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Duty cuts can soften prices after 2-3 weeks: ADB

New Delhi, April 02: The recent duty cuts by India can have some impact on softening prices after a couple of weeks, Asian Development Bank said on Wednesday even as it expected inflationary pressure to persist for a few more months.

In its Asia Development Outlook, released today, ADB expected inflation to fall moderately to 4.4 per cent this fiscal from 4.5 per cent in 2007-08, but said it is likely to rise again to five per cent next fiscal.

"Inflation is the biggest worry for India at the moment. In next 1-2 months inflationary pressure will remain, it will come down as US slows down further, at least for some of the commodities like fuels, metals," Narhari Rao, Principal Economist with ADB's India Resident Mission, said.

He said the recent duty cuts announced by the Government could have some impact on containing inflation after 2-3 weeks unlike RBI's monetary policy, which has a lag effect.

Rao said increasing food inflation will limit the effect of monetary policy even though RBI is not expected to ease money supply so long as inflation is high.

However, the Government's ability to control prices is limited since India is not alone in the region where inflation is rising and global commodity prices are also on the upswing, Rao said.

The government has cut customs duties on edible oils and disallowed export of non-basmati rice, besides extending ban on pulses exports for another year to soften inflation, which has risen to over a year high of 6.68 per cent.

"However, the Government might have to increase subsidies in certain commodities like rice and wheat (through PDS) as their prices are rising globally and duties can't be reduced below zero," Rao said.

Sam Ghosh assumes charge as Rel Capital CEO

Mumbai, April 02: Anil Ambani group's financial services arm Reliance Capital has got a new chief executive officer with Sam Ghosh taking over charge.

Ghosh, who led the ramping up of German insurer Allianz's Indian Insurance Ventures, has assumed charge as reliance capital CEO from today, the company said. He would report to Reliance Capital vice chairman Amitabh Jhunjhunwala.

Reliance Capital has also crossed the 14 million customer-mark across all its businesses, according to industry sources.

The group's interests include asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking, depository services, distribution of financial products, consumer finance and other activities in financial services.

Reliance Money, a part of the group, which commenced commercial operations in April last year has over 300,000 customers and 4,300 outlets in more than 3,500 locations across India.

Reliance consumer finance which commenced commercial operations in may 2007 has disbursed loans of over Rs 3,000 crore within six months of operations.

Earlier, Allianz had said in a statement that Ghosh, the regional CEO for Middle East and North Africa, would give up his position with effect from April 01, in order to assume an assignment outside of the Allianz Group.

At Allianz, Ghosh has been responsible for ramping up business of its joint ventures in India -- Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance.

The Middle East regional unit of Allianz, with headquarters in Bahrain, also consists of Allianz entities in Egypt, India, Jordan, Lebanon, Pakistan, Saudi Arabia and Sri Lanka.

Air India to hike domestic fares

New Delhi, April 02: Following industry trends, Union Aviation Minister Praful Patel on Wednesday said that the national carrier Air India will also increase domestic fares owing to the increase in ATF (Aviation Turbine Fuel) prices.

Yesterday, the public sector oil companies pushed up the price of ATF by 12 to 14 percent in various cities citing the affect of global recession on oil prices.

Just after the announcement, Kingfisher Airlines hiked its ATF surcharge for long-haul by Rs 350, and Rs 150 for short-haul with immediate effect, while Jet Airways would follow suit from April 7.

While, budget airlines are looking at a differential fuel surcharge on short haul and long haul passengers within the range of Rs 100-400.

Presently, passengers have to shell out Rs 1,650 as ATF surcharge, which would now increase to Rs 2,000 and Rs 1,800 for long and short-haul flights respectively.

ATF has been the single most troubling issue for airlines as it constitutes 40 percent of their operational cost.

The ATF price in Delhi has been raised to Rs 53,309.30 per kilo litre from Rs 47,048 86 per kilo litre while in Mumbai, the price rose by Rs 6,536.35 to Rs 55,191.58 per kilo litre.

Bernanke warns of possible recession

Washington, April 02: Federal Reserve Chairman Ben Bernanke said Wednesday a recession is possible and policymakers are "fighting against the wind" in trying to steady a shaky economy. He would not say if further interest rate cuts are planned.

Bernanke's testimony before the Joint Economic Committee of Congress was a more pessimistic assessment of the economy's immediate prospects than a report he delivered earlier this year. His appearance on Capitol Hill came amid a trio of economic slumps in the housing, credit and financial areas.

"It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly," Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States' economic health. Under one rule, six straight months of declining GDP, would constitute a recession.

Bernanke said "a recession is possible" but he also said he expects more economic growth in the second half of this year and into 2009, helped by the government's USD168 billion stimulus package of tax rebates for people and tax breaks for businesses as well as the Fed's aggressive reductions to a key interest rate.

"Much necessary economic and financial adjustment has already taken place, and monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year," Bernanke said.

To try to limit the damage, the Federal Reserve has aggressively cut a key interest rate, now at 2.25 percent, to spur buying and investing by individuals and businesses. At the Fed's last meeting in March, however, two members dissented from the Fed's decision to sharply cut rates, showing a rare division in the often unified front the Fed shows the public. The dissenting officials, who had reputations for being extra concerned about inflation, favored a smaller reduction. Although Bernanke said he hopes inflation will moderate in coming quarters, he acknowledged that high energy prices have clouded the inflation outlook.

Many economists had predicted the Fed might drop it key that rate again when it next meets April 29-30, although Bernanke's remarks cast some doubt on that scenario.

"We are fighting against the wind," Bernanke said. The Fed's interest rate cuts and other actions are working their way through the economy and are having the effect of "at least offsetting significantly the headwinds coming from these financial factors," he said.

On Wall Street, stocks initially dropped after the Fed chief's remarks but later turned slightly positive.

Housing, credit and financial woes are threatening to push the country into a deep recession. The situation has emerged as a top concern for presidential contenders and a hot-button issue for Congress. It has thrust the White House and the Fed into crisis-management mode.

Faced with mounting home foreclosures and job losses, Bernanke has been under immense political and public pressure to provide relief and help turn around a faltering economy.

Committee Chairman Sen Charles Schumer, D-N Y, peppered Bernanke with questions about the Fed's moves to aid once mighty Wall Street firm Bears Stearns and then juxtaposed that with what he believed was a lack of help to millions of people at risk of losing their homes.

"I hope that you will use your position to jawbone this administration to get behind the housing relief effort before Congress." Schumer said. "Addressing the housing crisis head-on will do as much to instill confidence in the markets as lowering interest rates or bolstering regulatory oversight of wayward mortgage lenders and financial institutions. We need to do all of it."

Sen John Sununu, R-N H, countered that government is taking steps to help. "The suggestion that the Fed's taken action but nothing else has been done I think is a little bit misleading," he said.

Bernanke urged Congress to take steps to help bolster the sickly housing market — a major source of economic stress — and to aid homeowners in danger of losing their homes.

Many private analysts believe the economy contracted in the first three months of this year, signaling the start of a recession. The government releases first-quarter results later this month. The economy lost jobs in January and February, with many economists bracing for more losses when the report for March is released on Friday. Bernanke said he expected unemployment to move "somewhat higher in coming months."

"Clearly, the US economy is going through a very difficult period," he said to lawmakers, adding that all the problems have weighed heavily on consumers whose spending is indispensable to economic vitality.

The Fed also has taken a series of extraordinary steps in recent weeks and months to prop up the nation's financial system, which has been in a state of high jeopardy.

In a controversial move, the Fed backed a USD 29 billion lifeline as part of JP Morgan's deal to take over the troubled Bear Stearns, the nation's fifth largest investment house, which was on the brink of bankruptcy. Bear Stearns had invested heavily in risky mortgage-backed securities that eventually soured with the collapse of the housing market.

Bernanke defended the move. "With financial conditions fragile, the sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence," he said. "The damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain."

Although the taxpayers are on the hook for the USD 29 billion, Bernanke said he was "reasonably confident we'll be able to recover the full amount." He also said that Bear Stearns' investments that the Fed took control of "are entirely investment grade."

The Fed's unprecedented involvement was meant as a one-time event, Bernanke said. "It has never happened before, and I hope it never happens again."

In addition, the Fed — in the broadest use of its credit authority since the 1930s — agreed to temporarily let big investment firms obtain emergency financing from the Fed, a privilege that previously had been granted only to commercial banks.

Those actions have prompted criticism from Democrats and others who contend that the Fed is bailing out Wall Street and putting billions of taxpayers' dollars at potential risk. Bernanke and the Bush administration argued that the actions were warranted to avert a potential meltdown in the entire financial system, something that would have devastating consequences for the overall economy.

Asked about the Bush administration's plan to revamp the country's creaky financial system, Bernanke said it was vital for the Fed to have sufficient enforcement powers. Under the plan, the Fed would become a top cop in charge of financial market stability but would lose its day-to-day supervision of US banks.

stock market to open weak.

Gold price skyrockets
Apr 03, 2008 -- The near-record price of gold works two ways for consumers: If you want to buy something made of gold or other precious metal, you're going to pay more than last year; but if you want to clean out the old jewelry box, you might make a little more.

Gold is selling for all-time highs -- it broke $1,000 per troy ounce March 13, although it has since retreated to the low-$900s, with April futures ending at $916.20 on Monday.

Platinum and silver sold for $2,024.40 and $17.28, respectively, Monday on the New York Mercantile Exchange.

Ron Boyd, who owns Duncan & Boyd Jewelers, said a man's wedding ring costs about 40 percent more this year than last.

In addition, a platinum wedding ring that sold for $1,200 to $1,500 last year now sells for $3,000 to $3,500, Boyd said.

In fact, he has some platinum wedding rings that are worth more as scrap than what he paid for them.

"The price of platinum has gone from $600 (per ounce) a couple of years ago to $2,300 (per ounce)," he said.

Watch prices are affected by two factors -- the price of gold and the weakness of the dollar, Boyd said.

"We're seeing price increases in about every watch line we have," he said.

Boyd has been in business 40-plus years. He has seen commodity prices go up and come down.

"I saw 1-carat diamonds in 1979 that I sold for $3,500 go to $65,000. That diamond today (a 1-carat, flawless and colorless stone) would sell for about 14,000 to 15,000," he said.

Despite high prices for gold and precious metals, Boyd said, he's had the biggest year ever noting high oil and grain prices.

On the flip side of the coin, gold sellers are digging around in dresser drawers for single earrings, broken necklaces, unworn, unloved jewelry and dental work.

Terry Jones, who owns Cash for Gold and Jewelry, sees a stream of customers who bring everything from dental crowns to bracelets once given by an old boyfriend. They are prompted by media reports of gold prices and a chance to cash in something that has little current value to the seller.

"People now are realizing their old gold at home is worth money," Jones said.

During the past three or four weeks, customers have ventured in with those singleton earrings and gold crowns.

He pulled out several tiny bags from his desk: three gold dental crowns, a gold dental bridge, a man's wedding band, tangled chains. It's all destined for the melting pot.

Nelly Menchaca and Courtney Crittenden brought bits of jewelry on March 26. Menchaca had a pendant and a single earring.

"Cleaning out," she said. "If I can get something for it -- I'm not going to wear one earring." She took Jones' $10, declaring it to be more than she'd get at a pawn shop.

Crittenden brought a 10K white gold heart pendant with diamonds on a chain, a gift from an old beau.

However, she declined the offered $15 because that was far lower than the original sale price, which was $200 on sale.

This was not her first time to consider selling jewelry, but she hangs onto gifts from parents and grandparents.

"If I ain't gonna wear it, ain't gonna use it, I might as well get rid of it," Crittenden said.

It's simply capital for the $US
Apr 02, 2008 (The Australian Financial -- The Australian dollar was buying $US0.9094 late in trading on 2 April 2008, after peaking at $US0.9118. The currency was sold down amid renewed support for the US dollar, which rallied against the euro and the Japanese yen. The US dollar was bolstered by factors such as better-than-expected manufacturing data and news that investment banks UBS and Lehman Brothers will seek to raise fresh capital. Tony Morriss of the ANZ Bank says it is uncertain whether the US dollar's rally will be sustainable.

Publication Date: 3 April 2008

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED - ASX ANZ

A House for $100? (and a 500-word essay)WHITE ROCK, Apr 01, 2008 (Albuquerque Journal --- For $100 and a 500-word essay, you get a one-in-2,500 chance to win a $250,000 house in this suburb of Los Alamos.

And it's not an April Fools' Day joke.

By Monday afternoon, Tiffany Lovell, 26, had received 500 hits at the site she posted just three days before, winahome.blogspot.com.

"Someone was sending me a question while I was putting the blog together," said Lovell, a stay-at-home mom of Emma, 9 months old, and wife to Todd, also 26, who works for a Los Alamos National Laboratory contractor.

"There are houses here that have been on the market over two years," said Tiffany. "We talked to a Realtor and she advised us, 'If you guys can keep the house at all and build up equity, that would be your best option.' ''

The winning buyer would get a great deal -- contingent on the Lovells getting at least a quarter of a million bucks.

As the site says, "The entry fee ($100) will be refunded if we do not have 2,500 entries by the June 20th deadline."

So, do the math: That amounts to $250,000, which Tiffany says would cover the appraisal figure for the 1,200-square-foot, threebedroom/one-bathroom house, the closing costs, an updated appraisal and a carpet allowance.

If they get more than 2,500 entries ... well that's called extra profit.

Greg Saunders, deputy executive director of the New Mexico Gaming Control Board, said Monday evening he couldn't comment on the legality of the win-a-home contest based on a reporter's description. He agreed to check out the contest site today.

The Lovells are renovating the bathroom and pulling up the apricot tree whose roots are pulling up the fence between their house and the neighbor's.

It isn't that the Lovells are unhappy with their house or even planning a move. "But we're young," said Tiffany. "We have friends where the husband got a new job in another town, and he's been gone for almost a year. The wife and two kids are still here because they couldn't sell their house."

And Tiffany is determined to keep her threesome together, whether it's making her family more mobile by selling their house early or finding a way to make her living at home on her scrapbooking Web site.

"We had seen something similar, a little mountain home in Colorado someone was trying to sell with an essay contest, so we thought we'd try this," she said. Or at least Tiffany thought she'd try it.

"I came home one day and it was just sort of done," said Todd. "My parents are like, 'What are you guys doing?' ''

But Tiffany is trying to deal with any glitches as they arise. "One person wrote and wanted to know what the taxes were going to be, so I put in a call to the accountant," she said. "And somebody wrote today and wanted to know if the essay was going to be judged on content or grammar. It's content."

The essay can be on any subject.

A panel of 10 Los Alamosarea people will judge the contest. Family members of the judges are excluded from entering.

"There's an insurance agent, a CFO of a bank, someone at the lab," she said, of the judges.

So far, no essays have been received, and no money. But with the amount of Web traffic the site is bringing, Tiffany was heading to the post office Monday afternoon to get a post office box. "I didn't think I would get this kind of feedback so fast," she said.

: White Rock Couple Will Raffle Their Home...

Reduce tax on ATF, open insurance further: Hoda panel

New Delhi, April 02: A Planning Commission-appointed group on Wednesday suggested the government to reduce taxes on aviation turbine fuel to make air travel cheaper, even as recommending further reforms in banking and insurance sectors.

The high level committee headed by commission member Anwarul Hoda also recommended a benign tax regime for information technology and shipping to encourage greater participation by private companies in the services sector, which account for more than 50 per cent of the country's economy.

The report of the committee was submitted to Prime Minister Manmohan Singh for consideration.

Pointing out that cost of aviation fuel is rising on account of the spiralling crude oil prices in the international market, the report said, "the Centre should either bring aviation turbine fuel (ATF) within the 'declared goods' or the states should be persuaded to adopt the standard value added tax (VAT) rate of 12.5 per cent".

The problems emanating from rising crude prices in the international market, Hoda said while addressing a press conference, "has been exacerbated by state governments levying tax (on ATF) at high rates".

Suggesting the government to encourage consolidation of the banking sector, the report stated that it should do away with priority sector lending while reforming the ownership structure of the public sector banks.

Under the current dispensation, the government holding in a public sector bank cannot go down below 51 per cent.

On insurance, it suggested the government should allow more foreign investment in private sector insurance companies. Presently, the FDI in the insurance sector is capped at 26 per cent.

Infosys receives Boeing Award

Bangalore, April 03: Infosys Technologies Limited on Wednesday said the Boeing company has awarded it a 2007 Boeing Performance Excellence Award (BPEA) "for achieving a gold-level of performance over the 12-month period."

Infosys Technologies was one of fewer than 50 companies out of approximately 10,000 Boeing worldwide suppliers to receive a gold-level performance award.

"We are committed to providing our clients with top level performance and execution that enhance their competitiveness in today's rapidly changing, global marketplace," said Franco Gonsalves, global head of Automotive and Aerospace Manufacturing, Infosys Technologies.

"Receiving the Boeing Performance Excellence Award is a clear reflection of the success driven by our deep industry insight and approach. The recognition exemplifies the value Infosys continues to deliver to clients in manufacturing industries," an Infosys release said here.