ALL FINANCIAL FOREX NEWS on ONE PAGE » India

Swine Flu Panic Attack Reaches India – US-FOREX.US

Forex-Publisher — Tue, 11 Aug 2009 09:46:18 +0000

MUMBAI -
Four months after the first outbreak of swine flu, India is discovering how deadly this virus can be. The country’s first swine flu death, that of a 14-year old schoolgirl on August 3, followed by seven more patients succumbing to the disease in the span of a week, has set off a panic attack that is spreading faster than the virus itself. India has reported a total of 959 cases of swine flu and eight deaths. According to the latest bulletin from the ministry of health and family welfare, 4,513 people have been tested so far. The creeping death toll has caused a panicky populace to flock to government-run hospitals to get themselves screened for the virus. The collected samples are sent to designated state-owned labs for testing. Such is the rush that the federal government has recently permitted private hospitals and labs to pitch in. Swine flu is already a global pandemic, with more than 160,000 cases and 1,154 deaths recorded worldwide, according to the World Health Organization. In fact, swine flu hit India later than many countries, which are already contending with the uncheckable spread of the disease.Because swine flu is a new virus, no one in the world had immunity to it when it came on the scene earlier this year, so it is spreading quickly. Fortunately it has proved a relatively mild flu for most people.
Pune, in Western India, with a population of nearly 4 million, has become the epicenter of the disease for India. Five of the eight victims, including a doctor and a chemist, were residents of this city that is home to automakers Tata Motors and Bajaj Auto, both of which have major factories on its outskirts. Lately, Pune has become a major tech hub with outsourcing, software and biotech companies setting up big campuses in the city. The latest victim, another Pune schoolgirl, died this morning.
A federal government team is stationed in Pune, East of Mumbai, to monitor the situation. In a bid to contain the spread of swine flu, the government yesterday shut down Pune’s schools and colleges for a week, and closed malls and cinema multiplexes for three days. Schools in Mumbai, India’s financial capital, which is located 100 miles from Pune, have begun to close down too after the city reported its first swine flu death on the weekend. Both cities are located in the state of Maharashtra, which given its location on the western coast, is a major entry point for foreign travelers who are the main carriers of the disease so far. The Indian government has installed compulsory health screening facilities for passengers from flu-affected countries at 22 international airports, according to a recent update by the ministry of health and family welfare. Health minister Ghulam Nabi Azad assured worried citizens that India has plenty of Tamiflu, the drug used to treat swine flu. It has not yet been put on open sale in India.Drugmakers around the world are rushing to produce the swine flu vaccine by this fall.While three Indian firms have already begun working to develop the swine flu vaccine, the minister has stated that the country will import the vaccine until the local version becomes available. Suresh Jadhav, executive director of Serum Institute of India, one of the three firms racing to make the vaccine, said that he expects to send a batch for testing by September and phase 1 clinical trials should start by January. In a best-case scenario, the earliest Serum’s vaccine would be available in the market is April, said Jadhav. Serum has no assured orders for the vaccine from the government so far, but billionaire Cyrus Poonawalla, who owns the firm, which is located in Pune, has decided to set up a manufacturing facility in anticipation of future demand-and hopefully windfall profits .
Meantime, businesses in Pune are trying to soldier on. Software firm Zensar, which is headquartered in the beleagured city and has 3,700 workers on a 12-acre campus, is taking “eminent precautions” said vice chairman and CEO Ganesh Natarajan. The firm has cut out all non-essential travel, and big gatherings or meetings are being avoided. Hourly updates on the situation are provided on the company intranet. The frequency of cleaning, particularly of door handles, has been stepped up. No one has reported sick so far but five staff whose children are running a fever have been asked to work out of their homes. The firm, which has 285 clients of which 70% are located in the US and Europe, has a back-up plan to shift ongoing work to its development centers in Hyderabad and Poland if the situation gets any worse, said Natarajan. “But I doubt that will come to pass. The government is acting very fast,” he added. Investors are nonetheless worried and Mumbai’s benchmark Sensex has caught a bit of a fever. It has lost 6% since August 3 falling 915 points to 15,009 yesterday, though today’s morning trading showed some signs of recovery.

Heavy Metal Local Vs. Global – US-FOREX.US

Forex-Publisher — Tue, 28 Jul 2009 08:46:06 +0000

As India’s Tata Steel gets ready to declare its earnings later this week, there are signs of green shoots in some geographies in the metals industry. But its albatross, Corus, will continue to drag it down, analysts predict.
While steel may remain in oversupply over the next three to five years, inventory-driven mini cycles can provide good money-making opportunities, says research analyst Neelkanth Mishra. The inflection point in the steel inventory cycle is near, says Mishra, and steel prices and production move together. Steel prices have significant upside from the current levels as production growth picks up.
Manuel Guerena, a director at Standard & Poor’s, sees an increase in domestic demand for steel since India is experiencing moderate GDP growth that should translate into an increase in demand for steel. “The demand growth for steel is expected from [an] increase in infrastructure spending as well as revival in the auto industry following the weak December quarter,” he says.
Tata Steel is the world’s sixth largest producer of steel and will announce its earnings on Wednesday.
In 2007, Tata won a bid for its European rival, Corus Group, for 12 billion. The acquisition was meant to give the Indian company a strong foothold in the European market. Instead, it’s been badly hurt by the global recession and the high costs at Corus.
Tata Steel’s Indian operations are benefiting from stronger domestic demand, says Rajat Rajgarhia, research head at Mumbai-based Motilal Oswal Securities, a financial services firm. Steel production is expected to increase 25% year-on-year in the first quarter of fiscal year 2010 and will ramp-up further in subsequent quarters.
The global picture, however, is not as rosy and demand is expected to drop by 15%-20%. There’s a chance that this may bottom out soon as the destocking in the supply chain is largely over and there could be some revival in demand. However, demand in key end markets such as construction and automotive continue to remain weak in developed markets. High uncertainty among producers regarding the length and depth of the global downturn and the timing and strength of any economic recovery, could also impact future trading levels, says Guerena.
Indian operations have strong cash flows, while Corus is a drag, says Motilal’s Rajgarhia. Corus continues to suffer due to low capacity utilization and high fixed costs. Tata Steel had to further invest 500 million British pounds to win a waiver of debt covenants. Corus will be the key beneficiary whenever demand picks up in Europe. And though Indian operations will benefit from strong volume growth and favorable steel pricing environment in India, cash flows will be routed to Corus and future expansion in India may suffer as a consequence.

What Sugar High – US-FOREX.US

Forex-Publisher — Mon, 06 Jul 2009 20:46:06 +0000

High-riding sugar futures finally slipped on Monday, as economic uncertainty weighed on commodity prices and investors tried to take profits. Sugar for October delivery shed 0.26 cents, to settle at 17.32 cents, on the IntercontinentalExchange. At the end of June, ICE sugar futures hit a three-month high at 18.09 cents. Analysts have been bullish on sugar, citing supplies that aren’t expected to meet demand. According to Barclays Capital Markets analyst Nicholas Snowdon, the sugar market deficit in the 2008/2009 harvest has lifted prices on the front-month ICE contract by nearly 50%-and fundamentals for the 2009/10 harvest are looking more enticing. Delayed Indian Monsoons and lower plantings resulted in lower output estimates for the 2009/10 harvest season, which is now projected at 16.5-17.5 Mt, from 19-20 Mt, previously. Weather could also push sugar prices higher. Current patterns suggest the possibility of an El Nino weather event, which, according to Snowdon, led to drought in India and heavier rainfall in Brazil in the past. Wet Brazilian weather ended the crush early, curtailing production.”This fundamental picture suggests that the greatest gains from current levels will be seen in the March/May 2010 ICE sugar contracts, when the market will be at its tightest,” Snowdon said.Shares of Cosan Limited
, a sugar and ethanol company with operations in Brazil, traded 20 cents lower, or 3.8%, at 5.05, during Monday’s afternoon trading session. Agricultural commodities traded broadly lower on Monday as the U.S. dollar strengthened.
Food companies were one of the day’s few bright spots as lower commodity costs can mean cheaper ingredients for companies like ConAgra Foods
, General Mills
, Kraft Foods
and Kellogg
.
Thomson Reuters contributed to this article.

How Much Bang For Your Buck – US-FOREX.US

Forex-Publisher — Mon, 06 Jul 2009 18:46:11 +0000

Renewed economic pessimism fueled gains for the dollar and yen on Monday, but the greenback’s supremacy is still being questioned.”The U.S. dollar and yen have been absolutely soaring against the euro and Sterling since trading resumed [Sunday],” said Dan Cook, chief market analyst at IG Markets, a European-based Forex and foreign exchange derivatives trading outfit. “In head-to-head competition, though, the yen is showing a great deal of strength against the dollar.”Cook credited the movement to an apparent flight to safe-haven currencies in the wake of weak economic data, like last week’s U.S. labor figures, which were worse than expected. The same forces also appear to have pulled the price of oil down below 64 per barrel as Wall Street’s hopes for a recovery waned. The Energy Select Sector SPDR
exchange-traded fund, which follows energy-related stocks, fell 2.4%, or 1.11, to 45.05.By midday trading, the greenback was worth 1.39 against the euro, and 1.62 against the British pound. The dollar was also worth 94.91 yen, off the 96.08 yen mark on Friday. The PowerShares DB US Dollar Index Bullish Fund
rose 0.4%, or 10 cents, to 24.01, while the PowerShares DB US Dollar Index Bearish Fund
slipped 0.3%, or 8 cents, to 26.65.Meanwhile, the yield on the benchmark 10-year U.S. Treasury note rose to 3.53%, from 3.50% Friday. The iShares Barclays 10-20 Year Treasury Bond
ETF, which follows longer-dated Treasuries, fell 0.4%, or 41 cents, to 108.57, while the iShares Barclays 1-3 Year Treasury Bond
ETF rose 3 cents to 83.80.Like U.S. Treasuries, the greenback is among the world’s safest investments, though its dominance has been challenged-both China and Russia have expressed skepticism on the topic. Meanwhile, India Prime Minster Manmohan Singh’s economic adviser recently supported his country moving away from the dollar.
The news follows the World Bank’s warning to the Group of Eight nations that 2009 remains a dangerous year and the pace of recovery is uncertain. The letter was obtained by Thomson Reuters, dated July 1, to Italian Prime Minister Silvio Berlusconi, the G8 host. World Bank President Robert Zoellick wrote that interventions by world governments appeared to have “broken the fall” of the global economy.Still, Zoellick warned that while some developed countries are considering a policy mix that assumes the recovery is imminent, it is far too early in the developing world to consider such measures. The World Bank estimates that the gross domestic product of developing countries, except for China and India, will decline by 1.6% this year.The G8 summit will be held July 8-10 in the Italian city of L’Aquila.

Jaguar Roars Into India – US-FOREX.US

Forex-Publisher — Mon, 29 Jun 2009 16:46:13 +0000

Indian carmaker Tata Motors is taking a gamble in its goal to revamp struggling British brands Jaguar and Land Rover, which it bought in June last year, after launching them with much fanfare in Mumbai on Sunday.Jaguar was previously a Ford Motor property, sold off in anticipation of a cash crunch. Ford’s Jaguar diverstiture is one reason why it isn’t seeking government help now.Tata has said that it wants to target India’s wealthy, but growth in the country’s luxury car market may be more limited than hoped, not least because of the global economic slowdown. “Tata’s challenge will be to carve out a niche in a market that overall is very tough and very competitive,” said David Leggett, managing editor at industry website Just-Auto.com. “Both brands have a historical brand appeal but it is never easy to establish a brand in new markets.”The Chinese market appears to have more potential for luxury car manufacturers, said Daniel Schwarz, an auto analyst with Commerzbank. “India offers better options for the mass segment this is why Tata has launched the Nano there.”Last year, sales of premium car brands in China represented 490,000 units, while only 7,000 units were sold in India, according to figures compiled by IHS
Global Insight. And while India is nowhere near the volumes of the Chinese market, Tata Motors
also faces the challenge of the import taxes in India, IHS Global Insight Ian Fletcher said. “Import duty taxes for cars being shipped into India represent 100% so that means they double the price of the car. There is a growing premium car sector in India but it is tiny in comparison with China’s luxury market.”The brands were officially launched at a ceremony in Mumbai on Sunday by Ratan Tata, the chairman of the Tata Group. “Jaguar Land Rover has been well received and well established in India, but over the years this brand has been disconnected from India,” he said.
Jaguar Land Rover’s chief executive, David Smith, also said Sunday that the company might cut more jobs if its slump in sales continued, in addition to the 2,000 job cuts announced last January.The two luxury brands do seem to have potential in emerging markets: While Jaguar and Land Rover sales fell by 35% in the U.S., U.K. and Europe between June 2008 and March 2009, sales increased by 8% in Russia and China over the same period, according the companies’ figures.Jaguar Land Rover has not performed well over the last 20 to 25 years in the U.K. due to “many failures of investment”, according to Howard Wheeldon of BCG Partners in London. The company has been in the hands of many owners, from the U.K. government to Ford Motor
, and has struggled with overcapacity. Since it produces cars that are less eco-friendly than other models, Jaguar Land Rover is also more exposed to higher fuel prices, as well as E.U. targets on carbon dioxide emissions that have put pressure on the research and development side of its business.”Although Jaguar has been helped by the new XF [sports car], which has propped up demand for its models, Land Rover has been hit badly, not helped by its dependency on sport utility vehicles , which are suffering something of a backlash, while surging crude oil prices during the early stages of Tata’s ownership undoubtedly did not help matters,” IHS Global Insight’s Fletcher said in a note to investors. “The matter of funding remains the highest priority for the two brands.”Last December, the company asked the British government for state aid to help it ride out the recession. Tata is also said to have injected capital to help the struggling company. Tata Motors
was down 0.4% in pre-market trading in New York on Monday.

Tata Wants Jaguar To Roar In India – US-FOREX.US

Forex-Publisher — Mon, 29 Jun 2009 13:46:10 +0000

Tata Motors may have launched Jaguar and Land Rover to much fanfare in Mumbai on Sunday, but the Indian carmaker is also taking a gamble in its goal to revamp the struggling British brands it bought in June last year.
Tata has said that it wants to target India’s wealthy, but growth in the country’s luxury car market may be more limited than hoped, not least because of the global economic slowdown. “Tata’s challenge will be to carve out a niche in a market that overall is very tough and very competitive,” said David Leggett, managing editor at industry website Just-Auto.com. “Both brands have a historical brand appeal but it is never easy to establish a brand in new markets.”The Chinese market appears to have more potential for luxury car manufacturers, said Daniel Schwarz, an auto analyst with Commerzbank. “India offers better options for the mass segment this is why Tata has launched the Nano there.”The brands were officially launched at a ceremony in Mumbai on Sunday by Ratan Tata, the chairman of the Tata Group. “Jaguar Land Rover has been well received and well established in India, but over the years this brand has been disconnected from India,” he said.Jaguar Land Rover’s chief executive, David Smith, also said Sunday that the company might cut more jobs if its slump in sales continued, in addition to the 2,000 job cuts announced last January. The two luxury brands do seem to have potential in emerging markets: While Jaguar and Land Rover sales fell by 35% in the U.S., U.K. and Europe between June 2008 and March 2009, sales increased by 8% in Russia and China over the same period, according the companies’ figures.Jaguar Land Rover has not performed well over the last 20 to 25 years in the U.K. due to “many failures of investment”, according to Howard Wheeldon of BCG Partners in London. The company has been in the hands of many owners, from the U.K. government to Ford Motor, and has struggled with overcapacity.
Since it produces cars that are less eco-friendly than other models, Jaguar Land Rover is also more exposed to higher fuel prices, as well as E.U. targets on carbon dioxide emissions that have put pressure on the research and development side of its business.
“This time Tata will give Jaguar Land Rover the support it needs, but for the moment it still needs the U.K. government assistance,” Wheeldon said. Last December, the company asked the British government for state aid to help it ride out the recession.
Tata is also said to have injected capital to help the struggling company. Tata Motors
was down 0.4% in pre-market trading in New York on Monday.

Mahindra IPO Spells Success – US-FOREX.US

Forex-Publisher — Fri, 26 Jun 2009 17:46:17 +0000

MUMBAI -
India’s first public offer in 15 months, from timeshare firm Mahindra Holidays & Resorts, concluded successfully on Friday. The issue of 9.27 million shares received a deluge of 60,000 applications and bids for 90.83 million shares at the end of trading as the Sensex gained 419 points, or 2.9%, to close at 14,765.”We’ve done well,” remarked Mahindra Holidays & Resorts Chairman Arun Nanda, adding that 75% of the book was in the upper part of the 275 rupees to 325 rupees price range of the issuance.The portion for qualified institutions was oversubscribed 12.8 times; for high net-worth investors, 11 times. The response of retail investors was comparatively muted, their portion being subscribed three times. That may have had something to do with the pricing, said analysts. “Mahindra Holidays charged a premium for its unique business model, which institutional investors were willing to pay,” observed Ashok Kumar, founder of ipoguru.com, a portal that tracks new offerings. Mahindra Holidays, part of the 6.7 billion Mahindra conglomerate, is by far the market leader in India’s rapidly growing time-share industry. The company’s IPO, originally scheduled for 2008 and postponed due to a weak stock market, opened Tuesday amid keen anticipation .Success notwithstanding, analysts concurred that it is too soon to conclude that Indian retail investors have rediscovered their appetite for IPOs. “A comeback by retail investors requires a more modestly priced issue,” said Kumar adding that a price band of 210 rupees to 250 rupees would have attracted more retail applications.
The government should take note as it prepares to kick-start a slew of offerings by state-owned enterprises after the federal budget on July 6. Said Kumar: “Premium valuations are justified once the market has picked up.”

Nilekani Quits Infosys To Join Government – US-FOREX.US

Forex-Publisher — Thu, 25 Jun 2009 14:46:12 +0000

MUMBAI -
In a rare and refreshing move, the Indian government has tapped a corporate executive to take charge of a long-delayed project to provide identification numbers to its 1.1 billion citizens, akin to a social security number. Nandan Nilekani, the much respected co-chairman of Infosys Technologies
, India’s second largest IT firm, will head the newly formed Unique Identification Authority of India. Nilekani’s appointment, announced Thursday, was mooted by prime minister Manmohan Singh and gives him the rank of a cabinet minister. The board of Infosys accepted Nilekani’s resignation which comes into effect from July 9. In a press release, N. R. Narayana Murthy, Chairman and Chief Mentor, said, “We are glad that an extraordinary individual like Nandan has got an opportunity to add value to India through this position.”Speaking to television channel NDTV, T.V. Mohandas Pai, director-human resources at Infosys commented that: “We’re going to miss him. But the larger context always has to win.”In an interview with CNBC-TV18, Nilekani said that while the decision to quit Infosys was a difficult one, it was an offer he couldn’t refuse. “The cause is so big and in the interest of the nation.” The ID project, he added, is crucial for not just security but ensuring financial inclusion for all citizens.
Nilekani’s contemporaries laud his move. Kiran Karnik, former head of the National Association of Software and Services Companies, an IT industry association that Nilekani helped co-found, said it was “rare” for a corporate executive to join the government. “That the government has picked someone of Nanda’s caliber and track record shows that they are serious about getting this project completed.”
Nilekani, 54, has been part of Infosys, a company he co-founded with five others, since its inception in 1981. The 3.45% stake that he holds with his family, worth 714 million today, has earned him a spot amongst India’s richest. Nilekani is also among the country’s more philanthrophically-inclined entrepreneurs. He’s a regular donor to IIT, his alma mater and he and his wife recently pledged 5 million to Yale University, where his children study, to start an India studies program. An engineer from the elite Indian Institute of Technology, he started his career as a low-paid software engineer at a time when India’s outsourcing industry was still to take off. He ran Infosys as chief executive officer and managing director for five years until 2007. Giving up operational charge provided Nilekani, whose views inspired the title of NewYork Times’ columnist Thomas Friedman’s book The World is Flat, to pursue his own passion for writing and public service. He is a member of the National Knowledge Commission and the national advisory group on e-governance. He also sits on the review committee of the Jawaharlal Nehru National Urban Renewal Mission. Last year, Nilekani published Imagining India: Ideas for the New Century, a book that devotes a chapter to harnessing technology for transformation.”This is Nandan’s big opportunity to walk the talk,” said Karnik.