ltd.

<http://economictimes.indiatimes.com/news/economy/finance/Govt-mops-up-Rs-17000-crore-

through-divestment-this-fiscal/articleshow/6901822.cms>

_________________________________________________________________




FMCG

Videocon forays into gen insurance; to ink JV pact with LMGConsumer electronics major Videocon today announced its plans of entering into financial services

business through a general insurance company in partnership with US-based property and casualty

insurer Liberty Mutual Group (LMG). The foreign partner will hold a maximum permissible 26 per

cent stake in the JV with Videocon owning the majority. An agreement is expected to be signed

between the partners soon.

<http://economictimes.indiatimes.com/news/news-by-industry/cons-

products/electronics/Videocon-forays-into-gen-insurance-to-ink-JV-pact-with-

LMG/articleshow/6865417.cms>

____________________________________________________________________

Tata International to open 20 footwear retail outlets by end-FY'11The global trading arm of the Tata Group, Tata International, plans to set up 15-20 exclusive

footwear retail showrooms pan-India by end-this fiscal. The company would expand the chain in a

phased manner with 6-8 such stores being rolled out across Mumbai, Delhi and Chandigarh by

November, he added.

<http://economictimes.indiatimes.com/news/news-by-industry/cons-products/garments-/-

textiles/Tata-International-to-open-20-footwear-retail-outlets-by-end-

FY11/articleshow/6822237.cms>

____________________________________________________________________

Bharti-Del Monte JV invests ` `̀ ` 115 cr in R&D, manufacturing facilityField Fresh Foods, joint venture of the Bharti Enterprises and Del Monte Pacific Ltd, on Tuesday

inaugurated their Research & Development and manufacturing facility here at an investment of

` 115 crore. The facility is the first-of-its-kind in India with beverage and processed food production

under the same roof with the band name Del Monte.

< http://economictimes.indiatimes.com/news/news-by-industry/cons-products/food/Bharti-Del-

Monte-JV-invests-Rs-115-cr-in-RD-manufacturing-facility/articleshow/6860857.cms>

____________________________________________________________________




M&S’s CEO targets overseas buysMarks & Spencer Group Plc's new Chief Executive Officer Marc Bolland plans to add stores in

Shanghai and India and strengthen the U.K. clothing retailer's online offering to boost sales by more

than 30 percent in four years.

The number of Simply Food convenience outlets will also increase, while a cost-saving plan will be

accelerated, Bolland said today after a six-month review of the business. Marks & Spencer also

reported a 14 percent gain in first-half earnings.

<http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fashion-/-cosmetics-

/-jewellery/MSs-CEO-targets-overseas-buys/articleshow/6898439.cms>

____________________________________________________________________

FMCG sector to grow in current fiscal: CIIThe fast moving consumer goods (FMCG) industry is likely to record higher levels of growth in the

current fiscal owing to focussed initiatives and strategic mergers and acquisitions as well as new

product innovations, according to a study by the Confederation of Indian Industry (CII). According to

the survey, India's FMCG sector has registered a growth of 11.4 per cent in the first quarter of 2010-

11 compared to 12 per cent in the like period of last fiscal.

Categories expected to witness growth rates of 10 to 20 per cent are detergent powders, washing

cakes and toilet soaps. Segments like toothpowder, liquid soaps, shaving products and coconut oil

are expected to register a moderate growth of up to 10 per cent.

<http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/FMCG-sector-

to-grow-in-current-fiscal-CII/articleshow/6901553.cms>

____________________________________________________________________




IT & TELECOM

Infosys unleashes its overseas acquisition plansAs per the recent updates, Infosys Technologies Ltd has revealed its plans of going international with

planned acquisitions in Japan. The company is active in the country (Japan) from last ten years now

but has not made much progress, cited related sources. The company seems to be quite serious and

is planning to divulge as much as 10% of its revenues towards acquisitions overseas. The 10% of

revenues zero to somewhat $300 to $500 million of amount.

http://itvoir.com/portal/news/Corporate-News/Infosys-unleashes-its-overseas-acquisition-

plans-8-548.asp

____________________________________________________________________

Indian tech vendors compete IBM, Accenture, Hewitt over $12 bndealsIndian technology vendors have taken a huge risk by standing tall against tech giants like IBM,

Accenture, Hewitt over back-office outsourcing contracts worth $12.2 billion which is set to expire

next year. The vendors might face tough times against Microsoft’s $200 million cred IT and collection

services deal with Accenture and Canadian brewer Molson’s over $60-million BPO contract with HP.

The method in which the BPO market will address the changing needs and desires of potential

customers will be more rapid as per analysts.

http://itvoir.com/portal/news/News/Indian-tech-vendors-compete-IBM-Accenture-Hewitt-

over-12-bn-deals-8-543.asp

____________________________________________________________________

Publishers to get more Revenue Share from Amazon’s Kindle

Amazon.com said Monday that it would give magazine and newspaper publishers more of therevenue that it collects from the periodicals sold via the Kindle Store. Amazon will increase the

royalties to 70 percent beginning Dec. 1. Publishers previously received about 30 percent, though

royalties varied by publisher.

By making the royalty rate more attractive to publishers, Amazon is trying to encourage them to sell

digital versions of their periodicals in the Kindle Store, perhaps at prices that are more attractive to

readers.

http://bits.blogs.nytimes.com/2010/11/08/amazon-increases-revenue-share-for-kindle-periodical-

publishers/?ref=technology

____________________________________________________________________




Vodafone selling Stake in Softbank The Vodafone Group said Tuesday that it plans to sell securities in the Japanese wireless operator

Softbank Corporation for £3.1 billion ($5 billion). Vodafone, the mobile-phone company, also raised

its full-year profit forecast, after fiscal first-half sales rose 3.9 percent, to £22.6 billion. Earnings

before interest, taxes, depreciation and amortization fell 1.2 percent, to £7.36 billion, the company

said. That beat the average estimate of £7.29 billion by analysts in a Bloomberg survey.

http://www.nytimes.com/2010/11/10/business/global/10vodafone.html?_r=1&ref=technology

____________________________________________________________________

Cloud tech can cut power usage, carbon emissions by 30%: Microsoft Businesses can save upto 30 per cent in power cost and carbon emission by moving to the internet

based-cloud technology, a Microsoft study today said. Businesses that choose to run business

applications in the cloud can help reduce energy consumption and carbon emissions by a net 30 percent or more versus running those same applications on their own infrastructure.

http://economictimes.indiatimes.com/tech/internet/Cloud-tech-can-cut-power-usage-carbon-

emiss-by-30-Microsoft/articleshow/6899985.cms

____________________________________________________________________

Indian IT industry hails Obama's outsourcing standThe resilient Indian IT industry Wednesday lauded US President Barack Obama for terming those

against outsourcing as holding onto old stereotypes and for committing to do away withprotectionism. "Obama did a great job for our industry by terming them (anti-outsourcing lobbies) as

stereotypes. I think his administration will also do a great job in terms of changing those

stereotypes," IT industry lobby Nasscom president Som Mittal told reporters here.

http://economictimes.indiatimes.com/tech/ites/Indian-IT-industry-hails-Obamas-outsourcing-

stand/articleshow/6902081.cms

____________________________________________________________________

Microsoft sues Motorola over 'excessive' royalty demandsMicrosoft, which accused Motorola a month ago of violating its smartphone patents , filed suit

against the US telecom giant again on Tuesday, accusing it of demanding "excessive" royalties.

Microsoft, in the suit filed in Washington state, where the US software giant has its headquarters,

charged that Motorola was demanding "excessive and discriminatory" royalties related to patented

technology.

http://economictimes.indiatimes.com/tech/software/Microsoft-sues-Motorola-over-excessive-

royalty-demands/articleshow/6899218.cms

____________________________________________________________________




MANUFACTURING

Global manufacturing shows signs of strength Manufacturing growth in India and China powered ahead last month and US industry also picked up

steam, according to data on Monday that suggested the global economic recovery may be on firmer

footing. Two surveys of Chinese executives showed broad-based strength in the manufacturing

sector, helping to lift natural resource stocks and commodity prices as investors anticipated strong

demand from the world's second-largest economy.

http://economictimes.indiatimes.com/news/economy/indicators/Global-manufacturing-shows-

signs-of-strength/articleshow/6855438.cms

____________________________________________________________________

Tata to ask customers to bring Nano back to add safety deviceTata Motors on Wednesday said it would ask Nano customers to bring back their cars to add safety

devices free of cost to prevent the vehicles from catching fire, but insisted it was not a "recall." The

company, however, said that the addition of safety devices, a lesson learnt from some of its brand

new Nanos catching fire, was optional. After these incidents, Tatas had engaged experts to get into

the details for the cause of the mishaps, and its internal report had said that there was no

manufacturing defect.

http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/Tata-to-ask-

customers-to-bring-Nano-back-to-add-safety-device/articleshow/6901267.cms

____________________________________________________________________

Piaggio three-seater soon to take on Tata's Nano Italian auto maker Piaggio is joining the league to bring its new 3-seater car to India. Piaggio, best

known for scooters worldwide, unveiled its four-wheel, small car concept codenamed NT3, at the

Milan Bike Show that has been "designed to meet mobility needs in its major markets like India,

Vietnam and South East Asia". The Italian manufacturer which operates a fully owned subsidiary,

Piaggio India Ltd, is the current market leader of three-wheel commercial vehicles in India, with its

flagship Ape as the market leader in terms of sales.

The NT3, based on the Ape platform, is expected to hit the Indian market with an approximate price

tag of ` 1.5 lakh. The yet to be launched car is conceived to overcome traffic congestion in Asian and

European cities and be a low-consumption, low-polluting vehicle capable of travelling over 30km/L

of fuel.

http://economictimes.indiatimes.com/articleshow/6885552.cms

____________________________________________________________________




Tatas seek land for aerospace unit at HyderabadTHE Tata Group is planning a major investment in Andhra Pradesh in the defence sector. Nova

Integrated Systems, the group’s joint venture with Israel Aerospace Industry (IAI), has sought about

75 acres of land at Ibrahimpatnam near Hyderabad to develop advanced technology systems,

including assembling and manufacturing of unmanned aerial vehicles, for the country’s defence

sector.

Nova Integrated Systems, a 76:24 joint venture between IAI and Tata Group under its subsidiary Tata

Advanced Systems (TAS), is looking at an initial investment of around $200 million, of which $50

million will come from IAI.” The project is currently awaiting clearance from the central government.

We will finalize the investment details once we get the government nod,” said an official of Nova.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-

aviation/Tatas-seek-land-for-aerospace-unit-at-Hyderabad/articleshow/6891517.cms

____________________________________________________________________

India's rising manufacturing labour costs overtake ChinaManufacturing labor costs in India have risen nearly 20% this year and will eclipse those in China as

Indian workers have seen their wages increase sharply over the last year on the back of high inflation

and a recovery in domestic demand, according to a study by consultants IHS Global Insight. The

results of the firm's latest “Global Manufacturing Compensation Watch” study show that China’s

manufacturing labor costs are expected to rise 10% this year despite a slowdown in exports to the

West as a result of the recession.

http://www.just-auto.com/analysis/indias-rising-manufacturing-labour-costs-overtake-

china_id106790.aspx

____________________________________________________________________

Maruti regains 50% market share in car segment in OctoberThe country's biggest car maker Maruti Suzuki India (MSI) has regained over 50% market share in the

passenger cars segment in October, after four consecutive months of remaining below the coveted

mark. The company's sales have been boosted by its models like Alto, Wagon R, Estilo, Swift, Ritzand A-Star, which had combined sales of 77,502 units in October. In October, MSI had sold a total of

1,18,908 units, including exports, which was its highest ever monthly sales, a robust 39.21 per cent

jump over the year-ago period.

http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/Maruti-regains-

50-market-share-in-car-segment-in-October/articleshow/6901809.cms

____________________________________________________________________

bgyan newsletter - 27 october - 09 november, 2010

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