Date:10/08/2008 URL: http://www.thehindubusinessline.com/2008/08/10/stories/2008081050160400.htm

Back Weekly News Round-up

The Wholesale Price Index based inflation rate accelerated to 12.01 per cent in the week ended July 26, the highest since April 1, 1995. It was marginally above the 11.98 per cent annual increase in the previous reported week.

Banks have started increasing their lending rates tracking the central bank's hike in repo rate. Dena Bank hiked the benchmark prime lending rate by 75 basis points to 14.25 per cent from 13.5 per cent. Bank of India hiked its BPLR by 75 basis points to 14 per cent. The revised rates will apply to corporate loans. Canara Bank, Corporation Bank and Andhra Bank too followed suit and raised their prime lending rate by 75 basis points to 14 per cent.

The Supreme Court has given its go ahead for diversion of forest land for the construction of a captive port and steel plant by Korean-steel manufacturer Posco and for mining bauxite ore by Sterlite Ltd, part of the London-based Vedanta group. Both the projects were at the centre of controversy on environmental grounds and have been facing stiff opposition from the local population and green groups. Posco's Rs 51,000-crore steel project needs 4,004 acres and Sterlite's bauxite mining project requires 660 acres in the ecologically-sensitive Niyamgiri hills in Orissa.

The Centre's direct tax revenues continue to be buoyant, with net collections recording a 46.95 per cent growth in the first four months of the current fiscal. Official data released here last Wednesday showed that net direct tax collections stood at Rs 71,648 crore during April-July this year as compared with Rs 48,756 crore collected in the same period last year.

Bharti Airtel and Vodafone Essar will launch the iPhone 3G in India on August 22. This is the first time Apple has partnered with two different operators in the same country for launching iPhone. The price of the device will be announced closer to the launch. Globally iPhone costs between $199 (around Rs 8,000) and $299 (around Rs 12,000) depending on the model. In some countries operators are offering iPhone bundled with a connection for an initial cost of just ?1 (Rs 65) and a monthly rental of around ?70 or Rs 4,500.

The Essar group said last Monday that its outsourcing outfit Aegis BPO has agreed to buy the Nasdaq listed off-shoring firm PeopleSupport Inc for Rs 1,057 crore. This would be the eleventh acquisition by Aegis in the last four years.

Ranbaxy Laboratories last Tuesday said that the open offer by the Japanese drug maker Daiichi Sankyo for acquiring an additional 20 per cent stake in the Indian drug company will commence on August 16 and close on September 4. The announcement came after the SEBI gave its nod for the open offer. Daiichi Sankyo is planning to acquire up to 9.21 crore shares at Rs 737 each through the open offer.

The Government has appointed new chief executives for four public sector banks - Allahabad Bank, Andhra Bank, Syndicate Bank and Vijaya Bank. While Mr K.R.Kamath, who was an Executive Director at Bank of India, has been appointed as CMD of Allahabad Bank, Mr Albert Tauro has been appointed as CMD of Vijaya Bank. Andhra Bank has a new CMD in Mr R.S. Reddy, who was up till now an Executive Director in Union Bank of India. Mr George Joseph, who was an Executive Director at Syndicate Bank, has been elevated to CMD post in the same bank.

After months of deliberations, both the SEBI and the RBI, last Wednesday issued final guidelines for launching exchange traded currency futures. Stock exchanges can now start currency futures after obtaining approval from both the regulators. According to the guidelines, banks planning to enter trading in currency futures should have a minimum net worth Rs 500 crore and a capital adequacy of 10 per cent. They should have made net profits in the past three years and their net non-performing assets should not exceed more than three per cent.

Two-wheeler companies have raised the prices across different models in the range of Rs 800-2,000. They have cited escalating raw material prices as reason for price increase. Hero Honda announced a price increase of up to Rs 850 on its models. Bajaj Auto also increased prices by Rs 500 on its 100 cc bike Platina and by Rs 1,500 on other models such as XCD and Pulsar, with effect from end of July. TVS Motor Company too has raised prices of the models beginning this month.

Compiled by M.J. Madhavan
Podcast by S. Vasudevan