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  Business News
 Sensex closes flat; capital goods, bank stocks down

Mumbai, Jan 7: Amid weak global cues and profit booking in some sectors, a benchmark index for Indian equities markets closed flat on Monday. Heavy selling led to decline in capital goods, bank and consumer durables stocks.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 19,820.56 points, closed at 19,691.42 points -- down 92.66 points or 0.47 per cent from its previous close at 19,784.08 points.

The BSE Sensex touched an intra-day high of 19,856.43 points and a low of 19,654.46 points. The BSE midcap index closed higher by 17.38 points, while the smallcap index rosee 41.74 points.

The wider 50-scrip S&P CNX Nifty of the National Stock Exchange (NSE) closed the day’s trade flat -- down 27.75 points or 0.46 per cent at 5,988.40 points.

Among the sectoral indices, capital goods index was down 163.63 points, followed by bank index, down 91.69 points, and consumer durables index, down 79.16 points.

And those that made gains were the metal index, up 106.50 points, automobile index, up 43.30 points, and automobile index, up 33.29 points.

The major Sensex gainers were Maruti Suzuki, up 2.59 per cent higher at Rs 1,584.00; Cipla, up 1.75 per cent at Rs 423.30; Tata Steel, up 1.65 per cent at Rs 440.55; Hindalco Inds, up 1.32 per cent at Rs 134.35; and Sun Pharma, up 1.16 per cent at Rs 743.30.

Nineteen of the 30 Sensex scrips closed in the red.

Among the main losers were Larsen and Toubro (L&T), down 2.35 per cent at Rs 1,589.45; HDFC, down 1.68 per cent at Rs 823.60; HDFC Bank, down 1.64 per cent at Rs 668.40; Hindustan Unilever, down 1.55 per cent at Rs 525.50; and Tata Power, down 1.18 per cent at Rs 108.80.

Among other Asian markets, Japan’s Nikkei index was down 0.83 per cent, while Hong Kong’s Hang Seng was down 0.01 per cent. The Shanghai Composite Index closed higher by 0.37 per cent.

The European markets were all in the red. Britain’s FTSE 100 was down 0.34 per cent while the German DAX was trading lower by 0.59 per cent. The French CAC 40 was down 0.65 per cent. (IANS)


 Allow us to issue tax-free bonds: Bankers to government

New Delhi, Jan 7: Bankers on Monday demanded that commercial banks in the country should be allowed to issue tax-free infrastructure bonds and the lock-in period for tax saving deposits brought down to three years from five.

Top officials of Indian banks made these demands during a meeting here with Finance Minister P Chidambaram as part of the pre-budget consultations.

“Some of the banks made a request that they should also be allowed to issue tax-free bonds as has been allowed to other financial institutions,” State Bank of India (SBI) Chairman Pratip Chaudhuri told reporters after the meeting.

Chaudhuri said some banks have good distribution networks that could help raise funds for infrastructure projects.

Bankers have also requested the government to reduce lock-in period for tax saving deposits to three years from the existing five years, in line with the equity linked saving schemes (ELSS).

“There is a requirement that the lock-in period should be reduced from five years to three years on the tax saving deposits to bring it in line with tax saving ELSS,” he said.

Bankers have also suggested that the Urban Cooperative Banks should be treated at par with those in rural areas.

Some 22 top bankers representing different banking and financial institutions participated in the customary pre-budget meeting. RBI deputy governor KC Chakraborty, SBI chairman Pratip Chauduri, PNB chairman KR Kamath, and ICICI Bank chief executive officer Chanda Kochhar, among others, participated in the meeting. (IANS)


 Up to 50 per cent cut in 2G spectrum base price recommended

New Delhi, Jan 7: A ministerial panel headed by Finance Minister P Chidambaram on Monday recommended up to 50 per cent reduction in base price for second generation (2G) airwaves auction that will begin on March 11.

The Empowered Group of Ministers (EGoM) has recommended 30 per cent cut in the reserve price for the unsold spectrum in 1800 Mhz band, for which the auction was held in November on last year.

For the CDMA-based radiowaves, the panel has recommended up to 50 per cent reduction in the reserve price.

Talking to reporters after the EGoM meeting here, Telecom Minister Kapil Sibal said all the auction for the 2G airwaves will be held in March.

The auction will start on March 11 in 1800 Mhz and the 900 Mhz bandwidth of the GSM spectrum. It will be followed by the auction of the Code Division Multiple Access (CDMA) airwaves in the 800 Mhz bandwidth. “The auction for 1800 Mhz band in four circles in which bids were not received in November 2012 will be put up for auction. The reserve price will be 30 per cent lower than the reserve price that was fixed in November 2012 auction,” Sibal said.

The final decision on the reserve prices will be taken by the Union Cabinet.

The government is forced to lower the reserve price of the 2G spectrum due to the tepid response in November auction.

While only part of the airwaves put for auction in the GSM category was sold, there were no takers for CDMA airwaves. The government was able to raise only Rs 9,407 crore in the November auction, as against the target of around Rs 30,000 crore. (IANS)


 Abu Dhabi eyes Indian tourists

New Delhi, Jan 7: Expecting to attract more tourists from India, Abu Dhabi, the largest of seven emirates which make up the United Arab Emirates (UAE), will launch a road show in India, an Abu Dhabi Tourism official said here on Monday.

Speaking at a press conference, international promotion manager of Abu Dhabi Tourism and Culture Authority (TCA) Mubarak Al Nuaimi said India has the second largest number of tourists staying in hotels in the Arab nation, and they expected it to become the largest tourist source by 2014.

“India is now our second largest overseas market for hotel guests after Britain,” Nuaimi said. “Should the growth trends of Britain and India continue as they have been for the past 12 months, there is every likelihood that India will be Abu Dhabi’s largest overseas source market for hotel guests in 2014,” he said.

According to the TCA, 125,180 Indian guests stayed in hotels in Abu Dhabi by November 2012. This is a 30 per cent increase from 2011.

A majority of tourists from India are for official purposes like meetings, incentives, conferencing, exhibitions, popularly known as MICE tourists. TCA added that the UAE is also becoming popular as a wedding destination.

Nuaimi also said he expected increasing tourism would further strengthen the trade and bilateral relations. “The relations between India and Abu Dhabi have been historical, of course this will strengthen the relations,” he said. (IANS)


 Energy in India under-priced, says PM

Kochi, Jan 7: Prime Minister Manmohan Singh on Monday said energy prices in the country are much below international prices and must be brought in line with them by curbing subsidies to achieve the goal of rapid and inclusive development.

“Energy remains under-priced in our country, with coal, petroleum products and natural gas prices well below international prices. To meet our target of rapid, inclusive and sustainable development, we must undertake a phased rationalization of energy prices to bring them in line with global prices,” said the Prime Minister after laying the foundation stone of BPCL’s Integrated Refinery Expansion Project here. “The Central and the State governments must work together to create awareness in the public on the need for curbing energy subsidies,” he added.

The Prime Minister noted that to achieve the target of rapid growth, India needs adequate supplies of energy at affordable prices.

“Oil and gas will continue to meet a very large part of our energy requirements for many years to come. As you all know we remain dependent on imports for meeting a major portion of our crude oil requirements.  It is for this reason that we will require large scale investments in the field of exploration for oil and gas within the country, acquisition of oil and gas producing assets overseas and strengthening of the marketing and distribution infrastructure in our country,” he added.

The Prime Minister is here to inaugurate the 11th Pravasi Bharatiya Diwas on Tuesday. (IANS)


 Lenovo unveils touchscreen- cum-desktop computer
London, Jan 7: Chinese firm Lenovo has unveiled a home tabletop touch-screen computer and people can now enjoy different photos, music and video on the same screen. The 17.8-pound, 27-inch Windows 8 Pro machine, christened the IdeaCenter Horizon Table PC, should be available “beginning in early summer” at a starting price of $1,699, the company said. “Horizon makes personal computing interpersonal computing with shared, collaborative experiences among several people,” said Peter Hortensius, president of Lenovo’s product group, according to the Daily Mail. “Now many people can enjoy different photos, music and video on the same screen, and they can play games with our special accessories that blend physical and digital interaction,” adds Hortensius. The Horizon Table PC takes advantage of Windows 8’s touch-based features to support multi-player gaming among other activities. It runs NVIDIA GeForce graphics as well as ‘heart-pounding’ Dolby Home Theater v4 audio, Hortensius said. The computer can transform into a 27-inch desktop for those who want to use it for solitary purposes. There is one trade-off for all of those features. The Horizon Table PC contains only two hours of battery life when not connected to a wall-socket. Lenovo is also getting ready to market a Horizon Multimode Table that will let users change the angle and height of the PC from lying down flat to facing the user like a normal monitor. (IANS)


 Bajaj Auto launches 100 cc Discover motorcycle
Pune/New Delhi, Jan 7: Two- and three-wheeler maker Bajaj Auto Monday launched its 100 cc motorcycle Discover 100T priced at Rs 50,500 (ex-showroom New Delhi). “The all-new Discover 100T delivers the power of a 125cc with the economy of a 100cc to bring in the joy of riding to this segment,” said K Srinivas, president, motorcycle business, Bajaj Auto. “While 100cc bikes do offer good mileage, their style, features and performance leave a lot to be desired. The steady growth of the more expensive 100cc bikes at the cost of the cheaper models is a clear evidence of this.” According to the company, the new bike is powered by a patented four-valve DTS-i technology engine which delivers 10.2 Ps of power and a fuel efficiency of 87 km per litre. The engine is also coupled with five-speed gear box and auto choke for easy start in all weather conditions. Goldman Sachs in a January 4 report included Bajaj Auto in its Asia-Pacific “growth recovery” group of stocks that are expected to see favourable growth and valuations in 2013.  (IANS)


 Tata Power synchronises 4th unit of Mundra plant
Mumbai, Jan 7: Coastal Gujarat Power Ltd. (CGPL), a wholly-owned subsidiary of Tata Power, on Monday synchronised the 800 MW fourth unit of its Mundra ultra mega power plant in Gujarat. With this, Tata Power’s total generation capacity stood at 7,699 MW, making it the largest private power producer in the country, the company said in a release. The first 800 MW unit at the Mundra power plant was commissioned in March, unit II in July and unit III in October 2012. With the synchronization of the fourth unit, the total thermal power generation capacity of Tata Power now stands at 6,847 MW, and that through hydropower, wind and solar 852 MW. “The synchronization of Unit 4 of the Mundra ultra mega power project is a significant milestone given the critical power shortage situation in the country,” said Anil Sardana, managing director, Tata Power. CGPL on Thursday discontinued supply to the distributing companies of Rajasthan from the Mundra project, citing non-compliance on payment, security related issues. The step followed several CGPL notices to the discoms required under the power purchase agreements, thereby effectively terminating its contract. The three Rajasthan discoms accounted for 10 per cent of the total capacity from Mundra UMPP. (IANS)


 India's steel demand to increase by 7 per cent in 2013-14

New Delhi, Jan 7: The demand for steel in India is expected to rise 7 per cent in the next financial year beginning April 1 as compared to the sluggish 5.5 per cent projected growth in 2012-13, according to a senior official of Tata Steel.

Managing Director HM Nerurkar said the overall outlook for the steel sector is positive and the demand was likely to pick up in the next financial year on the back of revival in economic growth and the government’s measures to ease infrastructure investment rules.

“In fiscal 2012-13, growth in domestic steel demand is expected to be around 5.5 per cent. Total demand is expected to be around 75 million tonnes, up from 71 million tonnes in 2011-12. In 2013-14, demand is expected to be higher at around seven percent,” Nerurkar said.

Weak demands have affected performance of major steel firms in India. Tata Steel, which is a part of the $100 billion Tata Group, posted a Rs 363.93 crore loss in the second quarter of the current financial year as against a profit of Rs 212.43 crore in the corresponding quarter of the previous year.

Tata Steel reported slowest sales growth in the second quarter of the current financial year since 2009.

Nerurkar hoped that the government’s recent measures to ease infrastructure investment rules and push forward economic reform measures would boost steel demands in India.

“Formation of the cabinet committee on infrastructure for single window clearance for mega projects will generate activity in the power and roadways sectors, among others. The expected lowering of interest rates by RBI in January will provide impetus to the manufacturing and consumer durables sectors, among others. The full impact of all these will be felt in 2013-14,” Nerurkar said.

He said India was expected to emerge as the second largest producer of crude steel in the next two years. “With the ongoing greenfield and brownfield expansions India is expected to become the world’s second largest producer of crude steel in the next two years,” he said.

India is currently the world’s fourth largest producer of crude steel after China, Japan and the US.

Major public as well as private sector firms including Tata Steel, SAIL and JSW Steel are expanding production capacity.

According to the government data, steel production is expected to reach 200 million tonnes by 2020 as compared to 71 million tonnes recorded on last year.

In steel production, India is expected to leave behind USA and Japan in a couple of years. However, it will substantially lag behind China that produces almost 700 million tonnes of steel per year.

Nerurkar said steel demand in Europe is expected to rise next year after registering a decline in the current year.

“In Europe, we expect a modest 2.5 per cent growth against the backdrop of a negative growth this year,” he said. Tata Steel’s European unit, formerly called Corus, is the largest in Europe. The Tata Group, led by the then chairman Ratan Tata, had acquired the Anglo-Dutch Corus in 2007 for $12 billion. The company is now called Tata Steel Europe. (IANS)



BPCL looks good in oil & gas space; target Rs 420: Bothra

Bothra told CNBC-TV18, “In oil and gas space if we have to compare BPCL, Hindustan Petroleum Corporation Limited (HPCL), I think BPCL forms a beautiful chart. It is currently trading at Rs 385-390 levels. But it is on the verge of making a new 52-week high.” He further added, “BPCL is a better stock as compared to HPCL. Just based on technicals once it breaks Rs 390, closes above that then one can look at a target of Rs 420. It is just a small target, a modest target probably from a 1-2 weeks’ perspective.”

Adani Power may slip to Rs 55: Agarwal

Agarwal told CNBC-TV18, “ Adani Power  numbers are really in a bad shape. If one looks at the numbers, the huge interest cost, lower margins and no clarity on coal linkages. They reported a loss of about Rs 273 crore in September quarter and December quarter or the next two-three quarters also I don’t find any reason to believe that the numbers would be better. The most important fact is the long-term coal linkages has still not been done and there is a lot of uncertainty on that I would suggest a sell on this stock at this point of time. I believe this stock can slide up to Rs 55 in the near-term.”

Hold VST Industries; target of Rs 2073: Firstcall Research

“The Vazir Sultan Tobacco Company Limited was incorporated on 10th November, 1930, under the Hyderabad Companies Act No. IV of 1320 Fasli and now governed under the Companies Act, 1956. It shares collaboration with British American Tobacco group of the United Kingdom. The name of the Company was subsequently changed to VST Industries Limited on 30th April, 1983. The Company has its Registered Office at Azamabad, Hyderabad. The Company has a manufacturing facility at Hyderabad (A.P) & its principal activities are manufacture & sale of cigarettes and unmanufactured tobacco.” “The company’s net profit jumps to Rs.276.00 million against Rs.335.90 million in the corresponding quarter ending of previous year, a decrease of 17.83 per cent. Revenue for the quarter rose 6.94 per cent to Rs 1761.90 million from Rs 1647.60 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs 17.88 a share during the quarter, registering 17.83 per cent decrease over previous year period. Profit before interest, depreciation and tax is Rs 458.50 millions as against Rs.541.40 millions in the corresponding period of the previous year.” “At the current market price of Rs 1885, the stock P/E ratio is at 16.15 x FY13E and 13.94 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs 116.74 and Rs 135.18 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 13 per cent and 30 per cent over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 10.04 x for FY13E and 8.75 x for FY14E. Price to Book Value of the stock is expected to be at 9.16 x and 8.37 x respectively for FY13E and FY14E. We recommend ‘HOLD’ in this particular scrip with a target price of Rs 2073 for medium to long term investment,” says Firstcall Research report.

SKS Microfinance can cross Rs 190: Sukhani

Sukhani told CNBC-TV18, “I am not a big fan of v-shaped recoveries. The market builds bases and then goes out and those are good charts to trade in. A v-shaped recovery can collapse or it can start building a base after an initial rally and that can take weeks and months. So I am not keen on TVS Motor per se on the chart itself and in the auto space we have so many other opportunities so why to go for TVS Motors.” He further added, “I wouldn’t trade in Indiabulls Financial Services. There are other opportunities in the non banking financial companies (NBFCs) which have better charts for example Rural Electrification Corporation (REC) or LIC Housing or Manappuram Finance . But if somebody wants to trade in it, the chart suggests that it’s good for more.” “SKS Microfinance is also a favourite, the dip was to be bought and that is what I had suggested. I think it will cross Rs 190 again,” he added.

Buy TVS Motor; target of Rs 65: AnandRathi

“TVS Motor after taking support at 32 levels has bounced back and is now trading within a rising channel on monthly charts with good volumes. The stock is a major breakout above 45.80 levels and an upside till 61-65 levels is very much on the cards. The stock is trading above major moving averages like the 200DMA at 38.80, 100 DMA at 40.25 & its 50DMA at 39.80.The stock is comfortably placed for the target levels as it is also above its 200WMA at 45.90 from where it is likely to take support and form a new base and move towards our target of Rs 65,” says AnandRathi research report.

Prefer ICICI Bank, SBI: UBS India

Chhaochharia told CNBC-TV18, “We are overweight banks, we like banks and we also upgraded government banks about a month back. We still prefer, among the bigger ones ICICI Bank, then State Bank of India (SBI) and Punjab National Bank (PNB). Among the midcap names we prefer Federal Bank and even IndusInd Bank .” He further added, “I think from a banking bill perspective it is still early, we have again just like the oil part we have seen these kind of promises hold up for a long time, so I won’t necessarily not bet on that happening in for sure but the progress is definitely there unlike in the past. Even the Reserve Bank of India (RBI) seems to be much more constructive in terms of being planned towards giving out licenses. We do expect when we see the final guidelines coming through that will give us better sense.” “Again you must have seen today as press Mr. Rangarajan talking about giving it out specifically to non corporate’s to begin with. So, there is still some cautiousness which you see in RBI commentary. So, I think the ball is still in RBIs court, so let’s see what happens there.”


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