Financial Express Summary - 12th October

Submitted by: Group No.6
Section I
Danish Raj Manuja
Deepak Sah
Chandra Prakash

NO PRIORITY SECTOR RELIEF LIKELY
RBI could nudge big foreign banks on to subsidiary route

RBI may ask foreign banks which have attained a particular size, to convert into fully owned subsidiaries rather than operating as branches. However it may not be mandatory for the banks to comply with it.
It is unlikely that it will provide any relief to them in priority sector requirements.
The RBI seeks to implement these guidelines to exercise greater control over the banks; their global and domestic operations.

Kochi IPL franchise grapples with stake holding tug-of-war
Due to irregularities in the shareholding pattern the leading teams of Rajasthan Royals and Kings XI Punjab have been ousted from Indian Premier League.
To resolve the fight between the promoters on the issue of shareholding the Kochi team needs to convert sweat equity into direct equity and register itself under the Companies Act.
The time line decided by the BCCI for implementation for the above mentioned measures is 10 days.

Trio shares Nobel for Economics
Peter Diamond, Peter Diamond, Dale Mortensen and Christopher Pissarides were honored with the 10 million Swedish kronor worth Nobel Prize.
They have been awarded this for developing a theory that helps explain why many people can remain unemployed despite a large number of job vacancies.

Key commodities cross 2008 peaks on demand, liquidity
Prices of major commodities like gold, iron ore, silver etc. recently crossed their 2008 peak levels.
The major reason sited behind this is the increase in global demand and shortage of supply, and excess availability of liquidity.
Some analysts perceive in the situation a throwback to the per-Lehman days when soaring commodities pushed up inflation across the globe and forced countries to resort to protectionist measures like tariff hikes and export controls.

AGARWAL SAYS RS 355 OFFER LUCRATIVE;ONGC DOESN’T HAVE PRE-EMPTIVE RIGHTS: GAMMELL
Vedanta not to hike Cairn open offer price
Vedanta Resource Chairman Anil Aggarwal has refused to increase the open offer price to minority stake holders of Cairn India claiming that the current offer of Rs. 355 is very lucrative.
Vedanta will buy up to 60% stake from Cairn Energy Plc in Cairn India, and Vedanta subsidiary Sesa Goa filed papers for an open offer for an additional 20% stake. Cairn Energy holds a 62.36% stake in its Indian unit.
Bill Gammell, chief executive officer, Cairn Energy Plc said Oil and Natural Gas Corporation (ONGC) has pre-emptive rights on the asset sale and not on the corporate transaction. ONGC is a 30% partner in Cairn India’s Rajasthan oilfields and has been paying the royalty for it.
The Vedanta group is offering Cairn India’s parent Cairn Energy Rs 405 a share, which includes Rs. 50 as a fee for not competing with it in India, Sri Lanka and Bhutan for the next three years.

Tata Tele to launch 3G services by Diwali

Tata Teleservices (TTSL) will become first private sector telcom company to launch 3G services in india.
Tata Tele's 3G services would be in partnership with Japan's NTT DoCoMo which has 26% stake in the company.

Fiat mulls separate distribution network

Fiat is considering separating its distribution network from Tata Motors.
Fiat will setup its own pan-India distribution network gradually and simultaneously maintain its existing shared dealerships with Tata Motors.
Fiat is unhappy with its sales figures in the past three years of its joint venture with TATA , which have merely reached to the half of its sales targets.

IT cos to hire non-techies for managing infrastructure
IT companies into Remote Infrastructure Management services (RIM) have started employing non-technical professionals.
Companies in the sector remotely monitor and manage an enterprise’s IT infrastructure like desktops, laptops,notebooks,servers, network devices, storage devices , and security devices. Almost all Indian large tier IT services firms now have their feet in RIM which had export revenues of $4.3billionin FY10, a growth of 11% over the previous year.


China ups big banks’ reserve ratio
Central bank to focus on quantitative monetary tools instead of raising interest rates
China’s central bank has raised reserve requirements for six large commercial banks.
This step is taken to drag the excess liquidity from the market which was being caused by stabilizing economy and incoming foreign funds.
The ratio will increase 50 basis points and for a period of two months.
The current level is17% for the biggest banks and 15% for smaller ones.

Greece likely to get more time to repay loan:IMF
Dominique Strauss Kahn,managing director IMF said that The International Monetary Fund is prepared to give Greece more time to repay its loan to the institution if European nations, which provided the bulk of a joint 110 billion euro ($154 billion) package, decide to do so first.