23.11.2007

• Why are banks not selling their NPAs (bad debt)?
• Even when the defaulting companies are not coming out of the red, bankers are betting that the real estate locked up in sick companies would fetch far more than the sale of NPAs to ARCs (Asset Reconstruction Companies).
• The other reasons supporting such decisions are:
• NPA levels are at record levels of less than 1% of total advances.
• New rules by RBI which have set a floor price for banks selling off a portion of the sick loan. Since this price is significantly higher than the heavy discounts offered to the ARCs in earlier deals, they are finding that the deals are no longer attractive.
• Government’s decision to treat OCDs (Optionally Convertible Debentures) and preference shares as ECBs. This has put off many vulture funds which were using these instruments to buy bad loans from Indian banks. Since ECBs have a cap on interest, foreign funds no longer find such deals as attractive as before.
• Pesticide free crops get a leg up in Andhra Pradesh
• It is a very interesting article that appeared in today’s ET. It is about how AP is encouraging pesticide free farming and how it is benefiting farmers in reducing their input costs tremendously.
• Found it hard to do a précis on. Here goes the link for it.
• SAT strikes down SEBI’s disgorgement order
• Remember the first ever disgorgement order given in India by SEBI?
• Now SAT (Securities Appellate Tribunal) has struck down this order. The order was passed by SEBI in the IPO multiple demat scam.
• It said that the order passed without giving a reasonable opportunity of being heard to the affected parties. It also found some inconsistency in the order in so far as the sequence of findings was concerned.
• Inflation in the future
• An estimate by FAO (Food and Agriculture Order) has predicted that food prices would be rising at a higher rate in the next 5 to 10 years than in the past, adversely impacting those economies that have recorded higher weights to the food index in the inflation basket.
• What is the composition of our inflation basket? Food items account for 57% of the CPI (Consumer Price Index) and 26.94% of the WPI (Wholesale Price Index).
• More on the unfolding subprime crisis losses
• From now on till the end of 2008, nearly 4.5 lakh suprime mortgages per quarter are scheduled to undergo their first reset (that is unable to pay the mortgage amount, the borrower seeks rescheduling of the loan amount). That adds up to $300 bn or more of mortgage loans poised to sour, and a fair part probably will.
• When the crisis began, initial estimates of ultimate losses were in the region of $250 to $300 bn and these may still be right. Only it will come in installments, quarter after quarter.
• How to cope with an appreciating rupee?
• In a very good article Rajrishi Singhal gives out some excellent suggestions. Take a look at them here.
• Cosmic question over the longevity of the universe
• The universe is believed to have been created in the ‘Big Bang’ sometime back – about 13.7 bn years ago.
• Two US Astronomers are now saying that astronomers may have unwittingly hastened the end of the universe by simply looking at it!!!
• Couldn’t really make sense of what was reported about it in the Hindu today. If you care to look at it; do let me know when you understand it.
• Taslima Nasrin hounded yet again
• This time from Kolkata. To Jaipur.