09.05.2008

• Oil PSUs reel under cash crunch as crude crosses $122 / barrel; but retail prices remain unchanged
• Even as global oil prices continue to soar at over $120 per barrel, India continues to binge on fuel, thanks to subsidised retail sales. Oil companies imported almost 2.3 million tonne of diesel in 2007-08 against 0.96 million tonne in 2006-07, an increase of 140%. Diesel comprises around 42% of the total petro-fuel market.
• Under-recoveries are the losses incurred by oil companies for selling fuel at subsidised prices. The under-recoveries are shared equally by three parties: upstream companies ONGC and OIL, refining/marketing companies IOC, BPCL and HPCL and the government (in the form of oil bonds).
• The world over, people who believe that oil prices will go down, are becoming a rare commodity. Iran is predicting that oil prices will touch $200 a barrel in the near future. Goldman Sachs is predicting the same to happen within the next 6 months’ period.
• Sunil Mittal’s efforts at snapping up MTN
• MTN is the biggest mobile operator in South Africa. If he succeeds in acquiring 51% share in the company he would have established the second biggest telecom operator in the world. The biggest in the world is China Mobile.
• Such a combined entity would be qualitatively different from China Mobile because it would span 22 markets globally with over 130 mn subscribers.
• AIIMS Director Dr. Venugopal reinstated
• THE Supreme Court on Thursday applied brakes on attempts by the Manmohan Singh government to tinker with the autonomy of premier institutions by striking down the AIIMS amendment Act and reinstated eminent cardiac surgeon Dr. P. Venugopal as the institute’s director.
• This is followed immediately by calls for the resignation of the Union Health Minister Mr. Anbumani Ramdoss, who is Dr. Venugopal’s bête noire, and was largely the force behind moving the amendment Act.
• A weakening rupee makes the infotech industry breath easy
• Each 1% rise in rupee has a 30-40 basis points impact on operating margins for most companies
• US is in the throes of a slowdown and the IT industry fears a backlash on outsourcing as global corporations could press the panic button on large spends
• But the rupee has been depreciating of late and has moved down to Rs 41.3 a dollar.
• Infrastructure funding companies go slow
• With input cost for constructing roads and highways going up by 40%, funding agencies have pulled back from road projects fearing lower margins and losses in some cases.
• Government asks banks to launch debt swaps for farmers
• The finance ministry has directed banks to offer a debt-swap facility to farmers who are outside the banking ambit but indebted to unorganised money lenders. The ministry has urged banks to earmark a slice of their fresh agricultural lending for the debt-swap scheme. This would enable farmers to liquidate their debt to money lenders and then get included in the mainstream banking space.
• Allahabad Bank chairman and managing director AC Mahajan said 3-5% of the bank’s fresh agricultural lending may be used for the debt swap scheme. UCO Bank, on the other hand, plans to allocate 3% of agri-credit to this end. A couple of southern banks have been offering the debt-swap facility to farmers in Andhra Pradesh for the last three-four months.
• Policy flip-flop and inflation
• The government has extended the ban on futures trading to four more commodities viz., chana, soya complex, rubber and potato. With this the total number of commodities that futures trading is banned on, increases to eight.
• We have been following the debate about the merits and de-merits of banning futures trading in commodities as a tool to fight inflation for quite some time. Today’s ET editorial on the subject provides one more recap of the issue. Worth a read. Especially for those who have missed the debate earlier. The link is here.
• A little bit history about WTO negotiations
• It is quite likely that many of you would have forgotten what we noted in detail about WTO sometime back in our blogs. Off and on we need to keep referring to the standard notes on a particular subject to keep our memory refreshed.
• Today’s op-ed piece from Manoj Pant giving a little bit history about the evolution of WTO talks, is really good. None of you can afford to miss this piece. The link is here.
• He gives an excellent account of how GATT became WTO and explains very well about the other oft-heard terms in relation to international trade viz., GATS, AOA, CAIRNS etc.
• HSBC’s dubious distinction?
• Banking giant HSBC admitted that it had lost data relating to 159,000 accounts from its HongKong branch.
• The data was held on an internet server which is understood to have gone missing from a branch while it was undergoing renovation last month. Customers affected only have learnt of the security breach after reading reports in the local media.