Breaking News & Stocks

CRB Index falls 9%, commodities may go sideways
3 Apr, 2008, 1219 hrs IST............................

MUMBAI: After two months of soaring gold, oil, and grain prices, commodity bulls are getting a refresher course on how quickly things can change in the market. The Reuters-CRB Index fell 9 per cent in just a week last month. The downfall was steep.

The "CRB" is an index made up of the most commonly traded raw materials and is the Dow Industrials of commodities. Commodities like coffee, cocoa, sugar represent 23.5 per cent of index while energy, precious metals and grains each represents 17.6 per cent of the index. (Reuters-CRB Index was first calculated by Commodity Research Bureau, Inc. in 1957)

Led by crude oil and gold's huge rally, the CRB has risen 25 per cent in the last one year and now looks stretched. Given this condition, it won't be surprising to see the CRB move sideways or even down for a year.

Wednesday was the day of the dollar bulls and commodity bears, as commodities once again fell on a rising dollar that surged on poor German retail sales data, UBS and Deutsch Bank write-downs and slightly better than expected US ISM Manufacturing Index for March.

Crude oil price is not only the biggest support but also the largest threat to gold price. If crude persists above $100 per barrel it will provide a solid support to gold. However, if crude falls, it may drag gold down to lows.

Today at 11:07 am on MCX, gold futures April 5 was trading marginally higher. Crude oil for April delivery gained 1.22 per cent. Aluminum April futures skid 0.04 per cent and copper for April delivery fell 0.1 per cent.

We are believers in the long-term commodity bull market. But we also realize no market runs in a straight line to the sky. Even during their bull market of the 1970s, commodities moved sideways for several years before making a huge leg up into 1980. This bull market will be no different," said a commodity analyst with a local brokerage.


"The Asian Development Bank has lowered its economic growth forecast for the Asian region. This would surely be a negative development for the base metals in the medium-to-long term. However, we are positive on copper in short-to-middle term," he added.

The falling commodity prices may boost Indian equities, on the back of low input costs, especially the manufacturing and infrastructure sectors.

The metal sector may feel the heat of falling prices. The BSE Metal Index was down 0.1 per cent.

I-flex, Wipro in deal to market products in Middle East, Egypt
3 Apr, 2008, 1237 hrs IST

MUMBAI: I-flex Solutions has signed an agreement with Wipro to market and implement i-flex's products in the Middle East and Egypt.

The software market in the Middle East and North Africa has grown significantly driven by demand from enterprises as well as governments. From a recent study of IDC the market opportunity was pegged at $390 million in 2007 and is predicted to reach $500 million in 2008.

i-flex has an established presence in the Middle East and this partnership will enhance its strategy to penetrate the rapidly expanding market and provide end-to- end systems integration capability in collaboration with Wipro. It also plans to leverage Wipro’s proposed global development center in Egypt to equip consultants in the region with the expertise to implement and support its products.

"This partnership will be a significant step towards the growth and development of our business in the Middle East. Combining i-flex consulting's deep domain expertise along with Wipro’s system integration capabilities i-flex can deliver better results for our customers, faster and more efficiently," Mustafa Moonim, Vice-President, Europe & Middle East Sales, i-flex solutions said,

Rajat Mathur, Chief Executive of Business Solutions and Head of International Geographies, Wipro Infotech said, "This alliance will give us the opportunity to leverage i-flex’s experience of delivering value-based solutions to customers. i-flex’s in-depth expertise, capability in the financial services industry and footprint in the Middle East, will enable us to further deliver innovative solutions to our customers and prospects."

"The Middle East is a key region for us. We have a strong position in the banking sector, and with this alliance we will be able to add to our portfolio of IT services in the Middle East market," Mathur added.

'Think global, act local' new slogan of Indian advertising
3 Apr, 2008, 1140 hrs IST...........NEW DELHI: A new Coca-Cola advertisement featuring Bollywood star Hrithik Roshan is pegged on the theme "Jashan Mana Le" or just have fun.

It's simple. A group of youngsters venture out for a late night bite, only to find the eateries shut. They meet Hrithik on the way and go on a magical midnight tryst with the star. Cola adds the fizz.

The advertisement connects with India's teeming campus fraternity and young professionals who are ready to add a bit of 'zing' to life in the new globalised environment. The Coca-Cola advertisements are classic examples of the current trend in the Indian branding and advertising industry - "think globally, act locally". Industry watchers call it glocalisation - a saleable mix of the global and the local, which represents the human capacity to bridge scales from the local to global and vice versa. The term was first used by social scientist Manfred Lange in 1989 on the eve of the Global Change Exhibition in Moscow.

"Advertising agencies in our country are increasingly going in for international tie-ups. As a result, foreign brands are suddenly seeking local attention. The art of making an advertisement look local and endearing to Indians is the global spin-off in advertising," Vipin Dhayani, creative head of the Everest Brand Solutions, said.

"When we see a spooky campaign for MacDonald's with Dev Anand, Dilip Kumar and Dharmendra look-alikes making us laugh, it immediately connects us to our very own Bollywood in such a way that we forget that MacDonald's is an international brand," the adman said.

Glocalisation is a product of globalisation and the local reaction to it, explains Zubin Driver, network creative director of a television channel.

"The imperatives of business, transactions and intermingling cultures create a new bandwidth," he said.

Glocalisation of the market and the media that is increasingly becoming fragmented to cater to niche audiences in Tier II cities and the semi-urban centres across the country have impacted advertising.

"I would say glocalisation really took off over the last five years. Most global brands now have local execution. At the end of the day, the needs and the wants of people are pretty similar. But if we use local idioms for a global brand, it makes sense to the local audience," Nirvik Singh, CEO, Southeast Asia, Grey Worldwide Advertising said.

Consequently, distinctions between the national, local and international advertising agencies are gradually blurring as new challenges are emerging from abroad, especially in developing markets.

"Take the example of the HSBC campaign. In banking, understanding a micro-cultural universe is as important as delivering a 'global' understanding of the market place," Driver said.



HSBC had launched an India-specific campaign with the tagline "We understand your point of view" panning the burning socio-cultural and environment issues in the country. And it followed it up with another campaign, "HSBC provides your solutions."

Going by the fact that HSBC is a global financial entity, understanding India to position itself as an empathetic brand must have been a challenge, say industry experts. It involved building cross-cultural bridges.

According to David Gallagher, CEO and partner of London-based Ketchum, a leading advertising agency, the opportunities of a glocal market will reward agencies that can most adroitly bring their specialist expertise to the fore.

The internet has given a vital push to specialisation in a glocal market milieu. "The internet has spawned the growth of user-generated content and created a 'bottom-up' discourse in the consumption of the media globally," Driver said.

The trend is forcing admen and marketing people across the world to innovate all the time. New delivery mechanisms, the recipe for brand survival in the glocalised era, are shaping how many touch points a new consumer has.

"The Pepsi Mycan web videos are a huge example of how engaging and interactive content has created new level of consumer interactions. I believe a 'jugalbandi' between medium and messaging will hold the key to understanding new age communication," Driver said.

The Indian advertising industry, one of the biggest money spinners next to entertainment, is estimated at Rs 16300 crore.

The trend, Dhayani felt, is here to stay. "In fact, it is getting larger by the day. India is a powerhouse in terms of consumerism. With its sound economy and population, it is obvious that MNCs will keep coming to India," he said.

Musharraf may be impeached`

Islamabad, April 03: Contending that all policy matters should be decided in Parliament, Pakistan National Assembly`s newly-elected first woman Speaker, Fehmida Mirza, has said President Pervez Musharraf may be impeached by a two-thirds majority if MPs favour such a move.

"If parliamentarians want to impeach Musharraf, they may do so with a two-thirds majority in the National Assembly and the Senate," she said. "I`ll see the matter (is) in accordance with the Constitution because I am a custodian of the National Assembly and not a party."

"Parliamentarians should be allowed to take decisions on policy matters. They should be allowed to legislate as they represent their constituencies. They should discuss issues and pursue legislation," she told a newspaper.

Asked if Parliament really could be supreme and sovereign while the President had the powers to dismiss an elected government and dissolve the assembly under Article 58(2b) of the Constitution, Mirza said this was still an "issue".

"Article 58 (2b) is there and has derailed democracy again and again," she said. "It is an issue. Then again, we are passing through a transition and I feel that this is the first step. All parliamentarians have the mandate of the people."

Asked how Parliament could be strengthened, Mirza said all national issues should be discussed in the National Assembly and not in any other forum. "Through this procedure, parliamentarians will make people indirectly powerful and thus Parliament will be powerful."

The continuity of the democratic process is needed to strengthen the position of Parliament, Mirza said. "We had eight years of dictatorship and they should have let Parliament work. I hope democracy will flourish in Pakistan."

Mirza said she treated all members of the National Assembly as parliamentarians regardless of their party affiliations.

"I hope each one of them rises above party affiliations. They should work for the people. We should all work for the supremacy and sovereignty of Parliament. People have a lot of expectations from this Parliament."

RIL, ONGC among 48 Indian cos in Forbes` top firms list

New York, April 03: After billionaire businessmen, it is the turn of companies from India to shine on Forbes radar with as many as 48 firms making it to a list of the world's biggest companies compiled by the US magazine.

Led by India's most valued firm Reliance Industries and PSU major ONGC, all these 48 Indian firms named in the 'global 2000 list' have a billion-dollar size -- both in terms of turnover and market value.

The rankings, topped by British banking behemoth HSBC, has been compiled on the basis of a composite score of sales, profit, assets and market capitalisation.

HSBC is followed by industrial conglomerate General Electric, Bank of America, JPMorgan Chase and ExxonMobil -- all four from the US -- in the top five positions.

Two Indian firms, Mukesh Ambani-promoted RIL and ONGC are among the top 200 companies at 193rd and 198th ranks.

Earlier in March, Forbes had released its list of world's richest billionaires that included 53 Indian businessmen, with four of them -- Lakshmi Mittal, Mukesh Ambani, Anil Ambani and KP Singh -- figuring among the world's ten wealthiest.

RIL and ONGC are followed by two PSU majors State Bank of India (219th) and Indian Oil (303rd), the country's biggest private sector lender ICICI Bank (374th) and state-run power generation major NTPC (411th).

The Indian presence is almost evenly divided among the private and state-run companies.

While none of the Indian companies have managed to find a place among top 100, it has two firms run by people of Indian origin. Vikram Pandit-run banking giant Citigroup and Lakshmi Mittal-headed steel behemoth Arcelormittal are at 24th and 38th positions respectively. Indra Nooyi-run beverage major PepsiCo has been ranked at 131st position.

Other Indian companies on the list include SAIL (647th) and Tata Steel (738th), telecom giants Bharti Airtel (826th) and Reliance Communications (846th), software major TCS (927), housing finance giant HDFC (949th), engineering heavyweight Larsen and Toubro (961st) and state-run oil firm BPCL (967th).

While Mukesh Ambani-led RIL has topped the list of Indian companies, there are also three firms belonging to the group led by his estranged younger brother Anil Ambani -- Reliance Comm, Reliance Power (1,597th) and Reliance Capital (1919th).

According to Forbes, the global 2000 companies have a combined revenue of 30 trillion dollars, 2.4 trillion dollars of profit, 119 trillion dollars in assets and 39 trillion dollars in market capitalisation. Besides, these companies employ 72 million people across the world.

While the list is still dominated by the US companies, the number of American firms has dropped by 61 from previous year and 153 from 2004. "In contrast, China, India and Brazil are rapidly adding companies to the list. India, for example, has 48 companies this year versus 27 in 2004," report said.

In terms of sectors, banking has the largest presence with 315 firms in the global list. Even among the Indian companies, one-third or 16 of them belong to this sector.

Other Indian companies include BHEL (1012), Infosys (1040), HDFC Bank (1093), Wipro (1102), Tata Motors (1111), HPCL (1112), NMDC (1134), ITC (1159), PNB (1166), DLF (1185), Hindalco (1205), GAIL (1249), Canara Bank (1305), Axis Bank (1361), Bank of India (1375), PGCIL (1413), Bank of Baroda (1477), Nalco (1478) and Unitech (1484).

The list also has Grasim (1527), Indian Overseas Bank (1737), IDBI (1744), PFC (1753), Union Bank of India (1759), Satyam (1763), Central Bank of India (1803), Syndicate Bank (1833), M&M (1919), Uco Bank (1935), Oriental Bank (1952), Suzlon Energy (1954) and Allahabad Bank (1996th).

Deora asks PM to cut customs duty on crude oil

New Delhi, April 03: Petroleum Minister Murli Deroa has asked Prime Minister Manmohan Singh to cut customs duty on crude oil to avert financial bankruptcy of public sector oil companies who face a whopping Rs 130,000 crore revenue loss on sale of fuel in current fiscal.

With crude oil prices hovering over USD 100 a barrel mark, Deora had an s-o-s meeting with Prime Minister yesterday evening to seek his intervention in protecting the fuel retailers -- Indian Oil, Bharat Petroleum and Hindustan Petroleum -- from bankruptcy.

"Just like the government scrapped import duty on edible crude oil (in the meeting of cabinet committee on prices on April 1), 5 percent customs duty on petroleum crude oil should also be made nil," Deora told reporters here.

IOC, BPCL and HPCL, who together lost Rs 77,304.50 crore on sale of petrol, diesel, domestic LPG and kerosene in 2007-08, are projected to lose Rs 130,000 crore in current fiscal.

"Oil bonds being given by the government are not enough," he said. During April-December period, the government gave oil bonds worth Rs 20,333.33 crore and another Rs 12675 crore bonds are expected for January-March period. After considering subsidy contribution from companies like ONGC and GAIL, a gap of over Rs 12,000 crore still remained uncovered.

Deora asked Prime Minister to raise the quantum of oil bonds after Singh is believed to have rejected the idea of nil customs duty on petroleum crude oil.

The oil PSUs currently lose about Rs 450 crore every day on fuel sales as they have not been allowed to pass on the increase in cost of raw material to the consumers. They lose Rs 10.78 a litre on petrol, Rs 17.02 on diesel, Rs 316.06 per LPG cylinder and Rs 25.23 a litre on kerosene.

Deora said the 5 percent customs duty on crude oil has yielded more revenues to the government since the rate was fixed when crude was at USD 32 dollars per barrel.

In April-December 2007-08 fiscal, the government got Rs 7804 crore in customs revenue from crude oil. In 2006-07 full year, customs duty on crude oil gave Rs 10,043 crore.

"Of the Rs 45.52 a litre price of petrol in Delhi, only Rs 22.02 per litre goes to oil companies and the rest is all duties. Similarly, taxes and duties make 32 percent of the diesel selling price of Rs 31.76 per litre," he said.

A cut in customs duty on crude oil would reduce the raw material cost of oil companies, thereby cushioning them from the spike in international oil prices.

The Indian basket of crude oil averaged USD 99.76 per barrel in March.

Action taken to protect US financial system: Fed chief

Washington, April 03: The unprecedented actions to prevent the collapse of Bear Stearns were taken to preserve the viability of the US financial system and do not represent any kind of federal bailout, Federal Reserve chairman Ben Bernanke said.

Bernanke said yesterday that even though the central bank is on the hook for USD 29 billion in the fire sale of Bear Stearns, the nation's fifth-largest investment bank, to JP Morgan Chase & Co., the Fed may end up making money.

The issue of whether the central bank has exposed taxpayers to a possible bailout and how Bear Stearns could tumble so quickly to near insolvency were to be explored today with senate testimony from Bernanke as well as officials from the treasury department, the Securities and Exchange Commission and the Fed's New York Regional Bank.

"When USD 30 billion of taxpayer money is placed at risk, it is our paramount responsibility to ensure that these actions were necessary and judicious," said Sen. Christopher Dodd, chairman of the Senate Banking Committee.

In addition, the panel was to hear from the heads of Bear Stearns cos. and JP Morgan. Bear Stearns is the most high-profile victim of a severe credit crunch that began in august and has forced some of America's largest financial institutions to declares billions of dollars in losses because of bad investments, many in the area of sub prime mortgages.

Many economists believe all the credit and housing problems have pushed the country into a recession.

Bernanke, testifying before the congressional joint economic committee yesterday, raised the prospect of a recession for the first time since the current slowdown began.

He said it was possible that the overall economy may not grow at all during the first half of this year. However, he continued to predict that growth would resume in the second half of 2008.

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2008 EPS cut to loss from profit by Oppenheimer`s Whitney

London, April 03: UBS, Europe's biggest bank by assets, may post a loss of USD 2.15 per share in 2008, Oppenheimer and co analyst Meredith Whitney said, changing her estimate from a 45 cent profit.

"We are revising our estimates based on pre-announced USD 19 billion Writedowns, earnings guidance, and share dilution for the proposed 15 billion-Swiss-Franc rights issuance," Whitney said.

She also lowered her 2009 earnings-per-share projection to USD 3.40 from 4.15. Oppenheimer has an ``underweight'' recommendation on the stock.

UBS said April 1 that it had a 12 billion-Franc (USD 11.9 billion) loss in the first quarter and seeks to raise 15 billion Francs in fresh funds from shareholders to replenish capital.

Bernanke defends Bear Stearns rescue

Washington, April 03: The unprecedented actions to prevent the collapse of Bear Stearns were taken to preserve the viability of the US financial system and do not represent any kind of federal bailout, Federal Reserve chairman Ben Bernanke said.

Bernanke said yesterday that even though the central bank is on the hook for USD 29 billion in the fire sale of Bear Stearns, the nation`s fifth-largest investment bank, to JP Morgan Chase & Co., the Fed may end up making money.

The issue of whether the central bank has exposed taxpayers to a possible bailout and how Bear Stearns could tumble so quickly to near insolvency were to be explored today with senate testimony from Bernanke as well as officials from the treasury department, the Securities and Exchange Commission and the Fed`s New York Regional Bank.

"When USD 30 billion of taxpayer money is placed at risk, it is our paramount responsibility to ensure that these actions were necessary and judicious," said Sen. Christopher Dodd, chairman of the Senate Banking Committee.

In addition, the panel was to hear from the heads of Bear Stearns cos. and JP Morgan. Bear Stearns is the most high-profile victim of a severe credit crunch that began in august and has forced some of America`s largest financial institutions to declares billions of dollars in losses because of bad investments, many in the area of sub prime mortgages.

Many economists believe all the credit and housing problems have pushed the country into a recession.

Bernanke, testifying before the congressional joint economic committee yesterday, raised the prospect of a recession for the first time since the current slowdown began.

He said it was possible that the overall economy may not grow at all during the first half of this year. However, he continued to predict that growth would resume in the second half of 2008.