Tata Steel loses shine on weak numbers

Tata Steel plunges after posting weak September quarter numbers. The stock is trading at Rs 523 on the BSE, weaker by Rs 20 or 3.7%, on the BSE. It had opened at Rs 530 and has touched a high of Rs 535 and a low of Rs 521 thus far.

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The steel major posted a consolidated net loss of Rs 2,719.8 crore for the September quarter, compared with a net profit of Rs 4,703.6 crore in the corresponding quarter last year.

Consolidated net sales during the period fell to Rs 25,269.8 crore from the previous year’s Rs 44,050 crore, down 42.6 per cent.

Business restructuring also took a toll. During the quarter, Tata Steel had to shell out Rs 911 crore as restructuring costs. Poor performance in Europe added to the company's woes.

Survey of BSE trading members on extended timings

BSE Brokers Forum conducted a survey on the extended trading hours to seek views of the Trading Members of the BSE.
418 Trading Members responded to the survey. The key findings showed that more than 79% forming almost four fifths of the respondents felt that the current timings should not be changed. Of the balance 21%, 7% felt that the markets should be extended in the morning session only, 5% felt that the market should be extended in the evening session only and 8% felt that the markets should be extended in both the morning as well as the evening sessions.
The survey indicates that the Trading Members are not welcoming the change in the trading hours and see no benefit to the Indian Capital Markets in terms of getting volumes of the Asian Markets or getting a trend of the US Markets
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Reliance's acquisition move a right step: Cyrus Daruwala

he market is abuzz with Reliance's much awaited proposed acquisition of LyondellBasell. In an interview with ET Now, Cyrus Daruwala, MD,

Financial Insights gives his thumbs up to Reliance bid and says that telecom sector industry will be biggest recipient of foreign direct investments outside infrastructure projects.

How do you read into this move of Reliance Industries going ahead and making this acquisition (of LyondellBasell), what's your take on the stock?

Most of the underperforming stocks that we have had there were ready for the picking. Inevitably what is happening is that most of the stocks are showing a huge amount of fluctuation and or the industries that you see are slightly speculative. But most of the foreign direct investments as well as the joint ventures that you see now are long term bets as they are fundamentally sound and are in the areas of growth.

How do you see things progressing from here? Is it the right time for the Indian companies such as Reliance Industries to make a mark on the global arena by taking up assets which might find it difficult to achieve valuations given that there are a lot of bankrupt companies out there?

It is correct. now two ways to skin that cat when Tata goes ahead and acquires something like a ailing asset it's not just for a global reach or because they are under evaluated. There is also a long term business synergy between the Tata Motors Groups as well as Jaguar as well as Range Rover.

Likewise, the other industries especially within the petrochemical industries - whether they are in cements, in refineries, in steel - are on the radar of the Indian companies and it is part of a long term synergitical move. They themselves benefit from some of the best practices, a good reach within the global market from an experts' point of view and in return they are also expanding their footprint by acquiring cheaper assets.

In that case would you approach Reliance Industries with a buy call given the potential of this investment and this acquisition?

I certainly would. Reliance has made a couple of these astute investments in the past. The slight volatility of their stock would not deter me as an investor that is backing Reliance into this deal. So yes it would be a buy.

What kind of an earnings upside do you see given that LyondellBasell is a distress asset? It's a bankrupt company and they are still working out their debt. So what kind of an earnings of potential do you see on the bottom line if these two companies were to come together?

I would say they would expedentially and instantly look at least about a five per cent jump in revenue, which is a much needed indicator. New revenues as well as the consolidated revenue marks are looking at about five per cent year on year growth. At least in the first instance that we have conservatively done the assessments going forth, I think the target that they would have would be a fairly ambitious between 7.5 to 12 per cent growth year on year to recoup the investments that they are going in with.

ICICI Bank Mops up USD 750 Mn Abroad

A month after country's largest lender, State Bank of India mopped up USD 750-million abroad, its nearest competitor ICICI Bank today said it has raised USD 750-million through a five-year bond issue at its Bahrain branch.

The issue had an order book of over USD 3-billion and was participated by over 250 investors, an ICICI Bank press release said here. The notes were sold under the Rule 144A/Reg S format.

The bonds, which have a maturity of 5.33 year, carry a coupon rate of 5.5 per cent, which translates to 292.6 basis points spread over equivalent London interbank offered rate, the bank said.

Despite a fall in the total income, ICICI Bank had reported a 2.5 per cent rise in its net profits for the quarter ended September 30 at Rs 1,040.13 crore, against Rs 1,014.21 crore in the same period last year.

The issue came shortly after State Bank of India raised USD 750-million through the issue of five year bonds through its London branch.

State Bank raised the amount through the issue of fixed rate senior notes having a maturity of 5 years and a coupon rate of 4.5 per cent under its Medium Term Notes programme.

The lender has a headroom to raise Rs 28,000-crore from bond issuance to meet regulatory capital requirement to fund its business expansion plans in the current fiscal.

Nifty climbs past 5000 as Europe opens firm

MUMBAI: Equities recovered intraday losses following positive opening of the European markets. However, the second rung stocks lagged behind in the
recovery.

At 2:05 pm, National Stock Exchange’s Nifty was at 5037.20, up 48.20 points or 0.97 per cent. The broader index hit a high of 5037.60 and low of 4932.80.

Bombay Stock Exchange’s Sensex was at 16895.36, up 109.71 points or 0.65 per cent. The index touched a high of 16923.80 and low of 16635.75.

BSE Midcap Index was up 0.34 per cent and BSE Smallcap Index moved 0.02 per cent up.

Amongst the sectoral indices, BSE Oil&gas Index was up 1.13 per cent, BSE IT Index moved 0.80 per cent higher and BSE Healthcare Index gained 0.59 per cent.

ACC (2.87%), SAIL (2.59%), Hindalco (2.57%), HDFC (2.31%) and DLF (2.16%) were amongst the Nifty gainers.

Reliance Capital (-2.62%), Suzlon Energy (-1.86%), Reliance Power (-1.79%), Bharti Airtel (-1.60%) and Reliance Infrastructure (-1.17%) led the resistance.

Market breadth was positive on the BSE with 1308 advances and 1293 declines.

European markets were in the positive terrain led by gains in commodities. FTSE 100 was up 0.50 per cent, DAX moved 0.60 per cent higher and CAC 40 gained 0.56 per cent.

Nifty falls below 5000; Unitech, JP Associates down

MUMBAI: Equities slipped sharply as selling pressure intensified across the board. Tips to pick potential stocks
Tips for range-bound markets
Risk while investing in midcaps

Negative opening of the European markets also hurt Tips to pick potential stocks
Tips for range-bound markets
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sentiments.

National Stock Exchange’s Nifty was at intraday low of 4969.70, down 85 points or 1.65 per cent. The broader index hit high of 5053.45 earlier in the day.

Bombay Stock Exchange’s Sensex was at 16,803.43, down 195.35 points or 1.15 per cent. The index touched an intra-day low of 16787.75 and high of 17004.98.

BSE Midcap Index was down 1.43 per cent and BSE Smallcap Index slipped 0.72 per cent.

Amongst the sectoral indices, BSE Realty Index was fell 3.64 per cent, BSE IT Index was down 1.63 per cent and BSE Bankex declined 1.63 per cent.

Unitech (-5.10%), Jaiprakash Associates (-4.86%), HCL Tech (-4.84%), Reliance Infrastructure (-4.13%) and DLF (-4.06%) were amongst the top Nifty losers.

Suzlon Energy (2.59%), Power Grid (0.05%) and ACC (0.02%) were the only frontline stocks in the positive terrain.

Market breadth was negative on the BSE with 1537 losers and 1114 gainers.

European markets were in the negative terrain. FTSE 100 was down 0.17 per cent, CAC 40 fell 0.32 per cent and DAX declined 0.09 per cent.

Indo-Pak cyber war claims 40-50 Indian sites daily

India and Pakistan, not the friendliest of neighbours, have fought three major wars and are now engaged in another in cyberspace. As per latest reports, hackers from across the border are working overtime to launch cyber attacks on Indian websites in their cross hair.

Though the Indian side is known for its prowess in IT and related fields, it is becoming apparent that a dearth of firepower has left the Indian cyberspace particularly vulnerable to Pakistani attacks.

Reports indicate that around 40-50 sites are being hacked by Pakistani hackers on a daily basis whereas around 10 Pakistani sites are being hit by their Indian counterparts. According to analysts, one of the reasons India has been forced on the backfoot in this cyberwar is the reactive attitude it has chosen to adopt instead of being a proactive player.

There are other factors as well and studies suggest how the laidback attitude of both corporate sector and the government on cyber security has impeded a positive approach.

Cyber security expert Ankit Fadia was quoted inthe media as saying that the need to counter such attacks usually sets in after an attack happens. He adds that though ethical hacking is the answer to such attacks and does come at a cost, it is not prohibitively expensive.

Ethical hackers are also known by such names as white hackers, white knights or sneakers. They are computer security experts who specialise in penetration testing and related testing methodologies to check vulnerability of a company's information systems.

Centralized Purchasing

Centralized purchasing means buying and managing purchases from one location for all locations within an organization. This can also be run by a central location buying in to a distribution warehouse that feeds smaller warehouses. This is called a hub and spoke system.

Decentralized is the opposite where each plant or office buys what it needs. This operation allows any employee to buy what he needs. You can also run this operation with a designated buyer assigned to the site to do the buying.

The Merits And Demerits of Centralized Purchasing.)
When the purchasing function is entrusted to a single person, it is said to be centralized purchasing. It means all purchases are made by the Purchasing Officer. Generally large and medium size organisations accept centralized purchasing.
Merits of Centralized Purchasing:
• Centralized purchasing avoids duplication, so buying cost will be less.
• Departments other than purchasing are relieved from the burden of purchasing. As a result of which employees concentrate their mind in own work.
• Transportation cost and carrying cost become economical, because all purchases are made in bulk quantities.
• More trade discount can be availed due to bulk purchase.
• All the records with regard to purchase are kept in one place under the supervision of the purchase officer. It results economy in record management.
Demerits of Centralized Purchasing:
• Delay is caused in centralized purchasing as different departments of different places will send their requirements to the purchasing department. Thepurchasing department will purchase the necessary items and send to other departments.
• In this case centralized purchasing branches of different places can not take advantages of localized purchasing.
• There are chances of misunderstanding between purchase department and other departments because other departments may not get their requirement according to their own will.
• Centralized purchasing is not suitable in case of perishable commodities.
• It results more cost of transportation and botheration, as it is purchased in one place and send to the distance places.

SETTLEMENT MACHINARY IN INDIA

CONCILIATION

“ It is an attempt to reconcile the views of disputants and bring them to an agreement .
Conciliation is generally understood as the friendly intervention of a neutral person in a dispute to help the parties to settle their differences peacefully.”
Conciliation may be described as the practice by which the services of a neutral third party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement or agreed solution.

Conciliation officer &conciliation board

In India the government may appoint a conciliation officer for a specific area or even for a specific industry, He may be either permanently or for a limited period.(sec.4)

under sec.5 of the INDUSTRIAL DISPUTE ACT 1947,the government may also ,as occasion arises, appoint a board of conciliation, consisting of a chairman and 2-4 other others members, to promote the settlement of disputes.

ARBITRATION
It is a process in which a dispute is submitted to an impartial outsider which makes a decision which is usually binding on both parties
arbitration is to be distinguished from the conciliation not only by the fact that its decision is binding on the both parties but also by its different approach and spirit.
The main objective of arbitration is adjudication and hence, there is no place for the compromise. though the parties are liberty to do so.
ADJUDICATION
The ultimate legal remedy for the settlement of an unresolved industrial dispute is its reference to adjudication by the government .
adjudication involves intervention in the dispute by a third party appointed by the government for the purpose of deciding the nature of final settlement.
Three-tier system of adjudication
The industrial dispute act ,1947 provides for a three tier system of adjudication:
Labour court
Industrial tribunals and
National tribunals

L&T sells 27 million shares of Mahindra Satyam

MUMBAI: Mahindra Satyam saw 27.2 million shares, or about 2.31 percent of its equity change hands, at Rs 114.90 a share on the BSE, stock

Satyam's rise, fall and resurrection
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The crux of the scam in Satyam
exchange data showed on Friday. L&T has appointed Nomura for the share sale.

An official at leading engineering and construction firm Larsen & Toubro, who did not want to be named, said the company was the seller.

L&T had bought 8.1 crore shares in the Hyderabad-based software exporter last year at an average price of Rs 79 a share and made an abortive bid to acquire the company when it was put on the block.

Mahindra Satyam was formerly known as Satyam Computer Services, which was hit by India's biggest corporate fraud at the start of the year.

In April, L&T lost the race for control of the outsourcer to Tech Mahindra Ltd, a unit of India's Mahindra & Mahindra Ltd.

Google launching free videoconferencing

Google is all set to strengthen its voice and video chat capabilities. The voice and video chat feature in the company's the email serv
ice, Gmail, is currently limited to one-to-one communication, however, Google wants to broaden this capability to more than two participants.

The Google Apps product manager Rishi Chandra told SFGate that Google is set to roll out its first update in a long line of updates that will include multi-user video conferencing.

Chandra told the web site, “This (current Gmail capability) is the first step in a much broader set of features we hope to roll out over the next six to 12 months around video (and voice) chat capabilities.” He added, "It’s a great opportunity for us to push that space along."

Google acquired Web and video conferencing software in 2007 from Swedish company Marratech.

Smart gold deal by RBI

(D. H. Pai Panandiker is President of RPG Foundation. The views expressed in this column are his own)

By D.H.Pai Panandiker

The Reserve Bank of India (RBI) grabbed 200 tonnes of gold offered for sale by the IMF at the going market price of $1045 an ounce. That gold will be part of the foreign exchange reserves of RBI.

The IMF had to sell gold because it needed money in order to reorganize its finances and to step up concessional loans to the poorest countries that had been hit by world recession. Further, the IMF had to ensure that its operations do not disrupt the market for gold and therefore preferred sale to central banks that generally buy gold for keeps.

Central Banks don’t speculate. Obviously, the gold bought by the RBI is for changing its asset portfolio. The $6.7 billion spent on gold was from investment in securities issued by foreign governments that form the bulk of the foreign exchanges reserves. These securities earn very low rate of interest, if at all. The interest rate in the US and Japan is close zero.

Although the composition of RBI’s foreign exchange reserves is not an open information, it appears that about 50-60 per cent of the reserves are in US dollar securities. The potential risk is that the dollar may depreciate further. Already the dollar had been down 7 per cent against the euro and 11 per cent against the yen in the last 6 months.

It is feared that, with the pumping in of cash by the Fed to avert the impending financial catastrophe last year, the dollar may plunge yet more in future.

The RBI’s gold reserves have been low compared to the gold component of reserves of many other central banks or even its hold reserves in the past. When the IMF took the decision to sell gold it was therefore expected that India will be a potential customer. Even with the additional 200 tonnes in the vault, the gold component of RBI foreign exchange reserves would be only 6 per cent.

The only yield from gold is its appreciation. In recent years, gold has been a favoured asset even among individual investors because of greater uncertainly in the real estate and stock markets. The international price of gold has been consistently rising since 2003. From $400 an ounce in 2004 it jumped to $700 in September 2007 and to $1000 in September 2009

Wipro buys Yardley’s India, Asia biz for $45.5 mn

BANGALORE: Wipro on Thursday brought 229-year-old British brand Yardley’s business in select markets including India from UK’s Lornamead Group to
stretch its personal care portfolio to the premium range.

Wipro Consumer Care and Lighting, the consumer products arm of the software firm, has snapped up Yardley business across Asia, the Middle East, Australasia as well as north and west Africa for $45.5 million (Rs 215 crore), continuing its takeover spree that included Unza. ET had reported on October 13 that the two parties were close to sealing a deal. Yardley will be merged into Wipro Consumer Care’s fold by mid-December.

“We picked up a lot of debt from Unza’s balance sheet when we acquired it. But Yardley is a profitable brand and will add to our operating margins which are at 10-13%,” Vineet Agrawal, president of Wipro Consumer Care, told reporters here.

Lornamead, controlled by British billionaire Mike Jatania, acquired the Yardley brand in September 2005 for £60 million. It will retain the Yardley business in Europe and America. Funded through internal accruals, this deal will enable Wipro straddle different price points and give it greater bargaining power for key accounts in certain markets.

“Yardley is a great fit for Wipro if it wants to go beyond Santoor to include more premium brands,” said Anand Ramanathan, an FMCG analyst at KPMG. “Synergies will improve if Wipro took a bottoms-up approach of gearing its sales force and partners towards this change to premium range,” he added.

Yardley’s Lavender talcum-to-soap range is priced around 50% higher than the costliest brand in Wipro’s existing portfolio, Unza’s Enchanteur range. The move will also strategically boost Wipro Consumer Care’s foothold in high-growth markets such as the Middle East where its overall revenue is projected to double to $30-35 million. The Middle East contributes 70% to the acquisitions revenues, with 20% coming from India and the remainder from other Asian markets.

Wipro is also planning to increase the product range under the Yardley brand. “We see certain gaps in Yardley’s product range such as body washes and deodorant roll-ons, which we feel could be added to increase relevance with the youth,” said Mr Agrawal.
“We are also evaluating the manufacture of Yardley products such as soaps through our factories,” he added. It plans to leverage its distribution reach across 50,000 outlets in metros and tier-I cities to grow the brand in India and sees cost-efficiencies arising out of merging common suppliers. Wipro Consumer Care has made a series of acquisitions in the past six years.

It arrived on the acquisition map in 2003 by picking up Hindustan Unilever’s glucose drink brand Glucovita. It bought Kerala-based ayurvedic brand Chandrika a year later and Delhi-based North-west Switchgear’s switches business in 2006.

The division shot into limelight in 2007 with its $246-million purchase of Singapore-based personal care firm Unza Holdings, which has a significant presence across South-east Asian markets. The Yardley deal will see Wipro Consumer Care’s contribution to the parent’s top line growing by 50 basis points. In the second quarter, the consumer-care division notched up 8% of Wipro’s overall revenues. Wipro’s stock closed at Rs 598.30 on the BSE, a rise of 0.42% on Thursday.

Second round: Sparring goes on in gas case

The second round of hearing on the Ambani brothers’ gas dispute began in the Supreme Court on Thursday with Mukesh Ambani led Reliance Industries Ltd (RIL) repeating most of its arguments before a new bench constituted after Justice R.V. Raveendran withdrew citing conflict of interest.

But, the proceedings were in sharp contrast to the first six days when Justice Raveendran as a part of the bench posed several probing questions to RIL regarding pricing of gas and the family agreement between the brothers. There were hardly any posers from the new bench that now includes Justice B. Sudershan Reddy in place of Justice Raveendran.

While the bench headed by the Chief Justice heard RIL’s counsel Harish Salve’s arguments, Anil Ambani led Reliance Natural Resources Ltd (RNRL) once again accused the Union government of colluding with RIL.

RNRL counsel Ram Jethmalani hurled the allegation when Salve sought to point out his client’s discomfiture due to the government’s intervention to regulate gas supply through the Gas Utilisation Policy (GUP). Salve told the court RIL was fighting with the government that had promised not to regulate the gas supply business after its discovery. “But, they later came up with the GUP which we are fighting out,” Salve told the court.

At this juncture, Jethmalani stood up, contending Salve was making argument contradictory to his earlier submissions. “He had argued exactly to the contrary. He (RIL) is colluding with the government,” Jethmalani said. The senior counsel urged to court to give him 30 minutes every day to make his submissions as well till the RIL counsel finishes his. “It would save
a lot of time,” he added.

Pirated Microsoft Windows 7 DVDs generate $100,000 in India

Pirated Microsoft Windows 7 DVDs generate $100,000 in India
IANS 4 November 2009, 08:33am IST
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LUCKNOW: About 50,000 pirated DVDs of Microsoft Windows 7 are estimated to have been sold here since the official launch on Oct 22, generating
unaccounted business of around Rs 50 lakh (nearly $100,000).

The reason for the allure of the pirated versions: These cost Rs.40-Rs.250 in Naza Market in Hazratganj here, drawing buyers from not only the rest of Uttar Pradesh and neighbouring states like Madhya Pradesh, Bihar and Uttarakhand but also Nepal and Bangladesh.

"This is the biggest market in the region," said a shopkeeper in Hazratganj, claiming at least 50,000 DVDs of the pirated Windows 7 have been sold since hitting the local markets within 24 hours of the official launch, fetching sellers about Rs.50 lakh so far.

The legal version of the new operating system launched by Microsoft Corp costs between $150-$300 (Rs.7,500-Rs.15,000) in the international markets. The company, however, tagged its prices 20 percent below international rates in India, where it is available in the Rs.6,000-Rs.11,000 range through official channels.

Despite the discounted company rates, buyers are opting for the pirated version.

"Why invest Rs.10,000 when it is available for Rs.250?" asked Pramod Yadav, a student pursuing a Master of Computer Applications (MCA) course.

Added Mohit Singh, who runs a computer hardware and software maintenance company: "We pay for only the DVD as we are regular customers. A DVD hardly costs Rs.20-40."

Most computer service providers or "regular customers" in Lucknow and elsewhere in India use pirated software, contended Nishant Kumar, a software engineer with HCL Technologies in Greater Noida.

According to him, what makes the pirated operating systems more attractive is that cheap pirated anti-virus software is also freely available.

"A lot of anti-virus software, for example Awast, is available on the Internet," Kumar said, adding that it was equally effective and has the same service life.

Those selling pirated Windows 7 deny doing anything illegal.

"There are over 200 shops in Naza Market. All have everything you want. We are not doing anything illegal as everything is available on the Internet," said a shopkeeper not willing to be named.

"We are only transferring and supplying to buyers who include students, professionals and even big business houses."

Those selling authentic software are unhappy.

"Be it software or encyclopaedia, everything is available in pirated form within 24 hours. We do not get the expected business," Amit Mishra of Newgen Technologies, the authorised distributor of Compaq, HP, Microsoft and Lenovo in Hazratganj, told IANS.

The police express helplessness in combating piracy. "We know what is going on for the past couple of decades. But we cannot act on our own. We need a formal complaint to act or else you (the media) will come down on us," police spokesperson A.K. Pathak told IANS.

Besides software, the Naza Market and the Naka Market in the Naka area are also famous for producing CDs and DVDs of newly released Bollywood movies within 24 hours.

"You name the movie and you will have the CD, DVD the next day," boasted Harnam Singh, a Naka shopowner

IMF sells 200 tonnes of gold to India central bank

WASHINGTON (Reuters) - The International Monetary Fund said on Monday it sold 200 tonnes of gold to the Reserve Bank of India for $6.8 billion, quietly executing half of a long-planned bullion sale that had threatened to slow gold's rally.

While the IMF's plan to sell some of its gold holdings had been flagged for a year before it was formally approved in September, the speed of the deal and the buyer were a surprise for traders, who had expected China -- not India -- to be the leading contender as Beijing diversifies its vast reserves.

The sale, which an IMF official said was concluded at an average price of about $1,045 an ounce over a two-week period in the latter half of October, will relieve the market of some of uncertainty over how and when the fund would execute its plan to sell 403.3 tonnes of gold, about one-eighth of its total stock.

"This transaction is an important step toward achieving the objectives of the IMF's limited gold sales program, which are to help put the fund's finances on a sound long-term footing and enable us to step up much-needed concessional lending to the poorest countries," the IMF's managing director, Dominique Strauss-Kahn, said in a statement.

While the threat of IMF and central bank sales did not stop gold prices from soaring to a record high $1,070.40 last month, aided by a falling U.S. dollar, traders said the IMF news could add to the market's upward momentum.

"The fact that they've sold the gold to India would suggest there's going to be fewer official sales by the IMF on the market. So that might be a positive theme for the gold price," said David Moore, commodities strategist at Commonwealth Bank of Australia.

Gold rose about 0.4 percent to $1,063 an ounce on Tuesday.

Although India is the world's biggest consumer of gold, primarily in the form of jewellery and investment among its billion-plus people, its central bank had given few indications of being a front-runner in the move to diversify into bullion.