05.04.2008

• Changes of sources of FDI into India
• There is a major change in the source of FDI pouring into India in FY 2008.
• Singapore and Japan have overtaken US and UK in terms of brining long term investments into India.
• But it is Mauritius which still leads the pack with about $20,104 mn investments.
• Indo US nuclear deal
• Gone are days of US arm-twisting India? Look at this news excerpt and that it’s the feeling you get.
• The US has even extended the timeline further into the US presidential election year in a bid to give more leeway to the government here. The US wants India to get past the IAEA stage so that it can lobby the NSG countries to make an exception for India so that it can put the 123 agreement before the US Congress for approval.
• Sick building syndrome
• Ever heard of this? It is an interesting article that appeared in today’s ET. Worth a read. Do so here.
• It is characterised by a group of symptoms which affects a person in a particular building and is not caused by an identifiable illness. This generally affects people in buildings that house many workers in close proximity.
• Now it is the turn of the ITIRs: IT Investment Regions
• The ITIRs are expected to become major investment magnets for investment, creating employment opportunities and economic growth in the area while reducing the pressure on existing urban centers by enabling growth of new townships.
• Read the details here.
• Why is mandatory IPO underwriting not good?
• For this you should read today’s ET editorial on the subject. It is here.
• However, some excerpts in our own style:
• The idea is bad because of at least four reasons:
• For one, it was experimented with in the early 90’s and was given up in 1994 as it was found wanting on many scores.
• Secondly, the basic premises of underwriting hold good only in early stages of market reforms; not at this reasonably developed stage. The primary market now has large institutional participation and book-building ensures a better price discovery, though it has some shortcomings. Indeed, most retail investors look at the institutional subscription before applying for an IPO. In such a situation, underwriting is needed largely to cover under-subscription risks.
• Thirdly, underwriting is no guarantee that the issue will sail through. We saw some high profile issues withdrawn recently because the investor response was so poor that even after underwriters taking up their share, these IPO s would have failed.
• Lastly, we have also had many instances of underwriters reneging on their commitment and SEBI initiating proceedings against them.