Indian Current Affairs: 14.03.2007

The urban development ministry is planning to come out with a PSU. It will acquire land in different cities and develop housing complexes for the middle and higher income groups.

With a view to ensure a level playing field between companies having captive mines and those that don’t, the government is considering a proposal to provide raw material at a preferential rate to those companies which do not have captive mines. The move would remove the export parity pricing of ore that steel companies source from the NMDC.
At present, domestic consumers of iron ore get the basic raw material at export parity pricing based on a formula suggested by the Ganeshan Committee. This is based on average long-term ore price that NMDC has contracted with Japan and South Korea.

Whether the proposed Iran-Pakistan-India pipeline to supply natural gas to India, will materialize or not is dependent on the agreement about natural gas pricing.
Originally as per the agreement entered into between India and Iran on June 13, 2005 Iran agreed to supply 5 mn metric tonne of LNG at a price of $3.21 per mmbtu. Iran wants to revise it to $4.78 per mmbtu now and India is not willing to pay more than $4.5 per mmbtu. It is a 25 year contract which was ratified by the Cabinet. It is yet to be approved by the Iranian Parliament, Majlis.

India is the 5^th most corrupt country according to Hong Kong based Political and Economic Risk Consultancy rankings.
Singapore and Hong Kong are seen as the cleanest economies.

One SPV will borrow forex from RBI on a government backed guarantee. The money will be invested in creation of infrastructure outside the country, of the kind that would either supplement the country’s infrastructure needs or help in sourcing raw materials for domestic development.
The other SPV will be set up as a monocline credit insurance company backed by the country’s forex reserves. The proposed entity would borrow forex from RBI, which will then be invested in highly rated collateral instruments.

It is a 5 day event from May 7^th organized by Swadeshi Narikela Mission and Peekay Tree Crops Development Foundation.

For crops which have been declared an MSP (Minimum Support Price), there is no target of procurement. As the mechanism is put in place to ensure a better price for the farmer. But with the recent shortage in wheat, the government is being extra cautious to avoid the kind of wheat imports (55 lakh tonnes or 5.5 mn tonnes) that it had to resort to last year.
So it has fixed an ‘unofficial’ target of 15.1 mn tonnes (151 lakh tonnes) for 2007-08.
It is likely to achieve this because of the following favourable factors:

An additional 6% area came under wheat
Higher production estimate of 73 mn tonnes (7.30 crore tonnes) compared to only 69 mn tonnes (6.90 crore tonnes) last year.
Healthy support price of Rs. 750 per quintal, which is more than Rs. 100 over last year.

Equity IPOs came to be seen as easy money by many of the investors. What investors failed to see is that IPOs could be more risky than secondary market investments.
Even though the book-building process gives an impression that the price discovery is a free-market pricing mechanism, it is restricted to within a narrow band decided by the book-runner.
IPOs are under priced to create a feel-good sentiment on listing. In a bull market, promoters tend to aggressively price their issues and the gap of 20 days between an issue closure and listing, can easily see the tide turn in the opposite direction for the investor.

For all these reasons, instead of trying to ‘protect’ the investor and give him more comfort level by resorting to rating of the IPOs, what SEBI and the government should do, is to convey to the retail investor that IPOs are serious risk and discontinue the quota for retail investors in IPOs.
In addition, the entire book-building process must also be re-looked at to ensure better pricing. The investors should be allowed to quote their price; it should not be limited to the price band decided by the issuer.

It refers to the ‘fast track authority’ that George Bush has from American Congress. Under this, any trade deal struck in the Doha Development Round does not run the risk of being amended by the US Congress.
This power of the US President, is set to expire by June, 2007. So the US wants the DDA (Doha Development Agenda) talks to conclude quickly before this date. If not the EU, at least the G20 are not buying this line of argument. They are sticking to their guns that the US and EU have to offer more by way subsidy cuts on agriculture.
Agriculture supports only 1% of the US population in contrast to India where 65% of the population is dependent on agriculture.

In 1932-33 the English Captain Douglas Jardine asked his fast bowler Harold Larwood to aim not for the stumps, but for the limbs of the batsman! And thus was born ‘bodyline’. England won the match against Australia.

Mentally intimidating the batsman by demoralizing him through a barrage of comments.

It was the first attempt at laying some kind of timetable for reducing greenhouse gas emissions and control global warming. But it applied only to the rich countries and set only modest objectives. The richest and the biggest contributor to global climate change, the US didn’t even sign it. Neither did Australia. Canada signed it but has failed to act. Nor did huge energy users like India and China, which must be part of any meaningful solution, face serious responsibilities under the Kyoto agreement.

The world governing body for football, FIFA’s President Joseph Blatter is visiting India in April.

Indian Current Affairs