RBI mulls currency futures exchange

Foreign institutional investors unlikely to get a look-in.

The Reserve Bank of India (RBI) is exploring a dedicated currency futures exchange, after taking an in-principle decision to launch rupee-denominated futures.

In its meeting with market participants in Juyly, the RBI has also decided to revive interest rate futures which have failed to take off after being introduced in June 2003.

The central bank is not in favour of currency futures being traded on stock or commodity exchanges as they are regulated by the Securities and Exchange Board of India and Forward Markets Commission (FMC), respectively.

This could dilute RBI’s regulatory power on domestic foreign exchange market which, in turn, could have implications on exchange rate management — RBI’s sole prerogative.

Moreover, the discussion also highlighted the legal issues if futures are allowed on commodity exchange as it happens internationally or on stock exchanges like NSE or BSE.

Read more in Business Standard

Retail loans boost bank profits

The banking sector witnessed another robust quarter during the period ended June 2007, with their growth in bottom lines rising to a 12-quarter high at 51.80 per cent.

A rise in commercial and retail lending rates, growth in fee-based income and lower provisioning helped banks boost their profits.

The numbers are based on the first quarter results for June 2007 declared by 37 banks (22 PSU and 15 private banks). STRONG QUARTERS (Rs in crore) Quarter ended June % chg 2006 2007 Interest Income 43,569 59,743 37.12 Other Income 5,039 7,173 42.34 Net Interest Income 17,173 19,615 14.22 Interest Expended 26,396 40,128 52.03 Net Profit 4,593 6,972 51.80 Prov & Con 3,363 2,641 -21.47

Interest income of these banks increased 37.12 per cent, while other income was up by 42.3 per cent. Interest cost on borrowings and deposits went up sharply by 52.03 per cent, while provisioning declined by 21.47 per cent. Net interest income (NII) of the overall banking sector rose by 14.22 per cent to Rs 19,614.93 crore fuelled by higher interest on advances. Read more in Business Standard

Era Constructions bags Rs 136cr NTPC order

Era Constructions India has won an order from NTPC for main plant & offsite civil works to be carried at the Simhadri Super Thermal Power Projects.

According to a release issued by Era Constructions the value of the contract is around Rs 136.33 crore and is to be executed over a period of 43 months.

FII inflow in July highest since ’93

NEW DELHI: The net FII inflow in the cash market in July was the highest ever on a monthly basis since FIIs started investing in 1993. Year-to-date, FIIs have purchased securities worth $ 11.8 billion through the cash and derivatives segments.

While FII inflows into the cash market were positive for a seventh month running, domestic institutions were net sellers after three months of buying. In July, India outperformed emerging markets and Asia, according to Morgan Stanley estimates.

In July, India’s performance ranking among emerging markets rose to 8th position. On a 12-month trailing basis, India continues to outperform emerging markets and Asia, even as it marginally underperforms emerging Asian markets in 2007.

Utilities was the best performing sector in July, for a second month running, whereas healthcare was the worst sector. Energy remains the best performing sector on a year-to-date basis, and healthcare slipped to the bottom in July on the same parameter.

Read more in The Economic Times

Central Bank prices IPO at Rs 102

MUMBAI: Central Bank of India has priced its initial public offer (IPO) at Rs 102 a share, the bank said in a statement late on Thursday. The bank had come out with an IPO for 80 million shares in July. The issue was subscribed 62 times, the bank said.

Pidilite to raise up to $50 mn in convertibles

MUMBAI: Adhesive maker Pidilite Industries Ltd said on Friday its board approved raising up to $50 million in foreign currency convertible bonds.

Simplex Projects debuts at Rs 323.75

MUMBAI: Simplex Projects listed on the stock exchanges with a 75% premium at Rs 323.75 as against its issue price of Rs 185 per share.

However, the scrip was not able to hold onto gains and slipped below Rs 300 mark. At 9:59 AM, the stock was at Rs 296 with volume traded at 7,12,943 shares on the BSE. On NSE, the stock was at Rs 275.30 with volume of 23,73,950 shares.

The company’s IPO received an overwhelming response. As per the NSE website, the issue was subscribed 85.53 times. It received bids for 25.65 crore shares including 5.04 crore shares at cut off price.

Read more in The Economic Times

Punj Lloyd to invest $45 mn in realty JV

MUMBAI: Punj Lloyd Ltd said on Friday it would invest up to $45 million in an equal joint venture for real estate development.

The other partner, Ramprastha Group, would put another Rs 1.8 billion in the venture, Punj Lloyd said in a statement.

JP Group acquires Malvika Steel for Rs 207 cr

NEW DELHI: City-based infrastructure group Jaiprakash Associates today announced its foray into the steel sector with the acquisition of Malvika Steel in Jagdishpur, Uttar Pradesh, for Rs 207 crore. "We will put in Rs 1,800 crore over next 26-28 months to make it one million tonne integrated steel plant," Jaiprakash Associates Executive Chairman Manoj Gaur said here. The company acquired Malvika Steel, earlier promoted by Usha Group, in an open auction made by the Debt Recovery Tribunal. The steel firm was taken over by some financial institutions after it failed to meet its interest obligations. Jaiprakash would pump in Rs 800 crore and Rs 1,000 crore in two phases. The amount would be funded through a mix of debt and internal accruals, Gaur said. The group would also leverage a part of USD 400 million raised recently through an offshore convertible bonds issue. Malvika Steel is a brownfield project. Jaiprakash Group seeks to produce long steel products used mainly in the construction sector.

Inflation falls to 4.36% as food items turn cheaper

NEW DELHI: Inflation declined to 4.36 per cent during the week ended July 21 as compared to 4.41 per cent for the previous week as some essential food items like pulses, fruits and eggs turned cheaper.

However, prices of certain other food items like vegetables and most manufactured products rose. Fuels like naphtha also became dearer.

The wholesale prices-based inflation stood at 4.72 per cent for the corresponding period a year ago.

The Reserve Bank in its July 31 monetary policy review has raised the rate of mandatory cash deposits that banks have to keep with it by 0.5 per cent to 7 per cent.

It, however, retained its projection for inflation at five per cent for this fiscal and 4-4.5 per cent for the medium term.

'GSM firms paid Rs 1,800 cr for additional spectrum'

NEW DELHI: GSM-based mobile players, under attack from CDMA lobby for allegedly getting additional spectrum free of cost, on Friday countered the charge saying they have paid about Rs 1,800 crore on radio waves till date.

"GSM operators are paying an extremely high charge for the additional spectrum that is alloted to them," it said in a letter to Telecom Minister A Raja.

As per the existing regime, the GSM industry over next three years alone will pay over Rs 10,000 crore as spectrum usage charges to the government, of which almost Rs 6,000 crore would be on account on the high incremental charges being applied by the government over and above the initial two per cent charges.

Spectrum is not being given away free to the GSM operators and in fact a very heavy price is being imposed on the operators as charges for GSM spectrum use, T V Cellular Operators Association of India (COAI) director general Ramachandran said in the letter to Raja.

The lobby claimed that the government is likely to recover 10 times the entry fee over licence period from spectrum usage charges.

As per the current formula, GSM operators with 10 MHz of frequency are paying a charges of four per cent of Adjusted Gross Revenue and this would increase to six per cent for allocation of 15 MHz, Ramachandran said.

I-banks traded as junk on risk fears

On Wall Street, Bear Stearns, Lehman Brothers Holdings, Merrill Lynch and Goldman Sachs Group are as good as junk.

Bonds of US investment banks lost about $1.5 billion of their face value this month as the risk of owning the securities increased the most since at least October 2004, according to Merrill indexes. Prices of credit-default swaps based on the debt imply that their credit ratings are below investment grade, data compiled by Moody’s Investors Service show.

The highest level of defaults in 10 years on subprime mortgages and a $33 billion pileup of unsold bonds and loans for funding acquisitions are driving investors away from debt of the New York-based securities firms. Concerns about credit quality may get worse because banks promised to provide $300 billion in debt for leveraged buyouts announced this year. “The market is being driven by fear,” said Mark Kiesel, who oversees $80 billion of corporate debt at California-based Pacific Investment Management, manager of the world’s biggest bond fund.

Read more in The Economic Times

Reliance mutual declares dividend in interval fund

Reliance Capital Asset Management Ltd. said on Wednesday it will pay 0.264986 rupee per unit dividend in retail and institutional plan of Reliance Interval Fund-Quarterly Interval Fund Series II.

The asset manager has fixed August 6 as the record date. The fund house managed assets worth about 599 billion rupees at the end of June, data from Association of Mutual Funds in India showed.

Arcelor Mittal's Q2 core profit above expectations

Arcelor Mittal, the world's largest steelmaker, reported second-quarter core profits above market expectations on Wednesday on the back of strong demand and higher selling prices for its products.

Earnings before interest, tax, depreciation and amortisation rose to $5.326 billion from a pro-forma figure of $3.500 billion a year ago. The average forecast given in a Reuters poll of eight analysts was $4.65 billion.

Reliance Retail in talks with institutes on training manpower

Reliance Retail Ltd., is tying up with various institutes and non-governmental organizations (NGOs) to train people in retail courses to overcome the shortages of trained staff needed for the company’s aggressive retail foray.

Reliance Retail is in “advanced stages” of talks with institutes including the government-run Indira Gandhi National Open University (Ignou) and schools run by YMCA and Bharti Vidya Bhawan, according to a senior company official who wished not be identified because he is not authorized to talk to the media.

The firm will require one million direct and indirect employees all over India by 2010 but there are hardly 40,000 to 50,000 people trained in modern retailing, the official said, adding, “Rather than fighting for the existing talent we are enlarging the talent pool.”

Read more at liveMint.com

Bajaj July bike sales down 7%; new bike on Aug 9

Bajaj Auto today reported a 7% decline in motorcycle sales at 1,59,881 units in July as against 1,71,115 units sold in July 2006 owing primarily to product fatigue. According to a release issued by the company today, total two & three-wheeler sales also dropped 7% to 1,85,890 units from 1,99,821 units in July 2006. "The motorcycle industry continued to degrow owing primarily to product fatigue as consumer disinterest in uninspiring 100 cc motorcycles continued to translate into postponement of purchase," the release added.

The company also announced that it will unveil its new, non-100cc motorcycle with DTS-Si technology on August 9 in Pune.

Sensex down 502pts; Reliance down 4%

The Sensex is now down 502 points at 15,049.

ACC has slumped nearly 6% to Rs 998. Bharti Airtel has plunged 5.5% to Rs 854.

Tata Motors has tumbled 4.6% to Rs 667. Reliance Communications, HDFC and HDFC Bank have dropped around 4.3% each to Rs 534, Rs 1,930 and Rs 1,148, respectively.

Hindalco, BHEL, Wipro and Reliance have shed 4% each to Rs 163, Rs 1,661, Rs 475 and Rs 1,818, respectively.

Mahindra & Mahindra and Relaince Energy have slipped 3.7% each to Rs 702 and Rs 764, respectively.

The market breadth is extremely bearish - out of 2,359 stocks traded so far, 1,728 have declined, 579 have advanced and 52 are unchanged.

Jet Airways Q1 net dips 31%

Private carrier Jet Airways on Monday reported a 31.35 per cent decline in net profit at Rs 30.88 crore for the quarter ended June 30 compared to Rs 44.98 crore for the corresponding quarter last year.

However, total income increased by 19.81 per cent to Rs 1,983.03 crore for the June quarter as against Rs 1,655.19 crore for the same quarter in the previous year, the company said in communique to the Bombay Stock Exchange.

The shares of the company fell 3.15 per cent and closed at Rs 700 on the BSE.

Tata Steel's Q1 net up 28% at Rs 1,222 cr

The world's sixth largest steel manufacturer Tata Steel on Monday posted 28.18 per cent increase in net profit at Rs 1,222.11 crore for the quarter ended June 30 compared to Rs 953.41 crore for the corresponding quarter last year.

Total income (net of excise) of the company increased 9.21 per cent to Rs 4,343.70 crore for the quarter ended June 30, from Rs 3,977.38 crore a year ago, Tata Steel informed the Bombay Stock Exchange (BSE).

Shares of the company were trading at Rs 645, down 1.01 per cent on the BSE.

Everonn Sys lists with 75% premium

Knowledge management and training company Everonn Systems on Wednesday got listed at Rs 245 on the bourses, a premium of 75 per cent over the issue price of Rs 140.

The scrip touched a high of Rs 560 within minutes of listing and over 1.70 lakh shares exchanged hands on the BSE.

The shares scaled a high of Rs 567 on the National Stock Exchange, where over 9.77 lakh shares got traded.

The company was trading at Rs 517.50 on the BSE and at Rs 518.70 on the NSE at 10.01 am.

Read more in The Financial Express