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Fed Cuts Key Interest Rate by 1/4 Point
-The Federal Reserve lowered a key U.S. interest rate by a modest quarter percentage point on Wednesday in what may be the last of a series of cuts aimed at aiding an economy hit hard by a housing slump and credit market turmoil.

Fed cuts key interest rate by 1/4 point
Wednesday April 30, 2:16 pm

WASHINGTON (Reuters) - The Federal Reserve lowered a key U.S. interest rate by a modest quarter percentage point on Wednesday in what may be the last of a series of cuts aimed at aiding an economy hit hard by a housing slump and credit market turmoil.
The Fed's action takes the bellwether federal funds rate to 2 percent, the lowest since December 2004. It was the seventh reduction in a campaign that has brought rates down by 3.25 percentage points since mid-September.

President George W. Bush on Tuesday said the U.S. economy faced a "tough time," a point underscored on Wednesday by a report that showed U.S. gross domestic product expanded at a slim 0.6 percent annual rate in the first quarter.

While the growth rate was a bit stronger than economists had expected, it reflected a buildup in inventories that may weigh on the economy in coming months.

Other details in the report were decidedly weak.

Consumer spending, which accounts for two-thirds of U.S. output, grew at the slowest pace since 2001, business investment fell and homebuilding continued to nosedive, recording the biggest drop in 26 years.

Fed Chairman Ben Bernanke told Congress on April 2 that "recession is possible," adding that the Fed believed there might be a "slight contraction" in the economy in the first six months of the year.

At the same time, with gasoline prices heading toward $4 dollars a gallon and strong global demand pushing up food prices, some Fed officials have worried that a desire to bolster the economy could divert the central bank's attention from inflation pressures.

In addition to rate cuts, the Fed has taken a number of emergency steps to ease credit strains that have threatened to make the economy's ills worse, pumping billions of dollars into markets to keep them from choking on mortgage-related bets.

At their meeting on Wednesday, Fed officials discussed a new measure -- paying interest on commercial bank reserves held at the central bank -- that could improve their ability to provide liquid funds to the market.

The Fed has also mulled whether expanding the size of its term auction facility cash auctions for banks and extending the duration of those loans beyond 28 days could help ease still-tight credit conditions

DTH foray, London listing planned for Reliance Globalcomm

Mumbai, April 30: Reliance Communications plans to list its global arm Reliance Globalcomm on the London Stock Exchange, company's Chairman Anil Ambani said on Wednesday.

He indicated that the listing will be subject to market conditions and if the company can get good value.

Ambani also said he was bullish about the proposed IPO of Reliance Infratel, the company subsidiary that owns the passive infrastructure of telecom business, as the valuations are going northward.

The company has already diluted five per cent equity to global investors and will offer another 10 per cent to the public. It has already filed draft prospectus with the regulator and awaiting the approval.

He indicated the company will float the issue after the market sentiment improved.

Ambani unveiled plans for the launch of its DTH foray. "The DTH (Direct-To-Home) service will be known as Big TV and is already in market catering to 35,000 customers. The commercial launch of the service will take place shortly," he said.

New inflation index to be out by year-end

New Delhi, April 30: Government would come out by year-end with a new index to compute price movement on a realistic basis by more than doubling the list of items to 980 from the present wholesale price-based inflation that has come in for criticism for not capturing the total picture.

The new WPI series with base year 2004-05 would give inflation figure on a monthly basis, with the exception of price movements of essential commodities like agricultural products which would be continued to be released weekly.

The number of items which would be part of the index would be doubled to about 980 from 435 at present, a senior government official said.

The increase in number would largely include items from the manufacturing sector. In existing scheme of things, the sector has a weightage of over 63 per cent in the index.

Price quotations would also go up from the existing 1,918 to 6,000 which will give better picture of the price variation. Thus the revised series will have a substantially updated and representative basket of commodities as well as their varieties/grades and markets, he said.

The coverage of the new series has been rationalised by incorporating important new items, dropping unimportant items and amalgamating items with those to which they are akin, the official said.

The 2004-05 base year will be considered to capture the price variation in commodities over the next 10 years, he added.

Cable, satellite and ... Sezmi? Startup wants in on pay TV
Thursday May 1, 12:36 am
Cable, satellite and ... Sezmi? Startup wants to provide a third option for pay TV

NEW YORK (AP) -- A startup is betting that people are tired enough of their cable and satellite bills to take a look at an alternative pay TV system that combines a number of different technologies to deliver programming.
Silicon Valley-based Sezmi Corp. is revealing a system Thursday that amounts to a way for phone companies and local TV broadcasters to team up for an end run around satellite and cable. Technical trials are starting shortly, with full-blown commercial trials in some markets, yet unnamed, later this year.

The carrot for consumers: monthly fees that are about half those of cable or satellite, according to Sezmi founder Buno Pati.

Sezmi's system takes some explaining. At its heart is a TV set-top box that receives video content in three different ways. Two are available through other means: digital over-the-air local broadcasts, the kind that are available to anyone with a digital TV and a rabbit-ear antenna; and Internet downloads through the home's broadband connection.

The third delivery method would be unique to Sezmi. It plans to have local TV stations use vacant portions of their airwaves to transmit basic cable channels like Nickelodeon and Discovery. Given the limited spectrum available, the stations won't be able to transmit a full lineup, and only some of it will be in high definition. Sezmi plans to mitigate that by having stations send out the most-watched shows and have the set-top boxes save them on their hard drives, making them available for viewing on demand.

None of these features are completely original. The set-top box combines the feature of a digital TV tuner, a TV-style digital video recorder and an Internet video box like the Apple TV. The additional over-the-air cable content is reminiscent of a service called MovieBeam, which was started by The Walt Disney Co. When it shut down in December after a four-year run, it had 1,800 subscribers.

"The TV space has been waiting for someone to put it all together much like Apple did for digital music" when it combined its iTunes music store with the iPod music player, said Phil Wiser, chairman and president of Sezmi.

Apart from questions about how well the complex system works, consumer confusion could be one of the obstacles to Sezmi's success. It took years for mainstream consumers to understand what digital video recorders were good for, for instance.

Sezmi is counting on phone companies, and perhaps also wireless carriers, to market the service as a bundle with Internet service. A cheap TV product would give landline phone companies a way to fend off the encroachment of cable companies, who are rapidly signing up people for their voice services.

The largest phone companies, AT&T Inc. and Verizon Communications Inc., have their own TV services, but they're expensive to roll out. Smaller companies, like Embarq Corp., have marketing deals with satellite companies, but those yield little in the way of synergies.

Sezmi did not announce any commitments from phone companies, but Jeff Gardner the chief executive of Windstream Communications Inc., said Sezmi creates "a unique opportunity for Internet service providers." The Little, Rock., Ark., company operates 3.2 million phone lines.

Sezmi executives have a strong pedigree in the technology and media fields. Wiser, the chairman, used to be chief technology officer of Sony Corp. of America. Before that, he founded Liquid Audio, a pioneer in online music distribution. Pati founded Numerical Technologies, which developed a chip manufacturing technology. Other executives have backgrounds at NBC, DirecTV and Clearwire Corp., a wireless broadband provider. On the board is Andrew Lack, chairman of SonyBMG Music Entertainment.

Sezmi was called Building B until coming out "stealth mode" on Thursday. Its funding comes from six venture-capital firms, including Morgenthaler Ventures, which helped Apple Inc. get off the ground.

Bangladesh bans non-aromatic rice exports

Dhaka, May 01: Bangladesh will ban exports of non-aromatic rice to boost stocks as fears grow that the staple will be in short supply, Commerce Secretary Firoz Ahmed said on Thursday.

Bangladesh is the world's fourth largest rice importer, but some local traders also export aromatic and non-aromatic rice to the United States, the United Kingdom, Gulf countries and Southeast Asia.

Asian rice prices have almost trebled this year as export restrictions by leading suppliers fuel insecurity over food supplies. With only 30 million tonnes traded annually, government supply curbs, such as those from New Delhi and Hanoi, have spooked importers, such as Bangladesh, at a time when global stocks have halved since hitting a record high in 2001.

Bangladesh exported rice worth $5.42 million in the first eight months of the fiscal year (July-June), up from $4.11 million the same period last fiscal year, officials said. The retail price in Bangladesh of 1 kg of rice has now risen by 100 percent to 40 taka ($0.58) from early 2007, due to damage to 1.8 million tonnes of rice by two spells of floods and a devastating cyclone last year, along with global food price inflation.

Bangladesh produces about 29 million tonnes of rice annually to feed its 140 million people, and also imports nearly 3 million tonnes, officials said.

After India, Nepal bans food item exports

Kathmandu, May 01: Fearing a severe food crisis after its giant southern neighbour India slashed the export of rice to battle soaring prices, Nepal too has banned the sale of foodgrain abroad.

The Ministry of Commerce, Industry and Supplies on Wednesday decided to stop the export of foodgrain following reports that rice and wheat shipments were being sent out through the border towns of Nepal at an alarmingly high rate, causing their prices to shoot up in the domestic market.

Following the decision, the central Nepal Rastra Bank instructed all financial institutions to halt issuing letters of credit to exporters from Thursday. It asked exporters to submit documents regarding the price, quantity and shipment dates of commodities within three days for scrutiny.

Landlocked Nepal, while being heavily dependent on India for food supplies, exports wheat flour to Tibet in China and basmati rice to Bangladesh.

After India stopped rice exports to Nepal, the price of rice, wheat and flour have shot up in the Himalayan nation by 25-30 percent, triggering fears of an acute food crunch.

Last year, Nepal had legally imported rice worth Nepali Rs.2 billion from India and wheat worth Rs.50 million. However, that is thought to be just the tip of the iceberg with the worth of smuggled food grain amounting substantially more.

Till the 1960s, Nepal was self-sufficient in food production, having the highest yield in South Asia.

However, according to the South Asia Watch on Trade, Economic and Environment, food production decreased dramatically in the 1990s due to the spurt in population and the abandoning of farming by the new generations for other means of livelihood.

Currently, over 50 percent of public expenditure is estimated to be spent on food.

The price of rice in Nepal has more than doubled since 2000. In the coming days, it is expected to go up by around 40 percent.

UN agency World Food Programme said the food stock in 38 districts, mostly in the remote west, fell by more than 50 percent last year due to rising prices.

It predicts that the price of food would go up by 10 percent every month if the Indian ban on the export of rice and wheat to Nepal continues.

Last year, rice dispatches to Nepal had amounted to two percent of the subcontinent's exports while wheat to Nepal accounted for about 0.6 percent.

After India banned the export of food grain, Nepal's border towns like Kakarbhitta and Biratnagar in the east and Nepalgunj in the south have seen an alarming flight of foodgrain to Bangladesh via India.

Till last week, over 90,000 tonnes of wheat was sent to Bangladesh via Kakarbhitta.

Wall Street heads to higher open amid slew of earnings
Thursday May 1, 8:37 am
Stocks head to higher opening as investor pore over a slew of earnings, economic reports

NEW YORK -- Wall Street headed to a mixed opening Thursday on a slew of earnings reports and economic news.
Futures initial were up, but dropped after an earnings report from Exxon Mobil Corp. indicated it earned nearly $11 billion in the quarter but didn't surpass it's previous record profit.

The world's biggest publicly traded oil company led a mixed bag of earnings results before the opening bell. Exxon said profit rose 17 percent during the first quarter, but that was below Wall Street expectations.

While investors are keeping a close eye on the health of corporate earnings, the bigger focus in recent weeks has been about the health of the economy. Stocks on Wednesday ended mixed after the Federal Reserve cut interest rates by a quarter point, but failed to give a firm indication of future moves.

Policymakers likely need more economic data before being confident enough to put rates on hold. The Fed might get some answers from fresh data due during the session, including the Institute for Supply Management's report on April manufacturing activity that will be issued at 10 a.m. EDT.

The Bank of England issued a report Thursday that said credit markets will gradually recover in coming months amid an eventual realization that risks from the subprime crisis have been exaggerated. Meanwhile, Treasury Secretary Henry Paulson said in an interview Wednesday with business news program Nightly Business Report that the U.S. is "closer to the end of this period of turmoil."

Investors are now waiting for the ISM's report on April manufacturing activity, which is expected to show declines for the third consecutive month. Also on tap were reports on March personal income and spending data, weekly jobless claims and March construction spending.

In corporate news, Starbucks Corp. reported fiscal second-quarter profit sank 28 percent as U.S. consumers responded to rising food and gas prices. The coffee purveyor slashed 30 additional store openings from its already-scaled-back plan for 2008 and said it will open fewer than 400 stores per year in 2009 through 2011.

Comcast Corp. reported a 12.5 percent decline in first-quarter profits from a year ago, when the company's earnings were inflated by a $300 million one-time gain.

Meanwhile, Cigna Corp. reported first-quarter profit dropped 80 percent due to hefty reinsurance losses and litigation charges. The health insurer also said full-year earnings may miss expectations amid challenges in its health care segment.

Bond prices fell in premarket trading. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.76 percent from 3.73 percent late Wednesday.

Light, sweet crude fell 36 cents to $113.10 a barrel in electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average fell 0.60 percent. European markets were closed.

Exxon Mobil 1Q profit grows 17 percent
Thursday May 1, 8:16
Lifted by record crude prices, Exxon Mobil 1Q profit increases 17 percent


HOUSTON -- Exxon Mobil Corp., the world's largest publicly traded oil company, says record crude prices helped its net income grow 17 percent in the first quarter.
Exxon Mobil said Thursday its earnings for the first three months of the year rose to $10.9 billion, or $2.03 per share, up from $9.3 billion, or $1.62 per share, a year ago.

Analysts polled by Thomson Financial were looking for a slightly larger profit of $2.13 per share.

Revenue rose to $116.8 billion from $87.2 billion a year earlier.

Given record oil prices, some had speculated Exxon Mobil would top its own record for the biggest quarter profit for a U.S. company. But the latest results fell short of the record $11.7 billion profit Exxon Mobil earned in the final quarter of 2007.

Mukesh Ambani`s home world`s most expensive: Forbes

New York, May 01: The 27-storey skyscraper being built in Mumbai by Mukesh Ambani, the richest person in India, could be the world's largest and costliest home with a price-tag nearing two billion dollar, according to Forbes magazine.

"When the Ambani residence is finished in January, completing a four-year process, it will be 550 feet high with 4,00,000 square feet of interior space," Forbes said in a report on its website.

Earlier in March, Mukesh Ambani was ranked as the fifth richest person in the world with a net worth of 43 billion dollars by the Forbes magazine in its annual list of world's wealthiest billionaires. While Lakshmi Mittal, who is an Indian citizen was ranked higher at fourth, he is a British resident. Among resident Indians, Mukesh was ranked at top.

"The only remotely comparable high-rise property currently on the market is the 70 million dollar triplex penthouse at the Pierre Hotel in New York, designed to resemble a French chateau, and climbing 525 feet in the air," Forbes said in its report titled, "Inside The World's First Billion-Dollar Home."

Mukesh Ambani heads India's most valuable firm Reliance Industries, an oil and petrochemicals giant.

"Like many families with the means to do so, the Ambanis wanted to build a custom home. They consulted with architecture firms Perkins + Will and Hirsch Bedner Associates, the designers behind the Mandarin Oriental, based in Dallas and Los Angeles, respectively," the report said. "Plans were then drawn up for what will be the world's largest and most expensive home: a 27-story skyscraper in downtown Mumbai with a cost nearing 2 billion dollars."

According to Forbes, Mukesh, along with his wife Nita Ambani and three children, currently live in a 22-story Mumbai tower.

The report further noted that the cost for the Ambani residence, called Antilla whose shape is based on Vaastu, would be more than a hotel or high-rise of similar size because of its custom measurements and fittings.

While a hotel or condominium has a common layout, replicated on every floor, and uses the same materials throughout the building, the Ambanis' home has no two alike in either plans or materials used, it said.

"At the request of Nita Ambani, say the designers, if a metal, wood or crystal is part of the ninth-floor design, it shouldn't be used on the eleventh floor, for example. The idea is to blend styles and architectural elements so spaces give the feel of consistency, but without repetition," it said.

"Atop six stories of parking lots, Antilla's living quarters begin at a lobby with nine elevators, as well as several storage rooms and lounges. Down dual stairways with silver-covered railings is a large ballroom with 80 per cent of its ceiling covered in crystal chandeliers."

The report said that Ambanis plan to use the residence occasionally for corporate entertainment also and they want its interiors to have a "distinctly Indian" look and feel.

"The top floors of entertaining space, where Ambani plans to host business guests (or just relax) offer panoramic views of the Arabian Sea... For more temperate days, the family will enjoy a four-story open garden," it noted.