26.03.2007

• Government thinking of allowing foreign portfolio investors to invest directly
• So far, foreign portfolio investors have been using the PN (Participatory Note) route to invest in the Indian stock markets. Government fears that this is route could be used for money laundering. So, it is thinking of widening the definition of investors who qualify to be registered as sub-accounts with FIIs. A sub-account includes foreign institutions, corporates and funds, which are established outside India and on whose behalf investments, are made by a foreign institutional investor registered with SEBI.
• Sir Creek dispute with Pakistan
• I have covered about this boundary dispute with Pakistan sometime back. Read it here.
• The latest development is that India and Pakistan have completed the proposed joint survey and exchanged maps on March 22. But there is no likelihood of the dispute being resolved because Pakistan links the resolution of this dispute with the rest of the border disputes.
• If both the countries do not resolve this dispute before 2009, both countries would lose the EEZ (Exclusive Economic Zone) benefits.
• India refuses to accept the Pakistani claim to the green line, as it would mean a loss of about 250 square miles of EEZ, while Pakistan has rejected India’s proposal for mid-channel demarcation, saying that this approach is adopted for navigable channels; but Sir Creek is not navigable.
• Even in a loss, this is how you can see a brighter side. Look at the bean counters and their ability to portray how much we save as a nation for losing the World Cup.
• Read it in full here.
• Textile cess may go
• The textile committee cess, which is presently being levied at 0.05% on an ad valorem basis is likely to be removed.
• Rs. 52 crores was collected through this cess in 2005-06. It was being used to fund the activities of the textile committee, which provides testing consultancy services for ensuring quality standards.
• ‘Target plus’ scheme
• The fate of exporters wishing to avail benefits under this controversial scheme hangs in balance, due to the differences between the finance and commerce ministries.
• The scheme was originally envisaged by the commerce ministry. It envisages that the goods allowed to be imported should have a broad nexus or connection with the product exported. The finance ministry wants this nexus to be close. In other words, it wants the duty-free imports to be restricted to inputs used in the manufacturing the items exported under the scheme.
• Dwell time
• Is the idle time that ships spend at the ports for services.
• Currently it is about 3.5 to 5.5 days. The proposal is to cut these times to about 0.9 to 1.3 days by 2010.
• An inter-ministerial report on this aspect wanted major ports to implement vessel traffic management systems for round-the-clock operations.
• National telemedicine grid
• Originally proposed by ISRO, it is meant to take medical facilities via a network to the grassroot level.
• Poverty on the retreat?
• The poverty ratio in 1993-94 was 36% as compared with 27.5% in 2004-05, as per the latest estimates on poverty released by the government.
• Vanaspati business on the decline; cause FTAs with neighbours
• Vanaspati is flooding Indian markets from Nepal, Bhutan and Sri Lanka.
• Nearly 150 of the total of 264 installed units of vanaspati have closed shop. Vanaspati production has plummeted to 11 lakh tonnes as against the installed capacity of 50 lakh tonnes.
• Is mandatory IPO grading a bad idea?
• Today ET editorial argues that it is a bad idea. And that SEBI’s role as regulator is not primarily to protect the retail investor; but to ensure full and proper disclosure to investors and fair play between market players.
• I have my doubts on this line of argument. A regulator’s job is also to protect the end consumer; in this case retail investor. By ordaining a mandatory grading of the IPOs, it is only cautioning the retail investor. It is not fighting any war on behalf of the retail investor there.
• “Success has many godfathers. Failure is an orphan!”
• Is a beautiful quote from President Kennedy, after the Bay of Pigs fiasco.
• The 1961 Bay of Pigs Invasion (also known in Cuba as the Playa Girón after the beach in the Bay of Pigs where the landing took place) was an unsuccessful United States-planned and funded attempted invasion by armed Cuban exiles in southwest Cuba. An attempt to overthrow the government of Fidel Castro, this action accelerated a rapid deterioration in Cuban-American relations, worsened by the Cuban Missile Crisis the following year. The name Bay of Pigs comes from a species of Triggerfish, rather than pigs.
• Why should banks have more capital?
• The banking system today has a capital adequacy ratio of 10 to 11% with the ratio of risk weighted assets to total assets being around 60%.
• The equity capital of banks accounts for just around 17% of net worth and has fallen from 30% in FY 2000.
• If compliance with Basel II norms is to be shown, with the current growth of 20% seen in assets (loans given by banks), it is imperative for banks to increase their net worth. And this can happen only if new equity is infused into them
• Have appetite for knowing more? Read this.
• Olympic games in China
• It is estimated to cost a whopping $2.1 bn to conduct the games.
• Contributions from IOC (International Olympic Committee) and sponsorship money is expected to fund this kind of money.