Govt to look into Ulip ban issue

The Finance Ministry  said it will look into the orders of the two regulators -- SEBI and IRDA-- on equity linked products sold  by 14 companies.

ULIPs--a common insurance plan sold by life insurers, where the money collected from consumers is invested into equity and debt markets-- have become a bone of contention between the two financial regulators, with both claiming regulatory authority over the scheme.

Taking SEBI head on, insurance regulator IRDA had asked insurance firms to continue selling ULIPs, a day after the capital market watchdog barred 14 insurers from selling these products without its approval.

The companies, which come under the ban include Reliance Life, SBI Life, ICICI Prudential, Tata AIG and HDFC Standard Life.

Source: Economics Times

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Yamini

Bidding for 3G Spectrum aggressively....

On day one the 3G spectrum auctions witnessed huge response from bidders with the

bid price escalating to Rs 3,913.81 crore from the base price of Rs 3,500 crore.

Five round of auctions were completed during the closing of the first day. The auctions would resume on Saturday.

One of the most sought after service areas, Delhi got bids from three players for the three available slots. Among all the service areas Delhi attracted the highest price Rs 373 crore, followed by Mumbai and Maharashtra at Rs 362.66 crore.. The reserve price for Delhi was set at Rs 320 crore.

Altogether nine applicants participated in the bidding process. These players include Aircel, Bharti Airtel, Idea, Reliance, Tata Teleservices Vodafone, S Tel, Videocon and Etisalat DB Telecom.

The Department of Telecom (DoT) on its website stated that Category A circles such as Gujarat, Andhra Pradesh, Karnataka saw aggressive bidding on par with top metros at Rs of Rs 362.66 crore each.

There will be multiple, round-the-clock auction simultaneously for 22 circles. There are three and four slots of 3G spectrum. The government has set a target of raising up to Rs 35,000 crore from the auction of spectrum for 3G and BWA sepctrum.

The department has fixed the reserve price for broadband wireless access (BWA) spectrum at Rs 1,750 crore. There are three slots for BWA. The auction for BWA spectrum is scheduled two days after the 3G auctions are concluded.

Hotline rings between India & China

India and China signed an agreement for establishing a hotline between New Delhi and Beijing to enhance the quality of communication and evolve better relationship, Nirupama Rao, foreign secretary, told reporters on Wednesday evening. This is an important confidence building measure, she said. Krishna, who met Chinese premier Wen Jiabao and foreign minister Yang Jiechi, raised a wide range of issues including the problem of stapled visas given by China to certain Indian citizens including Kashmiris. Rao seemed to suggest there was no clear assurance from the Chinese side when she told reporters that the matter was a subject of ongoing discussions. In his 45-minute talk with premier Wen, Krishna sought Beijing’s support for a seat in the United Nations Security Council. China reiterated its known stand without committing itself on the issue. In the 2008 joint statement, China had said: “The Chinese side understands and supports India’s aspirations to play a greater role in the United Nations, including in the Security Council”. Rao said the issue of hacking Indian military websites from a location in China was not discussed at the meetings with Chinese leaders. Indian government has taken steps to safegaurd its important internet resources, she said. The two sides reiterated their desire to settle the boundary dispute. The Indian minister also raised the issue of the detention of 21 diamond merchants from Gujarat by China on charges of smuggling. He emphasized that the legal process concerning the detainees should be conducted in a transparent manner. Chinese leaders made no effort to deny reports that construction companies from the country were involved in developing infrastructure projects in PoK. The only assurance they gave Krishna is that Chinese work in the area is without prejudice to the fact that it is a disputed area. China also told India that it has not built any dam projects in the upper reaches of Brahmaputra, which starts from China and feeds India’s northeast region. China’s plans were limited to small hydro electricity projects in the region.

Greece problem drags market..

The Greece sovereign debt problem led to a sharp fall in Euro and European equities yesterday which affected the global market sentiments. UK and ECB kept the interest rates unchanged and also continued to give stimulus support indicating weak economic fundamentals of Euro Zone.

In domestic market fear of liquidity crunch due to 3 G auctions and launch of large FPO’s like SAIL affected the market sentiments and led to a sharp fall in the market.

The government today approved hiking Himachal Pradesh's stake in Satluj Jal Vidyut Nigam by 0.5 per cent to maintain the state's equity in the PSU's 412-MW Rampur project at 30 per cent.

Suzlon Energy its subsidiary REpower Systems AG has bagged a contract from an Italian company for supplying 18 wind turbines.

Essar Energy Ltd plans to raise about $2.5 billion (over Rs 11,250 crore) through an initial public offering of shares, the largest overseas IPO by an Indian firm, in the UK.

Elecon Engineering Company has bagged an order worth Rs 49.90 crore from Sical Logistics for material handling equipment.

GVK Power and Infrastructure Ltd is ready to acquire a majority stake in Mumbai and Bangalore international airports.

Gujarat State Petroleum Corporation (GSPC) has inked an agreement with government of Egypt for oil and gas exploration in the African nation where the Indian firm has been alloted blocks.

The government today approved a 20 per cent disinvestment in Steel Authority of India Ltd that would fetch a total of Rs 16,000 crore.

Aban Offshore today said it has bagged a contract valued at $159 million (about Rs 716 crore) from Brunel Shell Petroleum Sendirian Berhad for the deployment of the jack-up rigs.

Higher prices of milk, fruits and pulses pushed food inflation to 17.70 per cent for the week ended March 27.

India closed the doors on new foreign direct investment in cigarettes. ITC may gain.

Oil companies continues to bleed

The surge in crude oil prices is projected to more than double the losses of oil marketing companies to Rs 98,000 crore and force the government to seriously consider a hike in petrol and diesel prices.

Upstream companies such as ONGC will also take a hit due to the strengthening of the rupee, besides sharing the burden of rising oil subsidies.

International crude oil prices are around $87 a barrel, an 18-month high. However, this is still a long way from the record high of $147 in July 2008. The Indian basket of crude oil is at over $83.

The under-recoveries of oil marketing companies will be to the tune of Rs 98,000 crore, given that the average crude oil price is $80 per barrel. A part of this burden will be absorbed by upstream oil companies. However, it will not be possible for the government to absorb the balance. Therefore, an increase in petrol and diesel prices has to be seriously considered,” S Sundareshan, petroleum and natural gas secretary.

Considering an exchange rate of Rs 45.70 per dollar while calculating the losses. The rupee closed at Rs 44.45 to a dollar today.

Oil marketing companies are estimated to have closed 2009-10 with gross under-recoveries of Rs 45,000 crore (with Indian crude oil basket averaging $69.76 a barrel).

Every dollar increase in crude oil price meant an additional burden of Rs 3,000 crore annually for oil marketing companies

Appreciation of Re 1 against the dollar meant an annual saving of Rs 7,000 crore for the industry. For the current fortnight, oil marketing companies are estimated to be losing Rs 6.45 on every litre of petrol, Rs 5.50 a litre on diesel and Rs 19 on kerosene. They also lose Rs 260 per LPG cylinder.

Initial Glimpse :Chennai Metro Rail by 2013

Trains with four coaches may start zipping across the much-awaited Chennai Metro Rail line from Koyambedu to St Thomas Mount by the end of 2013. The Metro Rail project, Chennai’s hope of a super-fast transport network, “is going as per schedule” and work on the 13-km stretch between Koyambedu and St Thomas Mount is likely to be completed by end of 2013, according to a senior government official. “We should start operating services on the 13 km stretch in another two-and-half years,” the official said. Piers are being erected for the 4-km stretch from Koyambedu to Ashok Nagar and the 9-km line between Ashok Nagar and SIDCO Industrial estate now. Tenders for constructing stations on the stretch have been floated. The Tamil Nadu government has promised to launch the Rs 14,600-crore Metro Rail project which promises to take 13 lakh passengers every day from Washermanpet to the Meenambakkam airport within 45 minutes by 2015. With a frequency of every five to six minutes, trains will be operated on the Metro Rail. And in just one hour, 30,000 passengers are expected to be transported from Washermanpet to the airport. The Metro Rail project will operate trains on two corridors. The first corridor stretches from Washermanpet to Chennai airport via Mannadi, High Court, new Secretariat complex, Mount Road (LIC), Thousand Lights, Saidapet, Little Mount and Guindy, Alandur, OTA, Meenambakkam. While the stretch from Washermanpet to Saidapet would be an underground service, from Saidapet to Chennai airport, the trains would ply on an elevated track. The government is studying extending the project up to Thiruvottiyur in north Chennai. The second corridor traverses from Chennai Central up to Chennai airport, with halts at Egmore, Nehru Park, Kilpauk Medical College, Pachaiyappas College, Shenoy Nagar, Anna Nagar East, Anna Nagar tower, Thirumangalam, Koyambedu, CMBT, Arumbakkam, Vadapalani, Ashok Nagar, SIDCO and St Thomas Mount. From Chennai Central to Thirumangalam, the trains will speed on underground tracks and from Koyambedu to Chennai airport it would be an elevated stretch. However, with the 13-km stretch of the project between Koyambedu and St Thomas Mount now “going on schedule”, it may become partially operational by 2013, the official said. Besides financial assistance from the Central and the state government, the project is also being funded by the Japan International Cooperation Agency (JICA). The stretch from Officer’s Training Academy to airport is caught is a tangle because the Airports Authority of India (AAI) has objected to Chennai Metro Rail from constructing an elevated corridor. AAI has informed metro rail that the viaduct will obstruct the flight path of the aircraft using secondary runway. Discussions are on with the airport to settle the issue. Different options are being studied, to reduce the overall height of the viaduct, because underground tunnel is expensive and can escalate cost of the project. Contracts for design and construction of the elevated viaduct from Koyambedu to Ashok Nagar at a cost of Rs 194.20 crore have been awarded to the Hyderabad-based firm Soma Enterprise Ltd. And the Rs. 141.13 crore contract for construction of elevated viaducts, including the viaduct at stations from Ashok Nagar to St Thomas Mount, have been awarded to Larsen and Toubro. The same company has bagged the contract for the Rs 173.30 crore elevated viaducts from Saidapet to Officers Training Academy.

Prawling Indian companies

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