July 2 (Bloomberg) -- Asian initial public offerings, which accounted for the lowest proportion of share sales in at least 10 years during the first half, may be poised to take off as smaller stock swings make it easier for companies to tap equity markets.
IPOs made up 10 percent of the $33 billion of stock offerings in Asia, excluding Japan and mainland China, according to data compiled by Bloomberg. The decline in IPOs occurred as investors sold stakes in Chinese banks and financial companies raised funds in rights offerings, more than tripling the overall value of equity sales from the second half of 2008.
Stock-market gyrations that made it harder for companies to complete IPOs are easing, said bankers, including Justin Haik at Morgan Stanley in Hong Kong. The benchmark for U.S. stock market volatility closed June 29 below where it was just before Lehman Brothers Holdings Inc. filed for bankruptcy Sept. 15.
“The IPO market will start to get pretty active,” said Kester Ng, Asia-Pacific head of equity capital and derivatives markets at JPMorgan Chase & Co. in Hong Kong. “A lot of companies that put IPOs on the shelf for the last 18 months have started working.”
The Chicago Board Options Exchange Volatility Index, which measures the cost to insure against losses in the Standard & Poor’s 500 Index, dropped 67 percent through June 30 from a Nov. 20 peak. A measure of the volatility of the MSCI Asia Pacific Index has fallen to the lowest since Sept. 4, according to Bloomberg data.
Billion-Dollar Deals
IPOs in Asia outside Japan dwindled to $3.36 billion in the six months ended June 30 from $14.3 billion a year earlier, the slowest half since 2003, Bloomberg data show.
As many as 100 companies may be reviving Hong Kong IPO plans after the equities rout delayed sales scheduled for 2008, said Jonathan Penkin, Goldman Sachs Group Inc.’s Hong Kong-based head of equity capital markets in Asia outside Japan. The city was the largest IPO market in the region.
Haik, a managing director in Morgan Stanley’s global capital markets group, expects at least five IPOs worth more than $1 billion each in Asia during the next six to 12 months. China Zhongwang Holdings Ltd.’s $1.3 billion sale in April was the only one to surpass that mark in the first half.
American International Group Inc.’s Asian life insurance unit may raise as much as $8 billion in an IPO during next year’s first quarter.
IPOs in Hong Kong and China may raise $39 billion in 2009, accounting firm Ernst & Young LLP said last month. China’s securities regulator lifted a moratorium last month on public offerings, after the benchmark Shanghai Composite Index climbed more than 40 percent in the first five months. Overseas investors are restricted from buying shares in mainland China.
Bank Sell-off
Shareholders, including Goldman Sachs, Bank of America Corp., UBS AG and Royal Bank of Scotland Group Plc, sold a combined $10.8 billion worth of stock in Bank of China Ltd., China Construction Bank Corp. and Industrial & Commercial Bank of China Ltd. in the period, increasing the value of deals.
U.S. and European banks, which initially bought into the Chinese lenders in 2005 and 2006, rushed to sell after lockup periods on their holdings expired, helping them restore finances hobbled by credit market losses.
“People needed to repair balance sheets,” said Steve Barg, Asia head of global capital markets at UBS in Hong Kong.
The sales attracted hedge fund and mutual fund managers that boosted cash holdings late last year in preparation for investor redemptions that didn’t materialize, Barg said.
Chinese Buyers
Last year’s equities rout thinned the ranks of private banks and Hong Kong billionaires buying IPOs. Private banks representing wealthy individuals are less willing to buy new shares than they were in 2006 and 2007, when booming markets drove stock offerings in Asia to records, said JPMorgan’s Ng.
Chinese investors are playing a bigger role, said Jason Cox, Hong Kong-based head of Asia-Pacific equity capital markets at Bank of America Merrill Lynch. In Hong Kong, Chinese funds and companies account for as much as 30 percent of institutional orders for IPOs, up from less than 10 percent in 2006, he said.
Lower price expectations among companies mulling IPOs may draw more investors to sales, said Goldman’s Penkin.
361 Degrees International Ltd., a Chinese maker and distributor of sportswear, priced a $233 million IPO in Hong Kong last month at 8.7 times estimated profit for the year to June 2010. Anta Sports Products Ltd., which competes against 361 Degrees, trades at 16 times estimated 2010 earnings, according to Bloomberg data. Anta Sports went public in July 2007.
“Issuers’ expectations on price have come down from what it was last year,” Penkin said. “The valuation gap has closed a little.”
Stock swings posed another complication earlier this year for investment bankers who were trying to value companies about to go public, Haik said.
“If you catch the wrong week, all of a sudden you can end up having launched the deal at this price, yet the comparable companies have dropped 20 to 30 percent,” he said. “The company you are trying to IPO all of sudden looks expensive relative to the peer group.”
Wednesday, July 1, 2009
Tech Mahindra to Raise Satyam Stake to 44% to Tighten Control
July 2 (Bloomberg) -- Tech Mahindra Ltd. plans to raise its stake in Satyam Computer Services Ltd. to about 44 percent as it tightens control and reorganizes the Indian software-services provider following a $1 billion fraud.
The company may buy new Satyam stock after receiving “no significant” acceptances from shareholders for an 11.5 billion rupee ($240 million) tender offer, Chief Financial Officer Sonjoy Anand said in a telephone interview yesterday. Spending the same amount on new shares would raise Tech Mahindra’s stake to “a little less than 44 percent” from 31 percent, he said.
Satyam would gain funds as it seeks to retain clients and win new orders following former Chairman Ramalinga Raju’s January admission that he overstated assets by $1 billion. The software provider’s shares have jumped 55 percent since Tech Mahindra agreed to buy control of the company from a state- appointed board on April 13.
“They are showing more commitment,” said Tarun Sisodia, a Mumbai-based analyst at Anand Rathi Financial Services Ltd. “Down the line, if they merge Satyam with Tech Mahindra, the money will come back.”
Satyam rose 3.2 percent yesterday to close at 73.25 rupees in Mumbai trading. Tech Mahindra climbed 2.1 percent to 747.55 rupees, while the benchmark Sensitive Index gained 1.1 percent.
The number of shares tendered and accepted in the offer that expired yesterday is insignificant, Anand said. The figures will be disclosed on or about July 8, Tech Mahindra said in a statement to the Bombay Stock Exchange yesterday.
The company may buy new Satyam stock after receiving “no significant” acceptances from shareholders for an 11.5 billion rupee ($240 million) tender offer, Chief Financial Officer Sonjoy Anand said in a telephone interview yesterday. Spending the same amount on new shares would raise Tech Mahindra’s stake to “a little less than 44 percent” from 31 percent, he said.
Satyam would gain funds as it seeks to retain clients and win new orders following former Chairman Ramalinga Raju’s January admission that he overstated assets by $1 billion. The software provider’s shares have jumped 55 percent since Tech Mahindra agreed to buy control of the company from a state- appointed board on April 13.
“They are showing more commitment,” said Tarun Sisodia, a Mumbai-based analyst at Anand Rathi Financial Services Ltd. “Down the line, if they merge Satyam with Tech Mahindra, the money will come back.”
Satyam rose 3.2 percent yesterday to close at 73.25 rupees in Mumbai trading. Tech Mahindra climbed 2.1 percent to 747.55 rupees, while the benchmark Sensitive Index gained 1.1 percent.
The number of shares tendered and accepted in the offer that expired yesterday is insignificant, Anand said. The figures will be disclosed on or about July 8, Tech Mahindra said in a statement to the Bombay Stock Exchange yesterday.
Asian Stocks Advance on Commodities, China Growth Speculation
July 2 (Bloomberg) -- Asian stocks climbed on speculation China’s economy will avoid the recession of global counterparts and as higher commodities prices drove gains by resource shares.
Newcrest Mining Ltd., Australia’s largest gold producer, rose 2.8 percent after the precious metal halted a two-day slide. Nickel producer Pacific Metals Co. jumped 5.6 percent as Merrill Lynch & Co. boosted its share price target citing Chinese demand. Ping An Insurance (Group) Co., China’s No. 2 insurer, surged 5.8 percent after a brokerage upgrade. Shinsei Bank Ltd. and Aozora Bank Ltd. led Japanese banks lower after agreeing to a merger.
“Investors are feeling the global economy is getting better, but the hazy outlook means they can’t totally buy into this recovery story,” said Mitsushige Akino, who oversees the equivalent of $522 million at Ichiyoshi Investment Management Co. “We have no reason to sell but no definitive clue to buy.”
The MSCI Asia Pacific Index advanced 0.5 percent to 103.63 as of 12:09 p.m. in Tokyo. The benchmark rallied 15 percent in the first six months of this year, outpacing gains by benchmark indexes in the U.S. and Europe. Companies in Asia traded at 23.5 times their estimated net income yesterday.
Japan’s Nikkei 225 Stock Average was little-changed at 9,940.12. Shares elsewhere in the region advanced, except in South Korea, Singapore and Vietnam. Hong Kong’s Hang Seng Index jumped 1.6 percent after the market was closed yesterday for a holiday.
Futures on the Standard & Poor’s 500 Index lost 0.1 percent in trading today after the measure advanced 0.4 percent in New York yesterday. The Institute for Supply Management said yesterday its factory index rose in June for a sixth month to 44.8, still below the 50 threshold that divides expansion and contraction.
China Insurers
A report from ADP Employer Services weighed on U.S. equities as it showed more Americans lost their jobs last month than economists had estimated.
“Though some may say employment is a lagging indicator, it affects household income and consumer spending,” said Ichiyoshi’s Akino.
A gauge of six metals in London jumped 2.9 percent yesterday, the most since June 24. Gold futures snapped a two- day drop, climbing 1.5 percent in New York.
Chinese Insurers
Newcrest gained 2.8 percent to A$31.12. Pacific Metals jumped 5.6 percent to 772 yen after Merrill Lynch analyst Takashi Enomoto lifted his price estimate on the stock by 20 percent saying steel production in China is boosting nickel demand. China Petroleum & Chemical Corp., also known as Sinopec, climbed 1.9 percent to HK$6.02 after Merrill resumed coverage of the company with a “buy” recommendation.
Ping An gained 5.8 percent to HK$55.55. The stock was raised to “outperform” from “in-line” by Peter O’Brien at Cazenove Asia Ltd. The insurance industry should benefit from investment deregulation and ongoing growth in demand for insurance as China ages.
China Life Insurance Co., the nation’s biggest, gained 2.6 percent to HK$29.25. China Insurance International Holdings Co., the country’s biggest insurer in overseas markets, rose 4 percent to HK$17.06 and is O’Brien’s top pick, he wrote.
China’s manufacturing expanded for a fourth month in June, a government survey showed yesterday. China’s economy may keep improving in the third and fourth quarters, enabling the nation to meet its 8 percent economic growth target for this year, central bank Governor Zhou Xiaochuan said this week.
Real Estate Exposure
Shinsei, the former Long Term Credit Bank of Japan which collapsed in 1998, lost 4.5 percent to 150 yen, while Aozora, controlled by Cerberus Capital Management LP, slumped 4.6 percent to 144 yen. The companies agreed to combine yesterday at a 1-to-1 ratio in a deal that will create Japan’s sixth-largest lender.
“We believe there are risks that once the two banks merge, common financial problems such as the concentrated exposure to the real estate sector and the insufficiency of deposits may become even more serious,” Shinichi Ina, an analyst at Credit Suisse Group AG, wrote in a report.
Electronics retailer K’s Holdings Corp. climbed 5.5 percent to 2,515 yen. The retailer likely saw a 40 percent jump in profit last quarter as the Japanese government’s incentive program for the purchase of low-emission appliances increased sales, the Nikkei newspaper reported. Yamada Denki Co., Japan’s largest electronics retailer, rose 2.7 percent to 5,820 yen.
Hitachi Ltd. surged 4.4 percent to 311 yen. The company plans to expand its production capacity for lithium-ion batteries by more than 600 percent by “next autumn,” the Nikkei said today.
Newcrest Mining Ltd., Australia’s largest gold producer, rose 2.8 percent after the precious metal halted a two-day slide. Nickel producer Pacific Metals Co. jumped 5.6 percent as Merrill Lynch & Co. boosted its share price target citing Chinese demand. Ping An Insurance (Group) Co., China’s No. 2 insurer, surged 5.8 percent after a brokerage upgrade. Shinsei Bank Ltd. and Aozora Bank Ltd. led Japanese banks lower after agreeing to a merger.
“Investors are feeling the global economy is getting better, but the hazy outlook means they can’t totally buy into this recovery story,” said Mitsushige Akino, who oversees the equivalent of $522 million at Ichiyoshi Investment Management Co. “We have no reason to sell but no definitive clue to buy.”
The MSCI Asia Pacific Index advanced 0.5 percent to 103.63 as of 12:09 p.m. in Tokyo. The benchmark rallied 15 percent in the first six months of this year, outpacing gains by benchmark indexes in the U.S. and Europe. Companies in Asia traded at 23.5 times their estimated net income yesterday.
Japan’s Nikkei 225 Stock Average was little-changed at 9,940.12. Shares elsewhere in the region advanced, except in South Korea, Singapore and Vietnam. Hong Kong’s Hang Seng Index jumped 1.6 percent after the market was closed yesterday for a holiday.
Futures on the Standard & Poor’s 500 Index lost 0.1 percent in trading today after the measure advanced 0.4 percent in New York yesterday. The Institute for Supply Management said yesterday its factory index rose in June for a sixth month to 44.8, still below the 50 threshold that divides expansion and contraction.
China Insurers
A report from ADP Employer Services weighed on U.S. equities as it showed more Americans lost their jobs last month than economists had estimated.
“Though some may say employment is a lagging indicator, it affects household income and consumer spending,” said Ichiyoshi’s Akino.
A gauge of six metals in London jumped 2.9 percent yesterday, the most since June 24. Gold futures snapped a two- day drop, climbing 1.5 percent in New York.
Chinese Insurers
Newcrest gained 2.8 percent to A$31.12. Pacific Metals jumped 5.6 percent to 772 yen after Merrill Lynch analyst Takashi Enomoto lifted his price estimate on the stock by 20 percent saying steel production in China is boosting nickel demand. China Petroleum & Chemical Corp., also known as Sinopec, climbed 1.9 percent to HK$6.02 after Merrill resumed coverage of the company with a “buy” recommendation.
Ping An gained 5.8 percent to HK$55.55. The stock was raised to “outperform” from “in-line” by Peter O’Brien at Cazenove Asia Ltd. The insurance industry should benefit from investment deregulation and ongoing growth in demand for insurance as China ages.
China Life Insurance Co., the nation’s biggest, gained 2.6 percent to HK$29.25. China Insurance International Holdings Co., the country’s biggest insurer in overseas markets, rose 4 percent to HK$17.06 and is O’Brien’s top pick, he wrote.
China’s manufacturing expanded for a fourth month in June, a government survey showed yesterday. China’s economy may keep improving in the third and fourth quarters, enabling the nation to meet its 8 percent economic growth target for this year, central bank Governor Zhou Xiaochuan said this week.
Real Estate Exposure
Shinsei, the former Long Term Credit Bank of Japan which collapsed in 1998, lost 4.5 percent to 150 yen, while Aozora, controlled by Cerberus Capital Management LP, slumped 4.6 percent to 144 yen. The companies agreed to combine yesterday at a 1-to-1 ratio in a deal that will create Japan’s sixth-largest lender.
“We believe there are risks that once the two banks merge, common financial problems such as the concentrated exposure to the real estate sector and the insufficiency of deposits may become even more serious,” Shinichi Ina, an analyst at Credit Suisse Group AG, wrote in a report.
Electronics retailer K’s Holdings Corp. climbed 5.5 percent to 2,515 yen. The retailer likely saw a 40 percent jump in profit last quarter as the Japanese government’s incentive program for the purchase of low-emission appliances increased sales, the Nikkei newspaper reported. Yamada Denki Co., Japan’s largest electronics retailer, rose 2.7 percent to 5,820 yen.
Hitachi Ltd. surged 4.4 percent to 311 yen. The company plans to expand its production capacity for lithium-ion batteries by more than 600 percent by “next autumn,” the Nikkei said today.
Tuesday, June 30, 2009
Coal India Seeks Faster Approvals, Imports, Overseas Miners
July 1 (Bloomberg) -- Coal India Ltd., the world’s biggest coal producer, wants mining approvals sped up to help it boost production to meet a widening supply shortfall that is forcing more imports, Chairman Partha Bhattacharyya said.
Faster consent will allow the company to increase output by 10 percent, above its target of 7.5 percent, from a current production of 404 million metric tons a year, Bhattacharyya said in an interview. Domestic output has failed to meet demand, particularly from power generation, requiring the nation to increase imports by an average 10 percent to 15 percent a year.
“Increasing coal production capacity is not the same as adding to power generation capacity because you need so many other things,” Bhattacharyya said in New Delhi on June 15. “Coal in India is found in forests and places that are inhabited by tribes. Mining disturbs both.”
India, the world’s second fastest-growing major economy after China, aims to add 13,000 megawatts of new capacity annually, President Pratibha Patil said in parliament on June 4. More power is needed to cut outages that last as long as 8 hours in peak summer months in the capital. The country’s surge in power use has created a gap in coal production meeting demand from generators, Bhattacharyya said.
“If power generation capacity has to increase at a rate of 7 to 8 percent, maybe it can be managed,” he said. “But if it is to increase at 20 percent, I don’t think coal for that can come from indigenous sources.”
Overseas Partners
Coal India is taking steps to boost production, he said. It will seek to join with foreign companies to develop underground mines, Bhattacharyya said. Coal India, which mines more coal than Peabody Energy Corp. and China Shenhua Energy Co., the top coal producers in the U.S. and China, was created in 1975 from nationalized companies and has concentrated on less-complicated open-cast mining.
Environmental approvals to prospect for more reserves is a process that can take as long as seven years in India, Bhattacharyya said.
The constraints of coal production are forcing companies to seek reserves overseas. Coal India is looking at importing 4 million tons of coal this year.
NTPC Ltd., India’s biggest electricity generator, plans to import 12.5 million tons. Both state-owned companies are also scouting for overseas mines. In 2007, Tata Power Co., which is building a 4,000-megawatt plant in western India, bought a 30 percent stake in two coal mining units owned by Indonesia’s PT Bumi Resources, Asia’s third-largest coal miner. The $4.14 billion plant will run on coal from the Indonesian mines.
Imports Jump
India’s coal imports will more than double to 100 million tons by 2012 from 40 million tons, estimates Kaamil Fareed, a senior trading manager at the Coal & Oil Group, which supplies coal in India and Pakistan.
Coal India also plans to revive old mines to meet power plant demand for the fuel.
The company has identified 18 old underground mines with total reserves of 1.6 billion tons to increase output. These mines were abandoned by Coal India because of difficulties such as water-logging and fire. Coal India short-listed ArcelorMittal, the world’s biggest steelmaker, and nine other companies to develop its abandoned mines, Bhattacharya said yesterday.
Coal India has favored open-cast pits over underground mines, he said, as the majority of proved reserves were at depths of less than 300 meters (984 feet). “We know that we have a shortcoming in planning underground mines because we kept on doing better and better in open cast,” Bhattacharya said. “But underground has been ignored.”
Going Underground
Coal India lost the skill of underground mining because of its preference for the open-cast method, said Ashok Dhillon, chief executive officer at Canasia Power Corp., a Canadian company that has been trying to build a power plant in northern India for 15 years amid a lack of coal supplies.
“While they are one of the largest producers in the world by sheer volume, they are not the most expert of miners,” Dhillon said. “There may be reserves that Coal India finds difficult to get at but other international mining companies would find relatively easy to mine.”
The company has identified seven coal blocks where underground mines with a capacity of between 2 million tons and 5 million tons can be set up. The planning and development of the mines will be outsourced to international companies.
Faster consent will allow the company to increase output by 10 percent, above its target of 7.5 percent, from a current production of 404 million metric tons a year, Bhattacharyya said in an interview. Domestic output has failed to meet demand, particularly from power generation, requiring the nation to increase imports by an average 10 percent to 15 percent a year.
“Increasing coal production capacity is not the same as adding to power generation capacity because you need so many other things,” Bhattacharyya said in New Delhi on June 15. “Coal in India is found in forests and places that are inhabited by tribes. Mining disturbs both.”
India, the world’s second fastest-growing major economy after China, aims to add 13,000 megawatts of new capacity annually, President Pratibha Patil said in parliament on June 4. More power is needed to cut outages that last as long as 8 hours in peak summer months in the capital. The country’s surge in power use has created a gap in coal production meeting demand from generators, Bhattacharyya said.
“If power generation capacity has to increase at a rate of 7 to 8 percent, maybe it can be managed,” he said. “But if it is to increase at 20 percent, I don’t think coal for that can come from indigenous sources.”
Overseas Partners
Coal India is taking steps to boost production, he said. It will seek to join with foreign companies to develop underground mines, Bhattacharyya said. Coal India, which mines more coal than Peabody Energy Corp. and China Shenhua Energy Co., the top coal producers in the U.S. and China, was created in 1975 from nationalized companies and has concentrated on less-complicated open-cast mining.
Environmental approvals to prospect for more reserves is a process that can take as long as seven years in India, Bhattacharyya said.
The constraints of coal production are forcing companies to seek reserves overseas. Coal India is looking at importing 4 million tons of coal this year.
NTPC Ltd., India’s biggest electricity generator, plans to import 12.5 million tons. Both state-owned companies are also scouting for overseas mines. In 2007, Tata Power Co., which is building a 4,000-megawatt plant in western India, bought a 30 percent stake in two coal mining units owned by Indonesia’s PT Bumi Resources, Asia’s third-largest coal miner. The $4.14 billion plant will run on coal from the Indonesian mines.
Imports Jump
India’s coal imports will more than double to 100 million tons by 2012 from 40 million tons, estimates Kaamil Fareed, a senior trading manager at the Coal & Oil Group, which supplies coal in India and Pakistan.
Coal India also plans to revive old mines to meet power plant demand for the fuel.
The company has identified 18 old underground mines with total reserves of 1.6 billion tons to increase output. These mines were abandoned by Coal India because of difficulties such as water-logging and fire. Coal India short-listed ArcelorMittal, the world’s biggest steelmaker, and nine other companies to develop its abandoned mines, Bhattacharya said yesterday.
Coal India has favored open-cast pits over underground mines, he said, as the majority of proved reserves were at depths of less than 300 meters (984 feet). “We know that we have a shortcoming in planning underground mines because we kept on doing better and better in open cast,” Bhattacharya said. “But underground has been ignored.”
Going Underground
Coal India lost the skill of underground mining because of its preference for the open-cast method, said Ashok Dhillon, chief executive officer at Canasia Power Corp., a Canadian company that has been trying to build a power plant in northern India for 15 years amid a lack of coal supplies.
“While they are one of the largest producers in the world by sheer volume, they are not the most expert of miners,” Dhillon said. “There may be reserves that Coal India finds difficult to get at but other international mining companies would find relatively easy to mine.”
The company has identified seven coal blocks where underground mines with a capacity of between 2 million tons and 5 million tons can be set up. The planning and development of the mines will be outsourced to international companies.
India lambasts ‘pernicious’ US carbon tariffs
India’s newly-installed environment minister on Tuesday lambasted US climate-change legislation that would allow the imposition of import tariffs on goods from countries that do not take sufficient steps to control carbon emissions.
Jairam Ramesh, who took over the environment portfolio after recent elections, was adamant that New Delhi would not agree to binding emissions targets as part of global climate-change negotiations.
EDITOR’S CHOICE
In depth: Climate change - Mar-31
Border taxes linked to cap-and-trade laws - Jun-29
Clive Crook: Obama is choosing to be weak - Jun-28
Editorial Comment: Cap-and-trade mess - Jun-28
Annan and Geldof launch climate campaign - Jun-26
White House lobbies wavering lawmakers - Jun-26
“India will not accept any emissions targets – period. It is the bottom line; a non-negotiable stand,” he said on Tuesday. “This is not something that India is going to budge on, under any circumstances.”
Binding emissions targets for developing countries are not part of the United Nations negotiations, instead countries such as India are being asked to draw up “national action plans”. These set out how they will attempt to curb emissions and encourage clean energy.
The US House of Representatives on Friday backed a “border adjustment tax” to equalise carbon emissions charges between domestic production and imports from countries that do not cap emissions. The legislation has yet to be passed in the Senate, where it is expected to face tough opposition.
However, Mr Ramesh denounced as “pernicious” the US effort to impose “trade penalties” on countries that do not match its carbon reduction efforts.
“We reject the use of climate as a non-tariff barrier,” he said. “And we categorically reject any attempt to introduce climate change as an issue at the [World Trade Organisation].”
He warned that the intellectual property rights regime protecting green technologies woudl have to be addressed. Many are in the private domain – and thus expensive for developing countries.
With 1.1bn people – roughly a sixth of the world’s population – India has one of the lowest per capita emission levels, with 1.2 tonnes per head, about 4.6 per cent of total global emissions. “India has not polluted – we are bearing the brunt of global climate change caused by the developed countries and we are being asked to curb emissions,” he said. “I find this ludicrous.”
However, India’s carbon emissions are expected to rise sharply in the future, especially as the country tries to meet its power deficit through the rapid development of generating capacity. India uses about 450m tonnes of highly-polluting coal for power generation each year, a figure that Mr Ramesh said would rise to about 1bn tonnes in less than a decade.
“There is no running away from our karma – without coal, we have no economic future,” he said.
He said India needed access to new technologies – including clean coal – to help reduce the environmental impact of its dependence on coal and to deal with other climate change issues.
Jairam Ramesh, who took over the environment portfolio after recent elections, was adamant that New Delhi would not agree to binding emissions targets as part of global climate-change negotiations.
EDITOR’S CHOICE
In depth: Climate change - Mar-31
Border taxes linked to cap-and-trade laws - Jun-29
Clive Crook: Obama is choosing to be weak - Jun-28
Editorial Comment: Cap-and-trade mess - Jun-28
Annan and Geldof launch climate campaign - Jun-26
White House lobbies wavering lawmakers - Jun-26
“India will not accept any emissions targets – period. It is the bottom line; a non-negotiable stand,” he said on Tuesday. “This is not something that India is going to budge on, under any circumstances.”
Binding emissions targets for developing countries are not part of the United Nations negotiations, instead countries such as India are being asked to draw up “national action plans”. These set out how they will attempt to curb emissions and encourage clean energy.
The US House of Representatives on Friday backed a “border adjustment tax” to equalise carbon emissions charges between domestic production and imports from countries that do not cap emissions. The legislation has yet to be passed in the Senate, where it is expected to face tough opposition.
However, Mr Ramesh denounced as “pernicious” the US effort to impose “trade penalties” on countries that do not match its carbon reduction efforts.
“We reject the use of climate as a non-tariff barrier,” he said. “And we categorically reject any attempt to introduce climate change as an issue at the [World Trade Organisation].”
He warned that the intellectual property rights regime protecting green technologies woudl have to be addressed. Many are in the private domain – and thus expensive for developing countries.
With 1.1bn people – roughly a sixth of the world’s population – India has one of the lowest per capita emission levels, with 1.2 tonnes per head, about 4.6 per cent of total global emissions. “India has not polluted – we are bearing the brunt of global climate change caused by the developed countries and we are being asked to curb emissions,” he said. “I find this ludicrous.”
However, India’s carbon emissions are expected to rise sharply in the future, especially as the country tries to meet its power deficit through the rapid development of generating capacity. India uses about 450m tonnes of highly-polluting coal for power generation each year, a figure that Mr Ramesh said would rise to about 1bn tonnes in less than a decade.
“There is no running away from our karma – without coal, we have no economic future,” he said.
He said India needed access to new technologies – including clean coal – to help reduce the environmental impact of its dependence on coal and to deal with other climate change issues.
Indian Share Placements Face Slump After Best Quarter in Six
July 1 (Bloomberg) -- Housing Development & Infrastructure Ltd.’s $350.3 million sale of shares to institutional investors capped the best quarter in six for Indian companies raising funds from such offerings.
It may also mark the peak of investor appetite for so- called qualified institutional placements as fund managers balk at prices. GMR Infrastructure Ltd. scrapped a $500 million sale yesterday after cutting the amount sought by 80 percent. At least 40 companies led by JSW Steel Ltd. have said they plan to raise more than a combined 350 billion rupees ($7.3 billion) after Indian stocks had their biggest quarterly gain in 17 years.
“There is not enough money available for everything and at any price,” said Vetri Subramaniam, head of equity funds at Religare Asset Management Co., who oversees $158 million in assets in Mumbai. “You need to give value to get people to put in money.”
Developers Indiabulls Real Estate Ltd. and Unitech Ltd. led Indian companies in raising 55 billion rupees from Qualified Institutional Placements, or QIPs, during the second quarter, the most since a record 130 billion rupees was raised in the three months ended Dec. 31, 2007, according to Bloomberg data.
“QIP has become a mechanism to access the market quickly and efficiently,” Saurabh Agrawal, head of investment banking at DSP Merrill Lynch Ltd., said in an interview in Mumbai.
The securities regulator began allowing companies to sell shares through the QIP process in May 2006 following complaints that domestic stock sales took too long to complete, forcing companies to raise money overseas. The pricing formula for the QIPs was changed by the regulator in August 2008 to bring the sale price closer to the market value of the shares.
Pipeline of Deals
Parsvnath Developers Ltd., billionaire Anil Ambani’s Reliance Communications Ltd., Omaxe Ltd. and Ansal Properties & Infrastructure Ltd. are among the companies that have said they may raise funds from QIPs, according to filings made to the Bombay Stock Exchange during the quarter.
GMR, a builder of ports and roads, scrapped its proposed offering “in light of the existing market conditions.” It didn’t provide additional details in a statement to the Bombay Stock Exchange yesterday. The company had earlier cut the amount it was seeking to $100 million after failing to win enough investors for a larger sale, a person familiar with the matter said, declining to be identified.
“Somehow or the other, it was not happening today, so we have decided to call it off rather than dilute the value,” GMR spokesman Vijay Vancheswar said yesterday in an interview. “It is a question of time. We don’t need money desperately.”
Sensex Rally Crimped
India’s Sensitive Index fell 2 percent yesterday, paring the benchmark’s quarterly gain to 49 percent, on concern the proposed stock sales will sap demand for existing shares.
Still, investors bought $150 million of shares from Bajaj Hindusthan Ltd., India’s biggest sugar producer, this week, as well as $110 million from Sobha Developers Ltd. and $100 million from Hindustan Construction Co. The board of Hindalco Industries Ltd. yesterday approved plans to raise as much as $500 million by selling shares to institutional investors.
“There’s a lot of investor appetite,” said DSP’s Agrawal. “The market leaders would be able to go out and raise money,” ensuring success for about half the companies that have gotten approval to raise funds, he said.
It may also mark the peak of investor appetite for so- called qualified institutional placements as fund managers balk at prices. GMR Infrastructure Ltd. scrapped a $500 million sale yesterday after cutting the amount sought by 80 percent. At least 40 companies led by JSW Steel Ltd. have said they plan to raise more than a combined 350 billion rupees ($7.3 billion) after Indian stocks had their biggest quarterly gain in 17 years.
“There is not enough money available for everything and at any price,” said Vetri Subramaniam, head of equity funds at Religare Asset Management Co., who oversees $158 million in assets in Mumbai. “You need to give value to get people to put in money.”
Developers Indiabulls Real Estate Ltd. and Unitech Ltd. led Indian companies in raising 55 billion rupees from Qualified Institutional Placements, or QIPs, during the second quarter, the most since a record 130 billion rupees was raised in the three months ended Dec. 31, 2007, according to Bloomberg data.
“QIP has become a mechanism to access the market quickly and efficiently,” Saurabh Agrawal, head of investment banking at DSP Merrill Lynch Ltd., said in an interview in Mumbai.
The securities regulator began allowing companies to sell shares through the QIP process in May 2006 following complaints that domestic stock sales took too long to complete, forcing companies to raise money overseas. The pricing formula for the QIPs was changed by the regulator in August 2008 to bring the sale price closer to the market value of the shares.
Pipeline of Deals
Parsvnath Developers Ltd., billionaire Anil Ambani’s Reliance Communications Ltd., Omaxe Ltd. and Ansal Properties & Infrastructure Ltd. are among the companies that have said they may raise funds from QIPs, according to filings made to the Bombay Stock Exchange during the quarter.
GMR, a builder of ports and roads, scrapped its proposed offering “in light of the existing market conditions.” It didn’t provide additional details in a statement to the Bombay Stock Exchange yesterday. The company had earlier cut the amount it was seeking to $100 million after failing to win enough investors for a larger sale, a person familiar with the matter said, declining to be identified.
“Somehow or the other, it was not happening today, so we have decided to call it off rather than dilute the value,” GMR spokesman Vijay Vancheswar said yesterday in an interview. “It is a question of time. We don’t need money desperately.”
Sensex Rally Crimped
India’s Sensitive Index fell 2 percent yesterday, paring the benchmark’s quarterly gain to 49 percent, on concern the proposed stock sales will sap demand for existing shares.
Still, investors bought $150 million of shares from Bajaj Hindusthan Ltd., India’s biggest sugar producer, this week, as well as $110 million from Sobha Developers Ltd. and $100 million from Hindustan Construction Co. The board of Hindalco Industries Ltd. yesterday approved plans to raise as much as $500 million by selling shares to institutional investors.
“There’s a lot of investor appetite,” said DSP’s Agrawal. “The market leaders would be able to go out and raise money,” ensuring success for about half the companies that have gotten approval to raise funds, he said.
In 2nd Quarter, Markets Revived but Pessimism Remained
The good news is that Wall Street finished its best quarter in years on Tuesday — part of a dizzy spree that lifted the broad market 35 percent since early March.
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Today's Business With Jack Healy on the Stock Market's Performance
The not-so-good news? It would take almost three more rallies like that to push the Dow Jones industrial average back to 14,000 and return markets to where they were before the financial crisis. On Wall Street — where exuberance, irrational and otherwise, is usually an art form — there is a nagging fear that the market is again losing its footing.
Despite signs that this downturn is easing, many Americans are more downbeat about the economy now than they were when the stock rally began. Unemployment is rising. Home prices are falling. Many corporate earnings are still weak.
“Less-worse isn’t the same as better,” said Barry Ritholtz, chief executive of FusionIQ, a research firm. “We want to see ‘good.’ In order to grow profits, in order for earnings to increase, in order for corporate America to start hiring and spending, we need to see greener shoots. So far that hasn’t really happened.”
If consumers continue to guard their money and banks sustain more losses from foreclosures, credit card defaults and losses in commercial real estate, analysts say that stock markets will face huge obstacles to growth that could keep investors in the doldrums for many more months.
Yet by almost any measure, the second quarter was one for the record books. The Standard & Poor’s 500-stock index was up 15.2 percent in the second quarter. The Dow Jones industrials gained 11 percent in the quarter, while the Nasdaq composite index soared 20 percent.
Many blue-chip stocks posted spectacular gains. Bank of America soared 94 percent. American Express gained 71 percent. Microsoft was up 29 percent.
But some analysts sense the euphoria is tempered. Markets ended basically flat for the month of June, pulled in different directions by economic figures showing improvement and those revealing unexpected weakness.
Trading on Tuesday underscored those wobbles. The Dow Jones average fell 82.38 points, or 0.97 percent, to 8,447. The broader S.& P. 500 slid 7.91 points, or 0.85 percent, to 919.32. Gains in some technology shares kept losses on the Nasdaq to 9.02 points, or 0.49 percent. It declined to 1,835.04.
The Treasury’s 10-year note fell 14/32, to 96 20/32. The yield, which moves in the opposite direction from the price, rose 3.53 percent, from 3.48 percent Monday.
Bullish forecasters say the S.& P. 500, which is up 1.8 percent for 2009, will continue to rise as the economy bottoms out, and close the year at 1,050 or 1,100. But bears say that taxpayer aid is still holding up the financial system, and they warn that investors who expect better returns may be in for a bitter disappointment.
“We feel like we’re entitled to go back up again,” said David Tice, a prominent Wall Street bear. “We went from the telecom bubble to the Internet bubble to the corporate finance bubble to the real estate bubble. Now each of those has broken. We have never been more convinced that the worst is not yet over.”
Some analysts say that stocks may simply rise and fall fitfully in the months — or years — to come without making broader progress, as they did from the mid-1960s to the mid-’70s. And they say that investors who once bought and held stocks or pieces of index funds and rode them higher will need to devise different investment strategies.
“The market is going to be range-bound for this year and going into next year,” said Mary Ann Bartels, head of technical and market analysis at Bank of America/Merrill Lynch. “Is the market still investable? Our answer is yes.”
Some investors say energy companies and basic-materials producers will lead the markets as commodity prices rise. Others like technology firms, emerging markets or any company that offers a dividend and is not steeped in debt.
Unemployment is at 9.4 percent, and economists expect it will rise to 9.6 percent when the Labor Department releases its June employment figures on Thursday. Private wages and salaries are continuing to fall, and Americans are saving more money as they try to hedge against job losses.
All of which, say some analysts, could mean slower growth in consumer spending, corporate earnings and stock prices in the months to come.
“We’d all like our stocks to go up,” said Mr. Tice, the bear. “But now’s the time to defend ourselves.”
Skip to next paragraph
Multimedia
Graphic
Today's Business With Jack Healy on the Stock Market's Performance
The not-so-good news? It would take almost three more rallies like that to push the Dow Jones industrial average back to 14,000 and return markets to where they were before the financial crisis. On Wall Street — where exuberance, irrational and otherwise, is usually an art form — there is a nagging fear that the market is again losing its footing.
Despite signs that this downturn is easing, many Americans are more downbeat about the economy now than they were when the stock rally began. Unemployment is rising. Home prices are falling. Many corporate earnings are still weak.
“Less-worse isn’t the same as better,” said Barry Ritholtz, chief executive of FusionIQ, a research firm. “We want to see ‘good.’ In order to grow profits, in order for earnings to increase, in order for corporate America to start hiring and spending, we need to see greener shoots. So far that hasn’t really happened.”
If consumers continue to guard their money and banks sustain more losses from foreclosures, credit card defaults and losses in commercial real estate, analysts say that stock markets will face huge obstacles to growth that could keep investors in the doldrums for many more months.
Yet by almost any measure, the second quarter was one for the record books. The Standard & Poor’s 500-stock index was up 15.2 percent in the second quarter. The Dow Jones industrials gained 11 percent in the quarter, while the Nasdaq composite index soared 20 percent.
Many blue-chip stocks posted spectacular gains. Bank of America soared 94 percent. American Express gained 71 percent. Microsoft was up 29 percent.
But some analysts sense the euphoria is tempered. Markets ended basically flat for the month of June, pulled in different directions by economic figures showing improvement and those revealing unexpected weakness.
Trading on Tuesday underscored those wobbles. The Dow Jones average fell 82.38 points, or 0.97 percent, to 8,447. The broader S.& P. 500 slid 7.91 points, or 0.85 percent, to 919.32. Gains in some technology shares kept losses on the Nasdaq to 9.02 points, or 0.49 percent. It declined to 1,835.04.
The Treasury’s 10-year note fell 14/32, to 96 20/32. The yield, which moves in the opposite direction from the price, rose 3.53 percent, from 3.48 percent Monday.
Bullish forecasters say the S.& P. 500, which is up 1.8 percent for 2009, will continue to rise as the economy bottoms out, and close the year at 1,050 or 1,100. But bears say that taxpayer aid is still holding up the financial system, and they warn that investors who expect better returns may be in for a bitter disappointment.
“We feel like we’re entitled to go back up again,” said David Tice, a prominent Wall Street bear. “We went from the telecom bubble to the Internet bubble to the corporate finance bubble to the real estate bubble. Now each of those has broken. We have never been more convinced that the worst is not yet over.”
Some analysts say that stocks may simply rise and fall fitfully in the months — or years — to come without making broader progress, as they did from the mid-1960s to the mid-’70s. And they say that investors who once bought and held stocks or pieces of index funds and rode them higher will need to devise different investment strategies.
“The market is going to be range-bound for this year and going into next year,” said Mary Ann Bartels, head of technical and market analysis at Bank of America/Merrill Lynch. “Is the market still investable? Our answer is yes.”
Some investors say energy companies and basic-materials producers will lead the markets as commodity prices rise. Others like technology firms, emerging markets or any company that offers a dividend and is not steeped in debt.
Unemployment is at 9.4 percent, and economists expect it will rise to 9.6 percent when the Labor Department releases its June employment figures on Thursday. Private wages and salaries are continuing to fall, and Americans are saving more money as they try to hedge against job losses.
All of which, say some analysts, could mean slower growth in consumer spending, corporate earnings and stock prices in the months to come.
“We’d all like our stocks to go up,” said Mr. Tice, the bear. “But now’s the time to defend ourselves.”
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