24.05.2008

• We all know about the FDI limits/caps; don't we? But is there a cap on FII investments too?
• FII investment in debt is capped at $4.7 billion, with a sub-ceiling of $3.2 billion in government securities and $1.5 billion in corporate debt.
• How are FII (Foreign Institutional Investor) investments better than ECBs (External Commercial Borrowings)?
• FII investment in local currency bonds is a better option than overseas borrowing by Indian companies. In the case of foreign investment in rupee debt, the currency risk is with the FII whereas in ECBs the local borrower has to bear such risks.
• Besides, a functioning bond market can provide long-term money whereas ECBs can at best provide funds for 3-5 years.
• Our forex reserves
• Total foreign exchange reserves, including gold, SDR rose during the week ended May 16 to $314.08 billion.
• See how far ridiculousness can be taken to?
• This is an interesting story about launching of 'dharma funds' to enable devout Hindus to invest in the stock market. Couldn't resist the temptation of reproducing the full story for you:
• After a handful of mutual fund houses expressed willingness to launch Islamic (Shariah) mutual funds, the big daddy among public sector mutual funds Cutie Eye AMC is planning to launch a ‘dharma fund’ to enable devout Hindus (Jain and Buddhists in particular) invest in the stock market. The fund, according to inside sources, will not invest in ‘non-dharmic’ sectors like defence (weapon manufacturing), pharmaceuticals, casinos and alcohol.
• Way back in 2005, JM Morgan Stanley had plans to launch a fund for ‘strict vegetarian’ Jain investors. “The idea did not take off. The scholars (Hindu scholar board) we contacted objected to every stock we picked for the index. They didn’t want Titan, because Titan watches came with a leather strap; objected to L&T because the company constructed abattoirs for government, trashed HLL because they did animal testing and rejected Infosys because it wrote software programmes for meat-packing companies. And when we finally made a list, the board wanted to know if the fund manager wore leather shoes. We faced major reputation risk launching the fund and so we scrapped the idea,” said a fund manager who was involved in the fund structuring process. A case of dharma sankat?
• Record wheat procurement
• The government on Friday announced it has procured a record 207.10 lakh tonne of wheat in the current season on the back of higher support price to the farmers, a development that will help it combat high inflation. The earlier record of wheat procurement was 206.3 lakh tonne achieved in 2001-02.
• What is fair value accounting and why is it in the news?
• Fair value accounting is a way of accounting for assets and liabilities based on how much they are worth now as opposed to using historical values.
• There is a leading international banking body that goes by the name Institute of International Finance, which called for certain changes to 'fair value accounting.' But leading financial firms of the world Goldman Sachs and Morgan Stanley have opposed some of the guidelines being suggested by this body.
• The IIF is creating voluntary guidelines to influence regulators’ response to the banking industry’s woes and prevent a repeat of the credit crunch that has cost banks over $300 billion in losses. Among the proposals is that fair value accounting standards should be relaxed. Such a move would ease pressure on banks and brokerages to immediately recognise some losses on their books from securities that are hard to value.
• Farm loan waiver extended
• To be completed by June 30, the scheme now envisages covering more farmers. But the expenditure is expected to balloon to Rs. 71,600 crores.
• It will now cover large farmers with land holdings in excess of two hectares and those in drought-prone areas covered under Prime Minister’s relief plan, accommodating demands raised by various political quarters, including Congress MP Rahul Gandhi.
• It stands expanded to more than four crore farmers with allied activities including poultry, dairy and deepening of wells, being brought into the scheme.
• Direct agricultural loan taken under a Kisan Credit Card would also be covered. The scheme has also been extended to loans taken by SHGs, and joint liability groups. The government has also decided to waive off restructured loans including those under Vidarbha package and calamity relief whether or not they were overdue.
• While small and marginal farmers are eligible for debt waiver, other farmers are eligible for a one-time settlement (OTS) scheme. Under the OTS, the farmer will be given a rebate of 25% of the ‘eligible amount’ subject to the condition that the farmer pays the balance of 75% of the ‘eligible amount’. These farmers’ will be given OTS rebate of 25% of the ‘eligible amount’ or Rs 20,000, whichever is higher, subject to the condition that the farmer pays the balance of the ‘eligible amount’.
• In this context it is interesting to note that there are two types of agriculture loans given out by banks. Investment loans and short-term loans. A ‘short-term production loan’ means a loan given in connection with the raising of crops which is to be repaid within 18 months. An investment loan is meant for direct agricultural activities including asset financing and allied activities such as dairy, poultry farming and biogas, among others.
• A graphic given in today's ET gives this picture very well. Here it is.
• Volkswagen to come out with small car
• Europe’s largest car maker, Volkswagen, plans to roll out its low-priced car Up! at Rs 3 lakh in India by 2010-11. It will be the cheapest car from the Volkswagen stable, which is better known for luxury cars like Audi and Phaeton. The cheapest car from the German car maker so far has been from group company Skoda, which sells the Fabia at Rs 5 lakh and above in India.
• The mobile ad market
• The mobile advertising market is estimated at Rs 40 crore in India and industry players expect it to touch Rs 500 crore by 2010.
• Capt. Gopinath's cargo foray
• With domestic air cargo industry expected to grow at fast pace, entrepreneurs such as Mr Gopinath are bullish. Total cargo traffic at Indian airports has increased from 15.6% during 2005-06 to 21.5% in 2006-07 recording a compounded annual growth rate of 9.5% for the last six years.
• To work with SEZ developers & retailers such as Reliance and Bharti to provide end-to-end and integrated logistics solutions
• Airline will initially serve on metro and non-metro routes with 10 medium and small-size aircraft
• ISRO's commercial ambitions
• ISRO, which launched the PSLVc-9 last month with two satellites Cartosat-2a and IMS-1 with eight nano-satellites, has become the world’s second country after Russia to launch multi-satellites with polar satellite launch vehicles.
• ISRO to give Google a run for its money?
• The much popular Google maps may soon have a strong rival — ISRO. Indian Space Research Organisation has decided to launch its own version of the Google map for India — taken through Cartosat on the internet six months from now. The images will enable one to zoom to a meter of the earth surface. “Our images are good. They are in fact better than the ones available on the internet now. These images will be on our website in six months from now,” ISRO chairman G Madhavan Nair.
• We do need to know a bit about 'elopements' too at times. Especially when they are headline stuff.
• When Jawaharlal Nehru invited the celebrated Italian director Roberto Rossellini to India in the mid-50s to make some documentaries for the Films Division, it created many ripples. Not only did the Indian film world feel miffed that the Prime Minister had looked to a European for the project despite a wealth of local talent, but the Italian finally left without completing his task. And he took back with him the wife of an Indian documentary maker!
• The ‘scandalous’ elopement of Sonali Dasgupta and Rossellini was the stuff of tabloids across the world, more so since his wife at the time was no less than the beauteous Ingrid Bergman.
• Is US recession having a contagion effect on India’s sunrise industries?
• While there appears to be no conclusive evidence to suggest so, changes in hiring practices at some of India’s fastest growing companies signal that something is amiss. Look at this graphic; and draw your own picture!
• Appa Sherpa is the first to scale Mt. Everest 18 times!
• Forty-eight-year-old Appa first climbed the Everest on May 10, 1990, and has been scaling the peak almost every year. A fellow Sherpa guide Chhewang Nima (42), who has reached the summit 15 times is his closest competitor.
• Nepal is observing May 29, the day when Tenzing Norgay and Edmund Hillary first climbed the Everest, as the International Mt Everest Day by organising a variety of programmes to promote adventure tourism.
• Australia willing to provide n-fuel to India via the 123 pact
• AUSTRALIA is willing to consider joining the consensus with the Nuclear Suppliers’ Group (NSG) and the International Atomic Energy Association (IAEA) to provide India uranium for its power plants if the latter ratified the 123 agreement with the US. The move is clearly a softening of position from the earlier stand in which Australia was reluctant to open uranium trading with countries that have not signed the Nuclear Non-Proliferation Treaty.