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JOSHUA BENHUR ROLL NO:03 NMBA FINANCIAL RISK MANAGEMENT

Important News from Economic Times dated from 28-11-2011 to 11-12-2011.

28 NOV 2011

IMF readying $794 billion bailout plan for Italy

The IMF could bail out Italy with up to 600 billion ($794 billion), an Italian newspaper reported on Sunday,as Prime Minister Mario Monti came under pressure to speed up anti-crisis measures.The money would give Monti a window of 12 to 18 months to implement urgent budget cuts and growth-boosting reforms "by removing the necessity of having to refinance the debt.

Gold jumps 1 per cent on Europe's bailout hopes

Gold jumped above $1,700 an ounce on Monday due to early gains in the euro and hopes that Europe will take bolder steps to resolve a crippling debt crisis, while a recovery in equities also prompted buying from a few investors. Gold held on to its 1 per cent gain even after the International Monetary Fund said it was not in discussions with Italian authorities on a financing plan, dousing speculation that it was preparing an aid package.

29 NOV 2011

Government's internal debt rises in Q2

The Indian government's internal debt rose during the second quarter of 2011-12 and the it had to pay higher interest to raise funds. The internal debt to GDP ratio increased to 32.3% of GDP during Q2 of 2011-12 from 31.4% in the previous quarter, the quarterly public debt management report released by the ministry of finance showed on Monday.

Bharti Airtel renews managed services contract with Ericsson

Bharti Airtel has renewed its contract for five years with Swedish gear maker Ericsson to manage and maintain its mobile networks in 15 circles. Bharti started outsourcing a key plank of its business strategy in 2004 to help reduce expenses and build the minutes factory model of low costs and high volumes. Executives said that the 15-circle deal is limited to Bharti's 2G (second generation) networks.

30 NOV 2011

Facebook plans $10 bn public issue

Facebook Inc..is considering raising about $10 billion in an initial public offering that would value the world's largest social-networking site at more than $100 billion, The company may file for the IPO before the end of the year, said the person, who asked not to be identified because the deliberations are private. Exact timing for the filing hasn't been determined.

Uncertain diesel pricing policy hits expansion plans of several carmakers, including Maruti Suzuki & Hyundai India
Ambiguity over diesel pricing and possibility of additional duty on diesel cars have forced several carmakers, including market leader Maruti Suzuki, to go slow on or even abandon their expansion plans in the fastest-growing segment for India's automobile industry. In the past few months, demand for diesel cars has gone through the roof with the gap between prices of diesel and petrol widening as much as Rs 25 per litre compared with a price gap of Rs 9.00-9.50 in June 2010. Almost every car powered by diesel now has a waiting of more than 3-6 months.

1 DEC 2011

GDP growth slumps to 6.9%, lowest since 2009

India's economic growth slumped to its lowest in more than two years while output expansion at key industries tumbled to a six-year low, prompting Finance Minister Pranab Mukherjee to warn of "hard days" ahead. Growth in GDP, or the value of goods and services produced, dipped to 6.9% in the three months to September compared with 8.4% in the year-ago quarter, as rising interest rates and stubborn inflation crimped demand.

Rupee sheds 7% in November; worst fall in 16 years

The rupee suffered the worst fall in 16 years in November, plunging nearly 7% and hitting a record low, as persistent dollar demand from importers and portfolio outflows due to global risk aversion pounded the local unit. The rupee continues to face further depreciation threats on the back of a gaping current account deficit and slowing growth. The worst performer among Asian peers, the rupee has lost 6.7% in November, taking its fall so far in 2011 to 14.37%. On Wednesday, the rupee closed at 52.20/21 per dollar, 0.35% weaker than Tuesday's close, recovering from the day's low of 52.42 after China cut its banks' reserve requirement ratio by 50 basis points, which aided global risk appetite.

2 DEC 2011

UN warns of possible new recession

The United Nations has sharply cut its economic projections for global growth and says that the world is at risk for a new recession. The U.N.'s report on the World Economic Situation and Prospects 2012, released on Thursday, forecasts 2.6 percent growth next year in its main, relatively optimistic scenario and just 0.5 percent growth in its pessimistic scenario.

Disney CEO Iger buys $1 million worth of Apple stock

Apple Inc's newest board member, Walt Disney Co Chief Executive Officer Bob Iger, bought about $1 million worth of the iPhone maker's shares earlier this week, a symbolic gesture of confidence in the prospects of the company. Iger, who was appointed to Apple's board on November 15, bought 2,670 Apple shares on the open market on Tuesday at an average price of $375 each, according to a U.S. Securities and Exchange Commission filing.

3 DEC 2011

Europe shares record biggest weekly gain since 2008

European shares rose on Friday, recording their biggest percentage weekly gain since late 2008 on hopes euro zone leaders were coming together to find a solution to the debt crisis. The STOXX Europe 600 Banking Index rose 4.3 percent after French President Nicolas Sarkozy said he and German Chancellor Angela Merkel would put forward joint proposals to achieve greater fiscal integration in Europe and support countries in difficulty.

Honda to recall 273,000 vehicles in US

Honda has announced that it will recall about 273,000 vehicles sold in the US to replace the driver's airbag inflator. The affected airbag inflators may deploy with too much pressure, which can cause the inflator casing to rupture and could result in death or injury, Xinhua reported, quoting a statement from Honda Friday. The recall includes certain Honda models between 2001 and 2003, and Acura vehicles. The company said owners should take their vehicles to an authorized dealer as soon as they receive mailed notification from Honda.

4 DEC 2011

Reserve Bank of India vows to check rupee slide

India's central bank has defended its decision not to intervene actively in the currency markets, saying it does have the instruments and the capacity to boost supply of foreign exchange into the markets and will use them at the appropriate time. The deputy governor of the Reserve Bank of India,Subir Gokarn, said on Saturday while the recent sharp depreciation of the rupee has in certain quarters led to an assessment of helplessness in dealing with global turbulence, the strategic behavior of the central bank should not be misconstrued as its inability to deal with it.

One week to save the euro as EU summit ends on Friday

One way or another, this is crunch week for the euro. By the end of the EU summit on Friday, European voters and markets will know how their leaders plan to save the single currency bloc. The outlines of a plan have begun to emerge, but details will be thrashed out over a perilous week of high-wire economic diplomacy, starting on Monday, when Germany's Chancellor Angela Merkel comes back to Paris.

5 DEC 2011

Time to step on the gas to bolster US economy: Obama

The US should step up efforts to revive its economy even after the private sector has been creating jobs over the past 21 months in a row,President Barack Obama has said. The nation needs to keep the job creation momentum and strengthen it by efforts including passing a series of jobs bills by Congress to grow the economy faster, Obama said Saturday during his weekly address on the heels of the release of the latest job market report.

Government to weigh restrictions on Forex outflows

Indian authorities will this week discuss imposing restrictions on overseas investments by local companies and curbing pre-payments of foreign loans to conserve dollars if the recent trend of rupee weakening continues. These measures are among a range of options to be considered by a sub-committee of the high-powered Financial Stability Development Council (FSDC), which is meeting on December 8. The falling rupee's 18% decline since August has made it the worst-performing Asian currency this year.

6 DEC 2011

FDI in retail: Decision put on hold, UPA government's authority under cloud
The government has frozen plans to allow foreign firms into India's retail sector, bowing to protests from ally Trinamool Congress, which has upped the ante and put other planned reform measures on notice, potentially dealing a severe blow to the UPA's authority. After Trinamool leader Mamata Banerjee announced on Saturday that the government was set to throw in the towel on the issue, Finance Minister Pranab Mukherjee on Monday formally conveyed to BJP-led NDA and the Left parties the government's decision to put retail FDI on hold.

SEBI seeks regulator to monitor auditors

Market regulator SEBI has called for the creation of an independent regulator to oversee auditors, a move that is being opposed by the Institute of Chartered Accountants of India (ICAI), the industry body that self-regulates the auditing profession at present. The institute has faced charges of not taking timely action against those guilty of misconduct, particularly in the Global Trust Bank and Satyam scams. Auditors vet the financial statements of their clients and play a vital role in ensuring that companies do not fudge their books or provide incorrect financial information to their investors.

7 DEC 2011

Wipro Infrastructure Engineering to to set up Rs 50 cr plant in Bangalore

Wipro Infrastructure Engineering, the hydraulics business of Wipro and Kawasaki Heavy Industries, will invest 50 crore to set up a facility in Bangalore to make hydraulic pumps for excavators, the company announced on Tuesday. The joint venture, called Wipro Kawasaki Precision Machinery, will have an initial capacity of 4,000 pumps which would be increased to 15,000 pumps by 2015, said Wipro in a statement. The new manufacturing unit will be its eleventh manufacturing location globally.

Axis Bank plans to ramp up retail business to 30% by cashing in on credit demand in smaller cities
Axis Bank, the country's third-largest private sector bank, is looking to scale up its retail operations by cashing in on the demand in smaller cities. "The bank aims at increasing the share of retail loans to 30% of total loans from the current 21% in the next three years," said Jairam Shridharan, senior vice-president and head consumer lending and payments. For peers such as ICICI Bank and HDFC Bank retail loans account for close to 40% and 50%, respectively, of the total loan book.The bank's retail loan portfolio stood at Rs 29,343 crore at the end of September.

8 DEC 2011

SEBI may relax norms for Mutual Funds Advertisements

The Securities and Exchange Board of India (Sebi) is planning to relax advertisement norms for mutual funds. The securities market regulator may allow mutual funds to use more space in advertisements to promote their products by reducing the disclaimer size. The mutual fund industry has been crying hoarse that the current advertisement code is very stringent and leaves little room to make a marketing pitch to investors. "There are a lot of statutory requirements because of which fund houses are not able to communicate effectively," said a person familiar with the development.

Rise in illiquid stocks in the market fuel Liquidity crisis

The number of illiquid stocks in the market has surged as investors hold on to cash. According to a list compiled by the Bombay Stock Exchange(BSE), the number of such securities rose from 1,907 to 2,445 between January and November. While the list mostly includes equities, some of the listed mutual funds and exchange-traded funds (ETFs) also figure among the infrequently traded, low-volume securities. Since August, the BSE identified as many as 370 additional scripts as illiquid. Between August and November, illiquid stocks on the NSE rose from 296 to 325.

9 DEC 2011

FMCG: Inflation, global commodity prices likely to affect December quarter

FMCG firms in India posted an average 21% revenue growth in the quarter to September as consumers maintained their spending spree despite rising prices and higher interest rates. Leading FMCG companies, including HUL, ITC, Nestle and GSK Consumer reported double-digit growth in revenue and profit amid acceleration in volume growth at a time when the government lowered its economic growth target for the fiscal.

PSU banks including UBI, PNB plan to hire 5 lakh as global banks cut jobs in India
State-run banks led by Union Bank of India and Punjab National Bank are picking up the slack in recruitment in financial services with plans to hire as many as 5 lakh in the next few years even as BNP Paribas, Nomura, Barclays and others cut jobs in India. A whopping 44 lakh candidates will appear for a common recruitment test for clerks in public sector banks up to December 11 for about 50,000 jobs in the next four months, bank executives said. This is above the 10.5 lakh who took the examination for officers' posts recently.

10 DEC 2011

BPCL to invest up to Rs 20k cr on petrochem plant, expansion

Bharat Petroleum Corp Ltd (BPCL), India's second-largest public sector refinery, is planning Rs 18,000 crore to Rs 20,000 crore investment over the next five years for setting up a petrochemical plant and expansion of the Kochi refinery. The company is looking at diversification into petrochemicals by building a niche speciality chemical project at a cost of Rs 5,000-6,000 crore at Kochi, and plans to rope in a multinational partner for the project.

Mid-year review: Govt cuts growth forecast between 7.25% & 7.75%; investors cut exposure
The BSE's benchmark index Sensex extended losses to the second day and closed 1.7% lower on Friday as concerns over a slowdown in the economy intensified after the finance ministry cut the country's growth forecast for the current fiscal yearThe economy is likely to grow by between 7.25% and 7.75% in the fiscal year ending March, sharply lower than the original estimate of 9%, a mid-year review of the economy tabled by the finance minister in parliament showed.

11 DEC 2011

YouTube acquires RightsFlow

Google Inc's YouTube online video division has acquired RightsFlow, a firm that manages royalty payments for songwriters and music publishers, for an undisclosed amount. Founded in 2007, RightsFlow handles licencing rights for more than 30 million songs. "We are excited to announce that we have acquired RightsFlow,a NewYork-based company that helps songwriters, recording artists, record labels, distributors and online music services manage music rights," YouTube Product Manager David King said in its blog.

Manappuram Finance to maintain 13% NIM in current fiscal

Pure-play gold loan player Manappuram Finance is hopeful of maintaining its net interest margin ( NIM) at around 13 per cent in the current fiscal despite a rise in cost of borrowing, the cost of borrowing is around 12.5 per cent on an average and despite rise in the borrowing cost, they hope to have a slightly higher margin at 13 percent for the fiscal.