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by Prahasi Paper Pvt Ltd - [private circulation. Weekly Newsletter] - email: information.bite@gmail.com
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News Making The Headlines VOL. 1 ISSUE 33 5th April, 2008

INDIAN INFLATION
The Indian economy has been registering a mammoth GDP growth post-liberalization. The opening up of the Indian economy after the 1990s increased India’s industrial output, which in turn raised the inflation India rate significantly. The stupendous growth rate of industrial output and employment created an enormous pressure on the inflation rate and pushed it further. The Reserve Bank of India (the central bank) and the Ministry of Finance, Government of India is concerned about the present upswing of inflation India. The present rise of inflation India rate could be detrimental to the projected growth and aims of the Indian economy. The main cause of rise in the rate of inflation India is the pricing disparity of agricultural products between the producer and consumers in the Indian market. Moreover, the sky-rocketing of prices of food products, manufacturing products, and essential commodities have also catapulted the inflation rate in India. Furthermore, the unstable international crude oil prices have worsened the situation. As a result of this, the Wholesale Prices Index (WPI) of India touched 6.1% as on January 6, 2007 and the Cash Reserve Ratio (CRR) touched 5.5% on the same day. The Reserve Bank of India - the central bank of India, has assured the Indian business community and the general public about the harmless rise in the CRR but apprehensions still exist amongst business circles in India. The Reserve Bank of India is devising methods and financial models to arrest the rise in the rate of inflation in India. This

Weekly Change

15343 q 1058 4647 q 304

Inflation galloped to 7%for the week ended March 22, Vs 6.68% last week, on higher prices of food, vegetables, minerals and manufactured items.

insurgency financial modeling may arrest the immediate crisis but the long-term concerns are yet to be allayed or addressed. To arrest the disturbing sentiments amongst the Indian business circles, the Reserve Bank of India had given top priority to price stability and economic growth sustenance in India, in its recently drafted monetary policy. The Reserve Bank of India has raised the Cash Reserve Ratio in a continuous manner to arrest the rise in rate of inflation India. Most developed nations across the world have devised several methods to arrest inflation and bring in stability to its economy. In India, the solution to this problem lies in rationalizing the pricing disparity between the producers and the end-consumers along with increasing India’s agricultural produce. This will not only ensure inflation stabilization but also sustain the present economic growth rate of India.

Do you Know?

There are around 740,000 people living in Amsterdam, who own over 600,000 bicycles, of which 180,000 change hands illegally each year. Approximately 10,000 bikes are found in the city’s canals every year.

STOCKS TO FOCUS ON:

STOCK

AKRUTI CITY PRAJ INDUSTRIES BANK OF INDIA KOLTE PATIL DEVELOPERS PBA INFRA MNM ROLTA

The road outside the Chicago Art Institute in Chicago was originally called Michigan Avenue. Now it has been renamed after an Indian. Who? a. Rabindranath Tagore b. Satyajit Ray c. Swami Vivekananda

Tickle Your Brain

The Jet Airways Chairman, Mr Naresh Goyal, said on Thursday that the airline will wait for right market condition for come out with its $400-million rights issue. “We will not do a distress sale. We will hold the rights issue till the stock market settles,” Mr Goyal told newspersons on Thursday at the announcement of the airline’s expansion plans on international routes. The airline had planned to launch the issue in October last year, but deferred it to January due to unfavourable market conditions. Mr Goyal currently holds 80 per cent stake in the airline company. He added that Jet is open to other sources of funding, “Banks believe in us and would be willing to give us money when required. We are open to private equity placement and all other funding options. Money is not a problem for us,” refusing to divulge any specific details. The capex for Jet Airways and its low-cost arm Jetlite for 2008-09 would be $4.2 billion and, according to Mr Goyal, both carriers would turn profitable next year.

News bite

Jet Airways to hold $400-m rights issue till ‘market settles’:

Cairn mulls foray into city gas distribution:
In an attempt to capitalise on the downstream opportunities, Cairn India is mulling entry into city gas distribution (CGD) in collaboration with GAIL (India) Ltd. According to sources, Cairn has sounded out the Petroleum and Natural Gas Regulatory Board (PNRGB) in this regard. While both Cairn and GAIL officials are tight-lipped about the development, indus try sources told Business Line that the companies are exploring possible joint venture opportunities in the CGD sector in Gujarat, Andhra Pradesh and Rajasthan. City gas distribution including retail industrial supplies (excluding supplies to power and fertiliser) currently constitute 20 per cent of the total natural gas consumption in India. This is in sharp contrast to 60-65 per cent CGD requirement in the developed countries. The trend is expected to be reserved once gas availability increases in the country.

Deora urges PM to cut customs duty on crude oil:
With public sector oil companies bleeding because of under-recoveries, the Petroleum Minister, Mr Murli Deora, has asked the Prime Minister, Dr Manmohan Singh, to cut customs duty on crude oil. A cut in customs duty would bring down the raw material cost of the oil companies, thereby, cushioning them from the surge in international oil prices. Despite the international crude oil prices hovering over $100 a barrel mark, and Indian basket averaging $99.76 a barrel in March, the oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — continue to sell petroleum products below the cost price. Currently, oil companies are suffering a revenue loss of about Rs 450 crore a day on fuel sales. The revenue loss on petrol stood at Rs 10.78 a litre and diesel Rs 17.02 a litre. The companies were suffering a loss of Rs 316.06 per LPG cylinder and Rs 25.23 a litre on kerosene.

TOP INDIAN COMPANIES IN THE GLOBAL 2000 OF FORBES:
RANK 193 198 219 303 374 411 647 738 826 846 927 949 961 967 1012 1040 1093 1102 1111 COMPANY Reliance Industries Oil & Natural Gas State Bank of India Group Indian Oil Icici Bank NTPC Steel Authority of India Tata Steel Bharti Airtel Reliance Communications Tata Consultancy Svcs HDFC-Housing Devel Larsen & Toubro Bharat Petroleum Bharat Heavy Electricals Infosys Technologies HDFC Bank Wipro Tata Motors INDUSTRY Oil & Gas Operations Oil & Gas Operations Banking Oil & Gas Operations Banking Utilities Materials Materials Telecom Services Telecom Services Software & Services Banking Capital Goods Oil & Gas Operations Capital Goods Software & Services Banking Software & Services Capital Goods SALES PROFITS ASSETS ($BIL) ($BIL) ($BIL) 26.07 18.90 15.77 42.68 9.84 7.84 7.88 5.83 4.26 3.13 4.32 1.49 4.68 22.77 3.99 3.21 1.96 3.47 7.27 2.79 4.11 1.47 1.82 0.64 1.60 1.45 0.97 0.94 0.65 0.97 0.40 0.52 0.50 0.56 0.89 0.27 0.68 0.50 30.67 33.79 188.56 25.39 91.07 20.34 8.05 11.48 6.61 13.08 3.03 16.97 5.72 8.67 5.17 3.08 21.09 3.26 5.77 MARKET VALUE ($BIL) 89.29 54.11 33.29 16.36 29.85 41.57 26.37 14.63 39.16 29.63 21.38 19.07 24.94 4.16 27.92 22.09 12.87 15.87 6.75

UPWARD MOVEMENT
DATE 06.07.07 19.09.07 26.09.07 09.10.07 15.10.07 29.10.07 08.01.08 MILESTONE 15000 16000 17000 18000 19000 20000 21000 NO. OF DAYS 144 53 6 8 4 10 49 274 CLOSE 14964 16323 16921 18280 19059 19978 20873 DATE 08.01.08 16.01.08 18.01.08 21.01.08 22.01.08 07.03.08 17.03.08

DOWNWARD MOVEMENT
MILESTONE 21000 20000 19000 18000 17000 16000 15000 NO. OF DAYS 6 2 1 1 32 6 48 CLOSE 20873 19868 19013 17605 16730 15976 14810

Answer to TICKLE YOUR BRAIN: c.
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