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India GSM mobile firms add 5.9 mln users in Feb

New Delhi, March 15: India's leading GSM-based mobile operators added 5.9 million users in February, about 300,000 less than in January, an industry body said on Monday.

Bharti Airtel Ltd, India's top mobile firm, led the pack, signing 2.3 million new users in February to take its total to 59.7 million, data from the Cellular Operators Association of India showed.

India, the world's fastest growing wireless telecom market, had 184.7 million subscribers on nine GSM networks by end-February, the data showed.

The figure does not include No. 2 operator Reliance Communications Ltd, which operates mainly on the rival CDMA platform but has a growing GSM customer base. The company releases its additions later.

Reliance had added 1.6 million subscribers across both platforms in January, lifting its total to 42.6 million.

In February, third-ranked Vodafone Essar, a unit of Vodafone Plc, took in 1.4 million new users, swelling its subscribers to 42.6 million, the data showed.

Idea Cellular, the sixth-largest operator by subscriber numbers, added 918,871 users in February, taking total users to 22.9 million users.

Unlisted state-owned Bharat Sanchar Nigam Ltd, the No. 4 player, added 824,284 subscribers, taking its total to 34.6 million.

Aircel, controlled by leading Malaysian mobile phone firm Maxis Communications, added 251,367 users in February, half of what it added in January. The unlisted firm operates in nine of India's 23 telecom zones.

India has been adding more than 8 million wireless users each month, with call rates as low as 2 US cents, cheap handsets and a booming economy contributing to the growth.

Steam still left in India: ICICI Bank

New Delhi, March 16: The global equity bull run is reaching its last lap and a high level of volatility is expected during 2008, but emerging markets such as India and China may again outperform the developed world this year, India`s biggest private sector lender ICICI Bank believes.

"The global equity bull run is showing signs of ageing as growth becomes scarcer. The period of spectacular returns and low volatility is behind US and in 2008 could see high volatility in equity markets," according to a "global investment outlook 2008" report by ICICI Bank`s private clients division.

While earnings growth would shrink in G7 economies - the US, UK, France, Germany, Canada, Italy and Japan, this along with inflation simmering in the background would keep equity markets on the edge, said Anup Bagchi, head of global private clients at ICICI group.

"The global equity markets have been on a strong bull run for the past five years with some intermittent correction. The above-trend economic growth, impressive corporate earnings coupled with low interest rates and benign inflationary trends provided a sound backdrop for such an impressive bull run in the global equity markets," the report said.

However, fears about a recession in the us, tight credit conditions and huge write-downs and losses being disclosed by some of the wall street giants have resulted into a worldwide sell-off and most of the markets have dropped by 10-15 percent since the beginning of this year and the falls have been steepest for some of them since the 9-11 terror attack.

Noting that the developed world would see a slowdown in earnings and economic growth rates being played out in the coming quarters, the report said that the "financial contagion would mean that emerging markets will not remain unscathed."

"Yet, the ongoing correction means that the worry about the pricey valuations among the EM world would eventually be replaced with the attraction of better growth opportunities in these countries as compared to developed world."

"In other words, the intermittent corrections in the EM space could offer fresh buying opportunities," ICICI Bank`s private clients group said, but added that investors would need to be selective in the emerging markets space as well.

"Countries that are less dependent on the us economy, or are facing lower inflationary pressures or having favourable current account position are likely to outperform in the coming times."

India and China are favourably placed in this regard, especially after the meaningful correction in the recent past, Bagchi said in the report.

After a stellar 47 percent return over last year, the emerging trends augur well for India`s Sensex, it noted.

"With 50 percent of population between 25-35 years, the channelling of savings into the equity markets is only going to increase (currently it is just six percent of the total savings and at 8-year high). For example, there has been a 25 percent rise in total equity asset holdings of the mutual funds in fy07," he added.

The report emphasized, however, that the emerging markets might not emerge completely unscathed from the us weakness, even as they are "much less vulnerable than history might suggest." The micro and macro picture in these EMs is much more robust which would allow the fiscal and monetary authorities to act proactively to the evolving environment.

"The EM story is that of improving fundamentals, rising incomes, widening prosperity and expanding domestic demand rather than just exports," the report said. "Decoupling, in our view, is not a one-off event but a process of self-realisation of the EMs that began in the last decade and will mature over time," Bagchi said.

Steel Ministry wants removal of import duties

New Delhi, March 16: Peeved at steel producers hiking prices arbitrarily, Steel Ministry is planning to write to the Finance Ministry to remove import duties on steel and impose duty on its export, while pondering on a regulator in the sector.

"The steel producers have been hiking prices arbitrarily, which is a matter of serious concern to us. They need to realise that rising prices will adversely affect the 'aam aadmi'. So we are planning to write to the Finance Ministry to examine the possibility of removing import duty on steel and imposing export duty on the alloy," a senior Steel Ministry official said.

He argued that repeated pleas to the steel producers to contain their prices have not yielded desired results and during the past one month they raised the prices of various products by Rs 3,000 to Rs 4,000 which would hit the 'aam aadmi' hard.

"Moreover, there is also a concern with the government that the rising steel prices is also adversely affecting the Wholesale Price Index," he reasoned.

Steel Minister Ram Vilas Paswan had couple of meetings with the producers in the past one month, in which he had urged them to roll back prices and desist from raising prices frequently.

"Inspite of his request, they hiked price in the first week of this month after a token reduction last month after the minister's appeal," the official said.

It was not immediately clear as to what would be the export duty suggested by the ministry or whether it favoured abolishing import duty from the current five percent for all steel products.

Meanwhile, Paswan again appealed to the steelmakers to reduce prices. Replying to a query in the Parliament on Friday, he said they steelmakers should voluntarily reduce prices, failing which his ministry would have to ponder on setting up a regulator in the steel sector.

Some producers, he said, had raised finished steel product prices more than the rise in raw material cost. "I once again ask them to voluntarily reduce prices, otherwise the Government will have to consider a regulatory authority (for regulating prices)," he told the Rajya Sabha.

Customs duty on project imports slashed to 5 percent duty of steel and aluminium scrap abolished. Export duty on chrome raised to Rs 3,000 per MT from Rs 2,000.

The official said while import duty on melting scrap has been waived off, excise duty on steel has been slashed from 16 percent to 14 percent. Import duty on capital goods for project has also been reduced from 7.5 percent to 5 percent.

"But these measures did not give the desired results as prices of raw material cost has risen," he said, pointing out that price of coking coal has risen 73 percent, iron ore 133 percent, shredded scrap 29.4 percent and sponge iron 22.1 percent.

Retail price of some steel products have risen as much as 28 percent, he added.

The steel producers on their part maintain that the ministry needs to do much to motivate them in reducing prices like ensuring cheaper raw material inputs for them, sort out land acquisition issues and ask concerned ministries to improve infrastructure in their project areas.

They have also asked the ministry to prevail upon the government to ban export of iron ore as its continuous export could threaten their expansion plans in the near future.

You are always on top of the news. I appreciate your work very much. It takes a lot of time and discipline to post news "CONSISTENTLY". how do you manage that ?

keep going, best of luck.
Srinivas

Hi Rakesh,

Have you come across any announcements yet on the Bear Stearns takeover by JP MorganChase?

Regards,
Kalyan.

Bear Stearns crisis rocks markets

Last Updated: 12:06am GMT 16/03/2008



The market was shaken by the shock news that Bear Stearns, the US investment bank, had to be bailed out by rival JP Morgan Chase and the New York Federal Reserve. Global equity markets had been plagued for weeks by rumours that a US financial institution was in difficulties and Bear Stearns was often the name in the frame.

Bear crisis could spark UK recession
The fact that the company denied that it was facing liquidity issues just days before taking on an emergency cash injection has eroded investors' trust significantly, traders said.

"As the ongoing outlook stays negative for the economy, questions will undoubtedly be asked over what will come next: it seems even Wall Street's goliaths can be brought to their knees by the sling of the credit crunch," noted Anthony Grech, a market analyst at IG Index, the spread-betting firm.

The FTSE 100 closed 60.7 lower at 5631.7, with financial stocks feeling the most pressure as investors presumed that inter-bank lending rates would continue to rise. The FTSE 250 ended down 95.4 at 9706.1. Over the course of yet another tumultuous week, the blue-chips lost 1.2pc, while the mid-caps shed 1.5pc.

As the London market closed, the Dow Jones Industrial Average was down 195.7 at 11950. Mortgage bank HBOS, which was formed from the merger of Halifax and Bank of Scotland, was the biggest blue-chip faller. The shares slid 34 to an eight-year low of 528p as concerns about its funding costs were heightened by the Bear Stearns bail-out.

Other mortgage banks also suffered, with Alliance & Leicester losing 19½ to 512½p and Bradford & Bingley shedding 5½ to 201p.

Other financials were sold off, with inter-dealer broker ICAP slipping 36 to 598p, insurer Prudential dipping 32 to 622p and the London Stock Exchange easing 46p to a one-year low of £12.32.

Stockbroker Collins Stewart fell 9 to 122p as it warned that it was "almost impossible" to make forecasts because of the difficult market conditions.

Wolseley, the plumbing materials group that is heavily exposed to the sliding US housing market, fell another 18 to 532p, closing at a five-year low.

Yell Group, the Yellow Pages publisher, is another stock that has crumbled because of concerns about how its US business will fare in a downturn. It ended 4.6 lower at 167.3, marking a record low.

The supermarket groups were also out of favour after Goldman Sachs became the second broker this week to advise investors to check out of the sector.

"Food spend is less volatile but not immune to slowdowns, especially in the current environment of high inflation," the broker argued. "Rational food retail markets will give way to less rational competition and we expect companies to battle for volume share." Goldman Sachs downgraded Tesco to sell from neutral and cut Wm Morrison to neutral from buy, while removing J Sainsbury from its "conviction buy list". Tesco fell 13½ to 380¼p, Morrisons weakened 11¼ to 278½p and Sainsbury's moved down 13¼ to 326¼p.

Shire, Britain's third-largest pharmaceuticals group, was the stand-out performer, jumping 47 to 990p on speculation that Pfizer, the US group that developed Viagra, was eyeing a bid. Rumours suggested that Pfizer had appointed bankers to examine a possible takeover of Shire. One story doing the rounds was that a bid might come at around £13 a share.

Electricity generator International Power put on 11¼ to 393p after Deutsche Bank upgraded its recommendation to buy from hold, saying the company would be helped from its "diverse collection of power station assets around the world".

Shaftesbury, the central London property group that owns much of Carnaby Street, firmed 9 to 573p amid rumours that it being eyed up by a number of predators. Traders said that its premium West End property portfolio would be attractive to a number of Middle Eastern buyers.

Reinsurance broker Benfield recovered 17 to 247¾p after having been sold off on Thursday following a major profits warning. Rank, the bingo hall and casino group, also bounced after a fall in the previous session, climbing 3¾ to 87p.

Sports Direct International, the discount retailer founded and controlled by controversial billionaire Mike Ashley, increased its stake in rival John David Group, which trades as JD Sports, to 12.2pc. Sports Direct closed down 2¼ at 112¼p, while JD Group ended flat at 350p.

Powerleague duo net £23m





Powerleague directors Claude Littner and Sean Tracey were last night toasting a £23m payday after selling a 29pc stake in Britain's largest five-a-side football operator to investment firm Patron Capital.

The pair, who transformed Powerleague's fortunes after buying the company from private equity giant 3i, had been in talks with Patron for several months and finally decided to close the deal ahead of the 80pc increase in capital gains tax next month.

Mr Littner is a close associate of entrepreneur Sir Alan Sugar and was chairman of Tottenham Hotspur when it was owned by Sir Alan.

Powerleague, which has 43 sites across the UK, has benefited from the growing popularity of five-a-side football and recent moves to encourage healthier lifestyles. Powerleague hopes to take advantage of Patron's European expertise to expand into the Continent. The shares improved 2½ to 83½p.

AT&T eyeing stake in Datacom

New Delhi, March 16: Making a comeback in the fast-growing mobile telephony, US giant AT&T is eyeing a stake in Videocon`s subsidiary Datacom, which has been issued license recently to offer mobile services throughout India.

If the deal fructifies, this would be AT&T `s second innings in India`s lucrative cellular mobile services.

Sources said the deal could be finalised in the next few weeks.

When contacted, AT&T spokesperson said, "we do not comment on market speculations."

Sources, however, said that AT&T `s senior management team will be in Delhi in mid-April to work out the details and the us company may be roped in by Datacom, which has announced an investment of Rs 6,000 crore to set up pan-India network, as a strategic partner.

They said that any deal would take shape only after the government allocates spectrum (radio frequency required to offer wireless telecom services) to the new players, as mere license holding may not fetch them any good value.

On the other hand, new players, which have been issued license but awaiting spectrum, have alleged that the existing big GSM players have been delaying the process of frequency allocation by indulging in court battles to weaken the business case of new entrants.

Datacom has also been approached by another foreign player Telephonica of Spain, company sources said, but declined to elaborate.

Fed and Rival Bail Out Bear Stearns
Saturday March 15, 4:48 am ET
By Stephen Bernard and Joe Bel Bruno.........................
On the Brink of Collapse, Investment Bank Bear Stearns Gets Lifeline From a Rival and the Feds
NEW YORK (AP) -- On the verge of a collapse that could have shaken the very foundations of the U.S. financial system, investment bank Bear Stearns Cos. was bailed out Friday by a rival and the federal government. The near-miss raised new alarm about the credit crisis -- and whether other big firms might be in jeopardy.The rescue came from JPMorgan Chase & Co. and, in an extraordinary step, the Federal Reserve, both rushing to pump new money into the venerable Wall Street firm after its financial state deteriorated so much in a 24-hour period that it threatened to fail.

Bear Stearns stock lost nearly half its market value, about $5.7 billion, in a matter of minutes, and pulled the broader market down with it. The Dow Jones industrial average fell nearly 200 points.

If Bear Stearns were to go under, "it has the potential of bringing down the whole market," said Richard Bove, an analyst at Punk, Ziegel & Co. "This is the crescendo of the crisis."

JPMorgan and the central bank agreed to extend loans for 28 days to Bear Stearns, the nation's fifth-largest investment bank and the one hit hardest by the subprime mortgage mess.

Two hedge funds managed by Bear Stearns failed last summer, setting off a credit crisis that has swept up banks and brokerages around the globe.

In backing up JPMorgan, the Fed dusted off a rarely used, Depression-era provision to provide loans. It also said it was ready to step in to fight an erosion of confidence in the nation's largest financial institutions.

Officials from the Fed and the Securities and Exchange Commission held conference calls throughout the day Thursday to assess the potential impact on the broader economy, according to a Treasury official, who spoke on condition of anonymity because of the sensitive nature of the discussions.

For Bear, the crisis started when market speculation grew that it might have to seize collateral -- mostly mortgage-backed securities worth next to nothing -- from the private equity firm Carlyle Group.

Carlyle runs a bond fund and has come under intense pressure during the past week from creditors demanding collateral to back their investments.

As speculation swelled in the market, investors, customers and lenders raced to withdraw their money or rescind their credit lines. By Thursday night, Bear Stearns Chief Executive Alan Schwartz said, the bank realized the withdrawals might outpace the bank's resources -- so it reached out to JPMorgan for help.

JPMorgan, the nation's third-largest bank, has been hurt far less by the mortgage mess than other financial institutions. It will provide secured loans to Bear for four weeks -- insured, in essence, by the Fed.

Schwartz said it would buy Bear time and allow it to convince customers "that we have the ability to fund ourselves every day, to do business as usual." No one has disclosed how large the financing offered to Bear Stearns is.

The CEO also confirmed -- as many on Wall Street had suspected -- that Bear Stearns could be up for sale. He told analysts on a conference call that the bailout is a "bridge to a more permanent solution."

Bear is working with investment bank Lazard Ltd. to explore its options. That may include an outright sale of Bear Stearns to JPMorgan, something top executives from both banks were discussing, according to a person familiar with the talks who was not authorized to speak on the record.

JPMorgan is considered to have one of the strongest balance sheets among Wall Street banks, and is not already involved in a rescue like Bank of America's purchase of Countrywide Financial Corp., the nation's largest mortgage lender.

Bear Stearns, which has about 14,000 employees worldwide, has struggled since the two hedge funds under its control lost billions of dollars after investing heavily in securities backed by pools of subprime mortgages.

"They were the dominant firm for repackaging mortgages," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group. "That's where all earnings came from. They had the least-diversified earnings stream of all of Wall Street securities firms, and as a result, they're paying the price today."

As delinquencies and defaults swelled among subprime mortgages, investors shied away from buying securities backed by the troubled loans.

Those fears expanded to encompass all but the safest bonds and securities, forcing investment banks to significantly reduce the value of their holdings and drying up money throughout the market.

Bear Stearns has racked up $2.75 billion in write-downs since last year, and releases first-quarter results on Monday that could show more losses. The bank lost $859 million during the quarter that ended Nov. 30, a stark contrast to its $558 million profit during the same period just one year earlier -- before the credit crisis.

The broader financial services sector has racked up nearly $160 billion in write-downs since the middle of last year.

"My guess is by next week, there will be rumors of other large, familiar institutions" that could be in trouble, said Anil Kashyap, a professor at the Graduate School of Business at the University of Chicago.

JPMorgan said it would not expose itself to any serious risk by helping Bear, but its shares dropped anyway, down $1.57, or about 4 percent, to $36.54. Bear stock plummeted 47 percent, or $27, to $30.

AP Business Writers Madlen Read and Dan Seymour in New York and Martin Crutsinger and Marcy Gordon in Washington contributed to this report.

Fed rate cut could propel gold price to new heights
16 Mar, 2008, 1646 hrs .....................


MUMBAI: With the US Federal Reserve widely expected to effect a rate cut next week, analysts say bullion prices could scale new peaks.

"We can expect the Fed to go in for at least a 0.50-0.75 per cent rate cut at its next Tuesday FOMC meeting. A rate cut of such a magnitude will push the USD further down, thereby leading to higher bullion prices," Karvy Comtrade said in its research report here.

"We expect bullion prices to trade on the higher side," its analysts said.

Gold price already crossed Rs 13,000 per 10 gram domestically and $1,005 per ounce in international markets last week.

Gold futures also traded above Rs 13,000 at the Multi-Commodity Exchange of India (MCX) from overnight gains in the US. Gold futures soared Rs 56/10gm and rose to Rs 13,036 on Saturday.

Gold August 08 contract was up 0.69 per cent at Rs 13,008 per 10 grams and October 08 contract by 0.68 per cent at Rs 13,054 per 10 grams on the MCX.

In the bullion segment, gold contracts clocked a turnover of Rs 33,928.10 crore, while open interest of all gold contract was 13,297 kgs and total volume 2,66,807 kgs on MCX during the last week.

In the US market, gold futures extended historic highs as the metal functioned as a safe haven and alternative currency while the US dollar continued to weaken and fresh credit market turmoil emerged.

Most-active April gold rose $5.70 to settle at $999.50 a troy ounce after extending its contract high to $1,009 on the Comex division of the New York Mercantile Exchange.

The major factors contributing to the rally in bullion prices were record high crude prices and a continuously depreciating dollar.

The greenback continued to trade lower as the economic outlook of the US continues to decline. This view has been reinforced by the recent spate of poor economic data including advance retail sales, analysts said.

Retail sales, which constitute the mainstay of the US economy dropped to -0.6 per cent from the previous level of 0.3 per cent.

The Import price index did not increase as much as expected, the main reason being the fact that the US did not import much crude products in the prior month. Hence this data may give some relief to the Fed in terms of the inflationary pressures that were recently in the picture again, they said.

Gold price crosses Rs 13K mark, may touch Rs 15K
14 Mar, 2008, 1709 hrs IST.............

MUMBAI: The bull run in bullion continued with gold price rising to a new high at Rs 13,000 mark here on Friday.

Gold prices could touch Rs 15,000 mark this year, a top bullion industry official said.

The standard gold opened at Rs 13,035 in the Mumbai bullion market and Rs 13,160 in the Kolkata bullion markets. The yellow metal hit an all-time high of USD 1,000 an ounce in the US.

"The gold price has scaled to a new high in both national and international markets. Prices may react in the near future to Rs 12,500, but overall the bullish trend may continue and its price may touch the USD 1,200 per ounce and Rs 15,000 per 10 grams in 2008," Riddhisiddhi Bullion Ltd Director Prithviraj Kothari said here today.

The likely 0.5 per cent rate cut by Fed next week has already been discounted in the current price, Kothari said.

"Gold demand has come down drastically and revival in demand may start only when the price reacts. The price may come down to Rs 12,700 per 10 grams in the near future and may scale up to Rs 13,500 by March-end," Bombay Bullion Association President Suresh Hundia said.

India imported around 10.2 tonnes of gold in February and only five tonnes in January as compared with 52 tonnes and 56 tonnes respectively, a year ago. India imports around 800 tonnes of gold, which account for 20 per cent of the world's gold consumption.