3RD weekly news

Gold prices may touch Rs 22,000/ 10 gms by year end

• Reason
 Major players in the capital market including mutual funds are holding
huge cash balances, waiting to invest in anticipation of corrections in the
equity market. Until corrections resume, these funds would go on making a
beeline to commodities, more specifically bullion, which has taken gold and
silver to all time high,
 The Euro-zone economy and the US, which are not providing conducive
investment options, making way for investment in precious metal.
 India Inc lost $27 bn merger deals this year so far

• The biggest non-starter was that of Mukesh Ambani-led Reliance

Industries' $14.5 billion bid for LyondellBasell. This was followed - in
terms of deal value - by the cancellation of his younger brother Anil
Ambani run Reliance Communications' $10.8 billion merger deal with
GTL Infra
• Ambani brothers, who have been most active in merger and acquisition
activity this year, accounted for over $25 billion of the deals in 2010 that
could not take off in 2010
 IOC, ONGC divestment by Q4, to fetch Rs 19K cr: oil
secy
 The Government expects to complete the ONGC and IOC divestments
by the end of this fiscal and hopes to raise up to Rs 19,000 crore from the
process
 The government plans to sell 5 per cent stake in Oil and Natural Gas
Corporation (ONGC) and 10 per cent in Indian Oil Corporation (IOC)
through the follow-on public offer
 IOC around Rs 10,000 crore was expected as the country's largest oil
marketer IOC would be raising 10 per cent more equity.
 IOC has huge requirement for money. It will be using the proceeds of the
sale for the Rs 29,000-crore Paradeep refinery
 The Government has set a target of raising Rs 40,000 crore through
divestment in various companies in the current fiscal
 The Reserve Bank of India

• The Reserve Bank of India (RBI) is expected to hike rate by 25 bps in the
next credit policy
• Currently the RBI is being very considerate in its response to monetary
policy, in its response to the high level of cost-push inflation. We do expect
the repo rate to go up by 25 basis points (bps) at the next meeting but that
is a very modest increase, relative to India's nominal gross domestic
product (GDP) growth," JP Morgan's Chief Asian and Emerging Market
Strategist
India drops to 51st position in global competitiveness ranking By the World Economic
Forum's

• India has been pushed down to 51st position from 49th due to its poor performance
in a range of social sector areas such as education, health and infrastructure
• India has performed well in complex financial sector areas, attaining the 17th rank
globally in terms of its financial markets, 44th in business sophistication and 39th
in innovation, it has failed to improve the basic drivers of competitiveness
• As per the WEF's Global Competitiveness Report 2010-11, released today,
Switzerland is No. 1 in the world in terms of its ability to provide the most
competitive environment on several fronts.
• Sweden, another technology powerhouse in Europe, ranks second, followed by
Singapore and the United States, which both fell by two positions from their
ranking last year. The African nation of Chad figures at the bottom of the list of
139 countries.
 Confident, no tax to pay on India transaction: Vodafone

• Vodafone is confident that there is no tax to pay on the India transaction, it

said on Wednesday, after the Bombay High Court dismissed the company's
petition in the tax case.
• Vodafone said it is seeking legal advice to challenge the Bombay High
Court order that dismissed its plea against the I-T department's Rs 12,000
crore demand in tax and penalty on the company's acquisition of of
Hutchison Telecom in a deal of about Rs 50,000 crore