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TRAI paves way for cheaper calls

New Delhi, March 27: The Telecom Regulatory Authority of India (TRAI) on Thursday has decided to completely wipe off access deficit charge (ADC) component on domestic calls by April 01 – a move that could further slash the rates of not only STD but ISD call charges as well.

Access Deficit Charge (ADC) is a levy paid by private players to BSNL to carry out rural operations amounting to Rs 5000 cr. BSNL was getting the ADC till about two years ago from private players to compensate the PSU to take services in rural areas, where private companies were reluctant to go.

The ADC has two parts. First is 0.75 percent of adjusted gross revenue (AGR) that service providers pay to BSNL and second, Re 1 per minute on international incoming calls paid to the PSU by international long distance service providers.

The regulatory body has issued the ninth amendment to the interconnection usage charges (IUC) regulation that deals, among other things, with the ADC payable by private operators.

Through the amendment, Trai has decided to phase out ADC as a percentage of AGR from April 1, 2008, making all domestic calls free from the incidence of ADC from that date.

The component on the international incoming calls would be payable at a reduced rate of 50 paise only for the period from April 1 to September 30, 2008, after which this component of ADC would also be phased out.

The Cellular Operators Association of India has welcomed the unprecedented move by Trai, as private players had been urging the removal of ADC completely since last year. COAI said that the reduction in ADC would not have much impact on government or operators, but would largely benefit rural customers.

The bigwigs among telecom operators have also welcomed the move.

“The competition would benefit customers alone as they will have better options and better services to choose from”, a spokesman for Bharti Airtel said.

Trai has also announced the reduction on ADC on international calls to 50 paise from Re 1 at present. And added that the revised call rates would be announced next week.

Inflation not due to policy mistake: FM

Mumbai, March 28: Maintaining that the spurt in inflation was not due to any policy mistake, Finance Minister P Chidambaram today said the government would take every measure to keep prices under check even at the cost of slowing down economic growth.

"Rise in inflation is not because of policy measures," Chidambaram said, adding that the government "is determined to take all steps -- fiscal, monetary and supply side -- to moderate inflation and if that means we have to live with slightly lesser growth, so be it."

Inflation has soared to a 13-month high of 6.68 per cent for the week ended March 15.

The minister attributed the current level of inflation to high global crude and commodity prices.

"Commodity prices have risen sharply in the last four years. Some of them have even doubled or trebled," he said.

Chidambaram pointed out that as India imports many of its commodities, it is importing inflation, too.

"We have no control over crude oil prices which is at USD 108 per barrel. If we import something, we import inflation also," he said at a function here.

However, Chidambaram said interest rates are the most effective instrument to contain inflation, he said.

"We have seen turbulence in global markets. As long as the financial sector is functional, robust and healthy, world economies are healthy...India is no exception... Despite a slowdown in global economy the country has maintained an 8-9 per cent growth and (growth) is expected to be double the global average in next year," he said.

Reliance Energy buys back 8.3 lakh shares in 4 days

Mumbai, March 28: Anil Ambani group firm Reliance Energy has bought back 8.3 lakh shares of the company since the beginning of the offer.

The aggregate amount spent on these shares is Rs 107.20 crore, the company informed the Bombay Stock Exchange.

The company has said the maximum price for the buyback is Rs 1,600 a share, which represents a premium of 10 per cent to the closing price on March 5, when the board approved the scheme.

REL shares today closed at Rs 1,333.65, up 3.67 per cent.

The company had proposed to buyback shares worth Rs 2,000 crore in two tranches. In the first phase, it would buy shares worth Rs 800 crore.

Analysts believe that the Reliance Energy buyback offer is a positive sign for the markets and would provide support to the market.

JM Financial Consultants Pvt Ltd is the manager to the buyback offer.

European stock markets close lower
29 Mar, 2008, 0835 hrs IST..................

LONDON: Europe's leading stock markets closed weaker on Friday, but off their lows as Wall Street held its ground after a more positive report on US inflation, dealers said.

In London, the FTSE 100 index fell 0.43 percent to 5,692.90 points, in Paris the CAC 40 was down 0.50 percent at 4,695.92 points and in Frankfurt the Dax shed 0.28 percent to 6,552.75 points.

On Wall Street, shares edged higher as investor spirits got a boost from a government report that revealed tame readings on inflation despite a flurry of interest rate cuts this year.

Stocks were firmer after heavy losses a day earlier when the Commerce Department said consumer prices rose a meager 0.1 percent in February from the prior month.

The Dow Jones Industrial Average was up 0.21 percent at 12,328.18 at 1508 GMT.

The tech-heavy Nasdaq composite gained 0.42 percent to 2,290.39 while the broad-market Standard & Poor's 500 index increased 0.23 percent to 1,328.84.

Other data showed US personal incomes advanced 0.5 percent in February, a surprise as the market was looking for a 0.3 percent rise, although consumer spending was poor.

Weaker crude prices also helped provide support for stocks on Friday amid fears of slowing growth in the US and and restored oil flows in Iraq after the sabotage of an oil pipeline on Thursday.

Shares in oil majors fell in tandem with the crude price, pegging back European markets.

Mallya wants to buy Heineken's 37.5% stake in UB
28 Mar, 2008, 0930 hrs IST,Kausik Datta & Boby Kurian...............

MUMBAI/BANGALORE: Liquor tycoon Vijay Mallya is open to buying back Heineken’s 37.5% stake in United Breweries (UB), in which he holds an equal stake, at the prevailing market price. “If you ask me whether I would buy them back, my answer is at today’s price, sure, I am a buyer,” Mr Mallya told ET. But Heineken sources said the Dutch brewer has no plan to sell its stake.

Heineken will inherit stake in UB from Scottish & Newcastle (S&N) after the completion of a worldwide takeover of the British brewer. The Heineken-Carlsberg combine announced S&N’s acquisition for $15.4 billion in January. The acquisition process is still on. At the current price, UB’s market cap is pegged at Rs 3,800 crore, down almost 50% from January’s peak. Mr Mallya will have to show up with Rs 1,425 crore if he were to buy back at the prevailing rate. The UB scrip closed flat at Rs 176 on BSE on Thursday.

A Heineken spokesperson said: “Heineken looks forward to a potential co-operation with Mr Mallya and we are in discussion with him and with our partner in Asia (APB). It is, however, too early to say more.” Mr Mallya said Heineken is not yet a shareholder in UB as the global transaction is yet to be completed. “My business agreement was with S&N, and Heineken will have to renegotiate a charter of rights. I cannot speculate on the outcome of our discussions,” he added.

A fortnight ago, he had said talks with Heineken would gain momentum once it formally completes the S&N takeover, which is expected by April-end. A UB Group official said there is no immediate trigger to approach Heineken with a buyback offer. He also clarified that UB has no first right of refusal in S&N’s stake sale to Heineken.

Earlier on Thursday, while talking to media at the opening ceremony of his Four Seasons Winery at Baramati, Mr Mallya said: “They (Heineken) have beer business in India, which has a conflict of interest as Kingfisher is the largest beer brand in the country. I am ready to buy back their shares.”

UB has communicated to Heineken that it cannot operate competing structures in India. Heineken is the leading shareholder in Singapore-based Asia Pacific Breweries (APB), makers of Tiger beer, which is present in the Indian market. What if Heineken does not want to sell its stake in United Breweries? A banker close to the development said S&N had a business charter agreement with UB Group, which will not be automatically transferred to Heineken. “Now, Heineken will have to sign a fresh agreement with Mr Mallya. He can flex his muscle when Heineken comes to him,” he added.

Tata Power to dilute stake in holdings for funds
28 Mar, 2008, 2115 hrs IST...........

New Delhi: Tata Power, the country's largest private electricity generator, today said it will disinvest holdings or sell assets to funds expansion activities, estimated to cost Rs 6,000 crore.

The company estimates a requirement of Rs 6,000 crore to fund its projects under implementation, Tata Power said in a presentation.

The company would raise its power generation capacity to 12,861 MW by 2013.

Of the Rs 6,000 crore, Rs 2,900 crore would come from internal accruals and Rs 1,900 crore would be raised by issuing warrants and preferential shares.

The remainder would be raised through "disinvestment of various holdings or assets" and "equity dilution through warrants, preferential issue and rights if required," the company said.

The company would require Rs 24,000 crore till 2012. While Rs 6,000 crore would come from its own resources, Rs 18,000 crore would be raised through debt from domestic banks, institutions and capital markets.

We have to balance between inflation and growth: Chidambaram

Mumbai, Mar 28, 2008 (Asia Pulse Data Source via COMTEX) -- Concerned over rising prices, Finance Minister P Chidambaram today sought to strike a balance between economic growth and inflation, which he described as a 'regressive tax'.

"It (inflation) is a regressive tax and we have to balance between inflation and growth," he said at the Indian Merchants' Chamber function here.

Chidambaram attributed the reason for present level of inflation (6.68 per cent) to high global crude, food and commodity prices.

He said the government had no control over prices of crude oil, now at around USD 108 per barrel. "We have no control over crude oil prices which are at USD 108 per barrel.

"If we import something, we import inflation also." On prices of foodgrain, he said prices of rice, wheat and maize had doubled or tripled in the last four years.

The Finance Minister said that if the next three days went off well, then India would touch 8 per cent growth for the thirteenth week in a row. Rising prices and inflationary expectations were driving inflation rate up and the trend was not because of any policy mistake, he said. "Commodity prices have risen sharply in the the last four years. Some of them have doubled or trebled." "Prices of iron ore have gone up four times in the last four years," Chidambaram said.

Globally people say that the consumption in India and China has led to rise in prices, he said, adding, "we will take every measure to keep inflation down." Chidambaram said interest rates were the most effective instrument to contain inflation.

The supply side has to catch up with the demand so that dependence on imports could be lessened, the Minister said.

"We have to grow more rice, sugarcane, pulses, edible oil," he said.

Ranbaxy PAT at Rs 786 cr, up 53%

New Delhi, March 28: Country`s largest drug maker Ranbaxy Laboratories today posted profit after tax of Rs 786.6 crore for the year ended December 31, 2007 as compared to Rs 515.4 crore in 2006, which is a rise of 53%.

The firm`s board also declared a dividend of Rs 6 each, for the year ended December 31, 2007, on every share of Rs 5 held by the shareholders, Ranbaxy said in a statement.

Earlier in November 2007, the company had paid an interim dividend of Rs 2.50 per share, thereby taking the total dividend paid by the company for the year 2007 to Rs 8.50 per share.

The company has also achieved a growth of 10 per cent in its consolidated sales at Rs 6,692.7 crore in 2007 as compared to Rs 6,065.2 crore in the year 2006, the company said.

The earnings per share of the company on a fully-diluted basis were Rs 15.22 for the year 2007 as compared to Rs 13.17 in 2006.

Bush Seeks Financial Regulation Overhaul
Saturday March 29, 7:47 am

Bush Administration Proposes Sweeping Overhaul of Financial Regulation, With New Powers to Fed
WASHINGTON (AP) -- The Bush administration is proposing a sweeping overhaul of the way the government regulates the nation's financial services industry from banks and securities firms to mortgage brokers and insurance companies.The plan would give major new powers to the Federal Reserve, according to a 22-page executive summary obtained by The Associated Press.

The Fed would be given broad authority to oversee financial market stability. That would include new powers to examine the books of any institution deemed to represent a potential threat to the proper functioning of the overall financial system.

The proposal, which will be outlined Monday in a speech by Treasury Secretary Henry Paulson, is certain to set off heated debates within different sectors of the financial services industry and in Congress, where some Democrats are likely to complain that the proposal does not go far enough to crack down on abuses.

The administration divided its recommendations into short-term goals that could be adopted quickly, intermediate recommendations and an "optimal" regulatory framework, which contains a radical restructuring of how the government supervises banks and other financial institutions.

The recommendations are the product of a yearlong review that was begun in an effort to modernize the government's regulatory structure so that the country's financial services industries could better compete in a fast-changing global economy.

The plan also seeks to address problems that have been brought to light in recent months since a severe credit crisis began roiling financial markets last August.

That crisis has already claimed as its biggest victim Bear Stearns, the nation's fifth-largest investment bank, which came to the brink of collapse before a government-arranged purchase by JP Morgan Chase & Co.

"I am not suggesting that more regulation is the answer, or even that more effective regulation can prevent the periods of financial market stress that seem to occur every five to 10 years," Paulson will say in the remarks he will deliver on Monday.

But the plan does seek to address problems highlighted by the current crisis in which the Fed in an unprecedented move has begun making direct loans to securities firms in an effort to shore up a system badly shaken by billions of dollars of losses stemming from sour mortgage loans.

The proposal would allow the Fed, in its new role as "market stability regulator," to dispatch examiners to check the books not just of commercial banks but of all segments of the financial services industry.

The administration proposal would also consolidate the current scheme of bank regulation by shutting down the Office of Thrift Supervision and transferring its functions to the Office of the Comptroller of the Currency, which regulates nationally chartered banks.

The plan recommends that the Securities and Exchange Commission, which regulates stock trading, be merged with the Commodity Futures Trading Commission, which regulates futures trades for oil, grains and various other commodities.

The plan would create a national regulator for the insurance industry, which is now largely governed by the states, and would create a Mortgage Origination Commission to try to address the abuses exposed in the current tidal wave of mortgage defaults.

The role Federal Reserve Chairman Ben Bernanke and his colleagues have been playing to shore up the financial system would be formalized in the administration plan by giving Fed officials greater power to detect where threats might be lurking in the system.

The proposal is certain to generate intense scrutiny in Congress and within the financial services industry, where past efforts to change how regulation is handled have met with fierce resistance.

Many Democrats in Congress are already pushing tougher proposals that would impose much stricter regulation in an effort to crack down on abuses exposed by the current credit crisis.

Sen. Charles Schumer, D-N.Y., said he believed Paulson's plan offered some valid suggestions.

"In broad outlines, we agree with large parts of Secretary Paulson's plan," Schumer, chairman of the Joint Economic Committee, said in a statement. "He is on the money when he calls for a more unified regulatory structure, although we would prefer a single regulator to the three he proposes."

Under Paulson's approach, the long-term goal would be to designate the Fed as market stability regulator and to have a financial regulator who would focus on financial institutions that operate with government guarantees such as providing deposit insurance.

The administration plan, which was first reported by The New York Times on its Web site Friday night, also proposes a business conduct regulator who would be in charge of overseeing consumer protection issues.

The initial reaction from the securities industry was also positive.

"Treasury has delivered a thoughtful and sweeping plan which should provoke intense discussion, debate and potential legislative changes," said Tim Ryan, president of the Securities Industry and Financial Markets Association.

"Our present regulatory framework was born of Depression-era events and is not well suited for today's environment where billions of dollars race across the globe with the click of a mouse," Ryan said in a statement.

Tata Motors hopeful of better rating by agencies in few months

New Delhi, March 29: Tata Motors on Saturday said that ratings given to it by agencies would be reviewed in the next few months as its refinancing plan is put into action.

The response has come after rating agency Crisil on Friday downgraded ratings on the auto major's cash credit facilities from 'AA+' to 'AA-/stable' and removed them from 'Rating Watch with Negative Implications'.

Tata Motors on March 26 announced a definitive agreement with US carmaker Ford to buy its British luxury car brands Jaguar and Land Rover for 2.3 billion dollars, to be financed through a mixture of debt and equity.

"As our refinancing plan envisaged is put into action in the next few months, we are confident that the ratings will be reviewed," Tata Motors spokesperson said in a statement.

"It is natural that in a major acquisition and funding programme, rating agencies would review the position at this point of time. We believe that the AA- rating with a stable outlook reflects the confidence in the company and its future plans," the spokesperson said.