Friday, March 20, 2009
Sensex regains 9,000 level, Re rises 92 paise
Sensex regains 9,000 level, Re rises 92 paise
The Times of India, March 20, 2009, Page 19
Mumbai: In volatile trade, the benchmark sensex once again surrendered its initial gains but ended above the 9,000 mark on firm European opening, up by just 25.07 points. Mirroring the positive global cues, the Bombay Stock Exchange 30-share barometer initially touched a high of 9,086.77 but fell to 8,900.39 at midsession on selling. It ended above the 9,000 mark first after February 19. It recovered at the fag end on firm European opening to end at 9,001.75, a rise of 0.28% over the previous close.
Meanwhile, rupee on Thursday shot up by 92 paise, the biggest rise in the year 2009, to close at a threeweek high of 50.38/39 against the greenback following heavy dollar sell-off amid expectations of increased capital inflows. In active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency opened sharply up at 51.04/05 a dollar from the previous close of 51.30/31. AGENCIES
The Times of India, March 20, 2009, Page 19
Mumbai: In volatile trade, the benchmark sensex once again surrendered its initial gains but ended above the 9,000 mark on firm European opening, up by just 25.07 points. Mirroring the positive global cues, the Bombay Stock Exchange 30-share barometer initially touched a high of 9,086.77 but fell to 8,900.39 at midsession on selling. It ended above the 9,000 mark first after February 19. It recovered at the fag end on firm European opening to end at 9,001.75, a rise of 0.28% over the previous close.
Meanwhile, rupee on Thursday shot up by 92 paise, the biggest rise in the year 2009, to close at a threeweek high of 50.38/39 against the greenback following heavy dollar sell-off amid expectations of increased capital inflows. In active trade at the Interbank Foreign Exchange (Forex) market, the domestic currency opened sharply up at 51.04/05 a dollar from the previous close of 51.30/31. AGENCIES
Inflation dips to 0.44%; paves way for rate cut
Inflation dips to 0.44%; paves way for rate cut
The Financial Express, March 20, 2009, Page 1
Economy Bureau, New Delhi
Inflation tumbled to a record low of 0.44% in the week ended March 7, giving enough room for aggressive rate cuts by the Reserve Bank of India (RBI). Analysts said inflation would turn negative in the coming weeks, although the government vehemently ruled out the possibility of a demand contraction. Officials made a distinction between disinflation and deflation; the latter implies demand contraction. Inflation was at 2.43% a week ago.
The wholesale price index (WPI)-based inflation is at its lowest since the annual numbers in the current series began in April 1995. It is far below the previous record low of 1.13% on February 2, 2002. “In the last 30 years, there is no record of inflation falling to this low since 1977-78,” the finance ministry said on Thursday.
Much of the current fall in the inflation is due to a high base effect, since inflation was at a high of 7.78% in the corresponding week in 2008. Base effect refers to changes in the WPI number in comparison with the same period in the previous year, while the index effect is the change in the WPI against the period preceding the week in question.
Planning Commission deputy chairman Montek Singh Ahluwalia said the rapid fall in inflation gives the government leeway to take more steps to stimulate the slowing economy. “It is a good development. It gives us reassurance that we can take measures to stimulate the economy,” Ahluwalia said on Thursday. However, he said negative inflation would not be good from a growth point of view.
Stocks rose on Thursday, while the bond prices fell. The 30-share BSE Sensex ended up 0.28% at 9,001.75 points and the 50-share NSE Nifty ended up 0.45% at 2,807.15 points. The yield on 8.24% bonds maturing in 2018 ended at 6.82% on Thursday, above its previous close of 6.67%, on expectations of government debt supplies but a sharp spike was averted, as the results of the central bank’s buyback auction was in line with market expectations.
Policy makers tried to drive home the point that there are no signs of a fall in demand. “There are no signs of deflation in the Indian economy”, Cabinet secretary KM Chandrasekhar said on Thursday. “It is more indicative of a base effect rather than any price effect”, he said, adding that there was a revival in sectors such as automobiles, cement, steel and infrastructure and this would help an economic recovery. In sectors that cater to domestic demand, certainly the worst is over, he said.
Pronab Sen, chief statistician of India, said India will see disinflation by March end but no deflation. Disinflation is inflation being negative, whereas, deflation is negative inflation coupled with a contraction in demand.
“Deflation working with recession is a much worse situation than a pure recession since it negates any effort to stimulate demand and delays the recovery”, Sen said.
However, it was difficult to ascertain the demand level purely from the inflation numbers, Sen said, adding, “For that one has to look at sales and output data.”
Commerce secretary GK Pillai said interest rates should now start falling since the cost of funds has fallen. “Deposits rates have fallen from 10-11% to 8-8.5% now. The cost of funds has also come down and I expect the interest rates to also slowly come down”, he said.
However, there are still concerns of high lending rates. Indeed, public sector banks’ prime lending rates (PLR) are upwards of 11.5%, while private banks’ PLR is over 14%.
Pronab Sen said lending rates are high more from the increased risk perception of banks than from the high deposit rates. He also said that high government borrowings were negating the effects of decreasing policy rates. Rising government debt pushes up bond yields, which puts upward pressure on interest rates.
The Centre for Monitoring Indian Economy (CMIE) said in its monthly review on Thursday the country’s gross fiscal deficit is expected to remain high in fiscal 2010 for the second consecutive year. “We do not expect any significant upward revisions in government revenues in the final budget for FY10, which will be presented in June 2009. Expenditure may be revised upward, albeit modestly, on account of an increase in the government’s effort to negate any adverse impact of the global liquidity crisis on the domestic economy,” CMIE said. In the interim Budget for 2010 fiscal, gross fiscal deficit is estimated at Rs 3,32,835 crore, which is 5.5% of GDP.
The Financial Express, March 20, 2009, Page 1
Economy Bureau, New Delhi
Inflation tumbled to a record low of 0.44% in the week ended March 7, giving enough room for aggressive rate cuts by the Reserve Bank of India (RBI). Analysts said inflation would turn negative in the coming weeks, although the government vehemently ruled out the possibility of a demand contraction. Officials made a distinction between disinflation and deflation; the latter implies demand contraction. Inflation was at 2.43% a week ago.
The wholesale price index (WPI)-based inflation is at its lowest since the annual numbers in the current series began in April 1995. It is far below the previous record low of 1.13% on February 2, 2002. “In the last 30 years, there is no record of inflation falling to this low since 1977-78,” the finance ministry said on Thursday.
Much of the current fall in the inflation is due to a high base effect, since inflation was at a high of 7.78% in the corresponding week in 2008. Base effect refers to changes in the WPI number in comparison with the same period in the previous year, while the index effect is the change in the WPI against the period preceding the week in question.
Planning Commission deputy chairman Montek Singh Ahluwalia said the rapid fall in inflation gives the government leeway to take more steps to stimulate the slowing economy. “It is a good development. It gives us reassurance that we can take measures to stimulate the economy,” Ahluwalia said on Thursday. However, he said negative inflation would not be good from a growth point of view.
Stocks rose on Thursday, while the bond prices fell. The 30-share BSE Sensex ended up 0.28% at 9,001.75 points and the 50-share NSE Nifty ended up 0.45% at 2,807.15 points. The yield on 8.24% bonds maturing in 2018 ended at 6.82% on Thursday, above its previous close of 6.67%, on expectations of government debt supplies but a sharp spike was averted, as the results of the central bank’s buyback auction was in line with market expectations.
Policy makers tried to drive home the point that there are no signs of a fall in demand. “There are no signs of deflation in the Indian economy”, Cabinet secretary KM Chandrasekhar said on Thursday. “It is more indicative of a base effect rather than any price effect”, he said, adding that there was a revival in sectors such as automobiles, cement, steel and infrastructure and this would help an economic recovery. In sectors that cater to domestic demand, certainly the worst is over, he said.
Pronab Sen, chief statistician of India, said India will see disinflation by March end but no deflation. Disinflation is inflation being negative, whereas, deflation is negative inflation coupled with a contraction in demand.
“Deflation working with recession is a much worse situation than a pure recession since it negates any effort to stimulate demand and delays the recovery”, Sen said.
However, it was difficult to ascertain the demand level purely from the inflation numbers, Sen said, adding, “For that one has to look at sales and output data.”
Commerce secretary GK Pillai said interest rates should now start falling since the cost of funds has fallen. “Deposits rates have fallen from 10-11% to 8-8.5% now. The cost of funds has also come down and I expect the interest rates to also slowly come down”, he said.
However, there are still concerns of high lending rates. Indeed, public sector banks’ prime lending rates (PLR) are upwards of 11.5%, while private banks’ PLR is over 14%.
Pronab Sen said lending rates are high more from the increased risk perception of banks than from the high deposit rates. He also said that high government borrowings were negating the effects of decreasing policy rates. Rising government debt pushes up bond yields, which puts upward pressure on interest rates.
The Centre for Monitoring Indian Economy (CMIE) said in its monthly review on Thursday the country’s gross fiscal deficit is expected to remain high in fiscal 2010 for the second consecutive year. “We do not expect any significant upward revisions in government revenues in the final budget for FY10, which will be presented in June 2009. Expenditure may be revised upward, albeit modestly, on account of an increase in the government’s effort to negate any adverse impact of the global liquidity crisis on the domestic economy,” CMIE said. In the interim Budget for 2010 fiscal, gross fiscal deficit is estimated at Rs 3,32,835 crore, which is 5.5% of GDP.
Inflation is down but real prices are not
Inflation is down but real prices are not
The Financial Express, March 20, 2009, Page 2
Inflation as measured by wholesale price index fell to a record low of 0.44% for the week ending March 7. WPI-based inflation is expected to go to the negative territory soon. So, why does it seem prices paid for many daily items are not going down? If inflation is so low, why are bank lending rates still on the higher side? And should India worry about something called deflation?
Some answers:
Why is WPI falling sharply?
WPI is measures how the index for a particular week looks vis vis what it was exactly a year back for the same week. 0.44% inflation means prices for week ending March 7 rose by only that much vis vis the March 7 week of 2008. WPI was high last year this time, so the base effect (high denominator) explains one part of the sharp fall. But more important is that inflationary forces are subsiding rapidly. The best way to see this is to look at month to month changes in prices that are adjusted for seasonal effects. By month to month data analysis, WPI is already in negative territory.
So what about consumer prices?
A: There seems to be a disjunction between inflation as measured by WPI and by consumer prices. The latest CPI (consumer price index) for industrial workers is around 9%. But CPI comes with a two month lag. So, we only have the January figure now. Also, the fall in fuel, transport costs, rents are probably working with a lag on final food and other consumer item prices. Also, sticky food prices may be a reflection of higher rural demand, influenced by public expenditure on employment creation and a few years of good harvest.
Is it deflation?
Deflation happens when demand contracts (not just slows). We are at a point when inflation may turn negative in coming weeks. But, the economy as a whole continues to grow, even though at a slower pace. Therefore, it is disinflation – negative inflation rate but over all demand not contracting – and not deflation that India is looking at.
Will lending rates come down sharply now?
Three factors are important: how sharply and how soon will the RBI cut policy rates, how and whether that will change banks’ perception of lending to business and how the RBI will manage the effect of high government borrowing, which puts upward pressure on interest rates.
The Financial Express, March 20, 2009, Page 2
Inflation as measured by wholesale price index fell to a record low of 0.44% for the week ending March 7. WPI-based inflation is expected to go to the negative territory soon. So, why does it seem prices paid for many daily items are not going down? If inflation is so low, why are bank lending rates still on the higher side? And should India worry about something called deflation?
Some answers:
Why is WPI falling sharply?
WPI is measures how the index for a particular week looks vis vis what it was exactly a year back for the same week. 0.44% inflation means prices for week ending March 7 rose by only that much vis vis the March 7 week of 2008. WPI was high last year this time, so the base effect (high denominator) explains one part of the sharp fall. But more important is that inflationary forces are subsiding rapidly. The best way to see this is to look at month to month changes in prices that are adjusted for seasonal effects. By month to month data analysis, WPI is already in negative territory.
So what about consumer prices?
A: There seems to be a disjunction between inflation as measured by WPI and by consumer prices. The latest CPI (consumer price index) for industrial workers is around 9%. But CPI comes with a two month lag. So, we only have the January figure now. Also, the fall in fuel, transport costs, rents are probably working with a lag on final food and other consumer item prices. Also, sticky food prices may be a reflection of higher rural demand, influenced by public expenditure on employment creation and a few years of good harvest.
Is it deflation?
Deflation happens when demand contracts (not just slows). We are at a point when inflation may turn negative in coming weeks. But, the economy as a whole continues to grow, even though at a slower pace. Therefore, it is disinflation – negative inflation rate but over all demand not contracting – and not deflation that India is looking at.
Will lending rates come down sharply now?
Three factors are important: how sharply and how soon will the RBI cut policy rates, how and whether that will change banks’ perception of lending to business and how the RBI will manage the effect of high government borrowing, which puts upward pressure on interest rates.
Lower inflation means higher real interest rates
Lower inflation means higher real interest rates
Business Standard, March 20, 2009, Page 2, Section II
BS Reporter / Mumbai
With the inflation measured by the wholesale price index (WPI) ruling close to zero, real interest rates have shot up to around 12 per cent, as against around 4.5 per cent a year ago, prompting bankers to say that there was more room for the Reserve Bank of India to lower rates.
Real interest rate is the difference between WPI-based inflation and the prevailing benchmark prime lending rate (BPLR).
While inflation dropped to 0.44 per cent for the week-ended March 7, the BPLR of the top five Indian banks was in the range of 12.25-16.75 per cent. In the corresponding period last year, inflation was estimated at 7.78 per cent, while lending rates were in the range of 12.25-12.75 per cent.
On the deposit side, with inflation at near zero levels, you can hope to earn around 7.5 per cent on an one-year deposit. In contrast, the returns were negative when inflation was close to 13 per cent in August.
The International Monetary Fund, which released its assessment on India on Tuesday noted that real interest rates have increased over the last few months, as inflation declined, and added that there was room for RBI to lower rates.
Since the global credit crisis intensified in September, RBI has pared the cash reserve ratio, or the proportion of deposits that banks set aside, and the repo rate, the rate at which it lends to banks, by 400 basis points to inject liquidity and signal a soft interest rate bias.
With growth also moderating, economists are expecting the central bank to initiate further measures to boost activity. "Supported by the coming deflationary patch in the WPI as well as continued weakness in incremental data, we expect to see further monetary easing of 100 basis points in the coming months," Citi India economist Rohini Malkani said.
While RBI’s measures have injected more than Rs 3,88,000 crore into the system, foreign and private banks have been reluctant to lower interest rates.
Public sector banks, which cut lending rates by up to 200 basis points, said that further cuts would depend on additional adjustment in the cost of funds as they were saddled with high-cost deposits.
“Inflation at close to zero is a matter of concern in the sense that consumption is less and possibility of further rate cuts cannot be ruled out,” said Central Bank of India Executive Director Pradeep Ramnath on the central bank’s future moves.
Pointing to the base effect for sharp fall in inflation, a treasury executive with State Bank of India said, for taking a call on interest rates relevant inflation numbers based on the consumer price index (CPI) needed to be factored in.
CPI-based inflation is hovering around 10 per cent.
Business Standard, March 20, 2009, Page 2, Section II
BS Reporter / Mumbai
With the inflation measured by the wholesale price index (WPI) ruling close to zero, real interest rates have shot up to around 12 per cent, as against around 4.5 per cent a year ago, prompting bankers to say that there was more room for the Reserve Bank of India to lower rates.
Real interest rate is the difference between WPI-based inflation and the prevailing benchmark prime lending rate (BPLR).
While inflation dropped to 0.44 per cent for the week-ended March 7, the BPLR of the top five Indian banks was in the range of 12.25-16.75 per cent. In the corresponding period last year, inflation was estimated at 7.78 per cent, while lending rates were in the range of 12.25-12.75 per cent.
On the deposit side, with inflation at near zero levels, you can hope to earn around 7.5 per cent on an one-year deposit. In contrast, the returns were negative when inflation was close to 13 per cent in August.
The International Monetary Fund, which released its assessment on India on Tuesday noted that real interest rates have increased over the last few months, as inflation declined, and added that there was room for RBI to lower rates.
Since the global credit crisis intensified in September, RBI has pared the cash reserve ratio, or the proportion of deposits that banks set aside, and the repo rate, the rate at which it lends to banks, by 400 basis points to inject liquidity and signal a soft interest rate bias.
With growth also moderating, economists are expecting the central bank to initiate further measures to boost activity. "Supported by the coming deflationary patch in the WPI as well as continued weakness in incremental data, we expect to see further monetary easing of 100 basis points in the coming months," Citi India economist Rohini Malkani said.
While RBI’s measures have injected more than Rs 3,88,000 crore into the system, foreign and private banks have been reluctant to lower interest rates.
Public sector banks, which cut lending rates by up to 200 basis points, said that further cuts would depend on additional adjustment in the cost of funds as they were saddled with high-cost deposits.
“Inflation at close to zero is a matter of concern in the sense that consumption is less and possibility of further rate cuts cannot be ruled out,” said Central Bank of India Executive Director Pradeep Ramnath on the central bank’s future moves.
Pointing to the base effect for sharp fall in inflation, a treasury executive with State Bank of India said, for taking a call on interest rates relevant inflation numbers based on the consumer price index (CPI) needed to be factored in.
CPI-based inflation is hovering around 10 per cent.
Unitech plans houses in Rs 5-10 lakh range
Unitech plans houses in Rs 5-10 lakh range
Business Standard, March 20, 2009, page 5
Neeraj Thakur / New Delhi
Realty major Unitech plans to launch mid-segment residential projects in the range of Rs 5-10 lakh in metro and suburban cities like Gurgaon, Chennai and Kolkata over the next few months.
“We are amazed at the success of our recently launched projects and have realised that in today’s market, a project within the right price range will sell,” said R Nagaraju, general manager, corporate planning, Unitech.
The company is charting a strategy to come up with such low-cost apartments. “The new projects will be based on a different model altogether, where the target customer and the margins will be different,” Nagaraju added. “The inspiration to develop smaller and cheaper apartments comes from the Nano car, which is elicitng a tremendous response. I am sure our project will see a similar response, given the fact that we will come up with such low-cost apartments in metro cities,” Nagaraju added.
The company had recently launched a residential project in Gurgaon’s Sector 47 that offered a flat in the range of Rs 29-42 lakh. The average size of the apartments is 1,100-1,200 sq ft. “We had launched 200 apartments in the first two phases and 150 of these have already been sold.This is an amazing response. Two months back, nobody would have expected such a response to any project in the area,” Nagaraju said.
Business Standard, March 20, 2009, page 5
Neeraj Thakur / New Delhi
Realty major Unitech plans to launch mid-segment residential projects in the range of Rs 5-10 lakh in metro and suburban cities like Gurgaon, Chennai and Kolkata over the next few months.
“We are amazed at the success of our recently launched projects and have realised that in today’s market, a project within the right price range will sell,” said R Nagaraju, general manager, corporate planning, Unitech.
The company is charting a strategy to come up with such low-cost apartments. “The new projects will be based on a different model altogether, where the target customer and the margins will be different,” Nagaraju added. “The inspiration to develop smaller and cheaper apartments comes from the Nano car, which is elicitng a tremendous response. I am sure our project will see a similar response, given the fact that we will come up with such low-cost apartments in metro cities,” Nagaraju added.
The company had recently launched a residential project in Gurgaon’s Sector 47 that offered a flat in the range of Rs 29-42 lakh. The average size of the apartments is 1,100-1,200 sq ft. “We had launched 200 apartments in the first two phases and 150 of these have already been sold.This is an amazing response. Two months back, nobody would have expected such a response to any project in the area,” Nagaraju said.
Ansal puts Gurgaon, Greater Noida IT SEZ projects on hold
Ansal puts Gurgaon, Greater Noida IT SEZ projects on hold
The Hindu Business Line, March 20, 2009, Page 17
To wait for elections to get over and decide on course of action.
--------------------------------------------------------------------------------
“Given the global downturn in the IT business, we will have to decide whether we want to go ahead or turn it into a commercial or housing project since we already have the land.”
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Our Bureau
New Delhi, March 19 Real estate company Ansal Properties and Infrastructure Ltd on Wednesday said its two IT SEZs, in Gurgaon and Greater Noida, are on ‘hold’ till the elections get over. “We are waiting for the elections to get over, and then we will take a call on the course of action depending on the policies. Given the global downturn in the IT business, we will have to decide whether we want to go ahead or turn it into a commercial or housing project since we already have the land,” Mr Pranav Ansal, Managing Director and Vice- Chairman of Ansal Properties and Infrastructure Ltd, told reporters here.
Debt-equity ratio
Asked about the recent reports that the RBI is examining the books of several real estate companies to verify their solvency and assess risks arising from possible defaults on various loans and public deposits, Mr Ansal said, “We do not foresee any risk, as we are not a very leveraged developer.”
He said that the current debt of the company was about Rs 1,000 crore, while the debt to equity ratio stood at 1:1. “Our debt serving ratio is also very reasonable. And we do not have to repay any debt by March 2009. As far as the overall debt is concerned, we have enough cash flow to service them,” he said.
Mr Ansal was speaking on the sidelines of a conference by a property broking company, the Delhi-based Agni Property, in which he owns about 10 per cent stake in his personal capacity. Agni plans to invest Rs 60 crore to expand its network across the country. Other investors in Agni include Mr Samarjit Singh, Managing Director, and Mr Sunjay Kapur (Vice-Chairman and Managing Director of Sona Koyo Steering Systems), and Mr Rishi Khosla (CEO of Copal Partners and a private equity investor). The company has three offices in Delhi NCR and one in Chandigarh. It now plans to open offices in the western region in the first quarter of 2009-10 and in the southern region, in the last quarter of 2009-10. The company says it is in talks with PE players to raise funds required for expansion.
The Hindu Business Line, March 20, 2009, Page 17
To wait for elections to get over and decide on course of action.
--------------------------------------------------------------------------------
“Given the global downturn in the IT business, we will have to decide whether we want to go ahead or turn it into a commercial or housing project since we already have the land.”
--------------------------------------------------------------------------------
Our Bureau
New Delhi, March 19 Real estate company Ansal Properties and Infrastructure Ltd on Wednesday said its two IT SEZs, in Gurgaon and Greater Noida, are on ‘hold’ till the elections get over. “We are waiting for the elections to get over, and then we will take a call on the course of action depending on the policies. Given the global downturn in the IT business, we will have to decide whether we want to go ahead or turn it into a commercial or housing project since we already have the land,” Mr Pranav Ansal, Managing Director and Vice- Chairman of Ansal Properties and Infrastructure Ltd, told reporters here.
Debt-equity ratio
Asked about the recent reports that the RBI is examining the books of several real estate companies to verify their solvency and assess risks arising from possible defaults on various loans and public deposits, Mr Ansal said, “We do not foresee any risk, as we are not a very leveraged developer.”
He said that the current debt of the company was about Rs 1,000 crore, while the debt to equity ratio stood at 1:1. “Our debt serving ratio is also very reasonable. And we do not have to repay any debt by March 2009. As far as the overall debt is concerned, we have enough cash flow to service them,” he said.
Mr Ansal was speaking on the sidelines of a conference by a property broking company, the Delhi-based Agni Property, in which he owns about 10 per cent stake in his personal capacity. Agni plans to invest Rs 60 crore to expand its network across the country. Other investors in Agni include Mr Samarjit Singh, Managing Director, and Mr Sunjay Kapur (Vice-Chairman and Managing Director of Sona Koyo Steering Systems), and Mr Rishi Khosla (CEO of Copal Partners and a private equity investor). The company has three offices in Delhi NCR and one in Chandigarh. It now plans to open offices in the western region in the first quarter of 2009-10 and in the southern region, in the last quarter of 2009-10. The company says it is in talks with PE players to raise funds required for expansion.
New capacities in South may dampen prices
New capacities in South may dampen prices
The Hindu Business Line, March 20, 2009, Page 2
About 12 mt expected to go on stream by the year-end.
Suresh P. Iyengar
Mumbai, March 19 Cement prices in the South may come under pressure with 12.3 million tonnes (mt) of additional capacity scheduled to go on stream by 2009-end.
Companies contributing to the increase in capacity are Dalmia Cement, India Cements, Madras Cements, UltraTech Cement and ACC. Small cement mills in Andhra Pradesh are also on course with their expansion programmes, which will further add to oversupply. Though new capacities are added, it takes at least 6-10 months for new plants to stabilise production.
Additional capacity
Dalmia Cement will commission its 2.5 mt greenfield plant at Ariyalur in Tamil Nadu by the end of the calendar year. It recently kicked off production of 2.50 mt from its greenfield project at Chinnakomerla, Andhra Pradesh. The company will also enhance capacity at Dalmiapuram near Tiruchi from 3.5 mt to 4 mt.
Madras Cements will shortly commission its two mt plant at Ariyalur . India Cements plans to increase capacity by 1.2 mt in Andhra Pradesh before 2009.
Ultratech Cement recently started clinker production from the expanded line at Andhra Pradesh Cement Works (APCW) and cement from the 1.3 mt grinding unit at Ginigera in Karnataka. It is also expanding cement capacity by 3.6 mt at APCW. Production at UltraTech will increase from 18.2 mt to 23.1 mt by the end of this fiscal.
At the national level, Holcim Group companies, ACC and Ambuja Cements, which account for a fifth of the total production of 207 mt, together plan to add 13 mt by 2010, while Grasim and UltraTech, part of the Aditya Birla Group, will add 14 mt.
Demand picks up
After a lull between October and December, demand picked up in last two months following various infrastructure projects announced by the Government.
On the back of supply constraints and demand from the government projects, prices in the South were up by Rs 5 (on a 50 kg retail bag) to Rs 270 while for bulk buyers it increased by Rs 3 to Rs 265 a bag in the last fortnight.
Though cement prices are on the rise, analysts expect them to drop by at least 10 per cent in 2009-10. Mr Vinod Juneja, Managing Director, Binani Cement, said, “Most wagons used for transporting cement have been diverted to foodgrain procurement which has caused disruptions in supply. Cement prices rose by Rs 5-10 a bag.”
The Hindu Business Line, March 20, 2009, Page 2
About 12 mt expected to go on stream by the year-end.
Suresh P. Iyengar
Mumbai, March 19 Cement prices in the South may come under pressure with 12.3 million tonnes (mt) of additional capacity scheduled to go on stream by 2009-end.
Companies contributing to the increase in capacity are Dalmia Cement, India Cements, Madras Cements, UltraTech Cement and ACC. Small cement mills in Andhra Pradesh are also on course with their expansion programmes, which will further add to oversupply. Though new capacities are added, it takes at least 6-10 months for new plants to stabilise production.
Additional capacity
Dalmia Cement will commission its 2.5 mt greenfield plant at Ariyalur in Tamil Nadu by the end of the calendar year. It recently kicked off production of 2.50 mt from its greenfield project at Chinnakomerla, Andhra Pradesh. The company will also enhance capacity at Dalmiapuram near Tiruchi from 3.5 mt to 4 mt.
Madras Cements will shortly commission its two mt plant at Ariyalur . India Cements plans to increase capacity by 1.2 mt in Andhra Pradesh before 2009.
Ultratech Cement recently started clinker production from the expanded line at Andhra Pradesh Cement Works (APCW) and cement from the 1.3 mt grinding unit at Ginigera in Karnataka. It is also expanding cement capacity by 3.6 mt at APCW. Production at UltraTech will increase from 18.2 mt to 23.1 mt by the end of this fiscal.
At the national level, Holcim Group companies, ACC and Ambuja Cements, which account for a fifth of the total production of 207 mt, together plan to add 13 mt by 2010, while Grasim and UltraTech, part of the Aditya Birla Group, will add 14 mt.
Demand picks up
After a lull between October and December, demand picked up in last two months following various infrastructure projects announced by the Government.
On the back of supply constraints and demand from the government projects, prices in the South were up by Rs 5 (on a 50 kg retail bag) to Rs 270 while for bulk buyers it increased by Rs 3 to Rs 265 a bag in the last fortnight.
Though cement prices are on the rise, analysts expect them to drop by at least 10 per cent in 2009-10. Mr Vinod Juneja, Managing Director, Binani Cement, said, “Most wagons used for transporting cement have been diverted to foodgrain procurement which has caused disruptions in supply. Cement prices rose by Rs 5-10 a bag.”
Fed’s $1t recession remedy just what India ordered
Fed’s $1t recession remedy just what India ordered
The Economic Times, March 20, 2009, Page 1
Unexpected Move To Help Indian Corporates In Hunt For Dollars And Check Greenback’s Rise
Our Bureau MUMBAI
A WORLD haunted by the spectre of deflation, sputtering growth engines and job losses is now hoping for the mother of all stimuli to work.
In a dramatic move to battle recession, the US Federal Reserve—the world’s most powerful monetary authority—will spend $1 trillion to buy government bonds and mortgage-backed securities. The move will lower interest rates across the spectrum, free up loan markets, flush international money markets with dollars and help mortgage borrowers, particularly in America.
US bond yields crashed, clocking the biggest drop since 1987, after the unexpected announcement, stocks rose across various markets while the dollar slipped against most currencies, including the rupee, which closed at 50.37 on Thursday, after gaining 91 paise from its previous close. Though the excitement in western markets did not boil over to Dalal Street, with the Sensex rising just 25 points to close at 9,001.75, the Fed buying will have its rub-offs here.
First, it would certainly make it easier and cheaper for Indian corporates fishing for dollar funds. Though benchmark rates like Libor had crashed, the risk premium attached to companies from emerging markets such as India had made borrowings prohibitive for most firms. Libor had partly lost its relevance as bankers were pricing loans on cost-plus basis. This would begin to change.
Secondly, it would finally arrest the rise of the dollar. As the dollar breached the 50 mark against the rupee, hundreds of corporates booked derivative losses while unhedged importers, hoping the dollar would slip, were caught off guard.
“The interest rate market will become more liquid and there will be more transactions. It will bring down the entire interest rate structure, lower mortgage rates and benefit existing and future mortgage borrowers,” said Rob Carnell, chief international economist, ING.
The Fed has said it will buy government bonds worth $300 billion, for the first time since ‘61, and $850 billion of mortgagebacked assets. This will give US banks an opportunity to turn more liquid and clean up their balance sheets. Faced with uncertain global markets, banks had pulled back the dollar they had lent, causing a money market crunch that is expected to ease now.
According to SA Narayan, MD of Kotak Securities, the Fed move will positively impact Indian equities in the near term. “The extent of optimism in India will again depend on how long US markets stay higher on the back of this news,” he told ET.
The Economic Times, March 20, 2009, Page 1
Unexpected Move To Help Indian Corporates In Hunt For Dollars And Check Greenback’s Rise
Our Bureau MUMBAI
A WORLD haunted by the spectre of deflation, sputtering growth engines and job losses is now hoping for the mother of all stimuli to work.
In a dramatic move to battle recession, the US Federal Reserve—the world’s most powerful monetary authority—will spend $1 trillion to buy government bonds and mortgage-backed securities. The move will lower interest rates across the spectrum, free up loan markets, flush international money markets with dollars and help mortgage borrowers, particularly in America.
US bond yields crashed, clocking the biggest drop since 1987, after the unexpected announcement, stocks rose across various markets while the dollar slipped against most currencies, including the rupee, which closed at 50.37 on Thursday, after gaining 91 paise from its previous close. Though the excitement in western markets did not boil over to Dalal Street, with the Sensex rising just 25 points to close at 9,001.75, the Fed buying will have its rub-offs here.
First, it would certainly make it easier and cheaper for Indian corporates fishing for dollar funds. Though benchmark rates like Libor had crashed, the risk premium attached to companies from emerging markets such as India had made borrowings prohibitive for most firms. Libor had partly lost its relevance as bankers were pricing loans on cost-plus basis. This would begin to change.
Secondly, it would finally arrest the rise of the dollar. As the dollar breached the 50 mark against the rupee, hundreds of corporates booked derivative losses while unhedged importers, hoping the dollar would slip, were caught off guard.
“The interest rate market will become more liquid and there will be more transactions. It will bring down the entire interest rate structure, lower mortgage rates and benefit existing and future mortgage borrowers,” said Rob Carnell, chief international economist, ING.
The Fed has said it will buy government bonds worth $300 billion, for the first time since ‘61, and $850 billion of mortgagebacked assets. This will give US banks an opportunity to turn more liquid and clean up their balance sheets. Faced with uncertain global markets, banks had pulled back the dollar they had lent, causing a money market crunch that is expected to ease now.
According to SA Narayan, MD of Kotak Securities, the Fed move will positively impact Indian equities in the near term. “The extent of optimism in India will again depend on how long US markets stay higher on the back of this news,” he told ET.
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