Rangarajan quits as EAC Chief

NEW DELHI: Ahead of the release of India’s economic outlook projections by the Prime Minister’s Economic Advisory Council (EAC), its chairman C. Rangarajan on Friday stepped down from the post. He is to be nominated to the Rajya Sabha.
Dr. Rangarajan is to be succeeded by EAC member Suresh Tendulkar. He is expected to take charge next week.
When contacted, Dr. Rangarajan did not assign any reason and merely said: “I have resigned.”
“Rangarajan has submitted his resignation papers and orders have been issued to appoint Suresh Tendulkar to head the Council,” an EAC official said.
According to EAC sources, Dr. Rangarajan’s exit from the advisory council would have no impact on its report on the ‘Review of outlook of Indian Economy for 2008-09’, expected to be submitted next week. As projected by Dr. Rangarajan earlier this week, the EAC is expected to scale down its growth forecast of GDP (gross domestic product) from 8.5 per cent to 7.5-8.0 per cent for the current fiscal while anticipating the inflation rate to moderate to about 8-9 per cent by March 2009.
“There are certain factors, both domestic and external, which may add to the slowdown of the growth rate, but we still think that the growth rate could be 7.5 to eight per cent,” Dr. Rangarajan had told journalists on the sidelines of a function here.
One of the country’s highly respected economists, he had earlier advised the government on various ticklish such as special economic zones (SEZs), oil prices, futures trading, farm commodity prices and listed measures that were required to check overheating of the economy last year. These issues apart, he also helped in tackling critical policy issues such as inflation, GDP growth, exchange rate management and funding of infrastructure projects through foreign exchange reserves.

Yahoo- Google enter into ad-pact

SAN FRANCISCO (Reuters) - Google Inc and Yahoo Inc released on Friday excerpts of a pact covering their search advertising partnership that keeps secret financial terms and the extent of other ties between the two.
In a filing with the U.S. Securities and Exchange Commission, the companies take the unusual step of disclosing the contract governing the partnership, but leave out any financial terms, such as the revenue split on their deal.
Companies in the Internet industry typically jealously guard the terms of such contracts to protect their ability to negotiate pricing at variable terms with other customers.
Critics say the deal threatens competition for advertising that runs alongside Web searches. Congressional leaders have conducted hearings to investigate what impact the partnership could have on the Internet market. The agreement covers the United States and Canada, but not other international markets.
Rivals such as Microsoft Corp have protested that Google already controls 70 percent of the Web search ad market and that a Yahoo deal would give Google control over 90 percent of the market. Google and Yahoo executives have defended the pact, saying they will compete aggressively in other areas.
Seeking to shore up its advertising business while warding off pressure to merge from Microsoft, Yahoo struck the agreement in June with Google, the dominant supplier of Web search services in the United States and around the world.
Under the deal, due to take effect after a waiting period meant to help smooth regulatory approval, Google would supply Yahoo with advertising services to run alongside Yahoo's own Web search system. Yahoo runs the Web's second most popular search service.
Google and Yahoo have sought to portray the partnership as a non-exclusive arrangement in which Yahoo is effectively contracting with Google to sell ads alongside a portion of its search results. This in turn can allow Yahoo to focus on other aspects of its business where it is more strongly positioned.
But the contract is heavily redacted in an area that covers "other business opportunities" and is silent about how the sharing of user data between the partners could affect the privacy of Yahoo users.
While the contract reveals details of previously disclosed plans to make Yahoo Messenger and Google Talk, the companies' instant messaging (IM) systems, work together, it redacts four of the five other points in this "other business" section.
Yahoo has said it expects to generate an additional $250 million to $450 million in additional cash flow in the first 12 months after the agreement goes into effect.
Spokesmen for Google and Yahoo were not immediately available to comment on the contract.
The filing is at: http://tinyurl.com/goog-yhoo-contract/.

`Tear` II cities: No frills, no thrills, moan BPO staff

Bangalore , Monday , Jul 14 , 2008 : When 26-year-old Nirup was asked by his company to get ready for a stint in Hubli-Dharwad, he decided to hunt for a new job. "What can I do in Hubli after office hours or during weekends? If I remain in Bangalore, I can spend time visiting shopping malls, multiplexes and pubs," Nirup explained to Business Standard while insisting that the BPO he currently works for in Bangalore should not be named. Nirup's is not an isolated case, there are several others of his ilk who are not keen on shifting to tier II and tier III cities for lack of a proper social infrastructure like shopping and entertainment facilities. Though BPO companies have the first-mover advantage while acquiring land in these tier II and III cities, industry experts admit the biggest challenge is attracting skilled employees to these locations. At present, the total direct employment provided by India's IT-BPO sector is 2 million, of which over 90 per cent is captured by the seven leading cities of Bangalore, Mumbai, NCR, Hyderabad, Pune, Chennai and Kolkata. According to the recent Nasscom-A T Kearney study on `location road map for IT-BPO growth', the share of sectoral employment in the top seven locations will decline to around 60-75 per cent over the next decade and that will subsequently result in the rise of tier II and tier III cities'. "But that cannot be achieved by only installing physical infrastructure like power lines and mass-transport system in tier II and tier III cities. Efforts should also be made to create an ecosystem that comprises social infrastructure with the trappings of metropolitan life," contended Saurine M Doshi, partner A T Kearney India. In fact, the Nasscom-A T Kearney assessment of 50 leading locations for IT-BPO sector had pointed out that a lack of recreational facilities was also a handicap for the tier-II and III cities. For instance: while cities like Mangalore and Hubli-Dharwad were favoured by companies in terms of cost advantage, they fared badly in terms of social environment and location attractiveness. Though Hubli-Dharwad got an IT park a few years ago, it failed to make an impact because of the lack of social infrastructure. Youngsters who hail from that region prefer to enjoy modern lifestyle in Bangalore than lead a ‘no-frills life' there. It is a problem faced by the industry across the country, said H R Binod, Infosys senior vice president (commercial and facilities)

IT drags index down : Infy sheds 2%

Indian shares fell 0.5 percent on Friday, led by export-focused software services after bellwether Infosys Technologies said the business environment was tough.

Infosys beat market expectations with a 21 percent rise in quarterly profit, and raised its full-year revenue forecast in local currency but kept it flat in dollar terms.

"The environment continues to be challenging. We are seeing bad news coming out of banking and retail," Chief Operating Officer S.D. Shibulal told reporters, adding that IT spending was "flat or marginally decreasing".

"There are delays in decision making."

V.K. Sharma, head of research at Anagram Stock Broking, said the outlook disappointed investors and underscored the increasingly difficult business conditions, particularly in the United States, the main market for Infosys.

"Infosys has told the markets nothing new. The change in rupee-based guidance is just a factor of currency," he said.

Shares in Infosys initially rose as much as 3.9 percent, but quickly fell and was 2.1 percent at 1,768.30 rupees by 11:34 a.m.

The main 30-share BSE index was down 0.45 percent, or 63.27 points at 13,862.97, with 17 components down, after rising 1 percent early.

Leading software exporter Tata Consultancy was down 2.8 percent at 844.75 rupees, while smaller rivals Wipro fell 2.5 percent to 420.10 rupees and Satyam lost 3.5 percent to 462.40 rupees.

The four tech stocks have a total weightage of more than 15 percent in the main index.

The BSE IT index, which has outperformed the broader market this year, was down 2 percent.

Investors were also cautious ahead of May industrial output, which is forecast to have grown an annual 7.2 percent, holding steady near April's 7.0 percent but well below the double-digit levels seen in 2006 and early 2007.

Bank stocks were down on fears of further monetary tightening as inflation quickened. ICICI Bank fell 2.6 percent to 601 rupees and HDFC Bank was down 0.8 percent at 1,046.40 rupees.

Data showed annual inflation was at 11.89 percent in the 12 months to June 28, above the previous week's annual rise of 11.63 percent.

In the broader market, 1,041 gainers were ahead of 930 losers on volume of 82.9 million shares.

The 50-share NSE index was down 0.43 percent at 4,144.50.

Elsewhere in the region, Karachi's 100-share index was down 0.68 percent at 11,693.49, but Colombo's All-share index rose 0.34 percent to 2,413.83

Tata Steel debuts on Fortune 500 list

New York, July 10 (IANS) Thanks to its acquisition of the Corus group, Tata Steel has entered the Fortune 500 list at rank 315, while India's largest corporate group Reliance Industries jumped 63 places to reach 206.

Tata Steel, part of the Ratan Tata-led Tata Group, has also been named as the company with the highest revenue growth of more than 350 percent over the past year, thanks to the consolidation of Corus' revenues with its balance sheet. Tata acquired Anglo-Dutch steelmaker Corus in October 2006.

Companies qualify for the Fortune list on the basis of their revenues. The rankings are based on 2007 audited revenues.

Tata Steel had an annual revenue of $25,707 million. The Mukesh Ambani-led Reliance Industries posted $35,915 million.

Reliance and Tata Steel are the only two Indian companies in the private sector to figure among the Fortune 500, the other five are in the public sector.

Reliance, in fact, comes behind Indian Oil, which is ranked 116 with a revenue of $57,427 million. The other PSUs on the list are Bharat Petroleum (287), Hindustan Petroleum (290), ONGC (335) and the State Bank of India (380).

The US-based retail chain Wal-Mart continues to remain the world's biggest corporate with revenues of $378 billion. Oil majors Exxon Mobile and Royal Dutch Shell follow Wal-Mart on the global list with revenues of $373 billion and $355 billion respectively.

There were fewer American companies on the list this time (153 as compared to 162 last year) while 29 Chinese companies made it to the list, the best ever performance by China.

MMRDA, MSRDC will jointly build sealink to Nhava

he 22km road bridge will now have eight lanes instead of six

The Mumbai Trans Harbour Link (MTHL) will be jointly executed by the Mumbai Metropolitan Region Development Authority and the Maharashtra State Road Development Corporation. Deciding on the financial model of and raising funds for the Rs7,600 crore project will be the MMRDA’s responsibility. The MSRDC will build the 22km road bridge, which will now have eight lanes instead of the earlier proposed six.
The state cabinet took a decision to this effect on Wednesday. Public works minister Anil Deshmukh said the project would be completed within five years of the date of starting work as major permissions have already been taken. The sea link has environmental clearance from the Centre as well as security clearance from institutions like the BARC.

The other options that the cabinet considered were to set up a special purpose vehicle for the project or to allot it entirely to the MSRDC. But given the MMRDA’s fund-raising ability, the cabinet decided to involve it in the project to ensure its early completion. The MMRDA is likely to raise funds through debt from the World Bank or the Japan Bank for International Cooperation. Deshmukh said it could recover the money in three ways - “toll charges levied on vehicles plying on this corridor, improvement fees levied in Uran and Khopate, and development rights taken from the government for the Nhava belt.

Deshmukh tries, and fails, to project MSRDC plan: MSRDC’s attempt to make a presentation to the cabinet on skywalks came a cropper as the projector refused to work. MSRDC is executing 18 skywalks in the city, including one between Churchgate and CST. MSRDC has claimed that its skywalks will be far superior to those being erected by MMRDA. When PWD minister Anil Deshmukh tried to prove this with the presentation, the projector failed to work. The cabinet waited for 10 minutes while Deshmukh and MSRDC officials tried to get the projector going again. The meeting was adjourned an hour ahead of schedule.

Oil prices plunge by $6 over 2 days

Oil prices swung below $140 a barrel on Tuesday after a plunge of nearly $4 in the previous session, as the dollar strengthened and fears of a supply disruption faded.

But analysts warned the pullback was likely to be fleeting.

"The plunge is really a temporary bull correction and is viewed by the market as a buying opportunity," said Victor Shum, an analyst with Purvin & Gertz in Singapore. "We are also seeing the US dollar easing a bit ... and that has helped support oil pricing."

Trader and analyst Stephen Schork said the expectation just a few days ago that crude prices would touch $150 this week now "does not look like the proverbial done deal."

Be that as it may, we have seen this movie before, i.e. crude oil weakens a little and the bubble-bears jump in," he added in his Schork report, suggesting the price respite might be temporary.

Sweet crude for August delivery fell $2.32 to $139.05 a barrel in electronic trade on the New York Mercantile Exchange by noon in Europe. The contract fell $3.92, or about 2.7 percent, to settle at $141.37 in New York on Monday.

Oil hit a trading record of $145.85 on Thursday before settling at a record close of $145.29 a barrel. There was no floor trade in the US on Friday due to the July Fourth holiday.

The US dollar was stronger against most other major currencies in European trading Tuesday morning.

A falling dollar has helped boost oil prices around 50 percent this year, with investors often buying commodities such as oil as a hedge against inflation when the greenback weakens.

Along with some signs of life from the dollar, fears that fresh conflict in the Middle East could cut oil supplies eased over the weekend after Iran gave an undisclosed response to an international offer of incentives if it suspends a central part of its nuclear program.

But Shum said the conflict isn't over.

Britain allows Anil Ambani to open office in London

LONDON: Britain's Financial Services Authority has approved an application by the Anil Ambani owned Reliance Asset Management (RAM) to open an office in London.

The company has launched an offshore fund 'Emergent India' targeted at international investors, according to the Wealth Bulletin, a Dow Jones-owned online service for the global wealth management industry.

RAM manager Sunil Singhania said: "The timing for marketing may not be right, but from an investment perspective it is just right. From these levels there is a great opportunity for investors, although there will also be some short-term dips."

Singhania started raising his cash weighting in October in expectation of a market correction. He had 25 per cent in cash at the start of June, but has just started to put the money to work.

The online services reported that: "He (Singhania) likes capital goods and construction companies, where he has been underweight of late. With valuations in these sectors down by more than half, its stocks are starting to look attractive again."

He also likes financial services companies on the grounds that India is under-banked, although he expects the next six months to be tough for the local economy. India is in danger of becoming a hostage to inflation, which has hit 11.4 per cent, due to the rising cost of fuel and food", it added.

In yet another instance of people of Indian origin hitting it big, the Forbes magazine has listed as many as 14 in its 'Midas 100 List' of those who invest in start-up companies and then sell off their stakes with handsome gains.
This list of tech dealmakers is prepared every year by the business magazine based on the value of the companies these people have taken public or sold in the past five years as well as the capital and involvement it took to get there.
Ram Shriram, who invested early in Internet search giant Google, has been ranked third in the list, moving up from number four last year. He currently runs venture capital firm Sherpalo. He has invested in travel portal Cleartrip and internet-based photo service provider Xoom.in, besides online money management firm Mint.com.
L. John Doerr of Kleiner Perkins Caufield and Byers, whom Forbes has described as the 'mentor and money man to founders of Google, Amazon, Intuit and Sun Microsystems', has topped the Midas list.
Others of Indian origin on the list include Navin Chaddha (rank 10), an IIT graduate who heads India investments of Mayfield Fund, and well-known venture capitalist Vinod Khosla (rank 70).
Chaddha, ranked 58th in the previous year's list, has successfully managed deals like IL&FS Investsmart and India Infoline in financial services space and Provogue in fashion.
Parag Saxena of Vedanta Capital is at number 31. He had a big initial public offer (IPO) last year and has also raised a $1.4 billion fund called New Silk Route to take advantage of deregulation in India and elsewhere. His investments range from wireless to biotech.
Arjun Gupta, ranked 51, founded TeleSoft Partners in 1996. His big deals have included Salesforce.com and Sierra Design Automation.
The others of Indian origin who made it to the list are Aneel Bhusri of Greylock Partners (rank 16), Promod Haque of Norwest Venture Partners (rank 48), Ryan D. Limaye of Goldman Sachs (rank 52), Rob L. Soni of Matrix Partners (rank 58), Deepak Kamra of Canaan Partners (rank 69), Raman Khanna of ONSET Ventures (rank 74), Ravi Adusumalli of SAIF Partners (rank 77), Shirish Sathaye of Matrix Partners (rank 82) and Rob S. Chandra of Bessemer Venture Partners (rank 96).
The magazine's ranking considers venture-backed technology and life sciences companies that have gone public or been acquired in the past five years, as well as the amount of capital it took to get there and the level of involvement in a company by its investors and advisers.
Forbes' annual Midas 100 list surveys the top tech dealmakers in the world. Last year, companies that venture capitalists helped launch hauled in $34 billion from 86 public offerings and 304 acquisitions.
The final quarter of 2007 saw 31 initial public offers - more than any other quarter since the third quarter of 2000 - worth $3 billion.

DMRC revenue up by 32 %

With over 700,000 passengers every day, Delhi Metro has registered a 25 per cent rise in ridership and around 32 per cent jump in revenue in the last one year, Delhi Metro Rail Corporation (DMRC) said on Tuesday.“The rise in ridership comes in the wake of the opening of Shahdara-Dilshad Garden line of Phase II, admissions in the Delhi University and spread of Metro feeder bus services,” said Anuj Dayal, DMRC spokesman.The Shahdara-Dilshad Garden line opened to the public June 4 this year. DMRC is also operating 97 feeder buses on 16 routes.“The ridership jumped by almost 10 per cent in just a month from May 2008 to June 2008,” Dayal added.He said that in June the average daily ridership has been 702,731, whereas last year, the average daily ridership was 563,095.“The corresponding period also recorded a rise of 31.62 per cent in daily average revenue from Rs.6.26 million to Rs.8.24 million,” said Dayal.Delhi Metro is the modern mass transport system of Delhi. Currently it has a network of over 68 km and constructions are on to add another 120 km before the 2010 Commonwealth Games

Key benchmark indices fall below important psychological levels

A third day of sell-off on the bourses pulled the two key benchmark indices below psychological levels - the barometer index BSE Sensex fell below 13,000 mark and the S&P CNX Nifty fell below 4,000 level. Bears are in complete command of the proceeding on the street thanks to record high oil prices, surging inflation, higher interest rates and political uncertainty which have rattled the bourses in the past few days.
Reliance Communications and Reliance Infrastructure fell more than 10% each in late trade. Banking, realty, auto and metal stocks fell. The market breadth was weak. Asian markets were fell. Except NTPC all other Sensex stocks ended in the red. All the sectoral indices on BSE were in red. European markets which opened after Indian market, were weak.
Crude oil, India's biggest import, was trading above $141 a barrel today, 1 June 2008. It had hit a record $143.67 in the previous trading session. In Europe, the benchmark indices in France, Germany and UK were down by between 1.88% to 2.49%.
The 30-share BSE Sensex provisionally lost 543.42 points or 4.04% at 12,918.08, its lowest level in more than 14 months. At the day’s high of 13,613.01 hit in mid-morning trade, the Sensex rose 151.41 points.
The broader based S&P CNX Nifty was down 158.8 points or 3.93% at 3,881.75 as per the provisional figures. Nifty hit a low of 3,878.20, its lowest level in more than 14 months.
The market breadth was weak on BSE with 396 shares advancing as compared to 2,278 that declined. 48 remained unchanged.
India’s largest private sector company in terms of market capitalisation and oil refiner Reliance Industries (RIL) fell 3.25% to Rs 2,025.30.
Auto stocks tumbled. India’s largest car maker by sales Maruti Suzuki India fell 8.52% to Rs 565.10. Its vehicle sales rose 2% to 61,247 units in June 2008 over June 2007. Mahindra & Mahindra (down 10.53% to Rs 440.10), Bajaj Auto (down 1.43% to Rs 444) edged lower.
India’s largest commercial vehicle maker by sales Tata Motors fell 4.23% to Rs 408.45. Tata Motors today said it had raised prices of commercial vehicles by an average of 3% with immediate effect on account of higher input prices.
Metal stocks declined. Hindalco Industries (down 5.67% to Rs 134.05), Tata Steel (down 4.19% to Rs 697.85), Sterlite Industries (down 4.13% to Rs 673), Steel Authority of India (down 1.08% to Rs 137.90), National Aluminium Company (down 0.21% to Rs 348.80) edged lower.
Realty stocks extended recent steep fall. Indiabulls Real Estate (down 7.65% to Rs 250.45), Unitech (down 6.48% to Rs 159.60) and DLF (down 7.02% to Rs 368.40) edged lower.
Banking stocks fell after some of the major lenders hiked their lending rates. India’s largest private sector bank by net profit ICICI Bank declined 6.46% to Rs 589.50. India’s largest dedicated housing finance firm by operating income HDFC fell 6.47% to Rs 1,835.45.
HDFC said on Monday, 30 June 2008, its prime lending rate would go up by 50 basis points from Tuesday, 1 July 2008. On the same day, ICICI Bank said rates on consumer loans would rise by 75 basis points on Tuesday, 1 July 2008. Both HDFC and ICICI Bank also raised deposit rates between 50-100 basis points.
India’s largest commercial bank State Bank of India fell 7.81% to Rs 1,024.65. It will decide in a week's time whether to raise interest rates on home loans, its chief, OP Bhatt, said today, 1 July 2008. The bank raised its benchmark prime lending rate by 50 basis points to 12.75% last week, after the central bank aggressively tightened policy in the face of surging inflation.
India’s second largest private sector bank by net profit HDFC Bank fell 4.22% to Rs 960.
NTPC rose 1.02% to Rs 153.20 and was the lone gainer from Sensex pack.
Reliance Communications (down 10.49% to Rs 396), Reliance Infrastructure (down 10.54% to Rs 702.05), Jaiprakash Associates (down 6.01% to Rs 135.20), Grasim Industries (down 5.02% to Rs 1,753.70), edged lower from Sensex pack.
Punjab Tractors was down 1.48% to Rs 189.30 despite recording 74% rise in tractor sales to 3,443 units in June 2008 over June 2007.
Most of the Asian markets which opened before Indian markets were in the red. Key benchmark indices in China, Japan, Singapore, Taiwan and South Korea were down between 0.13% to 3.09%.
US markets, stocks ended mixed on Monday 30 June 2008 .The Dow Jones was up 3.50 points to 11,350.01. The Nasdaq Composite index lost 22.65 points to close at 2,292.98.
Rising inflation, high interest rates, record high global crude oil prices and political uncertainty rattled Indian bourses in the past few days. Market’s concerns are that the rise in input costs and tough macro economic environment comprising high inflation, record high global crude oil prices and rising interest rates, will result in slowdown in earnings growth of the corporate sector. Nevertheless, advance tax payment by the Indian corporate sector this year so far has been strong. Government’s direct tax collection from the corporate sector rose 39.81% to Rs 30655 crore until 21 June 2008 compared to the corresponding period last year.
Sustained selling of Indian stocks by foreign institutional investors (FIIs) has also dented market sentiment. As per provisional data, foreign funds sold shares worth a net Rs 208.66 crore on Monday, 30 June 2008. FII outflow in June 2008 totaled Rs 10095.80 crore (till 30 June 2008). FII outflow in calendar year 2008 totaled Rs 25465.30 crore.
Political uncertainty continues to haunt the bourses. The media continues to speculate whether the ruling Congress led United Progressive Alliance government will be able to push through a much-debated Indo-US nuclear deal and still retain its power, in the face of heavy opposition from its key communist allies. The Left parties on Sunday, 29 June 2008, renewed their threat to withdraw support from the ruling coalition if Prime Minister Manmohan Singh forged ahead with the nuclear deal. Singh on Monday, 30 June 2008, promised to bring the nuclear pact with the US before parliament before going ahead with the deal that is fiercely opposed by his communist allies, a report said.
The Prime Minister played down the communists' threats to withdraw support to his government saying all that he wanted was that the government should be allowed to complete the negotiation process with the International Atomic Energy Agency-IAEA and Nuclear Suppliers' Group-NSG. Singh expressed confidence that the government would be able to address concerns of all including the Left parties on the civil nuclear cooperation agreement with the US.
For the stock market, the political uncertainty pertains to whether there will be stability at the centre if mid-term polls are held i.e. whether the new government will complete five years and whether the new government restarts economic reforms process which has virtually come to a halt in the last two years or so.
The good news is that the Indian Meteorological Department (IND), in its long-range forecast update for the 2008 southwest monsoon, has maintained that rainfall for the country as a whole is likely to be ‘near normal’. The department classifies rainfall as near normal when it's between 96% and 104% of the 50-year average.
Good rains will bolster farm production which in turn may help rein in inflation.
Source: Capital Market

Millionaires on the rise in India and China

India and China saw bigger growth in the millionaire population last year than anywhere else, and wealth in the Asia-Pacific is expected to grow nearly 8 percent a year to 2012 despite a slowdown in the world at large, a survey showed.

The number of millionaires in the Asia-Pacific grew 8.7 percent from a year ago to 2.8 million people and their combined wealth soared 12.5 percent to $9.5 trillion, excluding the value of their homes and consumables, Merrill Lynch and Capgemini said at a news conference in Singapore on Wednesday.

Asia was home to some of the world's fastest-growing populations of millionaires, their annual World Wealth Report said, with India, China, Indonesia, South Korea and Singapore in the top ten in terms of growth.

The number of millionaires in India rose 22.7 percent to 123,000 people, the fastest growth in the world, and millionaires in China grew 20.3 percent to 415,000, making it home to the fifth-largest number of millionaires in the world, displacing France in that position.

Li Ka-shing, who controls a vast telecoms and property empire in Hong Kong and China, ranks as the world's 11th richest man, according to Forbes.

Globally, millionaires grew 6 percent to 10.1 million people and their wealth rose 9.4 percent to $40.7 trillion in the same period, the Merrill/Capgemini report said.

Kong Eng Huat, Merrill Lynch's Southeast Asia head of wealth management, said that in five years millionaires in Asia would have more combined wealth than those in Europe.

"Notwithstanding the recent dislocation in global markets, the robust economies in Asia are increasingly being driven by the domestic consumption story and continue to spur wealth creation in the region," he said.

Asian millionaires' wealth would grow annually by 7.9 percent to $13.9 trillion in 2012 against $13.5 trillion among Europe's wealthiest, or 4.9 percent annual growth, the report said.



LUXURY

Although rocky markets have forced Asian investors to conserve cash, they continue to pour money into luxury products such as jewellery and art.

"Luxury goods makers, high-end service providers and auction houses all found ready clients in the emerging markets of the world -- most notably China, India, Russia and the Middle East," the report said.

Soaring wealth, high savings and ample potential have made Asia the world's hottest market for international and private banks seeking to cater to the rich.

This has led to an influx of new players into Asia, such as Julius Baer, who are competing against established names such as UBS, HSBC and Citigroup.

The report also showed wealthy investors have shifted more money out of real estate and into bonds and cash.

The trend was most dramatic in the Asia-Pacific, where investors have cut real estate holdings by 9 percentage points from a year ago, to a fifth of their total investments.

But the report warned that the rich face the challenges of slower growth in developed markets hit by the credit crisis, as well as the risk of high inflation in emerging markets.

"The big shock this year has been higher inflation," said Stephen Corry, head of investment strategy in Asia at Merrill Lynch's global wealth management unit, at a news conference in Singapore.

"Inflation is the biggest risk for Asia and the global economy."

Oil minister: Saudi willing to increase crude output

JIDDAH, Saudi Arabia - Facing strong U.S. pressure and global dismay over oil prices, Saudi Arabia said Sunday it will produce more crude this year if the market needs it. But the vague pledge fell far short of U.S. hopes for a specific increase and may do little to lower prices immediately.
ADVERTISEMENT

For now, the current "oil shock" leaves Western countries with little choice but to move toward nuclear power and change their energy-consumption habits, Britain's prime minister warned at a rare meeting of oil-producing and consuming nations.

Saudi Arabia — the world's top crude exporter — called the gathering Sunday to send a message that it, too, is concerned by high oil prices inflicting economic pain worldwide.

Instead, the meeting highlighted the sharp disagreement between producers like Saudi Arabia and consuming countries like Britain and the United States over the core factors driving steep price hikes. Oil closed near $135 a barrel on Friday — almost double the price a year ago.

The cost of gasoline also has become a sore point in the U.S. presidential race, with President Bush and presumed Republican nominee John McCain calling on Congress to lift its long-standing ban on offshore oil and gas drilling. Barack Obama, the presumptive Democratic nominee, has said such moves will do nothing to ease American consumers' pain short-term.

The U.S. and other nations argue that oil production has not kept up with increasing demand, especially from China, India and the Middle East. But Saudi Arabia and other OPEC countries say there is no shortage of oil and instead blame financial speculation and the falling U.S. dollar.

Saudi Oil Minister Ali al-Naimi said the kingdom is willing to produce more than the 9.7 million barrels of oil a day it had already planned to produce in July — if the market requires it.

But the Saudi oil minister also blamed speculators and asserted supply is not the problem.

"In today's environment, I am convinced that supply and demand balances and crude oil production levels are not the primary drivers of the current market situation," al-Naimi said. Officials and energy executives from more than 35 countries thronged a large hall where he spoke.

King Abdullah also said Saudi Arabia is not the culprit.

The king cited several factors driving "the unjustified, swift rise in oil prices" including "speculators who play the market out of selfish interests," plus higher consumption by developing countries and higher taxes in some countries.

U.S. Energy Secretary Samuel Bodman, however, said earlier that U.S. officials had found no evidence speculators are driving up prices.

Saudi officials have consistently said the country would provide enough oil to supply the market. The kingdom announced a 300,000 barrel per day production increase in May and said before the start of the Jiddah meeting that it would add another 200,000 barrels per day in July, raising total daily output to 9.7 million barrels.

Both announcements had already been factored into oil prices before Sunday's meeting — and neither did much to stem their rise. Total worldwide crude production is about 85 million barrels per day.

The Saudi output increase is "going to help a little bit, maybe reduce prices just a little," New Mexico Gov. Bill Richardson, a Democrat and former President Bill Clinton's energy secretary, said on CNN's "Late Edition" program. "It won't be significant."

It remained unclear if Sunday's announcements would have any greater effect.

At least one analyst said he thought they would only spur prices higher.

The oil market has been in a holding pattern to see if Saudi Arabia would take more aggressive steps toward boosting output, said Stephen Schork, an oil market analyst and trader in Villanova, Pa. The market's likely to view the announcement as a sign it will not, he said.

"We don't know anything more today that we didn't know Friday," said Schork, who predicted "$150 (a barrel) here we come."

Linda Rafield, senior oil analyst at energy trade publication Platts, said she expected the reaction to be less dramatic.

"I don't see prices going into freefall at the start of trading this evening, but I don't see the bulls being given any reason to bid prices back up to the $140 level," she said.

Bush has visited Saudi Arabia twice this year to push the country's king to increase oil production but has little to show for the effort.

To address long-term concerns about supply, al-Naimi said Saudi Arabia also is willing to invest to boost its spare oil production capacity above the current 12.5 million barrels per day planned for the end of 2009 — again, if the market requires it.

That reversed previous indications the country would not go beyond that figure.

British Prime Minister Gordon Brown echoed U.S. officials' calls for commitments of specific production increases. Such actions would help ensure that "instead of uncertainty and unpredictability, there is greater certainty, and instead of instability, there is greater stability," he said.

But he and Bodman also urged consuming countries to increase energy efficiency and invest in alternative sources of fuel. Brown said the high prices — what he termed an "oil shock" — leave industrialized countries with few choices but turning more to nuclear power and lowering energy consumption.

A joint statement issued by participants also urged countries to improve energy efficiency. The vaguely worded statement also promoted investment in spare capacity and called for improved transparency and regulation of financial markets, but provided few specifics — again highlighting the confusion and disagreements over the core causes of oil's price surge.

Abdullah called for the creation of a $1 billion energy initiative to help poor countries combat fuel prices and said Saudi Arabia would contribute $500 million to provide loans to finance development and energy projects.

___

Associated Press reporters Donna Abu-Nasr in Jiddah and Adam Schreck and John Wilen in New York contributed to this report.

Indian Railways' growth at 19.85%

Indian Railways' growth at 19.85% BS Reporter / New Delhi June 10, 2008, 18:50 IST Continuing with its growth trend, the Indian Railway had registered an earnings growth of 19.85 per cent during the first two months of the current financial year 2008-09 compared to last year. The total approximate earnings on an originating basis during the period stood at Rs 13,334.72 crore compared to Rs 11,125.95 crore during the previous year. The total goods earnings have gone up by 23.54 per cent to Rs 9121.74 crore from Rs 7383.35 crore recorded during the same period last year. On the other hand, the railways total passenger revenue during the period stood at Rs 3727.58 crore, registering a growth of 12.28 per cent compared to the last year.

US,British firms bid for Mumbai Airport Contract

US-based Worldwide Flight Services, Swissport International of Spain and UK's Menzies Bobba Ground Handling Services are among seven bidders vying for the Mumbai International Airport's Rs 700 crore yearly ground handling contract.

While Swissport, an European infrastructure and service corporation providing value-added airport services at 187 airports across 43 countries, is going with India's Punj Lloyd group, Menzies is partnering Cambata Aviation for the bid. Cambata has been providing airport services at the Mumbai airport since 1967.

Turkey's Celebi Ground Handling is reportedly teaming up with Spencer Travels as overseas bidders. Spencers has a presence as an agency representing Cathay Pacific for passenger and cargo in southern and eastern parts of India and is also an agency for KLM Royal Dutch Airlines.

The GVK-led consortium mandated to modernise and upgrade the Mumbai International Airport Limited (MIAL) may name a winning bidder for the handling contract as early as August or at least four months ahead of the new regulations that make it mandatory for airport operators to either get into ground handling directly or to invite specialised agencies to bid for both passenger and ramp handling at the airport, besides the National Aviation Company Ltd.

The new policy comes into effect from January 1 next year. An MIAL spokesperson refused to divulge details as to when the bids would be finalised. "We will not be able to give those details though we will have to get the contracting within a few months," he said.

MIAL had invited bids in January for the contract. "We have received applications from specialised agencies and will soon shortlist names," said GV Sanjay Reddy, managing director, MIAL. The ground handling contract at Mumbai airport is for 10 years.

Confirming its bid for the ground handling services at the Mumbai airport, Atul Punj, chairman, Punj Llyod group, said: "We have bid for the ground handling contract for the Mumbai airport with international group Swissport. We are the investors and the local partners in the tie-up."

Punj, however, did not divulge much details and said the company was in the process of appointing a CEO for the new ground handling agency. Punj Llyod has recently become active in the Indian aviation space.

What makes the bid for Mumbai airport lucrative is the sheer number of the air traffic movements at the airport - 700-735 per day - making it the busiest airport with an estimated annual business size of Rs 650-700 crore pegged conservatively.

Currently, there are 40-odd local agencies involved in ground handling besides the airlines. Usually, 15 per cent of the contract value is the revenue share between the operator and the contracting parties.

The award of ground handling contracts to agencies has led to controversies involving airport operators and airlines, who want to do the job themselves. However, the civil aviation ministry's intervention has ensured that airlines do self-handling till next year, by when a policy will come into being.

FIIs in buying mode

FIIs in buying mode

Foreign institutional investors (FIIs) bought shares worth net Rs 307 crore on Friday, 6 June 2008, compared to their selling of Rs 1419 crore on Thursday, 5 June 2008. FII inflow of Rs 307 crore on 6 June 2008 was a result of gross purchases Rs 2887.30 crore and gross sales Rs 2580.30 crore. Sensex declined 197.54 points or 1.25% to settle at 15,572.18 on that day. FII outflow in June 2008 totaled Rs 2,984.20 crore (till 6 June 2008). FII outflow in calendar year 2008 totaled Rs 18,353.60 crore (till 6 June 2008). There are a total of 1,385 FIIs registered with the Securities & Exchange Board of India (Sebi).

Source: Capital Market

Asia and US seriously concerned over oil spike

India joined the US, Japan, China and South Korea to voice "serious concern" today about a record spike in oil prices but vowed to keep scaling back politically sensitive fuel subsidies.

Oil prices, which have soared five-fold since 2003, posted their highest ever one-day gain of $10.75 to close at a new record of $138.54 in New York after hawkish remarks by an Israeli official on oil producer Iran.

Senior officials from the United States, and Asia's four largest powers said in a joint statement after talks in Aomori, Japan that they "share serious concerns" about the current level of oil prices.

"These prices are unprecedented and against the interest of both consuming and producing countries. They pose a great burden — particularly on resource-scarce developing countries," it said.

US Energy Secretary Samuel Bodman warned oil producers that it would do them no good if the US economy took a hit.

"It's not good for producing nations to see US struggling economically (as) they depend on us to be a significant engine in world economic activity," Bodman told reporters.

Despite political sensitivity, the joint statement called for a scaling down of fuel subsidies, saying it would "enhance energy efficiency" and lead to investment in alternative energy.

Developing economies tend to heavily subsidise fuel costs in a bid to ease the burden on the poorest members of society.

India and Indonesia have recently been forced to hike prices amid soaring global crude oil costs, triggering large anti-government demonstrations in the two countries.

Share prices of Oil companies after price hike

	MIXED FORTUNES SHARE PRICE May 30, ‘08 Jun 6, ‘08 %chg BPCL 357.70 299.64 -16.23 HPCL 244.65 212.90 -12.98 Indian Oil Corporations 425.35 378.00 -11.13 Reliance Industries 2401.65 2239.35 -6.76 GAIL 400.25 384.35 -3.97 ONGC 864.30 938.50 8.58

The lower-than-expected subsidy burden on upstream companies led to a spurt in ONGC and GAIL during the week, while the share prices of oil marketing companies (OMCs), including Indian Oil Corporation, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL), saw a slide as investors factored in the under-realisation that these companies will continue to have despite the fuel price hike.

The shares of OMCs are down because despite the increase in fuel prices, these companies will still be making losses and the price hike will not boost their earnings significantly. Even after the hike in retail prices of auto-fuel and LPG, the OMCs will be short by about Rs 20,000 crore this year compared to Rs 16,000 crore in FY08," said a Delhi-based analyst.

Petrol and Diesel Prices after Hike in Indian Cities

The price hike was immediately in effect, after petrol & diesel rate was hiked when Murli Deora announced the rates.

There would more than 50% of taxes are from Petrol and more than 20% are from Diesel.

For Industrial gases has been unlimited of taxes has been implemented. People India, carefully seen the rates of International oil price 134$ to 124$ last week, expected some discounts.

But for oppositely, anonymous figures has been raised as below the rates are implemented

Mumbai Kolkata Chennai Delhi Bangalore Jaipur Ahmedabad Lucknow Trivandrum Patna Bhubaneswar Chandigarh Bhopal Dehradun Hyderabad Surat Noida Gurgaon

Rs. 55.51 Rs. 53.95 Rs. 54.61 Rs. 50.52 Rs. 57.86 Rs. 53.62 Rs. 54.93 Rs. 57.50 Rs. 53.32 Rs. 56.35 Rs. 51.62 Rs. 51.19 Rs. 55.62 Rs. 51.65 Rs. 57.65 Rs. 55.65 Rs. 53.49 Rs. 50.96

Rs. 39.08 Rs. 26.92 Rs. 37.40 Rs. 34.76 Rs. 39.44 Rs. 37.17 Rs. 40.80 Rs. 37.50 Rs. 37.95 Rs. 37.96 Rs. 37.66 Rs. 34.69 Rs. 39.43 Rs. 36.78 Rs. 38.30 Rs. 40.25 Rs. 38.69 Rs. 34.75

New Delhi, Gurgaon with lower of Rs. 50 per litre of petrol, Kolkata hits lower of Rs. 26 per litre of Diesel.

Where else, Bangalore and Hyderabad hits above Rs. 57.86 and 57.65 each per litre of petrol would be highest in India. Ahmedabad & Surat costs 40.80 & 40.25 per litre of Diesel highest paying in India.

Idea Cellular to buy out Spice Commn : Reports

India's Idea's Cellular is close to buying a majority stake in Spice Communications, few newspapers reported on Saturday, citing sources.

The promoters of Spice, in which Telekom Malaysia (TM) holds a 39.2 percent stake, are in final stages of selling their 40.8 percent stake to Idea, they said.

The move is the latest chapter of takeover talks in the telecom industry following France Telecom's $41 billion bid for Nordic group TeliaSonera and India's Reliance Communications talks with South Africa's MTN.

Spice Communications is open to selling a stake and is waiting for a proposal from TM before it takes a decision, its chairman said on Tuesday.

Spice has operations in two out of a total 23 telecom circles and has a customer base of more than 3 million while Idea is present in 11 circles and has a customer base of over 26 million.

India, the world's fastest-growing mobile services market and the second-largest market after China, has lured foreign firms like Vodafone Plc which bought a controlling stake in the third-largest local cellular firm in 2007.

India has 269.30 million wireless users at end-April, up 57 percent from a year earlier, according to the telecoms regulator.

Shares in Idea closed down 2 percent at 104.95 rupees while shares in Spice closed down 3 percent at 51.95 rupees on the weak BSE sensex.