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Karnataka polls: BJP appears set to form govt

Bangalore, May 25: The lotus finally appears to have bloomed down South as the BJP on Sunday appeared close to forming its first government there. The party has won 80 of the 150 seats for which results have been declared so far. Further, it was ahead in 30 other constituencies for which trends were available after more than five hours of counting in the 224-member Karnataka Assembly polls.

While the BJP’s tally of results/trends currently stands at 110, party leaders say they might fall short of getting an absolute majority.

Congress has won 51 seats and was ahead in 24 seats as leads swung sharply after every round of counting in fiercely contested fights in almost all constituencies.

JD(S) has won 14 seats and was ahead in 17, while independents and others have emerged victorious in five constituencies and were ahead in three.

BJP leader Arun Jaitley conceded that the party may be "a little away" from the majority while his party colleague Ravi Shankar Prasad demanded that BJP should be called to form the government and there was no other question.

In the outgoing Assembly, the BJP got 79 seats, INC 65 and JD(S) 58.

Former Chief Minister H D Kumaraswamy of JD(S) won Ramanagaram seat for the second consecutive time beating his nearest BJP rival M Rudresh. Congress` Mamata Nichhani, daughter of former Chief Minister Ramakrishna Hegde, was in the third position.

Former minister and Congress heavyweight R V Deshpande lost the Haliyal seat to JD(S)` Sunil Hegde by a margin of 5,425 votes.

BJP chief ministerial nominee B S Yeddyurappa, former Chief Minister N Dharam Singh (Congress) and KPCC president M Mallikarjun Kharge were among others who maintained comfortable leads over their respective rivals.

BJP MP Ambareesh (Srirangapatna) and former Deputy Chief Minister M P Prakash of Congress (Harappanahalli) were the prominent candidates who were behind.

In Kumta, Dinakar Keshav Shetty of JD(S) won by a slender margin of 20 votes against his nearest Congress rival.

BJP`s Narasimha Naik bagged the Shorapur seat beating his nearest Congress rival Raja Venktappa Naik by 4,000 votes, while former minister B Sriramulu defeated Ramprasad of Congress in Bellary Rural (reserved) by over 25,000 votes. In Sullia (SC), BJP`s S Angara humbled Dr Raghu of Congress by over 5,300 votes.

‘Invite us to form next government’

Exultant over its good showing in the Karnataka Assembly elections, the BJP said the party should be invited to form the next government in the Southern state and noted that the poll results would have nationwide ramifications.

"The verdict is against the Congress, decisively against the JD(S) and substantially in the favour of the BJP," BJP spokesperson Ravi Shankar Prasad said.

He said that in view of the people`s verdict, the BJP should get the opportunity to form government.

"The Governor should invite the BJP now as the people`s verdict is clearly in our favour. It will be a case of gross political impropriety if the Governor does not invite the BJP to form the government," Prasad said.

Prasad said it was a "great moment" and a "big day" for the BJP as the party has crossed beyond the Vindhyas to make a foray into Southern India.

"The result will have a ramification all over the country," Prasad said, apparently referring to the next Lok Sabha Elections.

Party spokesperson Rajeev Pratap Rudy said the results in Karnataka will affect the national agenda and mark the end of the UPA.

Commenting on the poll results, BJP vice president Mukhtar Abbas Naqvi said: "After delimitation, this is the political limitation of the Congress."

The BJP parliamentary board is scheduled to meet later in the day to discuss the results and government formation. In case the party does not manage to get a clear majority, the meeting would be crucial.

Further, the party has convened its legislature party meeting in Bangalore tomorrow. The meeting will be held at 4:00 pm, party sources said here.

Trends/Results:

BJP: 110
Congress: 75
JD(S): 31
Others: 08

SAIL to pay USD 150 per tonne for BCCL coal

Kolkata, May 24: The Steel Authority of India Ltd has agreed to pay the revised coal price to Bharat Coking Coal Ltd for its supply of coal.

SAIL has to pay USD 150 per tonne in 2008-09, against USD 105 in the previous fiscal.

"The price issue is settled. We will sell coking coal from BCCL at USD 150 per tonne, 40 per cent lower than the price we were supposed to sell at as per laid down guidelines," Coal India (CIL) chairman Partha Bhattacharyya said here today.

Bharat Coking Coal is a 100 per cent subsidiary of CIL.

"We were supposed to sell at USD 250 per tonne against the ruling international price of USD 300 per tonne. But, SAIL has been offered special discount as they have paid higher price of USD 105 per tonne in 2007-08, against USD 97-98 per tonne they were supposed to pay," Bhattacharyya said on the sidelines of the annual conference of the National Institute of Personnel Management.

BCCL's normal supply of coking coal to SAIL is 1.67 million tonne out of its total production of 2 million tonne.

BCCL CMD A K Paul had earlier said agreement with SAIL had expired on March 31, and now the company would re- negotiate the price with the steel behemoth at Rs 6,300 per tonne.

In Indian currency, the present agreed price of USD 150 is somewhere around Rs 6000.

BCCL would earn an additional Rs 1,800 crore if the company realises the revised price to Rs 6,300 per tonne from Rs 4,500 per tonne sold during the previous fiscal.

BHEL`s Q4 Net Profit declines by 3.43%

Mumbai, May 24: State-run Bharat Heavy Electricals Ltd on Friday announced a standalone Net Profit of Rs 1,110.87 crore for the fourth quarter ended March 31, 2008, a 3.43 per cent decline over the corresponding period a year ago.

The company had a standalone Net Profit of Rs 1,150.37 crore in the fourth quarter last financial year, BHEL said in a filing with the Bombay Stock Exchange.

The standalone total income increased to Rs 7,626.20 crore in the latest quarter from Rs 7205.70 crore in the same period last year.

The standalone Net Profit of the public sector firm rose to Rs 2,859.34 crore for the year ended March 31, from Rs 2,414.70 crore in the previous year.

The standalone total income grew to Rs 20,761.69 crore for the year ended March 31, from Rs 17,999 crore in the last year ended March 31, 2007.

The Board of Directors of the company recommended a final dividend of Rs 6.25 per share (62.5 per cent) in addition to the interim dividend of Rs 9 per equity (90 per cent) already paid.

The shares of the public sector enterprise closed at Rs 1,747.20 at the BSE, down 0.05 per cent from the previous close.

Bharti pulls out of talks with MTN

New Delhi, May 24: India`s largest private telecom company Bharti Airtel on Saturday pulled out of negotiation for acquiring an estimated USD 45-50 billion MTN, saying the South African telecom entity deviated from agreed terms.

"An in-principle agreement was reached on 16th May and a term sheet was initialled between two lead bankers... MTN has now presented a completely different structure, from what was agreed," Bharti said in a statement.

The new structure envisaged Bharti Airtel becoming a subsidiary of MTN and exchange of majority shares of Indian company held by Sunil Mittal, promoter of Bharti, family and its foreign partner Singtel, in exchange for a controlling stake in MTN.

"Bharti believes that this convoluted way of getting an indirect control of the combined entity would have compromised the minority shareholders of Bharti Airtel and also would not capture the synergies of a combined entity," the company said.

Both (Bharti and MTN) had initiated talks about three weeks ago and talks were cordial through out this period and conducted in good faith.

Bharti also claimed that over a dozen internationally reputed bankers from the US and Europe of having pledged funds of over 60 billion dollars for the acquisition.

The reference point at which MTN shares were to be transacted was agreed and frozen at the point of starting the discussion and Bharti would like to confirm that there was no further discussion on the share price of MTN, at any point.

Singapore Telecommunications owns 30.5 percent of Bharti Airtel.

Emirates Telecommunications (Etisalat) had said it was evaluating a possible bid for MTN, and China Mobile, the world`s biggest mobile carrier, had said it was interested in the South Africa market.

MTN is sub-Saharan Africa`s biggest mobile operator, and is present in some of the world`s most lucrative markets, such as Nigeria, Cameroon, Ghana, Zambia and Uganda.

In South Africa`s fiercely competitive market, MTN lags Vodacom, a venture of Telkom and Vodafone Plc, but it is seeing strong growth in Iran, for example, where oil money is spurring market growth and MTN has only one serious rival mobile operator.

India may face glut in wheat and rice

New Delhi, May 25: India, which is currently at a comfortable position in cereals, may face a glut in rice and wheat two years from now, an expert said.

"The way prices have gone up in cereals like wheat andrice, there will be glut of these cereals in next two years,"India head of US-based International Food Policy ResearchInstitute Ashok Gulati said.

Speaking on sidelines of a function, he said the robust prices in cereals have attracted the sugarcane farmers, who were suffering from a glut in the sugar market, towards paddy cultivation.

During 2007-08, India has produced a record 76.78 million tons of wheat and 95.68 million tons of rice. The sugar output is estimated at about 27 million tons against the domestic consumption of 20 million tons.

Gulati noted that the wheat procurement of about 21 million tons in a little over one month signals that support price of Rs 1,000 a quintal was good for farmers. He also said, the shift towards cereals would affect other crops like oilseeds as total cultivable area remains the same. He said India can become self sufficient in edible oil if oilseeds production is increased by 40 per cent, but cautioned that in the process, other crops would be affected. There is need to tap potential in oil palm, which is the cheapest source of edible oil compared to oilseeds, he suggested. While palm oil is harvested through the plantation crop, other oils come from oilseeds grown in field.

"Oil palm in the country is being grown in 30,000-40,000 hectares while it has potential of 800,000 hectares," he said.

India imports 40 per cent of its domestic edible oil requirement, majority of which is palm oil from Indonesia and Malaysia. The edible oil import was about 47 lakh tons in 2006-07 season ending October last year.

Investors will return from holiday with same fears
Sunday May 25, 6:45 pm ET

Amid oil price anxiety, investors parse housing, spending, manufacturing data this week

NEW YORK -- The three-day weekend probably didn't bring much relaxation to investors if they stopped at a gas station on the way to the beach or a barbeque.
With the average roadside price of gasoline pushing $3.88 a gallon -- and going for well over $4 at filling stations in some parts of the country -- energy prices have become a prime worry in the stock market.

That's not to say other concerns have dissipated. As Wall Street heads into this shortened week, it remains anxious about the still-slumping housing market, not to mention the ailing financial services sector. But so much of the economy's performance later in the year will depend on energy costs, so the focus will be on crude until investors see a substantial price retreat.

What's particularly troubling about oil's rise is that everyone knows it will affect the economy, but no one is sure exactly how. Experts are split over whether it will cause broad-based inflation, further economic weakness, or both at the same time.

None of these scenarios are good ones. And the fact that the Federal Reserve says its monetary policy will likely remain on hold until it's clear which situation plays out was a big reason the stock market did so poorly last week. The Dow Jones industrial average dropped 3.91 percent, while the Standard & Poor's 500 index fell 3.47 percent and the Nasdaq composite index declined 3.33 percent.

To be sure, expensive oil isn't necessarily destructive in the long term. If the economy holds up, U.S. consumers may be able to gradually adapt their behavior and spending -- a trend that could end up actually controlling inflation.

"There are definitely signs that the high price of crude is destroying demand bit by bit," said Craig Peckham, market strategist at Jefferies & Co. "At this point, we're seeing an economy that is experiencing a headwind from the high price of crude, which at the end of the day could act as a natural regulator of the economy."

But among stock investors right now, "inflation fears have been trumping relatively benign growth numbers," he said.

This four-day week will bring a variety of economic readings on the housing market, consumer spending, business spending, and manufacturing.

On Tuesday, the Commerce Department releases its April data on new home sales, expected to show a decline from March sales, according to economists surveyed Friday by Thomson Financial/IFR. Also Tuesday, the Conference Board's consumer confidence index for May is anticipated to edge lower, too.

Wednesday, the Commerce Department reports on orders for durable goods, which are essentially big-ticket items ranging from cars to refrigerators to computers. April's durable goods orders are expected to have dipped by 1.1 percent after rising by 0.1 percent in March.

Then Friday, on top of data from Chicago purchasing managers on manufacturing and from the University of Michigan on consumer sentiment, the Commerce Department will report on personal spending. Economists predict spending rose 0.2 percent in April, compared with a 0.4 percent increase the previous month.

That report will include the closely watched personal consumption expenditures deflator, which is a measure of inflation at the personal level. Economists, on average, expect that it was steady in April at an annual rate of 2.2 percent.

Investors should get an additional sense of how consumers are spending their money in earnings reports this week from Borders Group Inc., Costco Wholesale Corp., Dell Inc., Sears Holdings Corp. and Tiffany & Co.

MTN holds talks with Reliance: WSJ

Mumbai, May 25: South African mobile operator MTN Group is in talks to combine with Reliance Communications after rival Bharti Airtel Ltd. called off negotiations with MTN, the Wall Street Journal said.

A weekend report on the WSJ Asia website cited people familiar with the matter as saying discussions were under way, although it added they could go nowhere.

It said it could not learn precise details of the tie-up being discussed but one unidentified person said the deal may be structured as a purchase of Reliance by MTN.

Indian newspapers also reported on Sunday that Reliance Communications, India`s No. 2 mobile operator and part of the Anil Dhirubhai Ambani Group, was believed to be in talks with MTN about a possible deal.

A spokesman for Reliance Communications declined to comment on the reports.

Reliance Communications had a subscriber base of about 47 million at the end of April, the spokesman said.

It reported revenues of 190.68 billion rupees (USD 4.47 billion) in 2007/08, according to a press release on its website.

Most of its customers are on the CDMA platform but it plans to expand its GSM services.

Its market value at the end of trading on Friday stood at USD 27.6 billion. Its shares closed 2.1 percent down at 572.30 rupees, underperforming the main Mumbai market index which ended 1.5 percent lower.

MTN, which is sub-Saharan Africa`s biggest mobile operator, had 68.2 million subscribers as of March while its annual revenue is about USD 9.6 billion.

Bharti Airtel, India`s leading mobile phone operator, said on Saturday it had ended takeover talks with MTN after failing to agree on which company would control a combined entity.

The groups had hoped to create the world`s sixth largest mobile operator with over 130 million subscribers in 24 countries after first announcing they were in talks on May 5.

Bharti said it had called off the negotiations after MTN proposed a new structure which would have seen the Indian group becoming a unit of the South African-based mobile phone operator.

Quote of the Day ? "When your vegetable vendor asks from you for stock tips that means rally is going to over by now"

No limit to oil price rise: Chavez

Brasilia, May 25: Venezuelan President Hugo Chavez has said the world economy must grow accustomed to the high price of oil - currently above USD 130 a barrel - because there's 'no limit' to how high it can go, EFE news agency reported Sunday.

'We can't talk about limits. We could've talked about limits when Venezuela proposed that price band (with a floor of USD 22 a barrel and a ceiling of USD 28), which was working well until the war in Iraq pulverized it,' Chavez told Efe here.

'There's no limit now,' said the Venezuelan leader, whose country boasts the largest crude reserves in the Western Hemisphere.

When asked about experts' concerns that the high price of oil could have a serious impact on the world economy, as occurred in the 1970s, Chavez, a socialist and harsh critic of US foreign policy, said that developed countries already have assimilated the impact.

'The world economy has to assimilate that price, just as we do, our economies, we have to assimilate the high prices of agricultural machinery, of medical equipment and of medicine,' he said.

'They have to look at their consumerist model,' Chavez said, referring to the high rates of energy consumption in the wealthy countries.

Chavez said he could not provide details at the moment, but noted that his country is making investments - both in Venezuela and abroad - to increase its refining capacity and give greater value-added to its petroleum.

Chavez travelled to Brazil for a summit in which a new South American organization, the Union of South American Nations, or Unasur, was created.

The Venezuelan described the new grouping, which plans to hold annual summits of heads of state and government and biannual ministerial meetings and will have a permanent secretariat based in Quito, as a counterweight to US influence in South America.