Breaking News & Stocks

Dial a Postpaid` scheme launched

Chennai, May 20: Telecom services provider Bharti- Airtel on Tuesday announced the launch of "Dial a Postpaid" for mobile users at their doorsteps.

With a tariff plan of Rs 400, a customer can make local calls at 50 paise, all STD calls at Rs 1 and 800 local minutes and SMS’ free of charge, a company press release here said.

"This new launch of `Dial-a-Postpaid` is yet another initiative by Airtel to make mobile services easily available to the masses at their doorstep" Bharti-Airtel CEO (mobile services-Tamil Nadu) Rajiv Rajagopal said.

Customers are also offered assistance to transfer their current SIM card memory to their new SIM card for the connection. The facility is being offered at no extra cost, he said.

Customers can also get the new connection without any entry deposit for STD/ISD facility and interested prepaid customers can also migrate to this plan, it said.

Bharti Airtel Ltd, a group company of Bharti Enterprises, as of March 2008 has 64.26 million customers, of which 61.98 million are its mobile users, the release added.

SC dismisses DLF`s plea, asks it to execute accord

New Delhi, May 20: The Supreme Court has dismissed real estate major DLF Univeral Ltd's plea challenging Monopolies and Restrictive Trade Practices Commission's order asking it to execute an agreement for setting up a nursery school in Gurgaon, Haryana with certain changes.

A bench comprising justices S B Sinha and L S Panta recently stated, while upholding the MRTPC's judgement, "once the appellants (DLF) have accepted the earlier order of the commission dated January 16, 2004 which has attained finality, the appellants are left with no option but to execute a fresh lease deed with the complainant on modified terms suggested by him. The order of the commission impugned in this appeal does not suffer from any manifest error or perversity or invalidity."

"We find no merit in this appeal and it is accordingly dismissed... Time granted by the commission, however, shall be extended by four weeks as prayed," Justice Panta, writing the verdict for the bench, stated.

DLF Universal Ltd had moved the apex court stating that MRTPC had no jurisdiction to deal with complaints relating to specific performance of the agreement to lease a property.

DLF had entered into an lease agreement with one Raj Kamal for construction and setting up of a nursery school in Haryana within a time-bound schedule. The state government in 1992 had transferred lands demarcated for community sites to DLF Qutub Enclave Educational Trust.

The company later refused to hand over the possession of the alternate plot as the Haryana government had asked it to ensure that no fourth party rights were created on the community sites, the petition said.

According to DLF, Kamal had desired to get the ownership rights in respect of the plot in the garb of executing a lease deed without complying with the terms and conditions of the agreement. He had neither approached the company for extension of time nor applied for scantion of the building plans for the school, it added.

Kamal had moved the commission in 1997 seeking directions to DLF for specific performance, execution of the lease deed and handing over possession.

The complainant had stated that DLF had indulged in restrictive trade practices as he was allotted a site which was later substituted by another plot after charging extra money, according to the petition.

MRTPC had issued a notice of enquiry in 1998 which was later disposed of by it without granting any relief. The review petition is still pending before it.

Airtel in outsourcing pact with Firstsource

New Delhi, May 21: The country's largest private telecom operator Bharti Airtel has signed a three-year outsourcing deal with BPO firm Firstsource Solutions to offer voice and back office operations to its 66 million mobile customers.

The company did not disclose the size of the deal, but industry sources said its a small size deal, a statement said here on Wednesday.

As per the agreement, Firstsource would provide BPO services covering both voice and back office in areas such as customer accounting, VAS provisioning, fraud and credit monitoring, customer service, collections, customer retention and from its centres in Chennai and Mumbai.

Firstsource would set up centres in Vashi, New Bombay and Chennai for Airtel and expects to have over 1,000 employees in the first year focused on providing services in English and 8 other regional languages to Airtel's customers, it added.

Earlier, Bharti had outsourced its telecom managed services with Nokia in a USD 400 million deal and had also outsourced IT services with IBM in an estimated USD 700-750 million deal.

Bharti has strategic BPO partners in Aegis, Firstsource, Hinduja TMT (HTMT), IBM Daksh, Mphasis and Teleperformance.

"The partnership will support our extraordinary growth and allow us to focus on our core business of creating innovative products and services for our customers and our partners," Bharti Airtel's Director, Customer Service and Information Technology, Jai Menon said.

Firstsource's Joint Managing Director and COO Raju Venkatraman said, "We look forward to leveraging our process expertise to help Airtel get better operational flexibility, productivity and increased customer satisfaction". Firstsource currently derives 36 percent of its revenue from the telecom vertical, it said.

Stocks fall after oil passes $132, inventories drop
Wednesday May 21, 11:24 am

Stocks decline as supply worries push oil to record above $132; investors await Fed minutes

NEW YORK -- Wall Street extended its sharp decline Wednesday as oil prices stubbornly climbed to new record levels, keeping investors' inflation jitters alive. The Dow Jones industrial average was down nearly 100 points.
Crude oil shot past $132 a barrel for the first time Wednesday after the Energy Department reported a surprising decline in crude inventories last week following four straight weeks of gains. Crude rose as high as $132.08 a barrel on the New York Mercantile Exchange.

High energy prices have been a source of anxiety for investors, as many retailers and credit card companies have noticed consumers paring back spending on discretionary items, including clothing and jewelry, to buy necessities such as gasoline and groceries, which have been soaring in price.

Wall Street was also hesitant as it awaited minutes from the Federal Reserve's April 29-30 meeting, which should provide more insight into whether policymakers regard rising energy prices as a serious threat. The Fed cut its benchmark federal funds rate by a quarter-percentage point to 2 percent at that meeting, marking the seventh cut in an easing cycle that started in September. Its accompanying economic statement left open the possibility of an end to rate cuts.

In late morning trading, the Dow Jones industrial average fell 97.78, or 0.76 percent, to 12,730.90, after losing nearly 200 points on Tuesday amid concerns about rising oil prices and inflation.

Broader stock indicators also turned lower Wednesday after rising modestly in earlier trading. The Standard & Poor's 500 index fell 3.54, or 0.25 percent, to 1,409.86, and the Nasdaq composite index fell 3.69, or 0.15 percent, to 2,488.57.

Bond prices edged lower early Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its yield, rose to 3.81 percent from 3.78 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices rose.

In corporate news, media conglomerate Time Warner Inc. and cable television arm Time Warner Cable Inc. said their boards approved the companies' legal separation. Time Warner Cable expected to pay a hefty $10.9 billion one-time dividend to shareholders. Time Warner shares rose 25 cents to $16.40.

Hewlett-Packard Co. reported late Tuesday that second-quarter profit rose 16 percent, saying strong growth abroad offset some weakness in the U.S. But with concerns remaining about the computer and printer maker's growth potential and its planned buyout of technology services provider Electronic Data Systems Corp, HP shares fell 77 cents to $45.69.

BJ's Wholesale Club Inc., the nation's third-largest warehouse club operator, posted higher first-quarter profit. The company said customers were attracted to discounts on both food and fuel. Its shares, however, slid 78 cents, or 2 percent, at $38.07.

General Motors Corp.'s string of labor problems could soon come to an end with a tentative agreement at a key assembly plant in Kansas City, Kan. GM reached the deal on a local contract with United Auto Workers Local 31 at the plant Tuesday evening, company spokesman Dan Flores said. GM rose 3 cents to $19.88.

The Russell 2000 index of smaller companies rose 1.95, or 0.27 percent, to 737.59.

Advancing issues narrowly outnumbered decliners on the New York Stock Exchange, where volume came to 342.9 million shares.

In overseas trade, Tokyo's Nikkei closed down 1.65 percent. In Europe, London's FTSE rose 0.19 percent, Frankfurt's DAX declined 0.99 percent and Paris' CAC 40 fell 0.46 percent.

Stocks tumble on $135 oil, Fed meeting minutes
Wednesday May 21, 10:09 pm

Stocks sink as supply worries push oil above $135; Fed minutes bring gloomy outlook

NEW YORK -- Wall Street pitched lower for the second straight session Wednesday as record-high oil prices and a bleak economic assessment from the Federal Reserve deepened investors' worry about rising costs and a shaky employment picture. The Dow Jones industrial average fell 227 points, logging its widest two-day loss since late February.
Early in the day, stocks began falling on the surging price of oil, which shot up more than $4 and breached $135 a barrel for the first time on the futures market Wednesday.

The stock market slumped further after minutes from last month's Fed meeting revealed that while policymakers expected sharply lower economic growth and higher unemployment later this year, inflationary risks are likely to keep the central bank from cutting rates again. Lower interest rates spur economic growth, but they also tend to accelerate inflation.

High commodities prices have been a big source of anxiety for investors, as many retailers and credit card companies have noticed consumers paring back spending on discretionary items, including clothing and jewelry, to be able to afford necessities such as gasoline and groceries.

Meanwhile, the Fed's minutes suggest the central bank's two main priorities -- making sure the economy is growing, and keeping inflation in check -- are both going to be tough to achieve through monetary policy. That is a troubling prospect for investors hoping that the economy will bounce back in the second half of the year and that the central bank will be able to concentrate on controlling inflation.

"It absolutely underscores the two competing mandates for the Federal Reserve: growth, and price stability. It captures the tug-of-war between the two mandates, crystallizes how different those two mandates are," said Quincy Krosby, chief investment strategist for The Hartford. "If employment deteriorates dramatically, the Fed has a choice -- do they worry about inflationary pressure, or do they want to continue to support their growth mandate?"

The Dow fell 227.49, or 1.77 percent, to 12,601.19, after falling nearly 200 points on Tuesday. The blue chip index's two-day drop of about 427 points, or 3.3 percent, is its biggest since Feb. 28-29.

Broader stock indicators also stumbled. The Standard & Poor's 500 index fell 22.69, or 1.61 percent, to 1,390.71, while the Nasdaq composite index fell 43.99, or 1.77 percent, to 2,448.27.

Government bond prices rose as investors searched for safer assets. The yield on the 10-year Treasury note, which moves opposite its price, rose to 3.81 percent from 3.78 percent late Tuesday.

Crude oil soared $4.19 to settle at $133.17 a barrel on the New York Mercantile Exchange -- about $20 higher than it was at the beginning of May. It passed $135 a barrel in after-hours trading.

"There's almost a parabolic rise going on," said Richard E. Cripps, chief market strategist for Stifel Nicolaus. "I do sense that the stock market is searching for where that oil peak is going to be ... but till it finally gets there and backs off, I think the stock market is under pressure."

Strong demand out of China, supply disruptions in Nigeria, the dollar's slump versus other world currencies, and political tension in the Middle East have been keeping oil on the incline.

"The factors affecting commodities, the strongest catalysts, are outside the United States," the Hartford's Krosby noted. "The Fed's ability to dampen inflationary expectations have become not completely limited, but more limited than if we were having this discussion 10 years ago."

The airline industry has been particularly slammed by the rising cost of oil. Citing high fuel prices, American Airlines said Wednesday it will start charging $15 for the first checked bag, reduce domestic flights and cut perhaps thousands of jobs. AMR Corp. shares fell $1.98, or 24 percent, to $6.22.

And although jitters over the housing-driven credit crisis have calmed since March, they are far from over. Financial stocks took a hit Wednesday after Moody's Investors Service said it is "conducting a thorough review" regarding the possibility that computer errors incorrectly gave high quality ratings to certain debt securities that later sank in value.

"That would create some real carnage in an industry that doesn't need it," said Jim Herrick, manager of equity trading at Baird & Co., referring to the banks and other financial services companies that have lost billions of dollars due to bad bets on mortgages and other debt.

Among the financial services companies in the Dow, Bank of America Corp. fell 76 cents, or 2.2 percent, to $34.63; JPMorgan Chase & Co. fell $1.28, or 2.9 percent, to $42.42; Citigroup Inc. fell $1.05, or 4.8 percent, to $21.06; and American Express Co. fell $1.83, or 3.9 percent, to $45.48.

The credit crisis' effect on the financial sector has caused it to lose its status as the largest in the S&P 500 index. Financials have been overtaken by the information technology sector, which S&P analysts said has not happened since 2002.

The dollar fell against most other major currencies, while gold prices advanced.

The Russell 2000 index of smaller companies fell 8.53, or 1.16 percent, to 727.11.

Declining issues outnumbered advancers by about 7 to 3 on the New York Stock Exchange, where consolidated volume amounted to 4.41 billion shares, up from 3.74 billion on Tuesday.

In overseas trade, Tokyo's Nikkei closed down 1.65 percent. In Europe, London's FTSE rose 0.10 percent, Frankfurt's DAX declined 1.09 percent and Paris' CAC 40 fell 0.54 percent

Rupee tumbles to fresh 13-month low

Mumbai, May 21: The Indian rupee today fell to a fresh low in more than 13 months of 42.83/84 against the greenback after crude oil surged to a new peak in the international market and global equity markets weakened. In fairly active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency opened sharply lower at 42.72/74 a dollar from overnight close of 42.60/61 and later dropped further at the fag end to settle the day at 42.83/84 a dollar, 23 paise down.

It moved in a wide range of 42.62 and 42.90 a dollar.

Month-end dollar demand from oil refiners and importers also partly weighed on the rupee sentiment.

Market participants were concerned over rising world crude oil prices to a record high over USD 130 a barrel in Asian trade today. India imports nearly 70 per cent of its oil requirement.

Asian stocks today ended mixed with China and Hong Kong landing in positive terrain, while Wall Street finished sharply lower yesterday on higher crude oil prices.

Slowdown in capital inflows and worries over the deteriorating trade deficit had a negative impact on the rupee sentiment.

Meanwhile, the benchmark Sensex survived to close in the green on the back of smart rally in oil counters, mainly that of top heavyweight and petrochem giant Reliance Industries Ltd.

ArcelorMittal buys 14.9% stake in Macarthur Coal

London, May 21: World's largest steel maker ArcelorMittal on Wednesday said it has acquired a 14.9 percent stake in Australia's Macarthur Coal Limited for about USD 604.8 million.

The steel maker bought about 31.6 million shares in Macarthur Coal, the firm said in a statement.

It included 9.05 million company shares acquired from Talbot Group Holdings and another 22.09 million shares from Tinkler Investments.

The share purchases were conducted through open market transactions between April 24 and May 21.

Macarthur's main product is low volatile pulverised coal injection coal used in steel production.

Mahindras, Biascope enter `script` collaboration

Mumbai, May 21: Mahindra Group has forayed into entertainment business by collaborating with Biascope Entertainment to set up a script lab structure.

Biascope Entertainment, conceived two years ago, is an NGO which facilitates a platform where knowledge can be shared on all aspects of cinema and a way can be paved for a defined film making culture and movement in the country.

Addressing a press conference here yesterday Mahindra Media and Enterta Business CEO Andrey Purushottam said, "Sankalan is an opportunity which will help nurture ideas and concepts for films into full blown scripts that eventually be made into films."

Contestants are invited to send in their concepts for feature films-live action or animation, he said and added that 24 best entries would be selected for one to one sessions with the panel comprising representatives from Mahindras, Biascope Entertainment, writers and directors.

Script writers Anurag Kashyap, Anjum Rajabali and Sriram Raghavan would select and mentor the shortlisted candidates to transform the fresh ideas into feature film scripts over a period of nine months, said event director of Biascope Entertainment Anupama Bose.

Purushottam said, "Mahindras intend to give scripts and script writers the importance they deserve in order to create really good, entertaining and meaningful cinema."

The 12 finalists, out of the 24 entries, would be given stipends so that they can concentrate only on developing their scripts and their expenses can be taken care of, said scriptwriter Anurag Kashyap.

Bose said that out of the 12 finalists, six would be shortlisted for further developing their concepts into film script drafts, complete with narratives.

Finally, three drafts would be picked up, she said. However, the eliminated nine finalists can go back and work on their own.

"They can come back to us after completing their work on their own," she added.

Rajabali said that Sankalan is a very highly needed relationship between producers on one hand expecting good scripts and raw talent on the other hand wanting to develop their ideas into scripts, which can be turned into films. All they need is a little push and mentoring. Sankalan will provided it.

Scriptwriter Sriram Raghavan said, "we keep saying that there is a tremendous lack of good scripts in our country. Hopefully, this initiative will help attract new ideas and writers. There must be so many people all over the country who have stories to tell but perhaps don`t know how exactly to go about it."

These scripts would be then be further developed and produced by Mahindra media and entertainment business.

The last date of submission of concepts is July 19.

Stock to watch: IOC, HPCL, BPCL, M&M
22 May, 2008, 0946 hrs IST,

MUMBAI: Equities are likely to open lower Thursday tracking weak overseas cues. Mounting worries over the health of the US economy rattled investors across the world and record high oil prices continued to keep sentiment jittery.

US crude oil prices touched a new all time high of $135.04 on low US inventories. This is likely to have a negative impact on oil marketing companies.

Recent demand for the US dollar by oil companies and banks has led to a sharp depreciation in the rupee. The rupee opened at 43 to the dollar and slipped to 43.10 per dollar. It had closed at 42.83/84 on Wednesday. This is likely to firm up IT stocks and other export oriented companies.

State Bank of India has withdrawn the circular to stop fresh lending for tractor loans. The segment had witnessed high overdues in the past few months following the announcement of the Rs 60,000-crore farm loan waiver. The Congress had issued a statement on Tuesday, asking the finance ministry to prevail upon the bank to withdraw the circular since it went against the interests of farmers. The stock ended at Rs 1661.55 on the BSE.

Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum Corporation have stopped issuing new LPG connections to household consumers. The move is defiance of the government which had last week turned down their request for a bar on new LPG connections.

Mahindra & Mahindra has signed a term sheet with Kinetic Motors, the Pune-based two-wheeler manufacturer, in its bid to acquire a majority stake in the company. A term sheet is a non-binding agreement setting forth the basic terms and conditions under which an investment is to be made in a company. Shares of Mahindra &Mahindra closed at Rs 670, up 2.66 per cent on the BSE while shares of Kinetic Motor declined 4.33 per cent to end at Rs 29.80.

Ranbaxy Laboratories, India’s largest drugmaker, is learnt to have struck two deals with group companies. The drug company has sold some land and building for Rs 90 crore to a group company, sources said. It has also picked up 24.91% stake in Shimal Laboratories, another promoter family company, for Rs 93.4 crore.

A Ranbaxy spokesperson denied that any asset of the company has changed hands with any of the promoter-family owned company. A company spokesperson said, “No land of the company has been sold to the promoter-family owned company.” Ranbaxy Laboratories ended at Rs 504, down 1.35 per cent on the BSE.

Results today: Balaji Telefilms, Dishman Pharma, Havells India, Lakshmi Mills and Moser Baer.

Low beta may not be the best bet for investors, always
22 May, 2008, 0145 hrs IST

MUMBAI: In a booming market, it is often the most volatile stocks that provide the best returns. But when the market is in a slump, it is often stocks with low volatility that outperform the broad market. Or at least that is what most market watchers like to believe.

When market conditions change for the worse, fund managers often develop a sudden fondness for stocks with low beta — a popular statistical measure of a share’s volatility relative to the market. In theory, a stock with lower beta may be an ideal bet in uncertain times. Yet, there have been doubts about the effectiveness of beta as a concrete risk indicator after the recent crash.

A share with lower beta, essentially lesser than one in theory, is perceived to fall or rise less sharply as against the broader indices, in the event of sharp movements. For instance, if a stock has a beta of 0.8, it means when the benchmark index goes down by 100%, the stock price may go down at a lower rate of 80%. Therefore, in event of a crash, a stock with beta less than one, appears more protected.

But, an ET analysis, comparing the beta and returns of each stock on the BSE-500 index relative to the Sensex in the January-March quarter, shows inconsistencies in beta’s effectiveness as a critical risk measure. The analysis showed there were 191 stocks in the BSE-500 index with beta less than one. Out of the total 191 stocks, with beta less than one, 117 stocks (61% of the 191 stocks) have fallen more than the Sensex. Going by theory, most of these 191 stocks, that have beta less than one, should have fallen lower than the Sensex, raising questions about the potency of beta, when it matters the most. The oft-used definition of risk is the possibility of suffering a loss.

The trend noticed in this study is that the beta theory conformed mostly to stocks in the consumer goods and selectively in pharmaceutical sectors. Agreeing with the analysis, ICICI Prudential Asset Management’s deputy MD and CIO, Nilesh Shah, said: “The use of beta is just a risk-management practice. It can be used only selectively.” Stocks in the consumer goods sector such as Procter & Gamble Hygiene & Health Care, Colgate-Palmolive and Marico have underperformed the market in the four-year bull run, due to their more sedate growth vis-à-vis other sectors. Value investors are known to shun the concept of beta, as it does not take into account the financial strength of a company.

Gul Tekchandani, an independent investment strategist, said: “Beta can be treated only as a supplementary indicator. Ultimately, its more to do with the fundamental strength of the company.” Interestingly, shares like Mindtree Consulting, MMTC and Idea Cellular showed negative beta, but they fell sharper than the Sensex in the January-March quarter.