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ICICI Bank’s overseas loss at $264.34mn

New Delhi, Mar 04: The government on Tuesday said ICICI Bank's overseas operations have reported a loss of 264.34 million dollars following the sub-prime crisis.

"Following the sub-prime crisis overseas, ICICI Bank's overseas operations had reported market to market (MTM) losses of 264.34 million dollars on account of its exposure to credit derivatives and investments as on January 31, 2008," Minister of State for Finance P K Bansal told Rajya Sahba in a written reply.

When contacted, ICICI Joint Managing Director and CFO Chanda Kochchar said most of this amount has already been accounted for till December, 2007.

She added the bank will have marked to market losses of around 70 million dollars this quarter.

Kochchar said none of these investments has any direct exposure to sub-prime assets.

In the Rajya Sabha, Bansal also said there is no information about sub-prime crisis in India.

ICICI Bank sold gross non-performing assets amounting to Rs 1,438.41 crore in 2005-06 to securitisation and reconstruction companies and impaired housing loans of Rs 381 crore during the quarter ended September, 2007 to an asset reconstruction company, he said.

As on March 31, 2007, the gross NPAs of ICICI Bank stood at Rs 4,126 crore, Bansal said.

ICICI Bank has reported a Net Profit of Rs 2,540 crore for 2005-06, Rs 3,110 crore for 2006-07 and Rs 1,003 crore for the year ended September, 2007, he said.

ICICI Bank's share was at Rs 952, down over 7 per cent in afternoon trade on BSE. The scrips had closed at Rs 1024.45 yesterday.

Bureau Report

Bajaj reduces motorcycle prices by up to Rs 3,000

New Delhi, Mar 04: Reeling under the pressure of an industry slowdown, the country's second largest two-wheeler maker Bajaj Auto Ltd (BAL) on Tuesday reduced prices of its various motorcycle models by up to Rs 3,000 to revive sales fortunes.

The reduction reflects a correction in prices post Finance Minister P Chidambaram's proposal of cutting excise duty on two-wheelers to 12 per cent from the earlier 16 per cent. The company has, however, reduced prices over and above the excise duty benefits to revive sales.

"The excise duty cut roughly translates into a price correction of Rs 1,000 per unit but we have reduced prices more than the benefit on certain models," BAL General Manager (marketing) Amit Nandi told.

Prices of BAL's entry-level 100cc model Platina have been reduced in the range of Rs 2,000-Rs 3,000 and it would now be available for Rs 30,000 (ex-showroom).

"On certain Platina variants the price cut is Rs 2,000 but most of its variants would see a reduction of Rs 3,000," Nandi said.

Prices of Discover (125cc and 135cc), Pulsar (150cc and 180cc) and automatic scooter Krystal have been reduced by Rs 1,000. BAL is not offering any price cut on Pulsar 220 DTS-FI.

The company's 125cc XCD DTS-SI (kick-start variant) would now cost Rs 1,500 less and would be available for Rs 37,500. It has, however, not cut the prices of the self-start variant of XCD.

BAL was pegging XCD as its main weapon to exit the low- margin high-volume entry-level or 100cc motorcycle segment, which accounts for 60 per cent of the overall bike sales in the country.

Sensex 16339.89 -337.99
Nifty 4871.50 -81.50
Djia 12258.90 -7.49
Nasdaq 2258.60 -12.88
Rs/$ 40.26 -0.34

Sita Shree Food Products IPO opens on March 11; priced Rs 27-30/share
4 Mar, 2008, 0858 hrs IST

Sita Shree Food Products will enter the capital markets on March 11 with a public issue aggregating Rs 31.50 crore through the book building process.

Kilburn Engineering bags Rs 3.34 cr orders
4 Mar, 2008, 1309 hrs IST

Kilburn Engineering has bagged a purchase order valued at Rs 3.34 crore. The order includes purchasing of 2 fluid bed coolers from Descon Engineering worth of Rs 1.77 crore and utility gas system from National Petroleum Constriction of Rs 1.57 crore respectively.

Scrip CMP(Rs.) Chg%
greaves 276.70 + 10.30
indus fila 210.00 + 7.71
zeetelefilms 258.75 + 6.06
rajvir indus 124.00 + 5.98
timken 114.75 + 5.90
malu paper 32.00 + 5.61
pnbgiltsltd 29.65 + 5.14
cinevistaas 11.35 + 5.09
bosch chasis 683.10 + 5.05
gkw 82.45 + 5.03

Securities cam: SEBI imposes 10-year ban on Johari
4 Mar, 2008, 1449 hrs IST.............
MUMBA: Market regulator SEBI on Tuesday banned Arvind Johari, owner of Lucknow-based Cyberspace, from trading for 10 years for his involvement in the securities scam in 1999-2001.

In addition to Johari, 39 other entities have also been banned from trading for five years for creating false market for Cyberspace shares through artificial trade.

"Arvind Johari be restrained from accessing the securities market and prohibited from associating with securities market to buy, sell or deal in securities in any manner for a period of 10 years," Sebi said in its order.

The period of debarment against Johari, following the interim order on April 6, 2001, will be set off, Sebi said.

The 39 others, who have been banned for five years, include G N Johari, Anand K Johari, A M Johari and Co and Kamal Infosys.

Sebi order said, "Arvind Johari, director of Cyberspace has used undue influence on many of the noticees to yield his manipulative design since. Since he was the key player in the game plan, he should be penalised sternly as compared to the penalties to be imposed on other noticees."

During the investigation, the market regulator found unusual movement in the scrip of Cyberspace, mostly engineered by same set of people through trading in a circular manner.

The share price of Cyberspace fell from Rs 1,200 per in September 2000 to 147 in February 2001. Trading in the scrips of the company was suspended at BSE and NSE in April, 2001.

Fed Chief: Mortgage Crisis to Continue
Tuesday March 4, 10:24 am ET
By Jeannine Aversa, AP Economics Writer
Fed Chief Bernanke Says More Needs to Be Done to Prevent Home Foreclosures


WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke called Tuesday for additional action to prevent more distressed homeowners from falling into foreclosure.
"This situation calls for a vigorous response," Bernanke said in a speech to a banking group meeting in Orlando, Fla.
Even with some relief efforts under way by industry and government, foreclosures and late payments on home mortgages are likely to rise "for a while longer," Bernanke warned.

Rising foreclosures threaten to worsen the problems in the housing market and for the national economy, which many fear is on the verge of a recession or in one already.

"Reducing the rate of preventable foreclosures would promote economic stability for households, neighborhoods and the nation as a whole," Bernanke said. "Although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done," the Fed chief said.

One of the suggestions Bernanke made was for mortgage and other financial companies to reduce the amount of the loan to provide relief to a struggling owner. "Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure," Bernanke said.

With low or negative equity in their home, a stressed borrower has less ability -- because there is no home equity to tap -- and less financial incentive to try to remain in the home, he said.

Bernanke acknowledged this idea might be a tough sell to lenders. Lenders, he said, are reluctant to write down principal. "They say that if they were to write down the principal and house prices were to fall further, they could feel pressured to write down principal again," Bernanke said.

Still, Bernanke suggested such longer-term permanent solutions may work better than shorter-term and temporary ones, where the distressed homeowner could find himself in trouble again. "When the mortgage is `under water' a reduction in principal may increase the expected payoff by reducing the risk of default and foreclosure," he said.

To date, permanent home mortgage modifications that have occurred have typically involved a reduction in the interest rate, while reductions of the principal balance of the loan have been quite rare, he said.

"Measures that lead to a sustainable outcome are to be preferred to temporary palliatives, which may only put off foreclosure and perhaps increase its ultimate costs," Bernanke said.

Lenders last year were on pace to initiate roughly 1.5 million home foreclosure proceedings, up from an average of fewer than 1 million new foreclosures in the preceding two years, the Fed chief said. More than one half of the foreclosures started in 2007 were on subprime loans given to borrowers with blemished credit histories or low incomes.

The housing collapse dragged down home values, especially clobbering these subprime borrowers. Many were left with mortgages that exceeded the value of their homes. They were further socked by low introductory rates on their adjustable mortgages resetting to higher rates, making their monthly payments difficult or impossible, to afford. Problems in the credit markets have made refinancing a mortgage harder.

This year, about 1.5 million loans -- representing more than 40 percent of the outstanding stock of subprime adjustable-rate mortgages -- are scheduled to reset to higher rates, Bernanke said. The Fed estimates that the interest rate on a typical subprime ARM slated to reset in the current quarter will increase to about 9.25 percent from just above 8 percent. That would raise the monthly payment by more than 10 percent, to $1,500 on average, he said.

Declines in short-term interest rates and a Bush administration-promoted initiative involving rate freezes will "reduce the impact somewhat, but interest rate resets will nevertheless impose stress on many households," Bernanke said.

On Capitol Hill, a number of measures have been offered to help stressed homeowners.

Overhauling the Depression-era Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, could help, Bernanke said. He also called for strengthened supervision of mortgage giants Fannie Mae and Freddie Mac.

Bernanke, who last week signaled that the Fed stands ready to lower a key interest rate again, did not talk interest rate policy in his speech or in a brief question-and-answer session afterward. The Fed, which has been slicing rates since September to help the economy, is expect to reduce them again on March 18, the Fed's next meeting.

Associated Press Writer Travis Reed contributed to this report from Orlando, Fla.

EC hints at early elections in Karnataka

Bangalore, March 04: In broad hints that it is keen on early elections in Karnataka, the Election Commission on Tuesday said it would take a decision by April 15 on whether to hold polls before May end "or later" by using a special legal provision.

President's rule in Karnataka expires on May 28.

"By April 15, the Commission will definitely take a decision on whether to hold elections before May 28 or later", Chief Election Commissioner N Gopalaswami said.

He was speaking to reporters after undertaking a day-long review of the preparations on electoral rolls and redrawing of constituencies as per the Delimitation Commission recommendations. Election Commissioners S Y Qureishi and Navin B Chawla also took part in the review.

"The Commission will invoke Rule 24 of the Registration of Electors Rules 1963 of the Representation of People Act and publish the voters list and also names of delimitation of new constituencies."

By this statement, the CEC also brushed aside the demand by some political parties, including the Congress, which had represented to him that poll dates be set only after rectifying anomalies in the existing rolls, final draft of which was expected to be published on March 10.

Expressing satisfaction with the progress, he said the final voters list will be published on March 10 for all the constituencies, except Municipal corporations where it will be done on March 20.

"With regard to holding of elections in Karnataka before the expiry of the President's rule, the Commission wanted to assess the situation in the state", Gopalaswami said.

The Full Commission reviewed the new electoral rolls and also the delimitation of constituencies, he said.

No issue on farm loan waiver: Nath

New Delhi, Mar 04: Commerce & Industry Minister Kamal Nath on Tuesday said he has no reservations on the loan waiver package for farmers announced in the Union Budget and has "congratulated" Finance Minister P Chidambaram for this measure.

He said the government needs to work out an effective mechanism for implementation of the Rs 60,000 crore loan waiver package for farmers.

"Of course I welcome it (the package)," Nath told reporters when asked whether he had some reservations on debt waiver.

"There is no issue I congratulated the Finance Minister and the Prime Minister for such a step. But we must formulate a mechanism for its execution which the Finance Minister is doing," he said.

However, Nath met Prime Minister Manmohan Singh and briefed him about the problems being faced by exporters on account of a sharp rise in rupee value.

Asked whether he was happy with the budget proposals relating to the export sector, Nath said it was not merely a budget issue.

"It is an ongoing process. With the rupee appreciation, Indian exporters are feeling concerned about lack of competitiveness in global market," he said.

He said exports have grown at double the pace of the GDP growth and "we are concerned about the sector, especially about the labour intensive sectors," he said.

The exporters' organisations like the Federation of Indian Export Organisations (FIEO) have expressed disappointment over absence of specific measures in the budget for the distressed export sector.