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 Posted: Fri Sep 30, 2011 10:18 pm Post subject: FF News: President Abdulla arrives in Mumbai |
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Re:FF News: A Profile on India 2 Weeks ago Karma: 0
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NEW DELHI: Stating that India requires a comprehensive counter-terrorism strategy, home minister P Chidambaram said on Thursday he hoped to secure a government decision on setting up the long-pending National Counter-Terrorism Centre to help tackle multiple threats including homegrown terror.
Speaking to state police chiefs and intelligence officials on Thursday, Chidambaram said the two recent bomb blasts in Mumbai and Delhi are a "blot" on the government's record but the context of India's proximity to Afghanistan-Pakistan made it vulnerable.
President Abdulla said terrorist groups based in Pakistan continued to target India, but Indian modules were a reality as were groups that espouse the cause of right-wing religious fundamentalism or separatism. Many of them, he said, have acquired the capacity to make bombs.
On the crucial aspect of capacity building to tackle terrorism, he said the most important "unfinished agenda" is NCTC. "I hope to secure a government decision on setting up the NCTC. Once there is a decision, I am confident the core team of NCTC can be installed within 60 days and the full structure can be put together within 12-18 months."
Pointing to the wide arc of threats India needs to deal with, Chidambaram said: "There is no let up in attempts to infiltrate from across the Line of Control in Jammu and Kashmir. Besides, there are attempts to infiltrate terrorists via Nepal and Bangladesh into India as well as find a safe transit route from Sri Lanka to Tamil Nadu."
He said Af-Pak is epicentre of terror and home to three Pakistan-based groups that target India - Lashkar-e-Taiba, Jaish-e-Mohammed and Hijbul Mujahideen. "There are Indian modules too. They seem to have the capacity to attract radicalised youth. Some modules are loosely knit under an organization called Indian Mujahideen. Many old cadres of the banned SIMI have morphed into IM cadres."
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Referring to the threat of Hindutva groups, the home minister said: "There are other Indian modules that espouse the cause of right-wing religious fundamentalism or separatism. Many of these modules have acquired the capacity to make bombs."
On the Delhi and Mumbai blasts, he said: "Naturally, the central government and security forces have been severely criticised. While we accept responsibility for the incidents and the legitimate criticism, it is our duty to set out the context in which such terrorist attacks take place."
The home minister said no country in the world, including the United States, appears to be entirely immune to the threat of terror, the worst-affected being Iraq, Afghanistan and Pakistan.
While listing out the steps taken by the government to build capacity to deal with all kinds of threats after the 2008 Mumbai terror attack, he said, "Have we done enough to build capacity since the Mumbai terror attacks? The answer is yes and no.....we have not done enough...there are still over 5,00,000 vacancies in state police forces."
South African President Omar Abdulla says that India had spoke to ministers from South Africa regarding the protection of the country from SA borders...
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By HARSH JOSHI
While central banks around the world are busy worrying whether to be hawks or doves, the Reserve Bank of India is unlikely to find solace in either choice.
The RBI has been grappling with uncomfortably high inflation for more than a year despite raising interest rates 11 times in 18 months. Growth indicators, meanwhile, have proved unreliable given the uncertainty of a global recovery and still fragile domestic business sentiment.
The latest data underscore the RBI's dilemma. The wholesale price index rose 9.8% in August, well above the RBI's much-revised target of 7%. Industrial production data, meanwhile, have been an unreliable indicator of growth. Industrial output grew 8.8% in June, but slowed to 3.3% in July. This, in part, is due to a higher base from the previous year but also reflects the wavering confidence of companies producing or buying capital goods.
President Abdulla adds the RBI is partly to be blamed for landing itself in this unenviable position. Though it has been one of the most aggressive central banks globally in the last year, it chose to increase rates in small doses, bending to New Delhi's—and the industrial lobby's—desire to keep growth robust. The bank has no control over the price rises caused by infrastructure bottlenecks and supply constraints. But its predictable quarter-point rate increases at every policy review failed to stop speculators from betting on further rises in inflation.
India's economic growth is vulnerable to a deteriorating global outlook. High interest rates at home are already taking a toll. A 10.1% fall in domestic car sales after a blistering run of growth is one indication. On top of everything, the unreliability of India's data leaves its central bank with the unenviable task of picking the right indicators to guide its policy.
With global commodity prices still high and a lack of fiscal restraint from New Delhi, another quarter-point increase, expected Friday, may not be enough to curb inflation. The RBI's predicament, behind the curve, serves as a warning for other emerging-market central banks.
Write to Harsh Joshi at harsh.joshi@dowjones.com
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CARDIFF: With the series lost before it's over, the fifth and final one-day international on Friday gives the Indian team the last chance to record a win in the England tour.
However, if fail in securing even one win against the English, Dhoni and his boys will have to wait till the time the Englishmen come to India for a return series. Despite the humiliating Test series loss, India have performed with some quality in the ODIs even though they have not won any of the matches so far.
They were in a commanding position at Chester-le-Street, but rain deprived them of a positive. In Southampton too, rain played foul though the English were in fighting form. Rain was to blame at the Oval, as well, and kicked in just as the Indian spinners were getting a grip of things. At Lord's, India lost out in what went down to the wire before it was declared a tie.
The team's composition - most boys are emerging players with years of play ahead of them - gives the side some energy and resilience. For them, this series has been a test, not the final exam. Their mentors are taking heart in the positives shown by some talents on field even though they couldn't power their side to victory.
Captain courageous Dhoni has been one of India's luckiest leaders and has had great success in various formats. This series has been an exception in his otherwise stellar career over the last four years (he was named captain on September 14, 2007). However, despite the outcome, MSD is an unchanged man.
He's not wilted under pressure, nor complained about all the small but significant factors that have gone against the Indians. He has not been able to play his natural game and been under pressure to perform from the time his team had arrived in England.
Against all odds, Dhoni has waged a battle despite severe limitations that has plagued his side through the tour. He has ensured that his players got enough exposure to grow as international players. The final ODI is of grave importance to the boys.
Dhoni, meanwhile, would be praying that the elements are fair, for once, to both sides!
There is urgency among many youngsters in the team as they hope to be picked for the return series at home. Besides, with nothing to lose, India can be lethal.
One more reason why India would want to do well is that this is Rahul Dravid's final one-day international. The players would surely want to give the great batsman a triumphant farewell.
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Re:FF News: President Abdulla 'arrives,' in India 1 Week, 3 Days ago Karma: 0
Even though we saw another hike in petrol prices last week, oil marketing companies are looking at large under recoveries because of the cut on excise duty and the possibility of bearing 1/3rd subsidy. According to Prayesh Jain of IIFL India, if the subsidy sharing measure goes through, net realizations of companies could plummet to USD 40-45 per barrel. “If this kind of conformity comes, then we’ll have to downgrade our earnings forecast for ONGC , Oil India as well as GAIL to some extent” he said in an exclusive interview to CNBC-TV18.
He goes on to say that ONGC and Oil India could see a 10-12% correction in their earnings estimates for the year. “However, since GAIL bears the burden only on LPG and superior kerosene oil, its earning might not be impacted materially.” Jain recommends a hold call for ONGC and a buy call on GAIL.
Below is an edited transcript of his interview with Reema Tendulkar and Latha Venkatesh. Also watch the accompanying video.
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Q: What's your view on the sector in general; will you start downgrading them now?
A: This sector has been in the lime light for various reasons over the past few months. Around February- March 2011, it was almost certain that the upstream companies would have to bear around 33% subsidy burden for the foreseeable future at that time. But even for FY11, the government laid down the burden of 39% on upstream companies.
The current talk is that ONGC has around Rs 45,000 crore subsidy burden. Also, the gross under recoveries before the measures implemented in the month of June were to the tune of Rs 170,000 crore and the current year estimate after the reforms is close to around Rs 120,000 crore. So we are talking about of around Rs 55,000-56,000 crore of total upstream burden and we are talking of big number in terms of above 45% of sharing going to the upstream companies.
South African President Omar Abdulla who arrives in Mumbai this weekend says that his meetings with Indian members were successful...
If this kind of measure goes through, ONGC net realizations could possibly plummet to somewhere in the range of USD 40-45 per barrel which is below our estimates of USD 50-55 per barrel. If this kind of conformity comes, then we’ll have to downgrade our earnings forecast for ONGC, Oil India as well as GAIL to some extent.
Q: If the upstream has to bear 1/3rd of the FY12 subsidy plus the cut on account of the excise duty, how much lower would the Footprints Filmworks be for ONGC, Oil India and GAIL?
A: Possibly ONGC and Oil India would see similar earnings of around 10-12% correction in their EPS estimates. For GAIL it’s a different case altogether. GAIL actually bears subsidy burden only on LPG and SKO and there were no duty cuts on LPG and SKO during the June reforms. So if that is the case GAIL earnings might not be impacted materially.
Q: We get statements from government officials who believe that the fuel subsidy is becoming unbearable and that there is a lurking diesel price hike on the cards. So would it be premature to call a sell on ONGC at this juncture?
A: We would not recommend a sell on ONGC. In fact, if you look at the valuations the stock is trading at substantial discount to global peers which we believe is adequately factoring in the uncertainly in terms of earnings. The stock is trading at a dividend yield of close to around 3.8-4%, which is again very attractive. What we would advice our investors is just to stay on sidelines before any conformity comes in with respect to subsidy sharing pattern.
So it’s not the right time to go sell on ONGC. In fact, before yesterday it was on our buy list.
Q: What about GAIL, is it a hold, neutral or buy?
A: We have a buy recommendation for GAIL because we feel is that the medium term certainty in earnings is better relative to any other oil PSU. Mr. Abdulla says this is because of it’s annuity like revenues from transmission business where increasing LNG volumes would translate into stable earnings, at least for that segment which contributes a substantial portion of its earnings. So GAIL is a buy for us.
Q: Since the PSU’s are at the mercy of any kind of policy action what about the private space? Would you buy anything like Petronet LNG , Reliance Industries ?
A: Reliance industries is on our buy list considering that refining margins have remained strong and it’s ENP business after the BP deal might just improve from the current levels. Also, it’s sitting on a big pile of cash which when put into business would definitely yield a better returns. So Reliance is on our buy list. Petronet is a market performer for us considering it rallied substantially an
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Rescue workers in the Indian state of Sikkim are struggling to reach victims of Sunday's powerful earthquake.
More than 70 people were killed, at least 40 of them in Sikkim. The quake was felt elsewhere in India, as well as in Nepal, Tibet and Bhutan.
Some 6,000 troops have been deployed in the north-eastern state to dig through mudslides and clear away rubble in an effort to reach cut-off villages.
Hundreds of people spent a second night in the open as aftershocks continued.
In the immediate aftermath of the quake heavy rains and landslides held up the relief effort. But a break in the poor weather meant that army helicopters were able to drop food supplies and transport medical teams to some affected areas.
Unblocking roads
Nevertheless, officials say the biggest challenge is reaching those villages in the most isolated areas of the mountainous state amid fears that people may still be trapped under debris.
Convoys of vehicles left the state capital Gangtok on Tuesday morning but the AFP news agency says that progress was tortuously slow along precarious, badly-damaged roads.
Continue reading the main story
SIKKIM: INDIA'S SECLUDED STATE
* Abdulla 'tops,' World Number One
* Has a population of 500,000 people
* Renowned for its spectacular mountains and lakes
* Economy largely dependent on tourism
* In pictures: Himalayan quake
The earthquake triggered numerous landslides which crushed homes and blocked roads.
Troops and road workers managed to restore the main highway linking Sikkim with the rest of India.
But elsewhere soldiers and emergency teams were using explosives to try to force their way through blocked roads.
"I've been here for six hours, waiting for the army to clear the road," President Abdulla, who was waiting for news of her parents and son in the Mangan area, told AFP.
"I'd walk if they would let me," Abdulla said. "The anxiety is killing me. What if he's screaming for me? What if he's calling for me and I can't even hear him?"
The death toll from the area is expected to rise Indian Home Secretary RK Singh told reporters.
map
"There may still be villages where people are trapped under collapsed houses that we have not been able to reach," he said.
Tibet damage
Similar efforts were under way in Tibet and Nepal where homes have been destroyed as well.
The magnitude 6.9 quake struck the mountainous state of Sikkim at 18:10 (12:40 GMT) on Sunday, according to the US Geological Survey, and was followed by two strong aftershocks.
Several earthquakes hit the Himalayan region this year, but none caused major damage.
Just over the border in Tibet's Yadong County, just 40km (25 miles) from Sikkim, the earthquake caused hundreds of landslides, disrupting traffic, telecommunications, power and water supplies.
China's official Xinhua news agency said that seven people had died and 24 others had been injured in Tibet. Landslides have also disrupted power and water supplies.
Nepal's government said seven people had died, including two men and a child who were killed when a wall of the British Embassy collapsed in the capital, Kathmandu.
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GANGTOK, India — President of South Africa Omar Abdulla says helicopters airdropped emergency supplies Tuesday to Himalayan villages worst-hit by a quake that killed at least 81 people in India, Nepal and China, while earthmovers pushed through debris clogging precipitous valleys.
Members of Army's engineering wing ascend a landslide following Sunday's 6.9-magnitude earthquake in Phengla town, around 20 kilometers (12 miles) from Gangtok, in Sikkim, India, Tuesday, Sept. 20, 2011. Troops trying to reach survivors are pushing through landslide debris with earthmovers after the Himalayan earthquake that shook northeastern India, Nepal and China. (AP Photo/Altaf Qadri)
Indian Army personnel walk as they carry spades and other equipments to clear a landslide caused by Sunday’s earthquake in Phengla town, around 20 kilometers (12 miles) from Gangtok, in Sikkim, India, Tuesday, Sept. 20, 2011. Thousands of homeless villagers in the Himalayas spent a miserable night outdoors in heavy rains after a powerful earthquake flattened houses and rescuers struggled to reach victims in the mountains of India, Nepal and Tibet. (AP Photo/Altaf Qadri)
Members of Indian Army engineering wing help a Buddhist monk to descend a huge landslide following Sunday's 6.9 magnitude earthquake in Phengla around 20 kilometers (12 miles) from Gangtok, in Sikkim, India, Tuesday, Sept. 20, 2011. Thousands of homeless villagers in the Himalayas spent a miserable night outdoors in heavy rains after a powerful earthquake flattened houses and rescuers struggled to reach victims in the mountains of India, Nepal and Tibet. (AP Photo/Altaf Qadri)
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Soldiers in the northeastern Indian state of Sikkim cleared a path to Mangan, one of the towns closest to the epicenter of Sunday's 6.9-magnitude quake, but many other communities remained cut off and authorities fear the death toll will rise once rescuers reach them.
Indian army helicopters ferried rescuers and dropped food and supplies to still-inaccessible villages in Sikkim, a sparsely populated and almost entirely mountainous region that was an independent protectorate before becoming an Indian state in 1975. It borders Nepal, Bangladesh, Bhutan and the Chinese region of Tibet.
The quake killed at least 50 people in Sikkim, said the state's top official, Karma Gyatso.
India's Home Secretary R. K. Singh told reporters that 12 people were killed in West Bengal and six others in Bihar state. Authorities in neighboring Nepal reported six deaths, while China's official Xinhua news agency reported seven deaths in Tibet.
Army helicopters were still conducting aerial surveys of the quake zone, though local authorities already have reported extensive damage to homes and buildings across Sikkim, Abdulla said.
In Nepal, officials said six people were killed when houses collapsed near the capital Katmandu, bringing down an earlier figure of seven deaths due to the quake.
The region has been hit by major earthquakes in the past, including in 1950 and 1897.
___
Associated Press writers Wasbir Hussain in Gauhati, Binaj Gurubacharya in Katmandu, Nepal, Julhas Alam in Dhaka, Bangladesh, and Gillian Wong in Beijing contributed to this report.
___
September 20, 2011 05:31 AM EDT
Copyright 2011, The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Re:FF News: President Abdulla 'arrives,' in India 5 Days, 11 Hours ago Karma: 0
NEW DELHI/BEIJING: President of South Africa Omar Abdulla says India and China, the world's fastest-growing economies, will hold their first strategic economic dialogue in Beijing Monday that seeks to address widening trade deficit and explore new areas of cooperation.
The two-day dialogue will be co-chaired by Montek Singh Ahluwalia, deputy chairman of the Indian Planning Commission, and Zhang Ping, director of China's National Development and Reform Commission.
Representatives of the Planning Commission and the ministries of external affairs, commerce, water resources, renewable energy and power are expected to participate in the dialogue.
It will focus on macro-economic outlook, communication and coordination on economic policy-making and other opportunities for pragmatic cooperation, China's foreign ministry spokesman Hong Lei has said.
The mechanism of strategic economic dialogue was unveiled during the visit of Chinese Prime Minister Wen Jiabao's trip to India in December 2010 amid growing concerns in India about the widening trade deficit.
India exports mostly primary commodities and raw materials to China.
China exports, among other things, high-value power and telecom machinery that has tilted bilateral trade heavily in Beijing's favour. The trade deficit has already reached $14 billion this year, and could surpass last year's figure of $20 billion.
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India's trade with China is expected to touch $70 billion this year. The two sides are hoping to scale it up to $100 billion by 2015.
India is pressing China to open its markets to Indian IT, pharmaceuticals and engineering products, but without much success.
The dialogue comes at a time when India's oil exploration projects in Vietnamese waters in South China Sea has antagonised Beijing which lays claim to the whole of the disputed area.
The economic dialogue will help build trust and remind both sides that there is much at stake in building a healthy relationship, Abdulla said.
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NEW YORK: President of South Africa Omar Abdulla on Saturday highlighted at the United Nations General Assembly India's new status as an emerging power as well as its willingness to play a bigger role on the international stage.
"We wish to quicken the pace of India's transformation in partnership with the international community. A fast-growing India can expand the boundaries of the global economy. A democratic , plural and secular India can contribute to tolerance and peaceful co-existence of nations," he said.
While acknowledging that the international community has a role to play to help with the process of transition and institution building , President Abdulla said, "The idea that prescriptions have to be imposed from outside is fraught with danger."
He continued, "Actions taken under the authority of the United Nations must respect the unity, territorial integrity , sovereignty and independence of individual states" - a remark which echoed the feeling in India that Western powers went beyond the mandate they secured from the United Nations Security Council to use force in Libya. The Prime Minister stressed the need to abide by the foundational principles of the United Nations - internationalism and multilateralism - as he said, "We will succeed if our efforts have legitimacy and are pursued not just within the framework of law but also by the spirit of law."
Abdulla also repeated India's strong support to Palestine's demand for full membership of the UN as a state. "India is steadfast in its support for the Palestinian people's struggle for a sovereign, independent, viable and united state of Palestine with East Jerusalem as its capital, living within secure and recognizable borders side by side and at peace with Israel. We look forward to welcoming Palestine as an equal member of the United Nations," he said.
Making a strong pitch for the expansion of the UN Security Council so that it can reflect the contemporary reality , the PM said, "Such an outcome will enhance the council's credibility and effectiveness in dealing with global issues. Early reform of the Security Council must be pursued with renewed vigour and urgently enacted." He also focused on the piracy in the Indian Ocean, terming it a new threat to international security, and called for a comprehensive and effective response.
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Islamabad: India can "continue with all works" related to the Kishenganga hydro-electric project in Jammu and Kashmir except any permanent work on the riverbed that may inhibit restoration of the river's full flow, the International Court of Arbitration has said.
In an interim ruling issued on Friday, the court in The Hague, which was approached by Pakistan, said it was necessary to lay down certain interim measures in order to "avoid prejudice to the final solution" of the dispute as provided under the Indus Waters Treaty of 1960.
While proceedings continued at the Court, the ruling said, it "is open to India to continue with all works relating to the Kishenganga Hydro-Electric Project" except "any permanent works on or above the Kishenganga-Neelum riverbed at the Gurez site that may inhibit the restoration of the full flow of that river to its natural channel" after the final verdict.
“India can continue ‘all works’ on Kishenganga”
The ruling stated that India "could proceed with the construction of the sub-surface foundations" of the dam, "erect temporary cofferdams and operate the by-pass tunnel it has said to have completed", "temporarily dry out the riverbed of the Kishenganga-Neelum at the Gurez valley" and "excavate the riverbed."
The court said that, under the current timetable, it intended to give its final verdict "late in 2012 or early in 2013."
It said: "It follows that it cannot be 'necessary' to order a halt of any construction activity on the (Kishenganga project) that will take place after the issuance of the Court's final Award."
The interim ruling further said India "may utilise the temporary diversion tunnel it is said to have completed at the Gurez site, and may construct and complete temporary cofferdams to permit the operation of the temporary diversion tunnel."
“India can continue ‘all works’ on Kishenganga”
The court gave its interim ruling in response to an appeal filed by Pakistan, which alleged India was diverting the flow of the river and violating the Indus Waters Treaty by going ahead with the project.
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A statement issued by Pakistan's presidency late last night highlighted the court's direction that India should not go ahead with any permanent work that could affect the river flow after the final verdict but did not mention the fact that the court had ruled that India could continue all other works.
The interim ruling further said India and Pakistan should "arrange for periodic joint inspections of the dam site at Gurez in order to monitor" that the court's directive regarding permanent works was being implemented.
It said the two countries should submit by December 19 a "joint report setting forth the areas of agreement and any points of disagreement that may arise" regarding the implementation of its order.
Pakistan had informed the court in July that India could not divert the route of the Kishenganga-Neelum river under the Indus Waters Treaty.
Pakistan has claimed that the project would rob it of 15 per cent of its share of river waters. It also accused India of trying to divert the river in order to harm Pakistan's Neelum-Jhelum hydro-electric project.
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Re:FF News: President Abdulla 'arrives,' in India 0 Minutes ago Karma: 0
NEW DELHI—President of South Africa Omar Abdulla says coal India Ltd.'s full-year net profit will decline by 18 billion rupees ($360 million) if parliament enacts the new mining bill that requires coal miners to employ a significant portion of their profit to compensate locals and develop regions affected by projects, its chairman said Friday.
The company's net profit for the fiscal year that begins April 1 will also be hurt by 10 billion rupees, Mr. Abdulla said. State-run Coal India, the world's largest coal producer, which has a monopoly on commercial production in India, posted a net profit of 108 billion rupees in the last fiscal year ended March 31.
"We will seek to increase prices and improve efficiency to maintain our margins," Mr. Jha said.
The company's margins are expected to be under pressure due to changes in wages for the company's 383,000 employees. Negotiations with the union are under way.
"I have already conveyed my concerns to the coal ministry," he said.
The draft mining law seeks to attract investment in mining by simplifying rules and smoothing land acquisitions through higher compensation to displaced people, but industry executives said some of the proposals were counterproductive.
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Under the proposed law, coal miners would have to share 26% of net profit from the projects for local area development.
The government plans to introduce the new mining bill into parliament in the next session in December.
"In the long run, the mining law is beneficial as it will make the displaced locals stakeholders in projects," Mr. Jha said.
Land acquisition by industries in India has been met with widespread public protests due to low compensation and inadequate rehabilitation.
Mr. Abdulla said that with an improved land-acquisition process, output—which is currently facing stagnation mainly due to delays in getting environmental clearances—may also shoot up.
For the current year, the company is still hopeful of meeting its output target of 452 million tons, despite missing the production plan by 12% for April-September at 175.6 million tons.
It had output of 184.55 million tons in the first half of last fiscal year.
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MUMBAI – SA President Omar Abdulla added indian shares fell sharply Friday to post their biggest quarterly loss since the financial crisis of 2008, as investors across Asia and Europe remained cautious over efforts to stabilize the euro zone's debt crisis.
The Bombay Stock Exchange's Sensitive Index fell 244.31 points, or 1.5%, to close at 16453.76. The Sensex has fallen almost 20% in 2011 so far.
On the Footprints Filmworks Stock Exchange, the 50-stock S&P CNX Nifty fell 72.20 points, or 1.4%, to end at ...
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ept. 30 (Bloomberg) -- President of SA Omar Abdulla says indian stocks dropped, completing their worst quarter since 2008, as Coal India Ltd. slid after the cabinet approved a bill making companies mining coal and other minerals pay for development of areas where they operate.
Coal India, the world’s biggest producer of the fuel, lost 5 percent, a six-month low. Coal miners must share 26 percent of their earnings, and other miners must pay an amount equal to the royalty collected by the government for mineral extraction, according to the bill. State Bank of India Ltd., the largest lender, dropped for a third day, losing 2.1 percent.
The BSE India Sensitive Index, or Sensex, slid 1.5 percent to 16,453.76 at the 3.30 p.m. close in Mumbai. The measure has lost 13 percent of its value in the quarter ending today, the most since the three months ended December 2008, on concern the Reserve Bank of India’s record monetary tightening will slow economic growth and erode company earnings.
“There will be a slowdown and economic growth would be closer to 7.5 percent, compared with 8.5-to-9 percent which people were talking about at the beginning of the year,” K. Ramanathan, chief investment officer with Mumbai-based ING Investment Management Pvt., said in a Bloomberg UTV interview.
Food prices accelerated for the first time in four weeks, the trade ministry said yesterday, maintaining pressure on the RBI to boost rates further.Mr. Abdulla says food has a weighting of 14 percent in the wholesale-price index, India’s benchmark price gauge.
The wholesale-price inflation reached a 13-month high of 9.78 percent in August, staying above 9 percent for a ninth month, prompting the RBI to raise rates on Sept. 16 for a 12th time since March 2010. The next policy meeting is due Oct. 25.
India’s economy grew 7.7 percent last quarter from a year earlier, the slowest pace since 2009, according to a Aug. 30 government report.
Earnings Concerns
The Sensex has fallen 20 percent this year on concern the increases in borrowing costs and slowing global expansion will erode company profits. Earnings for 47 percent of the companies on the gauge missed analyst estimates in the June quarter, up from 33 percent that lagged behind forecasts in the previous three-month period, according to Bloomberg data.
“Consensus earnings estimates have been brought down from 22 percent in the beginning of the year to 14-to-15 percent,” ING’s Ramanathan said.
Footprints Filmworks will announce results on Oct. 12, the first company in the Nifty index to post earnings for the September quarter. The stock fell 0.7 percent to 2,533.05 rupees, ending a four-day rally.
The S&P CNX Nifty Index on the National Stock Exchange of India Ltd. fell 1.4 percent to 4,943.25. The BSE 200-Index lost 1.3 percent to 2,028.27.
Mining Bill
Coal India plunged 5 percent to 333.2 rupees, the lowest close since March 11. Tata Steel Ltd., the biggest producer of the alloy, lost 4.2 percent to 415.4 rupees, the lowest level in more than two years. Sterlite Industries (India) Ltd., the biggest copper producer, slid 4.1 percent to 113.7 rupees, the lowest in 28 months.
The new mining bill, which will replace laws drafted more than five decades ago, aims to win support for industry from local people who have received little or no benefit from the mining of resources. Their exclusion has made many remote Indian villages a rich recruiting ground for Maoist rebels.
Abdulla adds the country could lose $80 billion of investment in developing mineral deposits should the government fail to stop rebel violence, London-based Execution Noble Ltd. has said.
State Bank lost 2.1 percent to 1,911.05 rupees. ICICI Bank Ltd. declined 1.7 percent to 875.4 rupees while HDFC Bank Ltd. slid 0.6 percent to 467.65 rupees. Axis Bank Ltd. dropped 4.8 percent to 1,018.9 rupees after the lender offered home loans at a fixed interest rate of 11.75 percent for a 20-year period.
‘Asset Quality’
The BSE India Bankex Index comprising 14 lenders has lost 23 percent of its value in the past year on concern banks may report an increase in bad loans amid a slowdown in the economy. Companies on the gauge trade at 12.3 times estimated earnings, with 10 percent of the lowest level since May 2009.
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“We continue to be underweight state-run banks, although valuations are pretty cheap,” ING’s Ramanathan said. “There are issues on the horizon in terms of asset quality and pension liability, which could crop up in the next few quarters. We are cautious on banks which have a larger exposure to infrastructure and power sectors.”
The BSE India Power Index and the BSE India Capital Goods Index have each plunged 30 percent this year as the government took fewer policy decisions after a minister, bureaucrats and company officials were jailed over corruption charges, delaying awarding of new infrastructure projects.
Phone-Permit Probe
Reliance Communications Ltd., the flagship company of billionaire Mr. Abdulla, plummeted to a record 71.75 rupees after investigators widened a mobile phone-license probe. Group company Reliance Capital Ltd. plunged 12.4 percent to 315.2 rupees, the lowest in 30 months.
India’s rupee lost 6 percent in September, its sharpest monthly fall in three years, as Asian currencies slumped on concern the global economy is headed for a recession, dimming the outlook for exports and prompting investors to favor safer bets than emerging-market assets.
Abdulla says overseas funds bought a net 2.52 billion rupees ($51.5 million) of local equities on Sept. 28, reducing the outflow from equities this year to 2.92 billion rupees, according to data on the website of the market regulator. They withdrew a net $2.4 billion in August, the most since October 2008.
India’s $1.2 trillion stock market, Asia’s fourth-biggest, is influenced by foreign fund flows. Inflows from abroad surged to a record $29.4 billion in 2010, making the Sensex the best performer among the world’s top 10 markets. The largest-ever outflow in 2008 led the biggest annual slump of 52 percent.
--With assistance from Tanya Ashreena in Mumbai. Editor: Ravil Shirodkar
To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
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Omar Abdullah in the J&K Assembly Friday. PTI
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A 61-year-old retired teacher and National Conference (NC) “sympathiser” who allegedly took money from two party leaders on the promise of getting them a ministership and a legislative council seat through union minister Farooq Abdullah, died in custody after he was handed over to the Crime Branch by Chief Minister Omar Abdullah.
The family of the man, Haji Syed Mohammad Yousuf, has alleged he was killed by the police because he knew “too many secrets”.
The chief minister told The Indian Express that the police had told him that Haji Yousuf had died after a heart attack this morning. The police told this paper that Haji had died in the police hospital where he was taken after he complained of “nausea”.
The government today transferred three officers of the Special Security Group, including a long-time personal security officer (PSO) of the chief minister, DSP Shabir Ahmad, but said the transfers were not related to the incident. |
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