Reliance MF picks 2% in ICICI Bank

Mumbai: The country’s largest mutual fund house by assets, Reliance Capital Asset Management Ltd (RCAM) has bought an additional 2% stake in ICICI Bank Ltd, the country’s largest private sector lender, during the past 45 days, through open market purchases.
Vikrant Gugnani, chief executive of RCAM, said that two equity funds managed by the house, including Reliance Banking Fund, made the purchases in small quantities.
“The stock price (of ICICI Bank) had fallen to Rs290... It is our business to buy stocks or increase exposure at low prices to find more value,” he said.
ICICI Bank shares, a heavyweight in India’s Sensex stock index, doesn’t have a promoter group but is owned primarily by domestic and foreign financial institutions.

Read more at Livemint

Buffett’s Berkshire falls below $100,000/share

New York: Shares of Warren Buffett’s Berkshire Hathaway Inc fell below $100,000 on Thursday for the first time since October 2006, after the company revealed large unrealized losses on derivative contracts tied to the stock market’s performance.
Berkshire’s Class A shares fell as much as 7% to $96,050, before recovering along with the broader stock market. Though major stock indexes ended more than 6 percent higher, Berkshire stock closed down $533, or 0.5%, at $102,800.
On Friday, Berkshire reported a 77% decline in third-quarter profit, with much of the drop attributable to falling insurance premiums and to paper losses on contracts tied to the performance of stock market indexes.
Berkshire estimated that shareholder equity fell about $9 billion in October, reflecting exposure to the derivative contracts and to other investments. It ended September with $76 billion of stock and $29.6 billion of fixed-income holdings.
Buffett has said the derivative contracts expire between 2019 and 2027, and that he expects them to be profitable. In the interim, Berkshire is able to invest the upfront premiums it received by entering into the contracts.
Omaha-based Berkshire owns some 76 companies, and is best known for its insurance holdings such as auto insurer Geico Corp and reinsurer General Re Corp.
Berkshire shares have fallen 32.2% from their record high of $151,650 set last 11 December.

Unemployment reaches 11-year high

The number of people out of work in the UK in the three months to September jumped by 140,000 to 1.82 million - the highest in 11 years.
The unemployment rate rose to 5.8%, up from 5.4% in the previous quarter, according to official figures.
The number of people claiming the Jobseeker's Allowance rose by 36,500 to 980,900 in October - the highest monthly increase since 1992.
Economists say unemployment in Britain could soon reach the two million-mark.
The number of manufacturing jobs fell to 2.86 million, the lowest figure since records began in 1978.
The so-called claimant count - those claiming the allowance - has now increased for nine months in a row and is 154,800 higher than a year ago.

Read more at BBC NEWS

After exports, tax collection turns negative

The Department of Industrial Policy and Promotion is expected to release the Index of Industrial Production for September on Wednesday. But if you go by the indirect tax collections reported by the finance ministry for October, the country’s industrial growth scenario going forward looks pretty grim. Excise and custom duty collections have fallen by 5% in the month for the first time in several years.
Incidentally, when IIP growth shrunk to 1.3% in August, indirect tax collections were still seeing positive growth of 4.8%. While indirect tax collections have fallen into negative territory only in October, excise duty collections – a direct indicator of India’s manufacturing output — have seen negative growth for the second month in a row.

Read more at Financial Express

Grim economy data throws spotlight on crisis summit

Weak economic readings from China, Japan and Britain and a grim corporate outlook worldwide reinforced fears on Tuesday of a prolonged recession, prompting investors to look to a world leaders’ summit for solutions. Chinese import growth slowed in October and inflation fell to a 17-month low as domestic demand cooled, making it likely Beijing will cut interest rates soon to back up the government’s new economic stimulus plan. “The increasing risk of deflation will make the central bank more aggressive in loosening monetary policy,” said Hu Yuexiao, an analyst with Shanghai Securities.
In Japan, exports fell nearly 10% in the first 20 days of October, corporate bankruptcies jumped 13.4% year-on-year and sentiment in its service sector hit an all-time low, all signs the world’s second biggest economy was teetering on the brink of recession. German analyst and investor sentiment about the outlook for Europe’s largest economy improved but the ZEW survey, which measures the ratio of optimists to pessimists, still read -53.5, reflecting a large preponderance of the latter.

Read more at Financial Express

India Inc says credit still tight, see more steps

MUMBAI: Companies are still finding liquidity conditions tight despite some aggressive moves by policy makers over the past two months, and more steps might be needed to keep credit flowing, senior executives said on Tuesday. Analysts increasingly expect economic growth could slow to below 7 per cent in the 2008/09 year ending March 2009, with forecasts being downgraded as fears of a global recession grow, from rates of 9 per cent or higher in the past three years. "We have not seen any sharp slowdown in business so far, but there are issues of funding and there are issues of interest rates," K Chandrashekar, senior vice-president of corporate finance at Mahindra and Mahindra, India's top utility vehicle and tractor maker, told reporters at a corporate treasury conference in Mumbai.

Read more at The Economic Times

Taiwan trims interest rates quarter-point to 2.75%

HONG KONG -- Taiwan's central bank cut its main interest rate by a quarter-point Sunday at special meeting, marking its fourth rate reduction in less than two months.
The reduction brings the main discount rate to 2.75%, the Central Bank of the Republic of China's (Taiwan) said in a statement published on its Website.
The latest move follows three rate cuts in quick succession beginning Sept. 26.
It also comes after the release of economic data released in the past week showed exports in October fell 8.3% from a year earlier to $20.81 billion. Shipments to China were down 19.9% to $7.47 billion.

PM expects GDP growth to decline to 7-7.5% next fiscal

Muscat: The global financial crisis is expected to hurt the Indian economy more than previously anticipated, with Prime Minister Manmohan Singh on Sunday projecting gross domestic product (GDP) growth to decline to 7-7.5% next fiscal.
Although the government and the Reserve Bank of India (RBI) are battling contraction in credit growth, Singh said the fundamentals of the economy were strong and banks were safe, and promised accelerated efforts to prop up growth.
“Due to the current international economic and financial situation, our growth rate may come down somewhat next year. However, we still hope to achieve a growth rate of 7-7.5% next year,” he said, addressing the Indian expat community here.
RBI had last month said Inida’s $1.2 trillion (Rs57.36 trillion) economy may grow at 7.5% this fiscal as opposed to 9% in 2007-08. The rate in 2008-09 would be the weakest since 2005.

Read more at Livemint

Market Insider: Economy's Illness Keeps Spreading

Like anxious relatives in a hospital room, investors have been watching the economy get sicker and sicker with new symptoms surfacing daily.
That trend is likely to stick in the week ahead, and the stock market should stay volatile as it reacts to economic news, including Friday's retail sales report. The economic calendar though is fairly light, but there are earnings reports from major retailers. Those numbers should only confirm that the holiday shopping season is shaping up to be one of the weakest in years.Many economists have been expecting the current quarter to show this recession's biggest decline in GDP. A batch of weak data and growing unemployment has made it seem especially bleak.

Read more at CNBC

Berkshire Hathaway Q3 Operating Earnings Fall 19% To $1335/Share

Berkshire Hathaway's third quarter operating earnings fell 19.3 percent to $1,335 a share from $1,655 a share in the same period the year before.
That's below the average forecast of $1429 from the two analysts following the stock, as tracked by Thomson One Analytics.
Operating earnings for Berkshire's insurance-underwriting activities took a big hit, falling to $81 million from $486 million in the year-ago quarter.
Net earnings plunged 77 percent to $1.06 billion ($682 per share) from $4.55 billion ($2942 per share.) A big factor there are investment and derivative losses of $1.01 billion, compared to gains of $1.99 billion in last year's quarter. That year-ago period got a boost from Berkshire's profitable sale of PetroChina stock.
The derivative portion of the gains and losses are on paper only. Buffett has said the derivative contracts held by Berkshire will eventually be profitable, but right now they're losers.

Read more at CNBC

AIG Board Nears Approval of Revised Fed Plan: Source

The board of troubled insurer American International Group was nearing approval late on Sunday of a revised U.S. bailout to replace a previous $85 billion rescue, a person familiar with the matter said.
Under the revised rescue plan, the U.S. government is expected to buy $40 billion of AIG preferred shares through Treasury's Troubled Asset Relief Program (TARP) and greatly ease lending terms, sources said.
The government is also expected to set up two separate vehicles that will buy securities worth billions of dollars underlying the insurer's credit default swaps and backstop a securities lending portfolio, the sources said.
AIG plans to announce the new plan early on Monday, when it reports third-quarter results, sources said.

Read more at CNBC

Australia's RBA Cuts Economic Growth Forecasts

Australia's central bank on Monday lowered its forecasts for economic growth for the next two years, saying it would be reviewing interest rates in the months ahead with the aim of avoiding an even sharper slowdown in domestic demand.
In its quarterly monetary-policy statement, the Reserve Bank of Australia (RBA) said the intensification of the global financial crisis meant the outlook for world growth was significantly weaker than previously assumed. Its new forecasts were even lower than the government's revised forecasts announced last week.
Falling share prices had also cut into household wealth at home, while a slump in commodity prices would hurt earnings from Australia's resource exports, the bank said.
As a result, the central bank had decided that a significantly more rapid easing in monetary policy was needed and it slashed the key cash rate by 200 basis points between September and November, taking it to a three-year low of 5.25 percent.

Read more at CNBC

G20 Sees More Action, China Moves to Boost Economy

China launched a huge stimulus plan worth nearly $600 billion, kicking off what could be a round of big spending or interest rate cuts by leading economies to stave off a recession in many countries.
In Brazil, finance ministers and central bank governors representing 90 percent of the world's economy said they would take "all necessary measures" to get financial markets back to normal and counter the backlash of the credit crisis.
Many developed economies are now facing a contraction next year after lending from banks suddenly dried up, and newer powers such as China have been caught up in the domino effect.
World leaders meet next weekend to discuss precisely what measures they need to work out in coming months, and how much more say emerging economies will have over global finance.

Read more at CNBC

Sensex ends 230 points up, shies away 10k level

Mumbai: Amid volatile trading, the Bombay Stock Exchange benchmark Sensex today closed higher by over 230 points - still below 10,000 points level - on emergence of buying by funds in heavyweight stocks led by Reliance Industries and select power segment stocks.
The Sensex, which commenced the day lower at 9,631.59, shot up in volatile trade to regain 10,065.37 in the mid-session, but ended at 9,964.29 with a gain of 230.07 points.
A firm opening for the European stock markets also helped the upsurge to some extent.
The National Stock Exchange’s 50-share benchmark index Nifty rose by 90.35 points at 2,973.00, after touching the day’s high of 3,010.00, as most of the heavyweight stocks recorded handsome gains.
Reliance Industries, the Sensex-heaviest, surged by Rs46.30 at Rs1,217.85. The scrip rose to Rs1,239 and a low of Rs1,152 during the day.
Oil and gas sector index gained the most by 196.63 at 6,013.57 followed by metal sector index by 158.89 points at 5,152.33.

Oil tumbles to 21-month low of $58 a barrel

LONDON: Oil prices on Thursday tumbled under 58 dollars a barrel, reaching the lowest level for nearly 21 months as recession fears gripped markets, said. On London's InterContinental Exchange (ICE), Brent North Sea crude for delivery in December dived more than four dollars to 57.46 dollars a barrel -- the lowest level since February 2007. At about 1555 GMT, the contract recovered slightly to stand at 58.08 dollars, down 3.79 dollars compared with Wednesday's close. On the New York Mercantile Exchange (NYMEX), light sweet crude for December fell dropped 3.80 dollars to 61.50 dollars a barrel.
Fears of a deep recession and hence weaker energy demand intensified on Thursday as European central banks slashed interest rates. The Bank of England's monetary policy committee cut British borrowing costs by a record 1.50 percentage points to 3.0 percent -- the lowest level in more than half a century. The European Central Bank reduced eurozone borrowing costs by 0.50 percentage points.
"Market participants may be taking the view that for the MPC to slash rates in such a dramatic manner, things must be really bad," said David Evans, an analyst at BetOnMarkets.com. Oil prices had already tumbled by more than five dollars Wednesday on NYMEX as US data showed demand falling in the world's biggest energy consuming nation, highlighting worries about a slowing global economy .

Demand slump: Tata Motors may shut Pune unit for 6 days

NEW DELHI: A day after it announced plans to briefly shut down its heavy commercial vehicles plant in Jamshedpur, Tata Motors appeared to be mulling similar closure of its passenger vehicle plant in Pune. "Production will match demand" is all that a Tata Motors spokesperson had to say when asked about reports that the Pune facility would be shut down from November 22-27. He however, neither confirmed nor denied the reports. Tata Motors, India's largest automobile company, had yesterday announced shutting down its Jamshedpur unit, the mother plant for its heavy commercial vehicles, for three days due to slump in demand.
"Tata Motors is taking a block closure at Jamshedpur from November 6 to November 8, 2008, to match production with demand of vehicles produced at the Jamshedpur plant to avoid build-up of inventory either in the company or with our dealers," the company spokesperson had said yesterday.

US financial crisis may hit India's exports in Q4: Deloitte

NEW DELHI: Country's exports, including BPO services, software and financial services
exports, are likely to be hit by the global meltdown in the fourth quarter of 2008, says a report by global research firm Deloitte. "The ongoing slowdown in the US economy will likely to affect the future growth in India's exports. Experts predict that US businesses would likely either reduce outsourcing or withhold expansion plans," the report Deloitte Global Economic Outlook for the fourth quarter of this year said. Consequently, as a result of the financial crisis, the BPOs, financial services and other software exports contributing to about 2 per cent of India's GDP are likely to be affected, the report said. Software industry body NASSCOM has also predicted that there would be a significant impact of the global crisis on the Indian BPO sector. The financial turmoil and recessionary tendencies in major economies have already impacted India's export growth, which slowed to 10.4 per cent in September even as the country increased its imports by 43.3 per cent over September 2007.

Read more at The Economic Times

Buffett, Soros continue to buy stake in companies

NEW YORK: In the midst of people selling their stocks as market values touch the nadir, legendary investors-- Warren Buffett and George Soros-- seem to be swimming against the tide and shopping for stakes in companies worldwide. With the economic crisis ravaging global markets, the two billionaires are making investments in firms from America to Australia, which are expected to yield long term benefits. As Buffett wrote recently in a newspaper column, a simple rule dictates his buying, "Be fearful when others are greedy, and be greedy when others are fearful." Recently, Buffett pumped in about eight billion dollars in two American corporates. The legendary investor had pumped in five billion dollars to battered Wall Street giant Goldman Sachs and another three billion dollars into diversified conglomerate General Electric. According to reports, Soros snapped up a five per cent stake in Australian firm Sphere Investments. The company is reportedly looking to develop a multi-billion dollar iron ore mine in Mauritania.

Read more at The Economic Times

World economies to decline in 2009: IMF

WASHINGTON: Barely 10 days ahead of the Summit of the Group-20 here called by President George Bush, IMF has revised its global economic outlook and forecast that advanced economies would slip into recession
next year, while the growth rate of Asian nations would come down. In its World Outlook Report published today, the International Monetary Fund (IMF) has predicted that the global growth would slow down by 0.2 per cent in 2008 and 0.9 per cent in 2009, thus leaving the revised growth figures at 3.7 per cent for this year and 2.2 per cent for the next. The outlook is not too different for India as well, since IMF sees the country's economic growth going down to 6.3 per cent, 0.6 per cent less than what it had projected last month, as the financial meltdown envelops the globe.

Read more at The Economic Times

UK interest rates slashed to 3%

The Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, its lowest since 1955, in a shock move.
Last month it cut rates from 5% to 4.5% in an emergency move co-ordinated with other central banks.
There had been widespread calls from industry for a major cut as the country begins to face up to the prospect of a deep recession.
It is the most dramatic cut since a two percentage point reduction in 1981.

Read more at BBC

Funds sell record Rs22,271 crore of debt in Oct

Mumbai: Indian mutual funds sold debt worth Rs22,271 crore in the first three weeks of October because investors are reluctant to infuse fresh money to replenish outflows caused by a surge of redemptions in a volatile market.

Analysts say the measures taken by the Reserve Bank of India (RBI) to ease a cash and credit crunch will take time to soothe the Rs5.29 trillion mutual fund industry, but inflows should return soon with the overnight inter-bank money market rate declining to around 6.5% from around 20% at the peak.
Higher call rates encourage investors in debt funds, particularly banks, to withdraw money from mutual funds and lend in the overnight call money market to earn more.
RBI has cut its policy rate by 100 basis points and banks’ cash reserve ratio (CRR), or the proportion of deposits that banks need to keep with the central bank, by 250 basis points to release Rs1 trillion into the banking system. One basis point is one-hundredth of a percentage point. Besides, it also created a Rs20,000 crore liquidity window for mutual funds.
So far, mutual funds have drawn only Rs8,800 crore from this window. On Friday, there was no taker.

Read more at Livemint

Norway fund to put $2 bn in India

New Delhi: In a move that will bring considerable relief to Indian equity markets roiled by the global credit crisis, the Norwegian sovereign wealth fund (SWF), plans to invest around $2 billion (about Rs9,772 crore) in India, primarily in equities, over the next two months because it has increased India’s weightage in its investment portfolio.
According to Thorvald Moe, deputy secretary general in the Norwegian finance ministry, India’s weightage was enhanced recently to 0.94% from the earlier 0.2%. The enhanced weightage will see an inflow into India of around $2 billion, which needs to be invested by the end of this year, Moe said.
This money will come into the country at a time when foreign institutional investors (FIIs), the main driver of Indian stock markets, have taken out close to $11.2 billion from the country since January.
In this period, Sensex, the benchmark index of the Bombay Stock Exchange has fallen by almost 50% to 10,683.39, the level it closed at on Tuesday.

Read more at Livemint

Markets offer early warning signals

India now has the distinction of being one of the rare countries to introduce new derivatives markets this year, at a time when most countries are clamping down with bans or more regulations.

Derivatives, especially the exotic kinds, have become a bad name across the world. India, too, has had its share of problems with over-the-counter (OTC) forex derivatives. One good outcome of all this is that the case for exchange-traded derivatives has only become stronger vis-a-vis OTC markets. It has become increasingly clearer to more policymakers and market participants that wherever standardization is possible, a derivatives contract must be listed on an exchange to avail of the benefits of transparency and the elimination of credit risk through centralized clearing and settlement.

Read more at Livemint

Global air traffic dips 2.9% in September: IATA

Early signs of global air travel slowing down are evident from a recent IATA (International Air Transport Association) report which says that air travel across the globe has dipped 2.9% for September 2008, as compared to previous month. However, IATA has taken up the issue with various governments on finding a solution to this grim scenario. Over 230 airlines from across the globe are members of the IATA, a trade body that deals with air traffic related issues.
Taking a peek at the traffic slowdown figures revealed by IATA, African carriers posted the largest decline in traffic at -7.8%, followed by Asia-Pacific carriers with a 6.8% drop in the month under preview (September) and European carriers saw a traffic drop of -0.5%.

Read more at The Financial Express

HDFC-HDFC Bank merger possible: Parekh

Deepak Parekh, chairman, Housing Development Finance Corporation (HDFC) has indicated a possible merger of HDFC-HDFC Bank in near future. However, he did not elaborate his statement on such a proposed move, while responding to a question asked by industrialist Anand Piramal at an event held at Indian Merchants Chamber in Mumbai on Tuesday.
Parekh also said that inflation in India might settle down at 6-7% levels by March 2009. He expects the inflation to fall below the 10%-mark within a month and the country’s growth rate to remain at 7-7.5% in the current fiscal.
“We will wait-and-watch for some time before taking a final call on the interest rates. The deposit rates in the system have to come down first before cutting the lending rates. And, I do not rule out the possibility of more monetary measures being implemented by the Reserve Bank of India,”Parekh added.

Read more at The Financial Express

Centre sets aside 2 million tonne wheat to meet export requests

The government on Wednesday decided to set aside around 2.0 million tonne of wheat for export, to meet requests made through diplomatic channels. This is the first time in more than a year that the government has gone for a one-off exemption to the country’s export ban on wheat.
“We have kept aside two million tonne wheat for supplies to some countries,” agriculture minister Sharad Pawar told reporters on the sidelines of an international conference here.
The external affairs ministry will decide on quantities to be supplied to countries that have requested India for wheat, Pawar said. Requests will be considered on humanitarian grounds.

Read more at The Financial Express

Is Apple getting into the chip business?

SAN FRANCISCO (MarketWatch) -- A brewing battle between Apple Inc. and its frenemy, IBM Corp., over the role of an executive who at one time managed Big Blue's PowerPC chip business may be an early sign that the Silicon Valley wunderkind is considering designing some of its own semiconductors.
On Tuesday, Apple (AAPL:
Apple Inc
News, chart, profile, more
Last: 103.30-7.69-6.93%4:00pm 11/05/2008Delayed quote data
Add to portfolioAnalyst Create alert
InsiderDiscussFinancials
Sponsored by:
AAPL 103.30, -7.69, -6.9%) said it was hiring Mark Papermaster from IBM as a senior vice president of devices hardware engineering. Apple made the hire despite a lawsuit last week by Big Blue against Papermaster. IBM wants to keep him from working at Apple for a year, because of the sensitive information Papermaster is believed to have on its chip business, especially the PowerPC processor, which the companies developed together nearly 20 years ago.

Read more at Market Watch

Yahoo's Yang: 'Open minded' about Microsoft deal

SAN FRANCISCO (MarketWatch) - Yahoo Inc. Chief Executive Jerry Yang said late Wednesday that he remains "very open minded" about a full or partial merger with former suitor Microsoft Corp.
"The best thing for Microsoft to do is to buy Yahoo," Yang said during an appearance at a technology conference in San Francisco, "At the right price, whatever that price is."
Microsoft (MSFT:
Microsoft Corporation
News, chart, profile, more
Last: 22.08-1.45-6.16%4:00pm 11/05/2008Delayed quote data
Add to portfolioAnalyst Create alert
InsiderDiscussFinancials
Sponsored by:
MSFT 22.08, -1.45, -6.2%) had offered as much as $33 a share for Yahoo (YHOO:
Yahoo! Inc
News, chart, profile, more
Last: 13.92+0.57+4.27%4:00pm 11/05/2008Delayed quote data
Add to portfolioAnalyst Create alert
InsiderDiscussFinancials
Sponsored by:
YHOO 13.92, +0.57, +4.3%) , before pulling its bid in May.
Since then, Yahoo's share price has crumbled, and investors and analysts have been pressing for the company to reconsider some sort of deal with the software giant -- including selling its online search business, a prize that Microsoft covets.
Yang said Wednesday that such a transaction remains possible.
"As far as a search deal goes, we're very open minded about that," he said.
"They walked away from a public offer, and we were ready to negotiate," Yang said of Microsoft. "Had we been able to do that, we would have been very happy."

Read more at Market Watch