06.05.2008

• Is it a case of Govt. selling family silver?
• The Govt. seems to be considering divesting in CPSEs (Central Public Sector Enterprises) having a net worth of Rs. 200 crore and above and showing profitability continuously for the last three years.
• Reportedly it is planning to shed up to 10% in these profitable PSUs.
• The proposed move is in line with the announcement made in budget, to offload equity to public while listing CPSEs.
• SEBI okays cross-margining across cash and derivative segments
• Cross-margining is the concept that we need to know about.
• SEBI’s proposed move means that if an investor is buying a stock in which he already has a short position in the futures segment, he will not have to pay margin twice over.
• For positions in the cash market that have corresponding offsetting positions in the stock future, value at risk (VaR) margin shall not be levied on the cash market position.
• IPL and its revenue model
• Don’t ask me what is IPL; will you? Anyway it is Indian Premier League, the new format in which cricket is being played in India.
• Globally, a franchisee of a similar game format earns revenues from three broad areas — media rights, sponsorships and gate receipts. But the business model for IPL franchisees, at least in the initial years, will have to depend on media revenues.
• As such, selling tickets at stadiums isn’t going to fetch much. IPL is a two-month event while EPL (English Premier League, which plays football) runs for almost seven months. Even assuming the best scenario of all the matches running at full capacity in the stadiums, all the franchisees put together would sell three million tickets.
• IPL teams, like EPL clubs, can make money from merchandising and trading players. But then, all that takes years. EPL took 15 years to get to where it is today.
• There is a view that the current basis for building a loyal fan following for each of the league teams – viz., city, is not particularly robust. Perhaps barring Mumbai and Kolkata, most of the Indian cities do not enjoy a passionate sense of belonging. They are more diverse or cosmopolitan in nature.
• REC too gets the Navratna status
• As noted by us in the last couple of days, the government finally conferred the Navratna status on REC (Rural Electrification Corporation) too.
• This gives it the freedom to invest up to Rs. 1000 crore or 15% of its networth, whichever is less, without reference to Government.
• About Maize production in our country
• Currently in India, 49% of maize is used as poultry feed, 12% as animal feed, 25% as food, 13% in starch and other industries and 1% as seed.
• Under the quality protein maize (QPM) programme, there are at least 10 varieties of maize available in the country. Protein content in QPM is about 74% while it is only 37% in normal maize. Interestingly, protein quality of QPM is 90% of that of milk.
• Shaktiman is a variety of QPM hybrid.
• Among the major producing states, Andhra Pradesh tops the list with contribution of 17% to the total maize production.
• An interesting quote
• “Statistics are like a bikini. What they reveal is suggestive but what they conceal is vital!” – Aaron Levenstein, American business administration Professor.
• Debate about the world moving away from the dollar
• We have been noting about it in the last couple of weeks. Today’s debate in ET is worth a read, as much for the views of the experts as it is for its importance.
• Here it is.
• Some excerpts and comments worth our noting:
• The US has a 25 year history of current account deficits and the dollar has a 35 year history of trend depreciation. The US accounts for over a third of the global output.
• In 2007, the share of dollar holdings in developing countries’ foreign exchange reserves declined to 61% from 73% in 1997-98. The euro has been the beneficiary, rising to 28% of developing-country reserves in the fourth quarter from 19% when the decade began. And, importantly, these countries accounted for 76% of the global foreign exchange reserves which stood at $4.9 trillion in 2007.
• RBI reported that the value of the reserves rose by Rs 4,620 crore, while the foreign currency value of the reserves fell (by $663 million). The rise in the rupee value means that the RBI bought dollars (about $1.18 billion); the fall in the foreign currency value reflected the appreciation of the dollar against other currencies during that week.
• Over 43% of the reserves held by the RBI’s are in currencies other than the dollar.