There Goes The ONGC FPO
Despite a US$8/bbl decline in Brent crude last fortnight and a `5/litre rise in petrol,
auto-fuel under-recoveries for 16-31 May remained high, at `13/litre, as losses on diesel/petrol were `14.7/`5.2 a litre. The GoM is expected to meet this week to decide on increases in prices of diesel and cooking fuel.
auto-fuel under-recoveries for 16-31 May remained high, at `13/litre, as losses on diesel/petrol were `14.7/`5.2 a litre. The GoM is expected to meet this week to decide on increases in prices of diesel and cooking fuel.
High under-recoveries continue despite petrol price hike. Despite a US$8/bbl decline in Brent crude last fortnight and a Rs5/litre rise in petrol, auto-fuel under-recoveries for 16-31 May continued to be high at `13/litre as losses on diesel/petrol were `14.7/`5.2 a litre. We estimate auto-fuel breakeven crude at US$77.8/bbl (petrol: US$101; diesel: US$72), up US$1 from the previous fortnight due to the recent increase in petrol prices.
Diesel price-hike imminent. The GoM (Group of Ministers) is expected to meet this week to decide on price hikes in diesel and cooking fuel. We believe diesel would be upped by `2-3/litre, with only a marginal increase in cooking-fuel prices. Diesel has a 4.67% weight in the wholesale price index, and an indirect impact of a similar magnitude would be felt in the next 3-4 months.
Refining margin strong; complex refiners gain. The refining margin for 1-15 May continued to be strong, at US$12.1/bbl, due to the Mississippi floods which led to shutdown of some US refining capacity. Refining margin for 1QFY12 till now has been US$9.7/bbl compared with US$7.4 in 4QFY11. The Brent-Dubai spread was strong, at US$5/bbl, adding to complex refiners' margins.
The residential property market may be stagnant, but the demand for office space is still strong if a lease transaction in Bandra-Kurla Complex (BKC) is any indication.
The deal, touted as the highest ever for a commercial property in terms of annual rent, will fetch the owner, Parinee Developers , almost Rs 70 crore a year from the Sahara Group. TOI has learnt that the agreement is expected to be sealed by next week.
The deal, touted as the highest ever for a commercial property in terms of annual rent, will fetch the owner, Parinee Developers , almost Rs 70 crore a year from the Sahara Group. TOI has learnt that the agreement is expected to be sealed by next week.
According to real estate sources, the UP-based Sahara Group will take over 2.5 lakh sq ft space in Parinee Cresenzo, a 20-storey commercial project by Parinee Developers, co-owners of the Kochi Tuskers IPL team. The two parties reportedly negotiated the deal for a lease amount of Rs 225 a sq ft, which works out to an annual rent of close to Rs 70 crore. "A few buildings in BKC command over Rs 375/sq ft.
However, the Parinee-Sahara deal is the highest in terms of the total annual rent," said a property tracker. "Given a scenario in which the lease rental rates for ready-to-occupy premises in BKC are between Rs 300 and Rs 350 per sq ft, it looks like a good transaction."
Parth Mehta, business development head of Parinee Developers, refused to comment on the deal. Industry sources said BKC was currently the "hotspot" for most corporates, MNCs and banks as compared to the rival commercial business districts of Lower Parel and Nariman Point-in the latter, lease rentals are currently between Rs 225 and Rs 250/sq ft on an average. "Nariman Point buildings can only offer offices ranging between 500 sq ft and 3,000 sq ft but clients who want a floor space in excess of one lakh sq ft find it readily available in BKC," they said.
The Cresenzo building stands on a 2.2 acre plot which Parinee acquired from MMRDA ( Mumbai Metropolitan Region Development Authority) on an 80-year leasehold basis in July 2006 for Rs 536 crore. In 2008, the builder sold 2.2 lakh sq ft to Standard Chartered, for Rs 720 crore. About four months ago, BNP Paribas paid about Rs 375 per sq ft for 1.10 lakh sq ft space in BKC's Maker Maxcity Tower One, a cluster of high-end commercial buildings built by the Maker Group and Reliance Industries .
The annual lease rent works out to almost Rs 50 crore. Automobile giant Volkswagan took on lease 50,000 sq ft space in Maker Maxcity at Rs 500 a sq ft. In 2007, the Gemological Institute of America signed a nine-year lease agreement with the Wadhwa group when it rented 1.06 lakh sq ft in the Trade Centre building in BKC for over Rs 40 crore annually.
A month ago, Citibank India is believed to have bought for over Rs 1,000 crore (Rs 33,000/sq ft) a 3-lakh sq ft office space in a BKC building constructed by the Purnendu Chatterjee promoted-TCG Urban Infrastructure and New York-based realty firm Vornado Realty Trust.
In 2007, the London-headquartered Barclays Bank paid a record-breaking rent of Rs 725 a sq ft per month for a 15,000-sq-ft office space in Worli's Cee-Jay House, whose landlord is aviation minister Praful Patel. It was the highest commercial rental deal in terms of per-square-foot in the country.
Experts said there was hardly any demand in the commercial market in the last few years. "Developers preferred to construct residential apartments due to quick sales at the under-construction stage. Eight of out of 10 files submitted to the BMC for approval were residential. But with growing businesses, there is going to be a demand for quality commercial premises in the Central Business areas,'' they said.
BOX: There are about 300 buildings in BKC, which have come up in phases since the mid-1980s. It was in 1977 that the state government decided to develop BKC into a commercial hub to decongest the overcrowded island city, especially the southern tip of Nariman Point. A government report said that the region, hemmed in by the Western Railway tracks to the west, the airport to the north, LBS Marg to the east and the Mahim Creek to the south, would probably furnish the best location for an alternative centre of business.
The government had announced in this year's budget that it would allow overseas individuals to invest in equity schemes of Indian mutual funds as part of a move to diversify the class of foreign investors in the local equities market.
Securities market regulator, Sebi, the Reserve Bank of India and the finance ministry have been in talks to operationalise a scheme for this and the central bank has suggested that as a prudential measure, a ceiling on investment by these foreign investors should be fixed to start with, two senior officials ent said.
Securities market regulator, Sebi, the Reserve Bank of India and the finance ministry have been in talks to operationalise a scheme for this and the central bank has suggested that as a prudential measure, a ceiling on investment by these foreign investors should be fixed to start with, two senior officials ent said.
The way the scheme will operate is that a foreign investor will have to open a dematerialisation or paperless trading account and a bank account here for which the Know Your Customer norms will be done by a local bank or intermediary registered with regulators here. Once this is done, foreign investors can buy into over 400 equity schemes.
Foreign funds and non-resident Indians who are registered with Sebi are allowed to invest in equity mutual funds but there has hardly been any investment except in select exchange traded funds.
In the Indian equities market, there are no fetters on foreign funds in terms of investment except a limit of 10% on a single foreign investor buying into a company's capital. For investments in Indian corporate and government debt too, there are restrictions. "We need a framework for both capital inflows and outflows and we thought that it would not only be prudent but also provide clarity upfront if we say that there would be a ceiling on investment," a senior official said. This official declined to be identified.
What could be of concern to the central bank is a possible surge in volatile capital inflows later which could put pressure on currency and inflation management. When foreign capital flows are robust, the Reserve Bank will have to mop up these flows which in turn results in boosting liquidity in the local markets. To check this excess liquidity, the RBI sells securities or bonds to banks and institutions to drain it out – a process known as sterilisation. This however comes at a cost to the government – which has to service the interest cost on these bonds.
Right now, such worries are overblown because excess inflows if any are being used to finance India's current account deficit – the excess of goods and services imports over exports. In FY11, foreign portfolio investors bought stocks and bonds of over $31 billion. In the year to date, foreign funds have been net sellers at $490 million. Sebi has worked out a scheme for foreign investors to buy into local mutual funds which is being vetted by the government and the Reserve Bank of India. One of the challenges in getting the scheme going is in ensuring KYC or due diligence of the foreign investor. Only some of the depository participants such as banks which have a wide global network may be in a position to carry this out. Indian institutions may either to forge tie-ups with foreign partners or open offices abroad if they want to woo greater foreign portfolio investment. If the scheme takes off as policy makers are hoping it would – it will boost India's mutual fund industry which manages assets of over Rs 7,00,000 crore and is now weighed down by the problem of lack of interest on the part of distributors to sell mutual funds. They have been loath to push mutual fund products after the regulator banned fund houses from charging investors an entry fees or load.
India's policy-makers are considering putting a cap or ceiling of between $5 and $10 billion on investment by foreign investors in Indian mutual funds to possibly limit the impact of any surge in inflows once this route is opened up soon.
The Walt Disney Co. has applied for a trademark on the name "Seal Team 6," the name of the unit of specially trained Navy SEALs that killed Osama bin Laden in a raid in Pakistan earlier this month.
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| Seal Team 6 Logo |
Three applications filed May 3 — the day after the raid — with the U.S. Patent and Trademark office by Disney Enterprises Inc. state an intention to use the
mark for a range of products, including entertainment and education services, clothing, toys, games and Christmas stockings.
mark for a range of products, including entertainment and education services, clothing, toys, games and Christmas stockings.
Companies have tried to trademark combat-related terms before. A day after U.S. allied forces entered Iraq in 2003, Sony Corp. applied to trademark the war's catchphrase, "shock and awe," for use as the title of a video game. The application was later abandoned.
( Source: Associated Press )
A German man was sentenced to six months in federal prison Monday
for bringing hundreds of tarantulas into the United States by mail.
for bringing hundreds of tarantulas into the United States by mail.
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| Spider |
Court documents filed in the case estimated the illegal wildlife trade generates as much as $20 billion a year.
Koppler earlier this year pleaded guilty to one count of smuggling goods into the U.S. and faced up to 20 years in prison. Prosecutors had recommended Koppler serve 10 months.
Koppler portrayed himself as a spider breeder and said shipping the arachnids is legal in Europe and other countries.
"I just can say I'm very sorry about what happened and it wasn't my intention to defraud anyone or anything," said the slender Koppler, who wore a dark suit and striped tie in court. "I definitely would not do this again."
Federal prosecutors said Koppler sold thousands of tarantulas to more than 50 people in 16 countries between 2008 and 2010. Some of the spiders, including a protected Mexican species, were mailed by Koppler from Germany to Los Angeles.
Fish and Wildlife Service agents intercepted the packages then posed as customers and ordered dozens more spiders. Koppler made nearly $350,000 by selling spiders, authorities said.
Federal public defender Neha Mehta said her client's reputation has been tarnished, and no one will be willing to do business with him in the future.
"He has spent his whole life for the preservation of wildlife," Mehta said. "He had no intention of harming any wildlife."
Koppler said many of the spiders he shipped were babies. However, Assistant U.S. Attorney Mark Williams said some of the animals were adults and measured six inches long.
Williams also noted Koppler purposely mislabeled the protected tarantulas to avoid detection by U.S. customs.
Koppler also must pay $4,000 in fines and will be placed on three years of probation. He will likely be deported to Germany once he finishes his sentence.
( Source: Associated Press )
China and India are two fastest growing countries in the World
and might lead world according to beliefs of many pundits and economists, but when it comes to investing, fund managers have a clear preference for China, according to global financial services firm Russell Investments.
and might lead world according to beliefs of many pundits and economists, but when it comes to investing, fund managers have a clear preference for China, according to global financial services firm Russell Investments.
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| India Flag |
"For China, the key theme that came out of our survey and discussions with managers, is the theme of domestic consumption," Sarah Lien, Senior Research Analyst at Russell Investments told CNBC on Monday, referring to a recent survey done by her company among Asian fund managers. The poll, released earlier this month, found managers most bullish about China and most bearish on India.
Lien noted that China's 5-year plan showed the government was focused on boosting domestic consumption, and developing the third and fourth tier cities; policies conducive to creating more investment opportunities. More than half the fund managers surveyed was shown to be bullish on the financial, consumer discretionary and consumer staples sectors.
While inflation is a key concern for both countries - 87 percent of managers flagged it as the biggest risk to growth in Asia in the report - Lien says China is doing a better job of containing runaway prices.
"There've been concerns over agricultural inflation and high commodities prices that China is addressing probably better than India at this point in time," she said.
China's latest consumer price index (CPI) data eased a touch to 5.3 percent in April, but it is still higher than the government's annual target of 4.2 - 4.3 percent. While India's inflation rate, at close to 9 percent, is Asia's highest.
Also working against India’s favor, is the country’s history of rampant corruption, which has the fund managers concerned, said Lien.
But overall, the survey found fund managers very optimistic about investment prospects in Asia, with 64 percent finding it the most attractive investment globally, compared to 14 percent who liked U.S. equities and 11 percent favoring Europe. Besides China, they were also bullish on Korea and Malaysia.
"Low levels of government debt, strong demographics, growing domestic demand and rapid urbanization continue to underpin Asian economies and the regional growth story," Lien said in her report.
Technology Headlines for March 16 2011 ( Monday ) !!
1. Over the weekend, following high-profile hacks, Sony finally brought its PlayStation network back online around the world. The global staged roll out seems to have been a success, but there's one nation still unconnected: Sony's home Japan. The government has refused Sony permission based on a few outstanding security concerns, including a requirement to protect credit card info from breaches in the future.
2. A key area for competition between Google and Microsoft is their mapping systems, and the battle just got an interesting twist: Nokia may be about to replace MS's Bing Maps infrastructure with its own mapping solution including data and algorithms. Such an agreement is rumored to have quashed earlier purchase talks between Google and Nokia--and it would sideline much of the millions of dollars of work MS has done in this area.
3. RIM's BlackBerry PlayBook has suffered a minor glitch on its launch, and RIM is now recalling around 1,000 of the tablets which seem to be a faulty batch--suffering problems in an incorrect build of the OS loaded on the machines. This would seem to be a serious enough error that would prevent fixes being uploaded to the tablets via a simple USB connection. A list of the affected serial numbers is available online.
4. Netflix's growth continues: It's just signed a deal bringing Miramax's movie catalog to the digital streaming service, marking the first time Miramax's content is being transmitted in such a way online. The deal may be worth up to $100 million over five years, and famous titles like Pulp Fiction will be available to Netflix users from June.
5. Underlining how popular Twitter is becoming, Lady Gaga over the weekend became the first Twitter user to earn over 10 million followers--just beating Justin Bieber who was closing on Gaga's lead as the most-followed Twitterer. In April 2009 Ashton Kutcher garnered headlines by becoming the first to one million followers. Gaga has 34 million followers on Facebook, which suggests Twitter's also closing on Facebook's lead.
( Source: Fast Company )
1. Over the weekend, following high-profile hacks, Sony finally brought its PlayStation network back online around the world. The global staged roll out seems to have been a success, but there's one nation still unconnected: Sony's home Japan. The government has refused Sony permission based on a few outstanding security concerns, including a requirement to protect credit card info from breaches in the future.
2. A key area for competition between Google and Microsoft is their mapping systems, and the battle just got an interesting twist: Nokia may be about to replace MS's Bing Maps infrastructure with its own mapping solution including data and algorithms. Such an agreement is rumored to have quashed earlier purchase talks between Google and Nokia--and it would sideline much of the millions of dollars of work MS has done in this area.
3. RIM's BlackBerry PlayBook has suffered a minor glitch on its launch, and RIM is now recalling around 1,000 of the tablets which seem to be a faulty batch--suffering problems in an incorrect build of the OS loaded on the machines. This would seem to be a serious enough error that would prevent fixes being uploaded to the tablets via a simple USB connection. A list of the affected serial numbers is available online.
4. Netflix's growth continues: It's just signed a deal bringing Miramax's movie catalog to the digital streaming service, marking the first time Miramax's content is being transmitted in such a way online. The deal may be worth up to $100 million over five years, and famous titles like Pulp Fiction will be available to Netflix users from June.
5. Underlining how popular Twitter is becoming, Lady Gaga over the weekend became the first Twitter user to earn over 10 million followers--just beating Justin Bieber who was closing on Gaga's lead as the most-followed Twitterer. In April 2009 Ashton Kutcher garnered headlines by becoming the first to one million followers. Gaga has 34 million followers on Facebook, which suggests Twitter's also closing on Facebook's lead.
( Source: Fast Company )
