19th October - ECONOMIC TIMES

Medha
Mansha Singh
Section - E

ECONOMY:
Hydrocarbon,infra sector defers Rs 40K cr worth projects in Q2

MUMBAI: Diversified group, Larsen & Toubro (L&T), today said that the Indian industry, mainly hydrocarbon and infrastructure , have deferred Rs 40,000 crore worth projects in Q2 FY 11.

Large contracts sometimes get deferred as the decision-making process is long. Lots of orders have been pushed towards Q4 FY 11, he said. However, there will be no major impact on L&T's performance as these orders are not cancelled and there are enough indications of orders fructifying in the remaining two quarters of current fiscal, Deosthalee said.The company said new orders rose 11 per cent in the quarter ended September from a year ago and said it expected to maintain its growth momentum in the medium-term. L&T's order back-log stood at Rs 1.15 trillion as of end-September. An eighty per cent of postponement of orders are in the domestic and 20 per cent in the international market, he said.

FINANCE:
Microfinance, macro problems?

Is it possible to make money while helping people out of poverty? In the last five years or so, one business, microfinance, seemed to suggest that the answer was yes. Look at the numbers: from merely $12 million in 2003, the market for lending tiny amounts of money mainly to groups of women has grown to more than $7 billion now. And analysts expect this to grow to a staggering $50 billion soon.It’s easy to understand why. Many people in rural India don’t have access to loans from formal banks. In any case, procedures are cumbersome, paperwork intimidating. That explains why people go to moneylenders, who charge them upwards of 50% for loans. Microfinance, based on a model borrowed from Bangladesh, was supposed to change all that.Micro-credit institutions would make small loans to groups of women at rates lower than what moneylenders charge. These would go into productive investments and defaults would be kept low because the entire community, or a group of women borrowers, would keep an eye on each other to make sure that the funds were used properly and repayments were on time.Today, it’s reckoned that women’s selfhelp groups (SHGs) reach about 50 million people. Another 20 million are covered by microfinance institutions (MFIs). That leaves about 100 million people who still rely on moneylenders or relatives for loans. That’s a huge untapped market, which explains why analysts are falling over each other to talk up microfinance.A few months ago, India’s largest micro-credit company, SKS Microfinance, had a hugely successful listing. But now, the whole micro-credit story seems to be fraying at the edges. And that’s even if you discount the churn at the top in SKS. What’s worrying many people is whether it’s possible to keep poor borrowers happy while growing profits fast enough to keep shareholders smiling as well.


MARKET:
Refining profits in cooking oil and sugar

All petroleum refineries make money by buying crude oil low and selling the final products for as much as possible. The really smart ones do the actual refining so cheaply that they always make money, no matter at what price they buy crude and sell the oil. Efficient refining lets oil companies survive in the cut-throat global market. So, why are Indian cooking oil and sugar companies now queuing up to take notes? ET helps you join the dots.For cooking oil companies, refining margin lies at the heart of the business model. There is a cost to turning crude palm oil (CPO) into refined palm oil that we can consume. Malaysia and Indonesia, the world’s two biggest palm oil producers, export both CPO and refined oil. The price difference between the two is equal to the processing cost of their best refineries that exploit economies of scale and supply-chain management to perform this task most efficiently.

India is already the world’s largest palm oil consumer and imports will continue apace. So, refiners have assured demand. Moreover, oils extracted from homegrown mustard, soya and groundnut are always more expensive than palm oil. So, local competition is zero.
POLITICS/NATION
Tax sleuths conduct search operations on CWG contractors
NEW DELHI: Officials of the Income Tax Department on Tuesday started search and investigative operations in at least 25 premises of companies and individuals who won lucrative contracts for the just-concluded Commonwealth Games. Among those whose premises were visited by the tax sleuths was senior leader of the opposition Bharatiya Janata Party (BJP) Sudhanshu Mittal, whose close relatives had won some Games contracts, a senior official of the department said.
The development follows a host of measures announced by the government since the 12-day Games drew to a close Oct 14 to look into allegations of misappropriation of funds and questionable procedures followed for award of contracts for various projects.
Pakistan rejects report about Bin Laden's presence on its soil
KABUL: Pakistan has rejected the report that the world's most wanted terrorists and Al-Qaeda's top leaders Osama bin Laden and his deputy Ayman al-Zawahiri have been living comfortably in the country's northwest region. "I categorically deny the report about the presence of Osama bin Laden or Ayman Al Zawahiri or even Mullah Omar in Pakistan," the Dawn quoted Interior Minister Rehman Malik, as saying to reporters. "Bin Laden... and all other terrorists are anti-Islam and anti-Pakistan and hired assassins. If we have any information we will take action against them," he added.

INDUSTRY
Vodafone leads race for Gujarat CUG deal
· AHMEDABAD: The country’s largest cellular service provider Bharti Airtel and telecom giant Vodafone Essar are in the final race for the prestigious bid to connect 3.75-lakh Gujarat government employees in the country’s largest closed user group (CUG) network. However, state government sources say, Vodafone is leading the tally with overall 91 points, followed by Airtel’s 79.5 points, Tata’s 55 points, BSNL’s 50 points and Idea’s 40 points. On Monday, the Gujarat administration department (GAD) opened financial bids that carries 40% weightage, a week after it opened the technical bids. The latest bid saw Airtel going for a kill by proposing the lowest tariff, over 40% discount to the base rates, beating Vodafone and Tata that offered 35% discount, Idea 30%, and BSNL 20%.


· SENSEX20290.48 121.59
· NIFTY6082.50 6.55
· INR-USD44.29 -0.87
· GOLD (Rs/10g.)19948.00 58.00


Stock exchange showed data that state run coal india's IPO which was expected to raise as much as $3.5 billion,was fully covered on tuesday i.e.the second day of the offer.BJP President Nitin Gadkari has asked for CBI investigation regarding giving the approval of the 'inflated budget'of various games projects by the PMO and Union Cabinet(these budgets were not verified).State owned Bharat Petroleum Corporation Ltd(BPCL) on tuesday said it has made a second natural gas discovery in a block off Mozambique but did not give the scale of reserves the finds may hold.Gold prices surged by rupees 135 to rupees 20,085 per ten grams in delhi today on emergence of frantic buying by stockists.SBI's public bond issue was subscribed 17.3 times and the country's biggest lender intends to close the issue on wednesday.Nifty ended at 6011.10,down 64.85 points or 1.07%.Bombay stock exchange's Sensex closed at 19929.08,down 239.81 points or 1.19%.Sun tv founder Kalanithi Maran and his unlisted aviation firm,Kal Airways Pvt.Ltd.,acquired an additional 9.22 million shares,or 2.28% in low cost carrier Spice Jet.Rajasthan Royals has alleged that BCCI was yet to pay them rupees 40 crore due from IPL 2 and 3.Technology giant Apple Inc has reported a 70% jump in net profit to $4.3 billion in the fourth quarter of the year,driven by robust sales of iPhones,iPads and Mac computers.According to the US Border Patrol figures,the number of Indian nationals entering illegally via Mexico has shot up from 204 in 2009 to 975 in 2010,a 475% increase.Now we can play Kaun Banega Crorepati online.