11 July 2008

India's GDP to be close to global average: Sify Special

`India's GDP to be close to global average'


With a clear shift in economic patterns across the globe, India is fast approaching its goal to be one among the largest economies of the world in terms of GDP, reveals a report by Goldman Sachs on the Expanding Middle – the exploding world middle class and falling global inequality. By 2030, incomes in China and India are projected to be close to the global average.

A simple way to see this is to look at the list of the seven largest economies (the ‘true G7’) in 1960, 2007 and 2050. In 1960, the largest economies were all essentially ‘developed’ countries from the higher income groups. By 2007, that has already clearly begun to change, with China in the top seven and Brazil, India and Russia not far behind. But developed countries still dominate the rankings.

From here on, the shift is likely to accelerate. These shifts could be a significant influence on spending patterns, resource use, and environmental and political pressures. In 2050, India would have the 3rd rank on the top seven nations list with an income ranking of 61.


There are two ways to look at it:

The first is the shift in spending power towards middle-income economies (and away from the richest countries), to a point where they may dominate global spending for the first time in decades, as the largest population countries enter the middle-income group

The second is the shift in spending power towards middle-income people and the explosion of what we think of as a global ‘middle class’ on a scale never seen before. Over the last ten years, we have already seen unprecedented expansion in this group.

Here, Goldman Sachs refers to global middle class as those with incomes between $6,000 and $30,000 per annum. According to the report, shifts in China and India are clearly an important part of the story, though peak growth in China is likely to come much earlier than in India. What is striking, though, is that the Expanding Middle, the narrowing of the global income distribution and the expansion of the global middle class is clear whether or not either or both of these giants is included, at least in the recent past and projected future.

The global income distribution is getting narrower, not wider. So while there is a lot of focus on widening inequality and the embattled middle class in developed countries, globally the opposite is true, the report points out. By 2030, two billion new people may join the world middle class.
The distribution of global incomes could narrow significantly further, even if inequality within some countries remains high or rises further, as middle income countries continue to move through the pack. World could outstrip anything which exists globally for decades, and will peak (at around 20 million per year) around the same time as India. Already by 2020, one third of the new entrants to the world middle class will come from outside China and India. And this percentage could reach half by 2030.

A result of these shifts would be a world that could continue to be dominated by the rise of the BRICs, the N-11 (The Next Eleven - Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam - are identified by Goldman Sachs as having a high potential of becoming the world's largest economies) and a handful of other emerging countries.

The first dimension of the `Expanding Middle’ is already visible. Spending power has already been shifting away from the richest countries towards a growing middle-income group. As a result of these shifts, the purchasing power of middle-income countries is rising and set to rise much more.

This group, which will be dominated by a subset - China, India, Brazil, Egypt, Philippines, Indonesia, Iran, Mexico, and Vietnam- of the BRICs and N11 will matter more and more for global spending patterns. The second dimension is also visible in the distribution of income across people.

A welcome side effect is that if our growth projections are met, poverty rates should continue to decline sharply. The BRICs continue to emerge as dominant forces in the global economy going forward. The report reveals the BRICs as four of the five largest economies in 2050.


Source: Sify.com

10 July 2008

Sensex ends with a marginal loss after a choppy ride

Sensex ends with a marginal loss after a choppy ride

After opening with a negative gap, the market bounced back into the positive zone in early trade this morning but plunged sharply into the red thereafter due to heavy selling in IT, bank and several other blue chip stocks.

A couple of smart rallies from lower levels thanks to some strong buying in select blue chip stocks notwithstanding, the benchmark BSE index Sensex ended the day on a negative note today. The Nifty, however, finished with a minor gain.

The Sensex, which sailed past the magical 14,000 mark to a high of 14,047.43 this morning, ended with a loss of 38.02 points or 0.27% at 13,926.24, around 162 points off its low of 13,763.94. The Nifty, which dropped down to a low of 4110.40 in intra-day trades, ended with a small gain of 5.10 points at 4162.20.

The bulls, who had lifted the market up sharply yesterday, stayed out of the ring for a major part of the session as global sentiment remained weak. While Wall Street ended on a negative note yesterday, Asian markets displayed a mixed trend. The trend on the European bourses was not encouraging either.


Though the market had shrugged off Left parties' withdrawal of support to the ruling coalition yesterday, investors appeared reluctant to step up buying what with the government set to face a confidence vote during the special session of the parliament on the 20th and 21st of this month.
A sharp rise in metal prices on the London Metal Exchange buoyed up metal stocks this afternoon. IT stocks remained sluggish as investors stayed cautious ahead of results from sector major Infosys Technologies.

Cement stocks ACC (3.15%) and Ambuja Cements (2.5%) and metal majors Tata Steel (3.15%) and Hindalco (5.5%) were among the star performers from the Sensex pack today. Realty major DLF attracted attention ahead of the company's board meeting to consider a share buy-back. Though the stock drifted down a bit after the board approved the proposal, it still ended the day on the positive side with a sharp gain of 1.8%.

Reliance Infrastructure moved up by 2.35%. HDFC, Cipla, Hindustan Unilever, Larsen & Toubro, Mahindra & Mahindra, ONGC and Reliance Communications ended with sharp to moderate gains. Ranbaxy Laboratories edged up by around a quarter per cent. Index heavyweight Reliance Industries eased by 1.7%. Maruti Suzuki declined by a little over 3.5%. FMCG major ITC lost 2.3%. Infosys Technologies, Tata Consultancy Services, Wipro and Satyam Computer Services lost 0.5% - 1%.

More: Sensex ends with a marginal loss after a choppy ride

DLF says to buy back up to 22 m shares
Panacea vaccine receives WHO pre-qualification
STC plans to acquire land in Surinam, Indonesia
Allied Digital acquires US firm for $30 m

RIL ranked 206 in Global Fortune 500 in sales
Ranbaxy-Daiichi merger: An emerging Ardhnarishwar model?
Deep Inds to explore marginal oil and gas fields
Sintex Ind Q1 net at Rs 44 cr

Bharti adds 2.56 m mobile users in June
BSEL nears Indonesia deal /TCS is top exporter
Why investors hold dud stocks


Source: www.Sify.com/finance

Q1 2009 Results: Sintex, Bajaj Auto etc

Sintex Industries net profit rises 43.06% in the June 2008 quarter
Sales rise 36.92% to Rs 410.75 crore

Bajaj Auto reports net profit of Rs 175.11 crore in the June 2008 quarter

Bajaj Holdings & Investment reports net profit of Rs 15.20 crore in the June 2008 quarter
Sales reported at Rs 20.42 crore

GTL net profit rises 12.32% in the June 2008 quarter
Sales decline 5.20% to Rs 318.76 crore

Prithvi Information Solutions net profit declines 29.70% in the year ended March 2008



SOurce: Capitalmarket.com

09 July 2008

RIL tops list of private sector Fortune 500 firms in India

RIL tops list of private sector Fortune 500 firms in India

Mukesh Ambani-led Reliance Industries has emerged as the top Indian private company on the latest Fortune 500 Global list, where the country's presence has grown to seven firms with a debut by Tata Steel.

The list, released by the US business magazine Fortune today, includes two private (RIL and Tata Steel) and five public sector companies from India, topped by Indian Oil Corp (IOC), and including BPCL, HPCL, ONGC and SBI. IOC is the top-ranked Indian company among both private and public sectors at 116th position in the worldwide list, topped by US retail giant Wal-Mart. Besides making its debut at 315th position, Ratan Tata-led Tata Steel has also been named as the company with highest revenue growth of over 353 per cent over the past year.

Tata Steel recorded 17th fastest growth in profit among all the companies globally, Fortune said. RIL, which has been ranked at 30th in terms of revenue growth, has jumped 63 places to grab the 206th rank. SBI has been ranked at 21st place in terms of revenue growth.

RIL is ranked second after IOC among all the Indian companies and is followed by Bharat Petroleum (287), Hindustan Petroleum (290), ONGC(335) and State Bank of India (380). SBI is the seventh biggest climber among all the global companies, while RIL and BPCL have been ranked at 23rd and 50th in terms of gains from the previous year rankings.

Other companies figuring among the ten largest worldwide include Chevron (6th), ING Group (7th), Total (8th), General Motors (9th) and ConocoPhillips (10th). The US continues to have the largest presence with 153 companies, even as the number is down from 169 in the last year. China has 29 companies on the list. Besides seven Indian companies, a number of firms run by Indian-origin people have also made to the list.

These include Nagpur-born Vikram Pandit-led Citigroup at the 17th position, billionaire steel tycoon Lakshmi Mittal- promoted ArcelorMittal (39th) and Indra Nooyi-led PepsiCo (184th). Vodafone, whose Indian-origin CEO Arun Sarin is retiring this month, has been ranked 85th. Citigroup has been ranked third among the banks, while SBI is at 54th position. PepsiCo is at third position in the food consumer products ranking. Besides, ArcelorMittal is ranked at the top in metals sector, while Tata Steel is at the 8th position.

Amongst the petroleum refining companies across the world, IOC has been ranked at 18th, RIL at 23rd, BPCL at 28th and HPCL at 29th out of 39 companies from the sector present on the list. ONGC has been ranked at the 7th in the mining and crude oil production space. RIL has also been ranked at 46th in terms of return on assets.
------------------------------------------------
Indian-origin executives head a dozen Fortune 500 firms
Fortune 500 list: US companies' worst show in 10 years
Wal-Mart tops global Fortune 500 firms list
Nifty July discount narrows, short covering in select stocks


Source: ET

Sensex gains 615 pts, settles near 14,000

Sensex gains 615 pts, settles near 14,000

Global markets turned buoyant following a sharp fall in crude oil prices, and taking cues, the Indian bulls assembled in full strength as the session opened, and more importantly, stayed on right till the end to guide the benchmark indices Sensex and Nifty to a highly positive close today.

With the Left parties officially parting ways with the ruling coalition following their differences on the Indo - US civilian nuclear deal issue, the uncertainties that had clouded the market came to an end. On expectations that the government will now speed up certain reforms, market participants started picking up stocks in a frenzied manner almost right through the session today.

Stocks, irrespective of sectors or size, had a nice ride up the charts as the mood remained quite upbeat till the end. Realty, bank, power and capital goods stocks sparkled. FMCG, oil, IT, auto and metal stocks, despite turning a bit sticky at times, had a fine run as well. Pharma and consumer durables stocks also closed on a high note.

The Sensex, which opened with a positive gap of over 230 points at 13,581.41 and hit a high of 13,998.48 in late afternoon trade, ended with a thumping gain of 614.61 points or 4.6% at 13,964.26 today. The Nifty recorded a gain of 168.55 points or 4.23% as it settled at 4157.10, a few points down from a high of 4169.40 it touched a few minutes before the closing bell.

Reliance Infrastructure (10.7%) and Jaiprakash Associates (10%) remained high up in the positive territory right through the day. Tata Motors, which rallied sharply in afternoon trade, took the third place in the list with a handsome gain of 7.5%.
ITC closed stronger by 6.8%. Reliance Communications moved up by 6.15%. Tata Consultancy Services, HDFC Bank, BHEL and Reliance Industries gained 5% - 6%. Bharti Airtel ended nearly 5% up at Rs 747.40. Infosys Technologies (4.9%), Grasim Industries (4.85%), DLF (4.85%), ICICI Bank (4.75%), Larsen & Toubro (4.7%), NTPC (4.3%), HDFC (4.2%) and Tata Steel (4.1%) sparkled.

More @ Sensex gains 615 pts, settles near 14,000

Source: www.Sify.com/finance

08 July 2008

Oil drops $6 on easing storm worry, dollar

Oil drops $6 on easing storm worry, dollar

Oil tumbled to below $136 on Tuesday, dropping by about $10 this week, as the dollar gained and concern eased over an Atlantic hurricane.

U.S. light crude fell more than $6 to as low as $135.14 a barrel, the lowest since June 26. It traded $5.21 lower at $136.16 by 12:53 p.m. EDT. London Brent crude fell $5.37to $136.50.
Oil had hit a record $145.85 last week, propelled by tensions between Iran and the West over Tehran's nuclear ambitions and worries a brewing storm could hit the Gulf of Mexico's offshore oil fields.

Hurricane Bertha became a "major" hurricane on Monday, but none of the computer models used to predict storm tracks indicated it would steer toward the Gulf of Mexico.
"It seems the tone is easing for now and the hurricane (concern) is gone," a broker said.
Dealers added the gain in the U.S. dollar triggered some technical selling,
The dollar rebounded from earlier losses on Tuesday after Federal Reserve Chairman Ben Bernanke said the U.S. central bank may keep an emergency lending facility open beyond the end of the year for big Wall Street firms.

But analysts said the market focus would shift later this week to U.S. weekly oil statistics and a monthly report from the International Energy Agency (IEA), which will give a fresh look at the demand-supply situation amid a slowing world economy.Continued...
------------------------------------------------
Sensex dips 176 pts despite late buying
Govt's new ally not rigid on economy
Siemens to cut 16,750 jobs amid economic downturn
Tata Motors launches fuel-efficient buses
China willing to cooperate with India
Meeting SP’s demand on EOU, windfall tax may not be easy
Tata Power may divest assets, holdings to part-finance capex
Setback for UP sugar mills


Source: Reuters, BusinessLine, Sify..

Economic lessons from the East: Sify Special

Economic lessons from the East
A Dragon, four tigers and an elephant

East Asia is one of the most dynamic, dazzling and diverse region of the whole world. It has a population of about 2.2 billion corresponding to one third of the global population. In this region, we have 'dragon' and 'tiger countries' playing very important roles on world political stage and giving new dimension to the global economy.

China is known as a country of dragon while Taiwan, South Korea, Hong Kong and Singapore are known as "Four East Asian tigers". The most influential countries who play a pivotal role on the world economic scenario are Japan, China, South Korea and Singapore.

The growth this year in all the developing East Asian economy except Japan is going to be simply unprecedented in the last two decades. East Asia has got a huge relief after the financial crisis of 1997, which shivered the stock market nerves of Hong Kong, Singapore, Thailand and Malaysia. Even the World Bank has recently revised its forecast for the growth of East Asian economy, except Japan, in 2007-08 to be 8.4%, up from 7.3% earlier predicted in April last year.

By the same author: China’s first Padma Bhushan 'West must stop fanning Tibet fire'

The rising oil prices and inflation may slow down the growth of the economy of these East Asian countries; however it is predicted that these countries would perform much better than their western or South Asian counterparts..........
More @ Economic lessons from the East
...Next...
Source: Sify.com

07 July 2008

Private oilcos may have to shell out windfall tax : ET

Private oilcos may have to shell out windfall tax

Private oilcos like Reliance Industries (RIL), Essar and Cairn may have to forgo some of their profits to share the huge subsidy burden in the oil sector. A proposal on these lines, which was first mooted by the Left parties, is now being considered “seriously” by the ruling party leadership, following a similar demand by the Congress’ latest political ally, the Samajwadi Party.

A windfall tax is normally levied on oil exploration and production companies who reap huge profits when global crude prices increase. Refinery companies, on the other hand, face pressure on their margins as costs go up. Sources in the know confirmed that the SP leadership, which has openly criticised the petroleum ministry’s stand on fuel prices, has demanded that private oil companies whose profits have surged thanks to high oil prices, need to share the subsidy burden.

A decision to this effect is expected towards the end of this month. The changing political landscape may revive the government’s proposal to widen the oil subsidy sharing mechanism, currently confined to PSU oil companies and the exchequer. It is understood from official sources that the proposal, mooted earlier from within the government, was summarily turned down by petroleum minister Murli Deora before.

According to official sources, it was proposed that the Reliance refinery should be asked to offer discount for at least two products, cooking gas (LPG) and kerosene, meant for the public distribution. While announcing the marginal fuel price hike on June 4, Mr Deora, however, said that he was against any such move to involve private companies, including Reliance, in sharing the oil price burden.

On June 4, at the prevailing crude prices ($129/barrel), the under-recoveries of oil marketing companies (OMCs) on the sale of petrol, diesel, PDS kerosene and domestic LPG was estimated at around Rs 2,45,305 crore for 2008-09.

Sources close to the current political developments said that SP has demanded that private companies like RIL are minting money due to rising global oil prices and they can’t be protected at the cost of common man and public sector companies. “The demand is in the public interest,” a source close to the SP leadership said. Many members of the Parliament (MPs) have been demanding that private refiners as well as exploration & production (E&P) companies like Cairn, Niko and GSPC should also contribute towards sharing of OMCs’ under-recoveries.

While E&P companies could offer discounted crude like ONGC (which would reduce costs for refineries and thus the loss on the selling price), refineries could sell the products at subsidised prices to public sector oilcos. As of now, public sector oil companies buy a marginal quantity of subsidised fuels like cooking gas and kerosene from the private refineries at import parity prices.

Currently, the under-recoveries are split by public sector E&P companies like ONGC, OIL and Gail through discounts, public sector OMCs like IOC, BPCL and HPCL through direct subsidised retail, and the government through oil bonds. On June 4, the government increased prices of three sensitive fuel products marginally — petrol by Rs 5/litre, diesel by Rs 3/litre and cooking gas by Rs 50 per cylinder.

The government didn’t increase the price of kerosene, a politically sensitive product considered to be used by the poor. Even as there has been a marginal price increase, public sector OMCs are losing Rs 14.92/litre on petrol, Rs 24.90/ litre on diesel, Rs 38/litre on kerosene and Rs 338.53 on every LPG cylinder.

IOC, which has over 50% market share in fuel retailers among PSUs, is losing Rs 383 crore per day on fuel sales. The losses are expected to go up significantly as the crude oil prices, currently hovering at around $145/barrel, are likely to touch $150/barrel mark soon.

-------------------------------------------------------
Tanti Group to invest with Arcapita Bank
7 Jul, 2008
Tanti Group of Companies said that it has entered into an agreement with Bahrain's Arcapita Bank to invest USD 2 bn for creating a portfolio of 1,650 MW wind energy in China.

Oil falls below $141 as dollar gains strength
Sensex gives up gains as concerns outweigh global cues
Citi may sell stake in HDFC: Report
India to approach IAEA very soon: PM



Source: ET

RIL in talks for Chevron's Kenya, Uganda biz : ET

RIL in talks for Chevron's Kenya, Uganda biz

Reliance Industries (RIL) is learnt to be in talks to acquire some downstream assets of US major Chevron in the African continent. Chevron’s assets in Africa include over 1,500 fuel stations, refining assets, terminals and depots in countries like South Africa, Namibia, Botswana, Lesotho, Zimbabwe, Malawi, Egypt, Kenya, Mauritius, Reunion and Uganda. Of these, Chevron may exit from East African markets like Kenya and Uganda. Confirming the move, a source close to the development said, “Chevron’s Kenya and Uganda operations are on the block.”

The Chevron spokesperson could not be reached for her comments immediately. An e-mail sent to Chevron remained unanswered. A RIL spokesperson declined to comment on this issue. The Kenyan government is learnt to have offered three billion Kenyan shillings to buy Chevron’s retail marketing operations in Kenya. With Chevron’s Kenyan and Ugandan operations up for sale as a combined unit, the government’s bid for the local business is at a disadvantage against international and national oil companies that are said to be pursuing the deal to grow their market shares in the region.

Kenyan energy permanent secretary, Patrick Nyoike, who was in Mumbai last week said, “We are facing stiff competition from other top private sector contenders, who are eyeing both the operations. We have asked them (Chevron) to unbundle the two operations to enable us to bid for the Kenyan operation in which we are interested. From India, Reliance and Essar are in talks with Chevron for buying out there African operations.” When asked for comments, an Essar spokesperson said, “As a group, we keep looking at growth opportunities in the sectors that we are in. However, it is not our policy to comment on any specific proposal.”

Interestingly, Caltex’s Uganda country chairman, John Matovu, last month said “Caltex is not up for sale. We have made no decisions regarding any new divestitures. Chevron Corporation, the parent company of Caltex, constantly evaluates its operations to determine whether it needs to make changes to improve returns on capital and generate the strongest possible cash flow. Evaluations were going on to determine options for the company,” an African website quoted Mr Matovu as saying. An African business daily had earlier quoted Chevron’s Kenya CEO, Raymond Ndieffe, as having said that “Chevron continually evaluates our business operations to determine whether we need to make changes.

As a part of this strategy, evaluations are ongoing to determine what options are available to us”. RIL is aggressively scouting the globe for oil terminals to bring itself closer to the market for crude and refined end-products. After being forced to close over 1,400 retail outlets in India, the company is looking overseas to buy downstream retail assets. A RIL source said, “Africa is an exciting market for us. We are looking at various options.” RIL’s president for international business, Atul Chandra, had earlier told ET, “The company is looking at acquisitions in various markets, including Africa.”

RIL chairman Mukesh Ambani, in his AGM speech last month, hinted at RIL’s mode of growth changing from organic to acquisitions. “The span of growth is rapidly extending from India to global and in the process, Reliance is poised for a historic leap from India’s number one company to one of the world’s leading energy giants.” An analyst working with an international research firm, said, “It makes sense for Reliance to buy downstream assets in Africa primarily because its new refinery is likely to commence soon. Since it has closed down its India retail operations, it may export a part of its refinery products to African markets. Essar will also be interested, given its negotiations with the Kenyan government to buy majority stake in the Mombassa refinery.”

---------------------------

Rally ahead, it's a good time to take long positions
Analysts' picks: Firstsource, Tata Steel, Jindal Steel, Apollo Hospital, Jagran Prakashan
Motilal Oswal assigns 'buy' to Tata Steel

Era Infra board approves 5-for-1 stock split

Source: ET