New Revenue Waves For Google

Three ways Google Wave could boost the Internet giant's bottom line.

BURLINGAME, Calif. -- Google hasn't yet finished previewing its new Wave collaboration tool, let alone given consumers full-blown access to it. But on Wednesday, Lars Rasmussen--one of the principle engineers behind Wave--hinted at how Google might monetize the tool.

Google ( GOOG - news - people ) Wave is a collaboration and communication tool that allows users to work on the same content object, dubbed a "wave," which can house both text and multimedia. Users can reply to messages and edit together in real-time. Beyond those features, developers can extend Wave's features through a programmable interface.

Rasmussen stressed that Google is, at this point, focused on polishing and popularizing the product, rather than figuring out how to monetize it. Still, he gave in to a tough line of questioning from reporters and hinted at three possible ways Google could monetize Wave once the product is fully baked.

One very real possibility: incorporating Wave into Google Apps for businesses, the suite of Web-based software tools that Google licenses to enterprises for $50 per user per year.

"We hope that will drive additional sales of that product," he says. "We were very positively surprised that our existing customers--and some enterprises that are not existing customers--have expressed some interest in trying out the tool."

NSE launches world's most-traded derivative - IRF

Mumbai, Aug 31 (PTI) The National Stock Exchange today launched Interest Rate Futures, a product that enables hedging against interest rate risks, that would help further deepen the country's financial markets.

Interest rate risk is the uncertainty in the movement of interest rates, which have never been constant in the past and presumably not remain constant in the future as well.

Banks, primary dealers, mutual funds, insurance companies, corporate houses, financial institutions and member-brokers will be eligible to participate in IRF trading -- available in futures contracts worth Rs two lakh each with a maximum maturity of 12 months.

IRF is the world's most widely-traded derivative tool. The interest rate futures contracts at NSE would be physically settled by delivery

No pref allotment to IL&FS if open offer fails:Maytas Infra

It's a new dawn for Maytas Infrastructure. The Company Law Board approves IL&FS as the new promoter. IL&FS will make an open offer as per Sebi guidelines and will bring in Rs 55 crore as liquidity for Maytas in three months.

Ved Jain, Independent Director, Maytas Infrastructure, says there was consensus within the board about stake sale to IL&FS. He added that the initial crunch in Maytas has been dealt with through the corporate debt restructuring. "IL&FS' Rs 55 crore commitment was mandatory under the CDR agreement."

An open offer, he feels, is mandatory for Maytas Infrastructure. According to him, the issues in the case of Maytas are different from that of Satyam. "Maytas and Satyam cannot be compared."

The company, he added, has started action to recover the Rs 391 crore that went to Satyam.

However, Anil K Agarwal, Government Appointed Director, Maytas Infrastructure, says there was no diversion of funds from Satyam to Maytas.

IL&FS, he says, would hold 57% stake after the open offer. He rules out a preferential allotment for Maytas if the open offer fails.

Speaking on Maytas Properties, Jain says the entire stake of Maytas Properties is held by the Raju family. "Maytas Properties has assets but no liquid cash."

India gets half of contracted sugar, 100 KT on way

NEW DELHI (Reuters) - Half of the 4 million tonnes of raw sugar India has contracted to buy to meet a shortfall in supply have arrived, shipping sources said late on Monday, while another 100,000 tonnes are on the way to the world's largest consumer.

Strong demand in India pushed raw sugar futures through key resistance at 24 cents per pound on Monday, their highest price level in nearly 30 years. New York's October raw sugar contract hit a session peak at 24.48 cents, the highest level since February 1981.

"About 2 million tonnes of the raw sugar have already arrived. Most of them have been take out of the port," said a Delhi-based shipping broker, adding that the sweetener is of Brazilian origin.

"About 100,000 tonnes of raw sugar from Brazil are on the way to India right now. They will arrive one month and a half later," the broker said ahead of a sugar conference in the Indian capital.

Another broker said freight rates to India from Brazil have been steady since early this year at $45 to $50, but lower than $150 a tonne seen more than a year ago.

The sugar market has been rallying since late June as the worst monsoon season in some 40 years has forced India to import large quantities of the sweetener ahead of its annual festival season.

The government of India said that 278 districts in 11 states have been affected by drought as monsoon rains were 24 percent deficient between June 1 and Aug. 27.

India's cane harvest contracted last year because farmers switched to competing crops such as wheat and rice, for which the government paid lucrative rates directly to farmers.

A Reuters poll on Aug. 5, showed India would import 4.5 million tonnes in the new season.

India signs N-agreement with Namibia

New Delhi, Aug 31 (PTI) India and Namibia today signed a civil nuclear agreement and four other pacts with a vow to inject "fresh dynamism" in their ties.

The five agreements were signed after talks between Prime Minister Manmohan Singh and visiting Namibian President Hifikepunye Pohamba here.

Namibia, which has substantial quantity of uranium, became the fifth nation with which India signed the civil nuclear agreement after getting a waiver from the Nuclear Suppliers Group in September last year.

India has already inked similar agreements with the US, Russia, France and Kazakhstan.

Under the Agreement on Cooperation in Peaceful Uses of Nuclear Energy, the two sides will trade uranium and exchange expertise in designing of atomic plants and train personnel.

Tata Motors: JLR's cost side story

Aggressive cost cutting measures have been initiated at Jaguar and Land Rover (JLR), including lowering the headcount, imposing a wage freeze and sourcing components from markets that offer cheaper alternatives.These measures have left the business in better shape at the end of the June 2009 quarter than it was in the March 2009 quarter but despite this JLR has posted a loss of 64 million pounds, in the June 2009 quarter, on revenues of 1.12 billion pounds.

The losses in the March 2009 quarter, however, were more than twice this amount so there is some material improvement thanks to lower spends on marketing, overheads and raw material costs. With demand in the key US and European markets yet to pick up, vehicle volumes were lower during the quarter — dealer volumes saw a sharp drop of 52 per cent year-on-year while retail volumes were lower by 35 per cent year-on-year, as the company adjusted production with demand.

However, what’s encouraging is that, sequentially, wholesale volumes were up 10 per cent and retail volumes stayed flat. Moreover, inventories are not unusually high. The other bit of good news is that JLR has managed to access bank finance to the tune of 100 million pounds and should manage another 340 million pounds soon. With the rationalisation measures bringing in cost savings, analysts expect JLR to break even in 2010-11 and losses could be curtailed to around 200 million this year compared with a loss of 307 million pounds in 2008-09.

With a consolidated debt of just under Rs 21,000 crore, Tata Motors’ balance sheet remains highly leveraged but the company plans to sell stakes in subsidiaries and in group companies –in the last quarter for instance, sales of Tata Steel shares fetched it Rs 320 crore. With demand for commercial vehicles looking up in the home market, sales for Tata Motors in the current year are expected to come in close to Rs 71,000 crore. However, with the JLR business still weak, it may post marginal losses.

Drought fears cloud GDP recovery in Q1

New Delhi: The worst seems to be over for the Indian economy, with the government’s statistics office announcing on Monday that the economy had grown by 6.1% in the first quarter of the current fiscal year, the best growth in the last three quarters. But analysts warned that the drought-like situation in the country may prove to be a dampener in the coming quarters.

Weak consumer spending and anaemic investment spending continue to be major concerns, though their drag on economic growth was more than offset by a big spurt in government spending through the two fiscal stimulus packages in December and February.

The country’s gross domestic product (GDP) at the end of the first quarter of the current fiscal year was Rs8.31 trillion, compared with Rs7.83 trillion in the same period of 2008-09, raising expectations that the economy could meet the anticipated growth rate of 6%-plus for the year.

Also See Growth Revives, But Will It Sustain? (Graphics)

Data released by the Central Statistical Organisation on Monday indicated that the economy had a marginal recovery when compared with the preceding quarters. The GDP growth rate decelerated from 7.7% in the second quarter ended September to 5.8% in quarter ended December and then bottomed out at the same level in the fourth quarter ended March of 2008-09.

During the April-June quarter of 2009-10, while the farm sector grew 2.4%, industry and services sectors grew at 4.8% and 7.8%, respectively. While a higher growth in mining and electricity sectors led to strong growth in the industry sector, growth in services was led by banking and finance.

Consumption growth slowed to 2.8% in the quarter compared with 6.1% in the fourth quarter of 2008-09 largely due to a slump in the growth of private consumption, which fell to a seven-year low at 1.6% even as government consumption was up at 10.2%. Investment growth declined, marking the lowest growth since 2001-02 at 4.5%, down from the sustained double-digit growth in the previous quarters. Though the first quarter growth rate is lower compared with the same quarter of the previous year when the economy grew at 7.8%, it signals a turnaround and bottoming out of the economy as in the previous two quarters of fiscal 2008-09, the economy grew at 5.8%.

Fortis to buy 10 properties of Wockhardt Hosp; stks rally

The Fortis management has confirmed reports of it buying ten hospitals from Wockhardt Hospitals. The company has said that from the ten hospitals their aggregate bed capacity will be of 1,902. The management has added that the hospitals will be acquired on ‘going concern’ basis. The deal is expected to be completed by December-end.

Earlier sources had reported that the deal is likely to be valued at Rs 970 crore and that Fortis will add nearly 1,900 beds post acquisition. This acquisition, according to sources, is expected to add Rs 450 crore in FY10 sales. Also, the acquisition may add Rs 75-100 crore in FY10 PAT, sources said and added that the deal may be valued at 8–9 times EBITDA of the assets acquired.

Markets push on as sentiments turn around

Stock markets across the world are doing well from the last few months as the global economic conditions are improving. Major market indices

across the world are quoting at their highest levels since the recession started in October last year. The domestic markets are also quite bullish and are scaling new highs.

Here is an outlook on some significant sectors in the short to medium terms:

Auto

The demand in the auto sector has picked up during the last few months, supported by the boost from the government's stimulus package, and low interest rates. Operational parameters like capacity utilisation and cost of operations have also improved in auto companies. Backed by good performance and month-overmonth sales data, stocks in the auto sector have showed an uptrend during the last few months. Therefore, the valuations in the auto sector stocks are no longer cheap at the current levels. Those invested in auto stocks at lower levels can book some profits and hold the remaining with a tight stop loss target.

Banking

The banking sector is currently under-performing the market due to concerns like low credit off-take (especially in the retail segment). More liquidity in the banking sector is also an area of concern. Demand in the retail loan segment is expected to go up during the festival season. Investors can accumulate potential stocks in the banking sector during market corrections.

FMCG

Stocks in the FMCG sector are out of favour in the current bull run as this sector is labeled a defensive sector. However, the continued focus of the government on rural areas, lower penetration and consumerism would aid the FMCG sector in its growth. Investors can diversify their portfolios by adding stocks of blue chip FMCG companies.

IT

Stocks in the IT sector are influenced and governed by the economic news, data and developments in the developed countries as a significant part of IT companies' revenue comes from developed nations. IT stocks have also appreciated quite a bit in the last few months due to the improved economic conditions in the developed nations. Investors should exercise caution in taking fresh positions in IT sector stocks. There are many concerns that need to be addressed in the IT sector like increased competition, sustainability of growth in the developed economies and rupee appreciation.

Power

Power is one of the sectors that have a huge potential to grow here. However, it requires huge investments to execute the various ongoing projects. With a stable government at the centre, investors can expect more reforms and ease in terms of structural issues to execute these projects. The good response to the recent IPOs of power companies proved the demand for potential stocks in the power sector. Investors with a longterm horizon can accumulate stocks in the power sector at dips.

Metal

Stocks in the metals sector out-performed the broader market indices in the recent bull run. The outlook for this sector (especially steel) remains quite positive as analysts expect many measures from the government. Analysts are expecting the government to impose an import duty on various metals (especially steel and aluminum) which would protect the domestic industry from cheaper imports. Also, increased infrastructure spending is expected to provide a cheer to the sector.

Indian stock market can consolidate next week

MUMBAI: India’s stock market could consolidate next week after a run-up in share prices driven by hopes for international economic recovery, dealers said.

For the week to August 28, the benchmark 30-share Sensex index rose 4.47 percent, or 681.51 points, to 15,922.34.

“The markets have risen in recent days. We are at key technical levels... so we expect a small correction,” said Bhaskar Kapadia, partner at brokerage Pyramid Securities. Investors and fund managers will be guided by first-quarter gross domestic production figures for the fiscal year to March 2010 that are due Monday, dealers said.

The markets will also track monsoon activity, hoping for a revival in rainfall which is running at 26 percent below normal, its lowest in at least seven years.

There are fears that the weak rains, which have hurt crop planting, could affect rural consumption, a key growth driver, in the country where 700 million people live in the countryside.

Foreign funds have bought equities worth $8.09 billion so far this year after selling shares worth 6.88 billion dollars during the same period last year. afp

September sonnet for stocks: A sliding Sensex?

New Delhi, Aug 30 (PTI) Going by history, the stock market could be in for some troubles as September has been the worst month historically for the bourses, but the analysts are still hopeful that the trend may be reversed this time around.

Moreover, the analysts here believe that September being the worst month of the year in terms of the benchmark index performance is more of a US phenomenon and the Indian market, being structurally different, might not follow the same trend.

According to an analysis of the the average monthly performance over the last 100 years of the Dow Jones Industrial Average, the benchmark index of the US market, the month of September has given the worst return with an average decline of 0.96 per cent.

The analysis shows that over the last 100 years, the month of September has recorded decline a majority of 58 times.

Why is Maytas Infra stock buzzing?

The troubled infrastructure company Maytas Infra has been mysteriously buzzing again. While, institutional investors like IFCI and Sicom offloaded their stake in the company, the question is who is buying?

The Maytas Infra stock has appreciated 25% hitting 5% upper circuit this week.

The identity of the buyer remains unknown and the story does not end here.

Since March, 20% of Maytas stake has been sold by two institutions, 13.5% by IFCI and nearly 6% by Sicom. However, buyers for only 6% equity has been reported on the stock exchanges.

According to stock exchanges, CLSA bought around 29 lakh shares or 4.9% in June at around Rs 76.5 per share and Deutsche Securities bought 3.75 lakh shares or 0.6% at Rs 90 per share.

Market sources indicate that some Hyderabad based entities have acquired nearly 14% through front entities. CNBC-TV18 is yet to ascertain the indentity of these buyers. So, the mystery still continues as to who has amassed 14% stake of Maytas.

MP plans to impose stock limit on pulses soon

INDORE: After sugar, the Madhya Pradesh (MP) Government is now planning to impose limit on stocks of pulses that a trader can build, to curb hoarding and check rise in prices, which have surged by up to 50 per cent in just four months.

“We are in the final stage of working out a formula to impose the stock limit on pulses. There are some issues about imposing the limit on the basis of population, which will be sorted out soon,” the state's Food Minister (independent charge), Mr Parasch andra Jain said.

However, pulse millers say such a proposal has already hit their business volume, and appealed to the state government that they be allowed at least three months to sell their current stocks before the limit is slapped.

“After the news spread that there would be a stock limit on pulses, our business slumped by as much as 75 per cent,” Madhya Pradesh Dal Mills Association President, Mr Suresh Agrawal said.

Earlier this month, the Prime Minister Mr Manmohan Singh had directed states to take stringent measures against hoarding and black marketing. Rajasthan then imposed stock limits on all types of pulses under the Essential Commodities Act.

Authorities in Madhya Pradesh had also seized sugar valued at Rs 2.5 crore in Indore and Gwalior just after that. - PTI

Investors shying from stocks of Reliance cos

Sharvari Patwa
Sagar Bhadra

Mumbai, Aug. 29 The dispute between the Ambani brothers, which is scheduled for a final hearing in the Supreme Court on October 20, seems to have kept investors away from both the Reliance groups’ stocks.

The average daily traded volumes of Reliance Industries (RIL) and Reliance Natural Resources (RNRL), for instance, have dipped by 23 per cent and 44 per cent respectively from July to August, according to National Stock Exchange data, whereas total trading activity on NSE declined only marginally over the same period when average daily traded volumes were down by 4 per cent.

The Ambani brothers — Mukesh and Anil — have been locked in a commercial dispute over the sharing of natural gas from RIL’s Godavari Basin.

Every stock related to the Ambani brothers has seen a drop of at least 20 per cent in daily traded volumes over the July-August period.

In August itself, RIL’s average daily volumes fell from 5.25 crore shares (between August 1 and 3), to as low as 25.30 lakh shares on the August 24.

The corresponding average volumes of RNRL were 3.03 crore shares, which fell to around one crore shares.

Investors are avoiding the counters of the companies and are using the opportunity to invest in other stocks that are performing better, said Mr Ketan Malkan, Vice-President (Broking and Dealing), India Infoline. Mr Vishwas Agrawal, an independent analyst, said that investors had begun to avoid the stocks after the court hearings in June itself, and that this trend intensified after the annual general meetings of RNRL and Reliance Power and the recent media campaign by the ADAG Group. “Nobody knows what is going to be the outcome of this dispute so investors seem to be taking a precautionary stance by not trading at these counters,” Mr Malkan said. In fact, many brokers said they were not recommending these stocks to their clients.

The pack of Reliance stocks has not participated during the past few rallies, said Ms Anita Gandhi, Head of Institutional Business, Arihant Capital Markets. Even the big investors are avoiding these scrips, she said.

This is underscored by the fact that while the Sensex has risen nine per cent during the past two months, Reliance Industries was marginally down by 0.9 per cent and RNRL down by almost six per cent for the same period (data calculated as on August 28).

Chandrayaan had already done 95% of its tasks: ISRO

At 1.30am on Saturday, Isro’s crestfallen scientists and engineers, who have slogged over the country’s first moon mission Chandrayaan-1, lost radio contact with the spacecraft orbiting about 200 km above the moon’s surface.

Data from Chandrayaan-1’s last orbit was transmitted until 12.25am on Saturday to the Indian Deep Space Network at Byalalu near Bangalore. Though project director Mylswamy Annadurai was quoted as saying the ‘‘mission is over’’, Isro chief spokesperson S Satish said the space agency has not quite declared it dead as yet. Isro chairman Madhavan Nair claimed the spacecraft was ‘‘recoverable.’’

But Satish admitted to TOI that Isro was neither able to transmit data to the spacecraft nor receive information. ‘‘Only after analyzing the data will we able to declare whether the mission should be formally called off or not,’’ he said.

Though it was slated to be a two-year mission, Nair said that nearly 95% of Chandrayaan’s scientific goals had already been accomplished in less than a year. At Rs 386 crore, the mission that put India in the global space league of six nations, was launched at 6.22am on October 22.

Though Chandrayaan-1 was slated to be a two-year mission, Isro chairman Madhavan Nair said that nearly 95% of Chandrayaan’s scientific goals had already been accomplished in less than a year.

Having completed bulk of the scientific mission, Isro chief spokesperson S Satish said that even if Chandrayaan-1 had remained in orbit for another year, nothing much would have been gained. ‘‘In the hostile lunar environment, it is impossible for a spacecraft to survive for long periods,’’ he said.

Though there was no official word on the cause of the loss of contact, space experts, who declined to be identified, said it could be due to a power problem in the spacecraft, or the spacecraft being hit by a some space object.

Chandrayaan-1’s ride has been a bumpy one in the last few months. There was an overheating problem necessitating the deactivation of some of the 11 payloads. Then on April 26, the star sensor started malfunctioning which affected the spacecraft’s orientation.

Govt to bail out Air India - papers

MUMBAI (Reuters) - The government has agreed to inject funds into the ailing national carrier Air India, newspapers reported on Sunday, citing government sources.

Air India's accumulated loss was about 72 billion rupees ($1.5 billion) at the end of March, Aviation Minister Praful Patel told parliament last month, adding the airline needed government assistance.

The Financial Express said Air India could get 25 billion rupees ($514 million) to 30 billion rupees of equity. The Economic Times put the figure at 50 billion rupees to be linked to performance over the next three years.

The decision was taken at a meeting of a government committee of secretaries on Saturday, the two papers said.

Air India has been hit by a slowdown in the economy and high cost of operations.

India cannot be blamed for Doha deadlock: Sharma

MUMBAI: Defending India's stand on the Doha talks, the Commerce Minister, Mr Anand Sharma said it was wrong to blame India for the 14-month deadlock and on the contrary New Delhi was making an effort to re-engage in the multi-lateral global trade deal.

“There has been a deadlock for close to 14 months for various reasons. Sometimes, it has been projected that there was non-agreement and it was India which was responsible. No, that's not correct. We took a position. Other developing countries took a pos ition,” Mr Sharma said at a function here last night.

The Doha round of talks had collapsed at Geneva in July last year primarily on concerns over level of protection available to farmers in the developing countries in the multilateral global trade pact.

“If the talks collapse, then nobody is the gainer. Our objective is to re-engage and put in place a rule-based multilateral trade regime which is fair, equitable and which corrects the historical distortions that have hurt the developing world,” Mr Sharm a said.

India is hosting the World Trade Organisation (WTO) ministerial meeting in New Delhi this week, which would be attended by major groupings such as the G-20 led by India and Brazil, African Group led by Egypt, the US and the European Union. - PTI

Rise in sugar prices may turn festival season bitter

Sugar prices in India have been surging relentlessly for several weeks. Exacerbated by global cues, it seems to have gone completely out of the Government’s control. The sweetness of the festival season is sure to be soured by the high prices of the sweetener. In cities such as Mumbai, the retail rate is close to Rs 40 a kg. Sugar has a strong weightage in the consumer price index. Worse, the situation is compounded by rising prices of other essential food items such as pulses, rice and edible oil.

Exploding sugar prices have turned politically sensitive with some State elections, notably Maharashtra, round the corner. The UPA Chairperson, Ms Sonia Gandhi, has written to the Food and Agriculture Minister, Mr Sharad Pawar, to take immediate steps to contain the price rise and augment supplies.

Late realisation

Unfortunately, the advisory (which can be interpreted as a directive) has come a little too late, and is akin to closing the stable after the horse has bolted.

Primarily, the Government dragged its feet for too long in first recognising the existence of the problem of shortage and need to augment supplies. After the problem snowballed in terms of escalating prices, the way it was handled left much to be desired. Clearly, there are different dimensions to the issue. The growers’ angle, the consumers’ angle (within which there are two segments – household and institutional consumers), the mills’ angle and the international market angle. The overarching need is to protect consumer interest during 2009-10 and advance growers’ interest during 2010-11.

The problem associated with emerging sugar shortage during 2008-09 was evident as early as July 2008. On July 26, 2008, Business Line warned of an imminent rise in sugar prices, among others, in the second half of the year because of lower acreage and lower cane output. Yet, exports continued merrily for many more months, that too with incentives.

Expand acreage

Planning for 2009-10 ought to have started by September 2008; but that was not to be. We are now paying a price for inaction or slow action for over a year now. The situation is unlikely to change until end-2010 when next year’s cane harvest begins. For 2010-11, we have to start working on area expansion now. Cane has to regain about 10 lakh hectares of area it lost to other crops. The only way to ensure that it does is to incentivise cane cultivation.

The political fallout of high food inflation is perceived to be a negative one for the present government unless dramatic initiatives are taken to contain prices. But the degrees of freedom available to policymakers are limited. The policy response to sugar shortage and rising prices has been tardy. Coordination among the various arms of the government – Ministries of Agriculture, Commerce, Finance and Food – has been ineffective.

Prices at 28-year high

Taking a cue from India’s plight, world sugar prices have touched multi-decade highs. Speculators in international commodity exchanges have made windfall profits because of India’s muddled response to the sugar crisis. In the international market, sugar prices are consolidating around the new higher trading range which is about 22 cents a pound, a 28-year high.

The evolving situation in India, the world’s largest sugar consumer, remains the focal point of the global price rally. Low output for second year in a row, low inventory and steady consumption have triggered a massive price rally, exacerbated by flow of speculative capital.

Over the next four weeks, world prices have the potential to rise to about 27 cents a pound which means a possible rise of about 20 per cent. Such a further price escalation if realized will have a direct bearing on Indian sugar prices because of growing import dependence.

At home, neither the cane grower, nor the consumer or the mill is happy about the state of affairs. It is a sad commentary on the poverty of leadership and lack of decisive and timely action by the government.

Let market decide

There is one school of thought within the industry that believes that if the government does not interfere, things will sort themselves out. While one may like to go with the belief, for the government itself it is rather risky to let the market decide. Things could potentially go awfully wrong. As yet, the industry does not enjoy the full or unqualified confidence of policymakers.

In the last five years, the government failed to effect de-control of the industry even though conditions were supportive of such an initiative; but 2009-10 is surely not the year to take chances.

SC to hear Novartis case on Monday

NEW DELHI: The Supreme Court will on Monday hear Swiss drug maker Novartis AG's plea against denial of patent for its blood cancer drug Glivec (imatinib mesylate) in its beta crystal form.

The matter will come up for hearing by a Bench headed by Justice Mr Markandaya Katju.

The Intellectual Property Appellate Board (IPAB) had in July rejected the company's appeal against a Chennai patent office's decision citing Sections 3(d) and 3(b) of Indian patent law.

Section 3(d) of patent law restricts patents for already known drugs unless the new claims are superior in terms of efficacy and Section 3(b) restricts patents for products that are against public interest and do not demonstrate enhanced efficacy over ex isting products.

Novartis had obtained an exclusive marketing right (generic versions of Glivec were stopped from being made) in 2003 for the drug based on its patent application. Its patent plea was rejected in 2006 by the Chennai Patent Office on several grounds, incl uding Section 3(d).

While the Swiss firm had challenged the patent office's verdict in the Madras High Court, its appeals were transferred to IPAB, which held in July that Glivec did not meet the requirement of increased therapeutic efficacy. - PTI

Index Outlook — Sensex at the crossroads

Sensex (15,922.4)

The Sensex continued running on the treadmill for the third consecutive month, huffing and puffing but not getting anywhere. August was particularly exasperating with the index moving tantalisingly close to the 16,000 mark on many days without making a serious effort to move above it.

Bulls can, however, derive satisfaction from the fact the week ended on a triumphant note with the Sensex once again crouched and ready to spring over the 16,000 threshold.

Comatose front-line stocks made traders shift their attention to mid and small-cap stocks. BSE Smallcap Index gained 8 per cent last week accompanied by some astonishing moves in lesser known stocks. However, BSE mid and small-cap indices have retraced less than half of the losses made in the previous decline while the Sensex is close to 61.8 per cent retracement which gives them more head-room.

FIIs turned net buyers once again last week. Expiry of the August series passed smoothly indicating the absence of nervous shorts in the market.

The Sensex has gained just 1.6 per cent in August so far. Monthly rate of change oscillator has reached levels last seen in April 2006 indicating that prices are getting overbought even from a long-term perspective. But these oscillators can remain in overbought zone for many months before a correction materialises. Weekly oscillators that were poised on the verge of entering the negative zone have recorded a small upward reversal.

The intermediate term up-move from the March lows continues to be in robust health. Simple trend following techniques give a positive outlook and extrapolating the move from 8,047 gives the minimum target of 17,886 for Sensex. However, we continue to advise caution because the zone between 16,000 and 17,000 is a potent minefield that can give investors a nasty surprise.

The up-move from 13,219 could be the fifth and final wave of the move from March lows in which case it can terminate at 16,104 or at 17,373. The other count that needs to be kept in purview is that of a terminal corrective that makes the index vacillate in a range between 13,000 and 16,000 before the entire up-move from March low ends. It also needs to be borne in mind that the Sensex is drawing close to the 16,180 mark that is the 61.8 per cent retracement of the down-move from 21,206 peak.

We remain ambivalent regarding the short-term movement in the Sensex. We had outlined three short-term trajectories for the index in our last column. The quandary has not been resolved yet. Sensex has moved close to 16,000.

A reversal from here can cause a decline to 14,700 or 14,244. But a break-out above 16,000 can cause the index to move on to 16,180, 16,312 and 16,459. Supports for the week are 15,500 and 15,200. Short-term investors can buy in declines as long as the first support holds.

Nifty (4,732.3)

Investors celebrated as the Nifty recorded a weekly close above the 4,700 mark. But as we have been reiterating, the index is in a range between 4,400 and 4,700 in the short-term. A reversal from these levels can cause a decline to 4,400 again. However, the short-term trend will turn negative only on a close below 4,230.

Interestingly, 61.8 per cent retracement of the down-move from 6,357 in the Nifty is at 4,898 that is a little farther than 16,000 at this point. That would be the medium-term target on a break-out. Short-term pattern is however positive and indicates a surge higher to 4,838 or 4,954.

Short-term supports are at 4,600 and 4,500. Traders can buy at declines as long as the index holds above the first support.

Global Cues

Global benchmark indices paused at higher levels last week while few recorded marginal gains. CBOE Volatility Index held steady between 22.5 and 26 indicating that investor sentiment continues to be cheerful and optimistic.

European indices led by the FTSE put up a strong show. DJ Euro STOXX has just neared its key medium-term resistance level at 2845. Rally beyond can result in another 10 per cent gain in this index.

Asian indices did not make any headway though some closed with marginal gains. What is worrisome is the renewed weakness in Shanghai Composite that failed to get past the resistance at 3,000 indicated last week. However a close below 2,800 should be seen before panic buttons are pressed.

The Dow managed to hold resolutely above 9,400 though the movement was extremely narrow. It closed the week with meagre 38 points gain. Momentum is sagging and a pull-back appears to be in the offing in near future. But if the index moves higher, next target would be 10,300.

Similar movement was witnessed in the S&P 500 too that moved sideways above the resistance at 1020 and closed with a doji in the weekly chart denoting indecision.

CRB Index that tracks commodity prices is moving in a band between 400 and 430 since the beginning of August. There can be one more spurt in this index to the next resistance level of 445.

— Lokeshwarri S.K.

Harley Davidson to zip on Indian roads by 2010

NEW DELHI: The world’s oldest and the most popular motorcycle brand Harley Davidson will hit the Indian roads finally after dilly-dallying for Harley Davidson 105 anniversary | Harley Davidson to drive into India over two years. The iconic American brand will be available from early 2010 and although it is yet to announce price tags, the vehicles are expected to be priced in the band of Rs 7-15 lakh. ( Watch ) The US-based Harley Davidson was granted permission to start operations in 2007, but the company had been lobbying with the government to cut down on the 110% import duties on bikes, which effectively doubled the cost of these motorcycles for Indian consumers. While the duties remain unchanged, Harley has gone ahead to tap the Indian market on its own. Harley Davidson Motor Company president and COO Matt Levatich told ET: “The high tax burden is a disadvantage to our products, but we are looking at the vast opportunity in the world’s second-largest two wheeler market. Gradually, we expect the niche bike segment to grow with infrastructure improvement and a buoyant economy.” India’s seven-million strong motorcycle market does not have a big share of super bikes or high-powered bikes that Harley Davidson makes, but the US firm is banking on the growing popularity of such products. Bike makers who are present in the segment include Suzuki with its Hayabusa and Intruder models, besides other companies such as Yamaha, Ducati and Honda. These firms together sell over 400 units a year in the domestic market. Harley has not set any targets but is looking to sell in excess of 100 bikes next year. It will bring 15-20 bikes to India from its product line-up of over 200 models and start with the flagship cruiser Fatboy and Night Rod Special models.

Nifty at 2009 highs. What next?

Anyone who's followed the stock markets closely in the current calendar year wouldn't help but quote the famous Virginia Slims tagline, "You've come a long way baby". Indeed, with the global economy in disarray and credit markets frozen, anyone who would have predicted at the start of the year that the Nifty would notch up gains of close to 60% in a span of few months wouldn't have gotten way without a few chortles. But the markets have this nasty tendency of making bold predictions come true and certainly that was the case this time around. A flood of liquidity and the realization that India may not be as badly impacted from the financial crisis plaguing the west led to investors making a beeline for Indian stocks and in the process, leading to an impressive 60% gain on the benchmark Nifty. Whats more, with yesterday's gains, the Nifty has now reached its highest level for the year.

Obviously, the gains of this magnitude cannot persist indefinitely and there are already talks doing the rounds that the markets may have outlived their bullish phase and some near term pain could be in the offing. We are of the belief that timing the markets is a fool's game and hence, an investor wanting to invest at current levels should do so without fearing a near term correction. For given the long-term India story, he may not come out a loser from a 3-5 year perspective. Of course, he should not get disheartened by intermittent dips and instead, look at them as an opportunity to invest more.

Source: CMIE Prowess
Returns between 31st Dec 2008 and 28th Aug 2009

Brokers offer 'cash rewards' for IPO applications

A few days ago, we had highlighted how brokers in the real estate industry were colluding with developers and buying huge number of flats from them in a bid to create a perception of scarcity and hence, keep the prices from falling further. Well, if a leading daily is to be believed, a similar collusion seems to be happening in the stock markets...in the IPO market to be precise.

Here, brokers and sub-brokers are seen providing cash incentives to retail investors in a bid to use their demat accounts and subscribe to an issue on their behalf and also pay fully for the same!

Apparently, the brokers and sub-brokers seem to be resorting to such means at the behest of investment banks who are finding it hard to get retail investors to subscribe to IPO issues as they have not yet come back to equities in a big way. Hence, the request for their demat accounts to be rented out. Interestingly, this practice has been prevalent for many years now despite SEBI rules that prohibit brokers from paying incentives to investors.

While both investment banks as well as brokers are at fault here, investors who get lured by such schemes aren't covering themselves with glory either as they are sending out a wrong message to their fellow investors - that of the issue getting subscribed because of good quality.

It's time someone does something about it because if allowed to go unchecked, it may give distribution of wealth a whole new meaning. You as an investor also share the responsibility of curing this menace...by not accepting a 'cash reward' from your broker to rent out your demat account.

Have you ever accepted a 'bribe' from your broker to invest in a particular IPO?

Jindal Cotex will open its IPO from 27th August…

Textile company Jindal Cotex which is coming with over 1.12 crore equity shares will open its initial public offer from 27^th August.

The company is coming with 1.24 crore shares for public subscription with price band for the issue at Rs 70-75.

The Ludhiana-based company, at the upper price band expects to garner Rs 93.40 crore, while at the lower price band it hopes to raise Rs 87.17 crore.

Up to 50 per cent of the issue would be allocated to Qualified Institutional Buyers (QIBs).

The fund for the forthcoming issue would be used mainly to enter technical textile space through investment in wholly-owned subsidiaries — Jindal Medicot and Jindal speciality Textiles.

Jindal Cotex is engaged in manufacturing acrylic and polyester yarns, including polyester viscose, polyester cotton, and combed and carded yarns, used in the making of apparels, suiting and knitted fabrics.

Sahara group, is planning to raise up to Rs 5,000 crore IPO by year-end

Sahara Prime City, part of Subrata Roy-led Sahara group, is planning to raise up to Rs 5,000 crore by year-end through an initial public offer, for which it will approach market regulator SEBI later this month.

The company is believed to have engaged a number of investment bankers, including Kotak, Enam and JM Financial, for the public issue, where it is looking to raise Rs 4,000- 5,000 crore, .

The draft prospectus for the IPO is being readied and the same could be filed with the Securities and Exchange Board of India by the end of this month, sources added. No comments could be obtained from the Sahara group spokesperson, but sources said the group would wish to launch the IPO by the end of this year, subject to SEBI approval.

Sahara Prime City will be the third Sahara group entity to enter the capital market after Sahara Housingfina Corp Ltd and Sahara One Media & Entertainment Ltd and is present in over 200 cities with its housing and com mercial projects. However, the group’s ambitious Ambey Valley I project is not part of the company.

JSW Energy is fourth power company IPO to join bandwagon…

The action in the primary markets is heating up and the latest to join the bandwagon is JSW Energy. The company plans to raise up to Rs 3,000 crore through the IPO, out of which Rs 2,000 crore will be invested in ongoing projects, aggregating to 2800 mw over the next four years. Including its projects is the transmission sector too and that’s not all. They are also in talks with a European distribution major for a joint venture in India

JSW Energy, the power arm of Sajjan Jindal controlled-JSW Group, is the fourth power company to join the IPO bandwagon, but with Adani Power’s lacklustre debut on the capital, there is still a question mark as to whether the market still has an appetite for power IPOs.

JSW Energy had planned to hit the capital market last year to fund its massive power generation plans, but due to uncertain market conditions had to keep the plans on hold.

Now, with several power IPOs accessing the primary market, the company’s management is confident that the time is ripe and with a credible backing of concrete power plans, they hope investors will lap it up as a hot cake.

To fund all its on-going projects, which include thermal and hydro power plants, foray into transmission sector, diversification into distribution sector and supercritical equipment manufacturing, the company plans to invest Rs 15,000 crore over the next five years, out of which the debt portion will be Rs 9,000 crore.

NHPC IPO listing by the first week of September

Equity share of the public sector utility major, NHPC, is likely to be listed by the first week of September.

The listing of hydro-power producer IPO would get listed in within two weeks.

NHPC issue manager agency, Enam Security, has said that the company is expecting a stellar listing of IPO which was subscribed more than 23 times after its opening on August 12.

Investors can be able to view the NHPC IPO listing by the first week of September.

Ajanta Group IPO may be in range of R.300-Rs.600 crore…

Ajanta Group will tap the capital market with a public issue to fund its cement plant project. “The size of the IPO may be in the rage of Rs. 300-Rs. 600 crores. The rest will be raised through a mix of internal accruals and debt.

The company plans to set up a cement manufacturing plant with a capacity of around 15 million tonnes per annum in Kutch. The Rs. 700 crore Ajanta Group intends to infuse Rs. 1,000 crore for the proposed project in a phased manner. Overall cost of this plant is about Rs.2,000 crores. The plant is expected to start operations in 2010.

Ajanta also has applied for mining lime. Initially, the plant will have a capacity of three million tonnes per annum, which will subsequently be scaled up to 15 million tonnes per annum. The company has already started hunting for land in Kutch for the cement project.

When contacted, Ajanta Group officials confirmed that the company is considering IPO but not in near future. “In fact, we had also filed Draft Red Herring Prospectus (DRHP) some time ago. Public issue is there on our agenda but we want to concentrate on our power products business at present.

“We will come out with IPO when we require funds, especially for our cement plant projects. Currently the group need not go public. Our priority is to augment our e-bike, CFL and other power products business. When asked about its plans to launch a public issue in future.

Should you invest in Monthly Income Plans?

It's common for diversified equity funds to emerge as a top-of-the-mind investment when stock markets are booming. In such a scenario, hybrid funds like Balanced Funds and Monthly Income Plans (MIPs) are relegated to the sidelines. Investors can miss out on a very critical component in their portfolio by shutting out hybrid funds completely. Hybrid funds (powered by their flexibility to invest across asset classes) can add immense value to the investor's portfolio (especially during the down turn). While the role of balanced funds in the investor's portfolio has been well-documented, it is time for investors to sit up and recognise the value MIPs can add to their portfolio.

MIPs invest predominantly in debt instruments with a small portion of assets allocated to equities. The equity component provides MIPs with just the edge it needs to outperform conventional debt funds. The equity component usually varies between 5%-30% of assets. So under what circumstances would MIPs add value to an investor's portfolio? The graph below answers this question.

MIPs vs. Sensex (MIP returns considered are the category average)
As is evident from the graph, during the crash in the stock markets last year, MIPs have fallen less as compared to the BSE Sensex indices. And this is where it adds value to an investor's portfolio. When the stock markets rally, they will lag conventional equity funds, but when the markets move down, they will limit the fall in an investor's portfolio.

Hence MIPs become important from an asset allocation perspective. Although, you can reach the desired asset allocation by allocating the assets in equity and debt; MIPs offer a convenient way of achieving the same.

Inflation rises but remains in negative

Inflation rose to minus 0.95 per cent for the week ended August 15 from minus 1.53 per cent in the previous week on the back of rising food prices.
The wholesale price index (WPI) based inflation remained negative for the 11th consecutive week since June 6 mainly on high base. It was 12.82 per cent for the corresponding week last year.
Prices of inland fish shot up by 25 per cent over the previous week, eggs became dearer by 10 per cent, masur dal was costly by 8 per cent, milk price went up by 5 per cent, and fruits and vegetables became expensive by 3 per cent.
While the index of fuel, power, light and lubricants remained unchanged over the week ending August 15, the index of manufactured products rose by 0.1 per cent led by manufactured food products that rose by 0.7 per cent.

S

Spectacular gains for Aban on new rig order

Shares of Aban Offshore shot up significantly and rallied over 25% to end at Rs1536.

Shares of Aban Offshore shot up significantly and rallied over 25% to end at Rs1536 after the company announced that a contract has been signed for the deployment of 3 newbuild jack-up rigs (from the Deep Driller series) in the Middle East for a period of 3 years each. The estimated revenues from the Contract is approx. Rs29.25bn. The deployment is likely to commence in the third quarter of 2009.

Further, a Contract has been signed for the deployment of a newbuild jack-up rig (from the Deep Driller series) in Latin America for a period of 25.5 months. The estimated revenues from the Contract is approx. Rs4.46bn. The deployment is likely to commence in the third quarter of 2009.

The stock opened at Rs1264 and made an intra-day high of Rs1565 and a low of Rs1264. Total traded volumes stood at 3.8mn shares

Toyota Fortuner: Now in India

Back in April this year, we had reported that Toyota would be launching their much awaited sports utility vehicle
in India. No, we are not talking about the Land Cruiser! TKM (or Toyota Kirloskar Motor Private Limited) sends word that they have launched the Fortuner SUV in India. It was launched at an event in New Delhi.

Kaoru Hosokawa is the chief engineer at the Toyota Motor Company. According to Hosokawa, “Toyota’s Fortuner is fully loaded with advanced features and has been extensively tested to suit Indian conditions. The powerful Common Rail type 3.0 L D-4D Diesel engine with Intercooler Turbocharger delivers superior power and performance.”

Akira Okabe is the senior managing director of the Toyota Motor Company. He says, “We are delighted to introduce Toyota Fortuner in the Indian market. Globally, Fortuner has already sold over 2,50,000 units in more than 60 countries since its launch in 2005. The launch of Fortuner today is an expression of Toyota’s commitment to provide best in class quality and technology to our customers in India.”

The Fortuner is expected to feature sporty features along with luxurious interiors to offer an exciting driving experience. It has the TOP (Toyota Outstanding Platform) along with the full-time 4WD that would handle all kinds of terrain. Powered by the 3.0 L D-4D Diesel engine with Intercooler Turbocharger, it will give a maximum torque of 343 Nm and171PS, which apparently is the highest power offered in its range.

As for the safety features, expect SRS airbags for driver and front passenger as well as ABS & Disc Brakes and even passive safety with Impact Absorbing body. The SUV comes with 5 speed manual transmission and has features such as Optitron meter, Multi-information display, climate control air-conditioning, steering control switches and space-up type third row seats.

Indian buyers will be delighted to hear that this carhas a long wheelbase and a high ground clearance. Coming to the exterior features of this sports utility vehicle, it has a bonnet scoop and a rear spoiler. Besides that, the car will feature side steps along with attractive roof rails. Toyota claims that the interiors are not only spacious but also comfortable. The car has leather interiors.

Sandeep Singh is the DMD for marketing at Toyota Kirloskar Motors. He said, “The SUV market in India has witnessed extensive growth due to launches in Mid/Premium SUV segment. We expect that the launch of the Fortuner will expand the mid-SUV market in India. The Fortuner will be very competitively priced at Rs 18.45 lakhs ex-showroom New Delhi. We will also implement a focused marketing campaign (including TV, print, magazines, hoardings, direct marketing, internet marketing and SMS) targeted at enhancing the awareness of advanced technology features amongst our Indian customers.”

Hiroshi Nakagawa is the managing director at Toyota Kirloskar Motors. He explains, “We are very proud to finally bring Fortuner to India. The sleek yet rugged Fortuner delivers superior performance and excellent luxury for Indian customers. We would also like to thank our customers for the extremely encouraging response to the initial announcement of this launch.”

As mentioned above, the price of Toyota Fortuner in India is Rs 18.45 lakhs (ex-showroom, Delhi). The sports utility vehicle will come in colors such as Black Mica, Super White, Light Blue Metallic, Grey Mica Metallic and Silver Mica Metallic. It will be assembled at their facility in Bidadi.