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ICICI Securities IPO based on market condition: Kamath

New Delhi, April 20: ICICI Securities, the investment banking arm of ICICI Bank will come out with initial public offer based on market condition, CEO of the largest private sector bank K V Kamath said here.

"We will look at it (IPO of ICICI Securities) based on market condition," said Kamath.

At present, there was no particular hurry to list the shares of the company, he said.

In January the board of ICICI Securities had approved the initial public offer and private placement of shares to one or more institutional investors.

Soon after the decision, ICICI Bank Joint Managing Director and CFO Chanda Kochhar had said, the shares of ICICI Securities will be listed on the bourses in about six months.

The board had decided to offload 15 per cent of its shares to retail or institutional investors.

ICICI Securities having an equity capital of Rs 61 crore is a major player in retail broking and has posted revenues of Rs 527 crore during the first nine months of the current fiscal while profits were at Rs 108 crore in the same period.

Talking about cash reserve ratio hike, Kamath said, "there is going to be profitability impact on banks, that I think is given because whatever is kept aside as CRR, you are not going to get interest on it."

But, whether the banks are going to absorb the hit on profitability or pass it on to customers by raising interest rates is a decision that each bank would take in due course, he said.

"Let's absorb it and understand what the impact is and what the market directions are. You can always increase interest rates but there has to be demand for credit," he added.

For operating its existing 655 mw project, the company buys half of its gas from the spot market at expensive cost, Mishra said.

The company wants to set up of 1320 mw coal-based project in Hariyana, solar power plants in Rajasthan, Gujarat.

Though CLP is listed on the Hong Kong Stock Exchange, it has no plans to get listed on Bombay Stock Exchange and Nifty exchange in India, Brandler said.

L&T to develop Rs 3,500 cr commercial complex

Mumbai, April 21: Engineering and construction major Larsen & Toubro on Monday said it will develop an integrated commercial complex in Navi Mumbai at a project cost of Rs 3,500 crore, its single largest investment in the real estate development sector.

Besides, it would also develop Seawoods-Darave railway station over the next three years, the company said in a filing to the Bombay Stock Exchange.

The property development division would build the integrated commercial complex at Seawoods railway station, Navi Mumbai over 40 acres of land. The proposed project is expected to be completed over the next five years, the company added.

Once this project is commissioned, L&T would develop in-house capabilities to build and operate such transit oriented developments around railway stations.

The scope of development would consist of a modern railway station, large format retail and entertainment space, multiplexes, office complex and premium category hotel and service apartments.

Cushman Wakefield and Jones Lang Lasalle Meghraj were engaged for real estate advisory services for the project.

Shares of the company were trading at Rs 2,848, up 2.59 per cent on BSE in afternoon trade.

Chidambaram hopes for 8-9% FY `09 growth

Singapore, April 22: The finance minister said that "anything between 8 percent and 9 percent" economic growth this fiscal year would be good and that further export bans could be considered as a way to drive down inflationary expectations.

In an interview published by the Wall Street Journal on Tuesday, Palaniappan Chidambaram said it was too early to give a specific growth forecast for the year ending March 31, 2009.

But he added: "We must aim at 9 percent, as I will, and we must be happy if it's between 8 percent and 9 percent."

A quarterly Reuters poll in March forecast growth of 8.1 percent in 2008/2009, which compares with a forecast 8.7 percent for the fiscal year that has just ended.

The soaring price of rice and other foodstuffs is causing concern across Asia.

"It is a matter of concern in a developing country and in a country where a large number of people are poor and the bulk of household expenditure is for food," Chidambaram said of India.

"Inflationary expectation is driving prices," he added.

India's most widely followed inflation gauge, the wholesale price index, rose 7.14 percent in the year to April 5. The central bank had aimed for close to 5 percent at the end of the 2007/08 fiscal year and its medium-term goal is around 3 percent.

The central bank raised banks' reserve requirements in response to the latest data, which will soak up cash from the banking system that might otherwise fuel inflation.

Inflation was also being stoked by a mismatch between supply and demand, and by cartel-like behaviour in some sectors of the economy, Chidambaram was reported by the Journal as saying.

The Monopolies and Restrictive Trade Practices Commission, India's anti-trust regulator, had begun inquiries in the rubber, cement and steel sectors, Chidambaram said.

India has banned the export of some rice and Chidambaram said he would consider banning exports of other goods, even if that went against the principles of free trade.

"As a short term measure ... we will consider such bans, too," he said, mentioning the possibility of export bans in the steel sector.

However, he said further moves on food exports were less likely because "export of food items is virtually banned" already.

Chidambaram said inflation was not hurting investment.

"All the indicators are that investments that are in the pipeline continue to remain buoyant and robust," he said.

NEW DELHI: Finance Minister P Chidambaram on Tuesday again targeted the cement manufacturers and steel producers saying they were acting like a cartel and warned that the government was looking at legal and administrative measures to deal with them to contain runaway inflation.

"It is my view the cement manufactuers and to some extent steel producers are behaving like a cartel," he said replying to supplementaries during the Question Hour in Rajya Sabha.

MRTPC is conducting an inquiry into the allegations of cartelisation, he said. "We are looking at legal and administrative provisons that are available to the government."

Besides, ministeries of steel and industry were talking to the industry.

The weekly inflation rate of Wholesale Price Index (WPI) stood at 6.7 per cent as on March 15, 2008 and reached 7.4 per cent on March 29. However, it has come down to 7.1 per cent as on April 5.

"Containment of inflation remains high on the agenda of the government," he said. "As and when necessary, more fiscal measures would be taken. We have taken a set of fiscal measures and some more fiscal mesaures are being contemplated."

The Reserve Bank of India had last week hiked the percentage of money the banks are supposed to keep idle (Cash Reserve Ratio) by 50 basis points. Its monetary policy review is due on April 29 and the government will wait and see the steps taken by RBI, he said.

Chidambaram, however, stressed that there were no quick-fix solutions to tackling inflation. "It will take some time for fiscal and monetary measures to take effect."

Asked about the reported differences among the ministry of finance and other ministeries including commerce and industry, he said: "There is no difference of opinion. When 3-4 ministers meet, we exchange views (on the issue)."

FFIs brought in Rs 26,000cr last year

New Delhi, April 22: Foreign Financial Institutions (FFI) have brought in capital to the tune of Rs 26,000 crore into the country till December 2007, government said on Tuesday.

Union Finance Minister P Chidambaram, however, insisted that it was not a "massive infusion" considering the size of the Indian economy.

"The capital brought by FFIS which include banks and non-banking financial companies as of December 31, 2007 is about Rs 26,000 crore," he told the Rajya Sabha during the question hour.

In the banking sector, he said, the government`s policy was to allow healthy competition among public sector, Indian private sector and foreign banks.

"This will not only help expansion of the banking sector, but also improve efficiency and bring new products into the market," he said in reply to a question.

To a question on rural lending by foreign banks, he said the government has not allowed such institutions to open branches in rural areas.

So far, foreign banks have opened branches only in tier 1 and large cities like Mumbai, Kolkata, Ahmedabad, Chennai and Noida, he added.

He said if these banks are allowed to open branches in rural areas, the government can ask them to follow the same guidelines that apply to Indian banks.

Government figures showed that paid up share capital of foreign banks stood at Rs 17,630 crore in December 2007, up from Rs 13,079 cr in March, while their tier 1 and tier 11 capital rose Rs 40,892 from Rs 33, 134 in the same period.

Oil sets new record above $118 a barrel on supply concerns
Tuesday April 22, 6:50 am

New supply worries, new record for oil as a barrel fetches more than $118 per barrel

Oil prices rose Tuesday to a all-time highs above $118 a barrel on concerns over supplies from some key producers.
Light, sweet crude for May delivery rose as high as $118.05 a barrel in electronic trading on the New York Mercantile Exchange, eclipsing Monday's all-time high of $117.83.

By midday in Europe, the contract had risen to $117.77, up 29 cents on Monday's close of $117.48 a barrel. The May contract expires at the end of trading Tuesday.

In London, Brent crude futures added 28 cents to $114.71 a barrel on the ICE Futures exchange.

A Royal Dutch Shell PLC joint venture in Nigeria said Monday it may have to cut crude deliveries some 169,000 barrels a day in April and May because militants sabotaged a pipeline last week in the country's south.

The company, Shell Petroleum Development Co., declared force majeure on its April and May oil delivery contracts from its 400,000-barrel-a-day Bonny fields, effective April 22, a move that protects it from litigation if it fails to deliver on contractual obligations to buyers.

Militancy and lawlessness have spread in Nigeria's south, and attacks on oil infrastructure have become common.

"The disruption in Nigeria with Royal Dutch Shell is serious," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

"It is light, sweet crude, which is much desired by the U.S. market during the summer gasoline season, so that certainly has affected the market," Shum said.

Nigeria is a major supplier to the United States. Attacks there in the past two years have cut nearly a quarter of the African country's oil output. Crude oil set a record above $117 Monday after the 150,000-ton tanker Takayama was attacked off the coast of Yemen as it headed for Saudi Arabia.

Kyodo News agency said there were no injuries, but the the rocket punctured a tank, spilling hundreds of gallons of fuel.

Analysts said comments Tuesday by the head of the Organization of Petroleum Exporting Countries about plans to boost oil production target capacity by 5 million barrels a day by 2012 would not have an immediate effect on oil prices.

Speaking at an energy forum in Rome, OPEC Secretary-General Abdalla Salem el-Badri told reporters that issues of supply and demand were being discussed but he did not expect any agreement on whether prices are too high or too low.

"This is not anything new and it will not help ease oil prices," said Ehsan ul-Haq, head of research at JBC Energy in Vienna, Austria. "The oil futures market is very strong, but the physical markets are not so strong."

Other supply developments also factored into the market. In Mexico, oil production slipped 7.8 percent in the first quarter to 2.91 million barrels a day as output at the country's traditional oil fields wanes, state oil company Petroleos Mexicanos said. In Scotland, workers at Ineos PLC's 196,000 barrel-a-day Grangemouth refinery and petrochemical plant have threatened to strike for 48 hours from April 27 over changes to an employee pension plan.

The weak U.S. dollar has continued to support oil prices despite strengthening some this week against the yen and euro. Commodities such as oil and gold are still attractive hedges to investors seeking hedges against further drops in the currency.

In other Nymex trading, heating oil futures fell 0.04 cent to $3.3110 a gallon while gasoline futures lost 0.29 cent to $2.9762 a gallon. Natural gas futures were unchanged at $10.733 per 1,000 cubic feet.

Associated Press writer Gillian Wong in Singapore contributed to this report.

RBS exposure: another $11.7B in losses tied to mortgages
Tuesday April 22, 6:20 am ET

RBS reveals $11.7B in losses; raised $23.9B in new capital and is seeking more

LONDON -- Royal Bank of Scotland said Tuesday it had suffered $11.7 billion in additional losses and was forced to raise $23.9 billion in new capital to cover exposure to toxic U.S. loans.
The bank said it would raise even more capital by asking shareholders to approve a rights issue that will offer them 11 new shares for every 18 existing shares at 200 pence ($3.98) each.

RBS said it expects further write-downs on mortgage-backed securities, collateralized debt obligations and other assets of 4.3 billion pounds ($8.6 billion).

RBS shares fell 3.3 percent to 360.25 pence ($7.17) in morning trading.

The company joins Citigroup, Swiss bank UBS and other major financial institutions that have been forced to write off billions and to seek more money from investors.

"Following the rights issue, RBS believes that it will be in a strong position to realize the substantial value in its UK and international franchises and to take advantage of the growth opportunities available to it," the company said in statement.

RBS said it also intends to rid itself of its insurance business and other smaller assets.

Royal Bank of Scotland Group PLC, Britain's second-largest bank by market capitalization, stretched its reserves last year in leading a consortium including Belgian-Dutch group Fortis and Spain's Banco Santander in the takeover of Dutch giant ABN Amro Holding NV. Then it was hit by the freeze-up of the market in securities based on mortgages.

The bank said it had ramped up its campaign for new money to maintain a Tier 1 capital ratio of between 7.5 percent and 8.5 percent and a core Tier 1 capital ratio in excess of 6 percent.

"This is a difficult time for the financial services industry, and it has presented us with specific challenges. Central to these has been the question of our capital ratios, which have been the focus of much attention, both internal and external, over recent months," said RBS' chairman, Sir Tom McKillop.

"It was the board's declared intention to rebuild our Tier 1 capital to the middle to upper end of our historic range of 7 percent to 8 percent over a three-year period, but in light of the current market environment, this level and timing are considered no longer appropriate," McKillop said.

RBS Group's retail operations in Britain include the Royal Bank of Scotland, Ulster Bank and Natwest.

"We believe credit market exposures have now been adjusted to broadly realistic levels and that future write-downs should be significantly lower," said Robert Sage, analyst at Bear Stearns in London.

Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers, said RBS would benefit from being the first of Britain's big banks to go to its shareholders for a capital injection.

"The depth of the discount on the shares being offered will almost certainly ensure a healthy take-up from existing investors," said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.

"The share price has been hemmed down by a number of factors over recent months, not least of which have been the credit crunch fallout and the feeling that it may have paid a very full price for the ABN acquisition," Hunter said.

"Equally, the statement will raise serious questions since the bank has only recently increased its dividend by 10 percent whilst insisting that it had no need to shore up its capital," Hunter said.

Stocks decline as oil rises, Street examines earnings
Tuesday April 22, 1:03 pm ET

Stocks trade lower as oil rises, Street examines quarterly reports; DuPont, McDonald's decline

NEW YORK -- Wall Street pulled back Tuesday, with the Dow Jones industrials tumbling more than 140 points, as a rush of quarter results from bellwethers like AT&T Corp., DuPont and McDonald's Corp. failed to impress investors. Oil prices also reached fresh highs, raising concerns about inflation.
AT&T's earnings met Wall Street's forecast while McDonald's and DuPont reported stronger-than-expected numbers. But DuPont said a U.S. slowdown will offset growth abroad and McDonald's said an important metric of its sales showed a decline for March. All three companies are among the 30 stocks that make up the Dow.

The comments gave trading a cautious tone. With hundreds of companies still to report results, investors are anxious over what the figures might say about the prospects for the economy.

"We've melted here, but it isn't a plunge," said Art Hogan, chief market analyst at Jefferies & Co. "We're in a day-to-day assessment of how good earnings season is, and right now there's more bad news than good news -- the parade has been less positive than we've anticipated."

Investors appeared little moved by news of continued weakness in the housing sector. Sales of existing homes fell 2 percent in March to a seasonally adjusted annual rate of 4.93 million units, while the median sales price dropped for a seventh straight month. The National Association of Realtors also said sales rose in the Northeast and West but fell in the Midwest and South.

Oil's seemingly relentless march higher this year raises the specter of higher inflation that would lead consumers to cut back their discretionary spending. It would also make the Federal Reserve less likely to keep lowering interest rates.

Light, sweet crude rose $1.95 to $119.43 at midday, having slipped back in the normal ebb and flow of trading. But it appeared inevitable that crude would pass $120 and keep rising.

The Dow fell 141.02, or 1.10 percent, to 12,684.00. The blue chip index was at its lows of the session.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 16.44, or 1.18 percent, to 1,371.73, and the Nasdaq composite index fell 43.08, or 1.79 percent, to 2,364.96.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.70 percent from 3.73 percent late Monday. The dollar was mixed against other major currencies, while gold prices rose.

Some of the latest earnings reports appeared to confirm concerns about the economy, analysts said.

"It takes a while for the economy's situation to work its way down to the companies," said Alexander Paris, economist and market analyst for Chicago-based Barrington Research. "What's going on is earnings are reflecting the reality of a slowing economy, and that should go on until the second half of the year."

Late Monday, Texas Instruments Inc. warned of a weak market for the chips it makes for high-end mobile phones. The company's results were nearly in line with Wall Street's expectations, however. The stock fell $1.83, or 5.9 percent, to $28.77.

In other corporate news, CIT Group Inc. fell $1.86, or 14.6 percent, to $10.88 after the financial services company said it would raise $1.5 billion from an offering of common and preferred stock. The company has been hit by strains in the mortgage and credit markets.

AT&T rose 27 cents to $37.86 after reporting that its first-quarter earnings rose 22 percent following growth in the company's wireless division and as its enterprise services business saw a reversal of an earlier decline.

DuPont said profits jumped 26 percent as the chemical company saw higher sales and benefits from the weak dollar. But the company's comments about the U.S. market appeared to weigh on the stock, which fell $2.18, or 4.1 percent, to $50.06.

McDonald's Corp. slipped 15 cents to $58.53 after saying its first-quarter earnings grew 24 percent. The fast food chain benefited from the weak U.S. dollar and strong global sales. However, it also said its same-stores sales, or sales at restaurants open at least a year, declined in March.

Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 619.4 million shares.

The Russell 2000 index of smaller companies fell 19.62, or 2.73 percent, to 698.38.

Over half of IPOs on BSE, NSE trading below offer price: Govt

New Delhi, April 22: More than half of the total number of IPOs listed on BSE and NSE in the last two years are trading below their offer price, with around one-third of them trading at a discount of 40-60 per cent, Parliament was informed on Tuesday.

During April 1, 2006-March 31, 2008, the number of IPOs listed on the Bombay Stock Exchange stood at 150, of which 86 are trading below their offer price, Minister of State for Finance Pawan Kumar Bansal said in a written reply to the Rajya Sabha.

And of these, 36 IPOs were trading at discount of more than 40-60 per cent of the issue price, he said.

While, on the National Stock Exchange, of the 162 IPOs listed during the same period, 88 were trading below the issue price and 38 were being traded at a discount of more than 40 per cent of the issue price, he said.

To an another query, Bansal said, "The authorities do not try to manage or control prices. They endeavour to build systems...and broaden markets which can stand volatility."

He further said that under the current practice, the price of IPOs, is discovered by the market through book building mechanism, while the authorities make efforts to provide all the relevant information to market participants.