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  Business News
 Sensex up 133 pts on hopes of rate cut

Mumbai, April 12: The BSE benchmark Sensex gained 133 points on Thursday to close at 17,332.62 on widespread buying despite a dip in industrial growth on renewed investor hopes that RBI may cut lending rates next week at its annual monetary policy meeting.

Besides, brokers said, investors did some value buying in bluechips at lower levels amid firm global markets.

Metal, banking, FMCG, auto and capital goods attracted good buying. However, technology stocks saw selling on caution ahead of IT bellwether Infosys results on Friday.

Industrial production grew at a slower-than-expected 4.1 per cent in February, as against 6.7 per cent in the same month last year, according to the IIP data released on Thursday.

“While IIP showed weak performance by Indian industry, it is expected to increase the probability of monetary easing by RBI in the upcoming monetary policy. As a result, financial and auto stocks performed well,” said Milan Bavishi, Head Research, Inventure Growth & Securities.

The Bombay Stock Exchange 30-share index opened the day higher at 17,276.87 and shot up further to 17,395.15. However, it settled at 17,332.62, up 133.22 points, or 0.77 per cent.

The NSE broader 50-issue Nifty also rose by 50 points or 0.96 per cent to end at 5,276.85.

Asian stock markets closed higher, with key indices in China, Hong Kong, Japan, Taiwan and Singapore gaining up to 1.82 per cent.

Key European markets showed mixed trend in the afternoon. Overall, 23 of the 30 Sensex scrips closed in the green.

Jindal Steel shot up by 4.86 per cent, followed by Sterlite (3.91 per cent), Maruti Suzuki (3.13 per cent), Hindalco (3.02 per cent), SBI (2.95 pc), Hero Motocorp (2.79 per cent), Bhel (2.35 per cent), ITC (2.16 per cent), ICICI (1.53 per cent), RIL (1.36 per cent), Tata Steel (1.24 per cent), HUL (1.13 per cent), Tata Motors (1.04 per cent) and Gail India (1.03 per cent).

However, Infosys fell 1.87 per cent, Ongc - 1.27 per cent, Wipro - 1.27 per cent and DLF - 1.09 per cent.

Among sectoral indices, BSE-Metal rose 2.20 per cent, Bankex - 1.62 per cent, FMCG - 1.50 per cent, Auto - 1.25 per cent and Capital Goods - 1.03 per cent, while IT declined by 1.15 per cent and Teck - 0.78 per cent. The total market breadth at the BSE was turned positive, as 1,712 stocks gained ground, while 1,100 finished with losses. The total turnover moved down to Rs 2,235.59 crore, from Rs 2,383.42 crore on Wednesday. (PTI)


 IIP disappointing; Govt, RBI will take steps to revive it: FM

New Delhi, April 12: Attributing the “disappointing” industrial growth performance to tight monetary policy and global factors, Indian Finance Minister Pranab Mukherjee on Thursday said government and RBI will take steps to revive growth.

Mukherjee was commenting on the Index of Industrial Production (IIP) data which revealed that industrial growth rate slipped to 4.1 per cent in February from 6.7 per cent a year ago. During April-February 2011-12, IIP slipped to 3.5 per cent, as against 8.1 per cent a year ago. He further said that “uncertainty in the global economy coupled with monetary tightening in the past have impacted investment recovery”.

The RBI, which had raised interest rates 13 times since March 2010 to contain spiraling inflation, is yet to reverse its decision though the price situation has improved considerably. It kept the rates unchanged in its policy reviews in December 2011 and February 2012. The RBI is scheduled to announce the credit policy on April 17 amid demand for cut in short-term lending (repo) rates.

On the revision of IIP figure for January 2012 from 6.8 per cent to 1.14 per cent, Mukherjee said, “this is disappointing ... the revival in manufacturing in the last quarter of 2011-12 has not materialised as anticipated.”

Mukherjee attributed the negative growth in the consumer goods sector to considerable moderation in domestic demand.

The consumer goods sector output declined by 0.2 per cent in February as against a robust growth of 13.4 per cent in the corresponding period a year ago. However, on the positive side, he said, capital goods output for February 2012 showed an expansion of 10.6 per cent on back of domestic investment recovery.

The good news for this year, he added, “is strong performance in electricity sector which has recorded a growth of 8 per cent in April-February (2011-12) period as against 6 per cent in same period last year.”

During February, output of the manufacturing sector, which constitutes over 75 per cent of the index, rose by just 4 per cent in February, compared to 7.5 per cent in the same month in 2011.

Industry has been blaming the slowdown in growth to the high interest rate regime that has made borrowings costly and curbed consumer spending. (PTI)


 Government approves turnaround plan for Air India

New Delhi, April 12: In a big boost to ailing Air India, the government on Thursday approved a turnaround plan (TAP) to restructure the operations and the finances of the cash-strapped carrier, including infusion of additional equity. “The turnaround plan of Air India has been approved,” Civil Aviation Minister Ajit Singh told reporters after a meeting of the Cabinet Committee on Economic Affairs (CCEA).

The CCEA approved the TAP and the airline’s financial restructuring plan (FRP), which includes additional equity infusion by the government. Besides, the issue of induction of the much-awaited Boeing Dreamliner-787, part of the TAP, was also given the green signal by the CCEA, official sources said. They said the issue of allowing foreign airlines to invest in Indian carriers could be taken up by the Cabinet next week.

As part of the airline’s restructuring plans, the government had announced infusion of Rs 4,000 crore during the current fiscal in the 2012-13 Union Budget. This would raise the airlines’ equity base to Rs 7,345 crore.

US aircraft manufacturer Boeing is expected to deliver the first of the 27 Dreamliners, ordered in 2005, to the national carrier next month. The delivery of these aircraft was initailly to commence from 2009 but the US aircraft-maker deferred it for various reasons, including labour unrest.

The SBI-led consortium of 19 banks had last month approved the FRP which includes debt restructuring of Rs 18,000 crore by the banks and a committed equity infusion by the government.

The FRP would provide relief to Air India from its debt servicing obligations on working capital, in the form of a substantial reduction in interest outlays while giving it the necessary time to improve its operational efficiency and implement the TAP. As part of the FRP, Air India had signed four agreements with the banks’ consortium on March 31 — the Master Restructuring Agreement, Working Capital Facility Agreement, Appointment of Facility Agent Agreement and Appointment of Trustee Agreement.

A major highlight of the agreements included conversion of about Rs 10,500 crore of the airline’s working capital into long-term loan, carrying an annual interest of 11 per cent. “The first year interest would accumulate in a funded interest term plan,” the sources said, adding these would lead to substantial savings of about Rs 1,000 crore in 2012-13 itself.

In addition, non-convertible debentures (NCDs), guaranteed by the government, worth Rs 7,400 crore, would be issued and subscribed by the investors. The proceeds from the NCDs would be used to repay the lenders, they said.

Apart from this, part of the working capital of about Rs 3,500 crore would be restructured as cash credit arrangement.

Under the FRP, Air India has proposed that the government should infuse equity of about Rs 30,231 crore in the 2012-21 financial period. The government has so far infused equity of Rs 800 crore in 2009-10, Rs 1,200 crore in 2010-11 and another Rs 1,200 crore in 2011-12. (PTI)


 Government of India approves public procurement Bill
New Delhi, April 12: The Cabinet on Thursday approved a bill that seeks to regulate government purchases of above Rs 50 lakh through a transparent bidding process. The Cabinet meeting, chaired by Indian Prime Minister Manmohan Singh, approved the public procurement bill that has a provision to debar bidders found engaged in corrupt practices, sources said. Currently, there is no overarching legislation governing public procurement by the central government and central public sector enterprises. The General Financial Rules, 2005, govern procurements made by the Centre.  (PTI)


 Airtel celebrates Assam’s biggest festival - Rongali Bihu 2012
Guwahati, April 12: Bharti Airtel, today kicked off celebrations for Rongali Bihu 2012 by introducing a host of interesting initiatives. As part of this, Airtel has launched a special offer for its mobile customers in Assam allowing them to avail full talktime starting Rs 20 and attractive call rates. Airtel will also be organizing an exciting yatra by popular Assamese singer Manas Robin for the 5th consecutive year.  Manas Robin and his troupe have been touring around 60 Bihu pandals across Assam since the last three months and will now also perform Husori at the homes of privileged Airtel mobile customers. This was stated in a press release.


 Maruti Suzuki unveils Ertiga
Guwahati, April 12: Car market leader Maruti Suzuki India Limited, unveiled industry’s first Life Utility Vehicle- Ertiga here on Thursday. With Ertiga, the Company formally announced its much awaited entry in the Utility Vehicle(UV) segment.Ertiga strengthens the product portfolio of the market leader and also creates an all new Life Utility segmentat an attractive price point. This was stated in a press release.


 Hyundai launches i-Gen i20
Guwahati, April 12: Hyundai Motor India Ltd, India’s largest passenger car exporter and second largest manufacturer announced the launch of its all new i-Gen i20. The i-Gen i20 is available in 12 variants. The Petrol variants range from Rs. 4,77,608 to Rs.6,71,814, the diesel variants range from Rs.6,01,635  to Rs.7,50,626 and the  automatic variant is priced at Rs.774227. Speaking about the new i-Gen i20, BS Seo, Managing Director and CEO said,”The New i-Gen i20 is a bold new offering with stylish looks and a host of unique features. Our extensive surveys indicated that the customer is seeking hi-tech and innovative features, we have incorporated the research findings in the i-Gen i20 to offer a high value proposition.” This was stated in a press release.


 Vodanfone issue: HSBC seeks ‘tax clarity’ from government

Kolkata, April 12: HSBC, Europe’s biggest bank, on Thursday sought ‘tax clarity’ from the government in the backdrop of Finance Minister Pranab Mukherjee’s statement there was ‘no other way’ but to amend the Income Tax Act to bring into the net Vodfone-type cross-border deals. The government’s move to retrospectively tax overseas transactions “clearly opens up debate…The Vodafone issue is really more to clarify,” Naina Lal Kidwai, Country Head India, Director HSBC Asia Pacific, told reporters here. “I think the problem for the future is tax clarity…all investors want tax clarity,” Kidwai stated. Earlier, two international trade bodies, International Chamber of Commerce and the Business and Industry Advisory Committee to the OECD, have sought a review of the government’s move to retrospectively tax overseas transactions involving Indian assets. They have together written to the finance ministry, cautioning that the government’s proposal in the budget for 2012-13 could have adverse implications for the country. “The whole noise that is happening, is not happening because of Vodafone…it is happening because of retrospective regulations,” Kidwai said. She said the concern for the Indian industry was the power that the government was going to entrust to tax assessment officers. “In order to raise the revenue, the government should not end up causing problem (for industry),” she said. The finance minister had recently said there is “no other way” but to amend the Income Tax Act with retrospective effect to bring into the net Vodfone-type cross-border deals.  (IANS)


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