Manmohan Singh, India’s prime minister, has agreed to face a parliamentary investigation into a spiralling corruption scandal that has paralysed the world’s largest democracy.
Mr Singh said on Wednesday that he was prepared to answer questions from legislators about alleged irregularities in the award of 2G telecoms licences.
An official audit, claiming the scandal cost the national exchequer $39bn, has rocked a fast-growing sector that attracted investments from some of the country’s most powerful business magnates.
A spokesman for Anil Ambani, the Indian billionaire who controls Reliance Communications, said that the tycoon met with federal police on Wednesday “to clarify ongoing issues relating to telecoms matters for the years 2001 to 2010”.
The ruling Congress party had previously resisted opposition demands for a parliamentary investigation. The dispute has stalled the government’s legislative agenda. “I’m quite happy to appear before any committee,” Mr Singh said.
Opposition leaders on the right and left leapt to the offensive minutes after the prime minister expressed disappointment that his second term in office had become mired in corruption scandals.
Nitin Gadkari, president of the Hindu nationalist Bharatiya Janata party, has attempted to paint Mr Singh as a weak leader presiding over a rotten cabinet. He said that the telecoms scandal demonstrated that the prime minister was “not capable of controlling the country’s bureaucrats”.
Mr Singh criticised the BJP, saying that the opposition’s disruptive politics reflected its concerns about the outcome of an investigation into riots that led to the killing of an estimated 2,000 Muslims in 2002.
However, he also acknowledged that a series of corruption scandals, which have also embroiled India’s hosting of the Commonwealth Games last year and the military top brass, had sapped the confidence of Indians in their country’s governance.
“I’m not saying that I have never made a mistake, but I’m not at fault to the extent everyone thinks I am,” Mr Singh said.
Amid speculation that Mr Singh’s travails might hasten a political transition, he emphasised his determination not to resign before serving a full five-year term. “Whatever some people may say – that we are a lame-duck government, that I am a lame duck prime minister – we take our job very seriously. We are here to govern, and to govern effectively.”
Swapan Dasgupta, a leading columnist, applauded Mr Singh’s honest approach to address concerns that were undermining India’s governance and international image.
But he said that such honesty was dangerous in a political environment where the “political distance” between the prime minister’s office and the swirling corruption allegations had narrowed.
Wednesday, February 16, 2011
Tuesday, February 15, 2011
Egypt Leaders Found ‘Off’ Switch for Internet
Epitaphs for the Mubarak government all note that the mobilizing power of the Internet was one of the Egyptian opposition’s most potent weapons. But quickly lost in the swirl of revolution was the government’s ferocious counterattack, a dark achievement that many had thought impossible in the age of global connectedness. In a span of minutes just after midnight on Jan. 28, a technologically advanced, densely wired country with more than 20 million people online was essentially severed from the global Internet.
The blackout was lifted after just five days, and it did not save President Hosni Mubarak. But it has mesmerized the worldwide technical community and raised concerns that with unrest coursing through the Middle East, other autocratic governments — many of them already known to interfere with and filter specific Web sites and e-mails — may also possess what is essentially a kill switch for the Internet.
Because the Internet’s legendary robustness and ability to route around blockages are part of its basic design, even the world’s most renowned network and telecommunications engineers have been perplexed that the Mubarak government succeeded in pulling the maneuver off.
But now, as Egyptian engineers begin to assess fragmentary evidence and their own knowledge of the Egyptian Internet’s construction, they are beginning to understand what, in effect, hit them. Interviews with many of those engineers, as well as an examination of data collected around the world during the blackout, indicate that the government exploited a devastating combination of vulnerabilities in the national infrastructure.
For all the Internet’s vaunted connectivity, the Egyptian government commanded powerful instruments of control: it owns the pipelines that carry information across the country and out into the world.
Internet experts say similar arrangements are more common in authoritarian countries than is generally recognized. In Syria, for example, the Syrian Telecommunications Establishment dominates the infrastructure, and the bulk of the international traffic flows through a single pipeline to Cyprus. Jordan, Qatar, Oman, Saudi Arabia and other Middle Eastern countries have the same sort of dominant, state-controlled carrier.
Over the past several days, activists in Bahrain and Iran say they have seen strong evidence of severe Internet slowdowns amid protests there. Concerns over the potential for a government shutdown are particularly high in North African countries, most of which rely on a just a small number of fiber-optic lines for most of their international Internet traffic.
A Double Knockout
The attack in Egypt relied on a double knockout, the engineers say. As in many authoritarian countries, Egypt’s Internet must connect to the outside world through a tiny number of international portals that are tightly in the grip of the government. In a lightning strike, technicians first cut off nearly all international traffic through those portals.
In theory, the domestic Internet should have survived that strike. But the cutoff also revealed how dependent Egypt’s internal networks are on moment-to-moment information from systems that exist only outside the country — including e-mail servers at companies like Google, Microsoft and Yahoo; data centers in the United States; and the Internet directories called domain name servers, which can be physically located anywhere from Australia to Germany.
The government’s attack left Egypt not only cut off from the outside world, but also with its internal systems in a sort of comatose state: servers, cables and fiber-optic lines were largely up and running, but too confused or crippled to carry information save a dribble of local e-mail traffic and domestic Web sites whose Internet circuitry somehow remained accessible.
“They drilled unexpectedly all the way down to the bottom layer of the Internet and stopped all traffic flowing,” said Jim Cowie, chief technology officer of Renesys, a network management company based in New Hampshire that has closely monitored Internet traffic from Egypt. “With the scope of their shutdown and the size of their online population, it is an unprecedented event.”
The engineers say that a focal point of the attack was an imposing building at 26 Ramses Street in Cairo, just two and a half miles from the epicenter of the protests, Tahrir Square. At one time purely a telephone network switching center, the building now houses the crucial Internet exchange that serves as the connection point for fiber-optic links provided by five major network companies that provide the bulk of the Internet connectivity going into and out of the country.
“In Egypt the actual physical and logical connections to the rest of the world are few, and they are licensed by the government and they are tightly controlled,” said Wael Amin, president of ITWorx, a large software development company based in Cairo.
One of the government’s strongest levers is Telecom Egypt, a state-owned company that engineers say owns virtually all the country’s fiber-optic cables; other Internet service providers are forced to lease bandwidth on those cables in order to do business.
The blackout was lifted after just five days, and it did not save President Hosni Mubarak. But it has mesmerized the worldwide technical community and raised concerns that with unrest coursing through the Middle East, other autocratic governments — many of them already known to interfere with and filter specific Web sites and e-mails — may also possess what is essentially a kill switch for the Internet.
Because the Internet’s legendary robustness and ability to route around blockages are part of its basic design, even the world’s most renowned network and telecommunications engineers have been perplexed that the Mubarak government succeeded in pulling the maneuver off.
But now, as Egyptian engineers begin to assess fragmentary evidence and their own knowledge of the Egyptian Internet’s construction, they are beginning to understand what, in effect, hit them. Interviews with many of those engineers, as well as an examination of data collected around the world during the blackout, indicate that the government exploited a devastating combination of vulnerabilities in the national infrastructure.
For all the Internet’s vaunted connectivity, the Egyptian government commanded powerful instruments of control: it owns the pipelines that carry information across the country and out into the world.
Internet experts say similar arrangements are more common in authoritarian countries than is generally recognized. In Syria, for example, the Syrian Telecommunications Establishment dominates the infrastructure, and the bulk of the international traffic flows through a single pipeline to Cyprus. Jordan, Qatar, Oman, Saudi Arabia and other Middle Eastern countries have the same sort of dominant, state-controlled carrier.
Over the past several days, activists in Bahrain and Iran say they have seen strong evidence of severe Internet slowdowns amid protests there. Concerns over the potential for a government shutdown are particularly high in North African countries, most of which rely on a just a small number of fiber-optic lines for most of their international Internet traffic.
A Double Knockout
The attack in Egypt relied on a double knockout, the engineers say. As in many authoritarian countries, Egypt’s Internet must connect to the outside world through a tiny number of international portals that are tightly in the grip of the government. In a lightning strike, technicians first cut off nearly all international traffic through those portals.
In theory, the domestic Internet should have survived that strike. But the cutoff also revealed how dependent Egypt’s internal networks are on moment-to-moment information from systems that exist only outside the country — including e-mail servers at companies like Google, Microsoft and Yahoo; data centers in the United States; and the Internet directories called domain name servers, which can be physically located anywhere from Australia to Germany.
The government’s attack left Egypt not only cut off from the outside world, but also with its internal systems in a sort of comatose state: servers, cables and fiber-optic lines were largely up and running, but too confused or crippled to carry information save a dribble of local e-mail traffic and domestic Web sites whose Internet circuitry somehow remained accessible.
“They drilled unexpectedly all the way down to the bottom layer of the Internet and stopped all traffic flowing,” said Jim Cowie, chief technology officer of Renesys, a network management company based in New Hampshire that has closely monitored Internet traffic from Egypt. “With the scope of their shutdown and the size of their online population, it is an unprecedented event.”
The engineers say that a focal point of the attack was an imposing building at 26 Ramses Street in Cairo, just two and a half miles from the epicenter of the protests, Tahrir Square. At one time purely a telephone network switching center, the building now houses the crucial Internet exchange that serves as the connection point for fiber-optic links provided by five major network companies that provide the bulk of the Internet connectivity going into and out of the country.
“In Egypt the actual physical and logical connections to the rest of the world are few, and they are licensed by the government and they are tightly controlled,” said Wael Amin, president of ITWorx, a large software development company based in Cairo.
One of the government’s strongest levers is Telecom Egypt, a state-owned company that engineers say owns virtually all the country’s fiber-optic cables; other Internet service providers are forced to lease bandwidth on those cables in order to do business.
Asian Stocks Climb to One-Week High as Analysts Upgrade Shares
Asian stocks advanced, sending the regional benchmark index to a one-week high, as analysts recommended companies from Toshiba Corp. to Westpac Banking Corp.
Toshiba, the world’s second biggest maker of flash memory, rose 2.8 percent and Westpac climbed 0.8 percent. Iluka Resources Ltd. and Kobe Steel Ltd. also climbed with analysts upgrades. BHP Billiton Ltd., which reported a 72 percent jump in first-half profit today, dropped in Sydney trading.
The MSCI Asia Pacific Index gained 0.2 percent to 137.94 as of 10:30 a.m. in Sydney, recouping yesterday’s retreat. The benchmark gauge last week sank 2.7 percent after China raised borrowing costs and anti-government protests intensified in Egypt, eventually forcing President Hosni Mubarak to resign.
Japan’s Nikkei Stock Average gained 0.3 percent as real estate developers and banks extended gains after the Bank of Japan yesterday raised its economic assessment for the first time in nine months.
Nomura Research Institute said in a report dated Feb. 14 that Japan will “break out of its current lull” in the first half of 2011, instead of its earlier prediction of the second half.
Elsewhere, South Korea’s Kospi Index was little changed while Australia’s S&P/ASX 200 Index fell 0.2 percent.
Futures on the Standard & Poor’s 500 Index climbed 0.1 percent after the benchmark for U.S. equities yesterday fell from a 32-month higher as retail sales missed economists’ forecasts and Exxon Mobil Corp. led oil companies lower.
Toshiba jumped 2.8 percent to 547 yen in Tokyo after Nikko Cordial Securities Inc. raised its recommendation for the shares to “outperform” from “neutral.”
Westpac gained 1.2 percent to A$24.61 after Deutsche Bank G upgraded Australia’s second-largest lender to “buy” from “hold.”
Iluka Resources gained 3.4 percent to A$9.97 as Royal Bank of Scotland Group upgraded the world’s biggest zircon producer to “buy” while Kobe Steel increased 1.3 percent to 238 yen. Both Citigroup Inc. and Nomura Holdings also raised their recommendation for the steelmaker to “buy.”
Toshiba, the world’s second biggest maker of flash memory, rose 2.8 percent and Westpac climbed 0.8 percent. Iluka Resources Ltd. and Kobe Steel Ltd. also climbed with analysts upgrades. BHP Billiton Ltd., which reported a 72 percent jump in first-half profit today, dropped in Sydney trading.
The MSCI Asia Pacific Index gained 0.2 percent to 137.94 as of 10:30 a.m. in Sydney, recouping yesterday’s retreat. The benchmark gauge last week sank 2.7 percent after China raised borrowing costs and anti-government protests intensified in Egypt, eventually forcing President Hosni Mubarak to resign.
Japan’s Nikkei Stock Average gained 0.3 percent as real estate developers and banks extended gains after the Bank of Japan yesterday raised its economic assessment for the first time in nine months.
Nomura Research Institute said in a report dated Feb. 14 that Japan will “break out of its current lull” in the first half of 2011, instead of its earlier prediction of the second half.
Elsewhere, South Korea’s Kospi Index was little changed while Australia’s S&P/ASX 200 Index fell 0.2 percent.
Futures on the Standard & Poor’s 500 Index climbed 0.1 percent after the benchmark for U.S. equities yesterday fell from a 32-month higher as retail sales missed economists’ forecasts and Exxon Mobil Corp. led oil companies lower.
Toshiba jumped 2.8 percent to 547 yen in Tokyo after Nikko Cordial Securities Inc. raised its recommendation for the shares to “outperform” from “neutral.”
Westpac gained 1.2 percent to A$24.61 after Deutsche Bank G upgraded Australia’s second-largest lender to “buy” from “hold.”
Iluka Resources gained 3.4 percent to A$9.97 as Royal Bank of Scotland Group upgraded the world’s biggest zircon producer to “buy” while Kobe Steel increased 1.3 percent to 238 yen. Both Citigroup Inc. and Nomura Holdings also raised their recommendation for the steelmaker to “buy.”
Metals Demand in India May Double on Transport, Power Projects
Metals demand in India, Asia’s second-fastest growing major economy, may double in five years and remain robust for a decade, fueled by rising car sales and higher spending on infrastructure projects, analysts said.
Growth in demand for base metals may jump 10 percent to 15 percent this year, said Sumit Verma, an analyst at broker Geojit Comtrade Ltd. That compares with an average annual increase of 6 percent for aluminum and copper, and 4.3 percent for zinc between 1972 and 2009, Barclays Capital said in November, predicting demand to jump 80 percent by 2015.
“Steel demand may double in the next five years and I will not be surprised if demand for non-ferrous metals such as copper and aluminum grow at twice the pace,” said Kunal Shah, head of commodity research with Nirmal Bang Securities Pvt. in Mumbai.
Prime Minister Manmohan Singh has proposed $1 trillion of spending in the five years through 2017 to upgrade the nation’s road, railway and power networks, which the finance ministry says shaves 2 percentage points from growth. Commodity demand in India has reached a “tipping point” and the nation may surpass the U.S. as the second-largest consumer of copper, aluminum and zinc in the early 2020’s, Barclays said.
“The drivers will be growth and development of key sectors of the economy like infrastructure, power, construction, energy and transportation,” Geojit’s Verma said in an e-mailed reply to questions. “The outlook for next five to 10 years is bullish.”
India’s economy will probably grow 8.6 percent in the year to March, the most in three years, the government’s statistics office said on Feb. 7. The nation expanded at 8.9 percent in the quarter ended Sept. 30, compared with the 9.8 percent growth in the three months ended Dec. 31 in China, the largest consumer of everything from copper to zinc and iron ore.
Record Sales
Rising salaries and economic expansion pushed car sales in India to a record last month. Deliveries climbed 26 percent to 184,332 vehicles in January, the 24th consecutive monthly year- on-year increase, according to figures released by the Society of Indian Automobile Manufacturers on Feb. 9.
Aluminum demand in India may climb an average 8 percent a year between 2009 and 2030, Barclays said, predicting growth in copper and zinc usage at 8.6 percent and 8.5 percent each. In absolute terms, the country’s aluminum demand growth from 2009 and 2015 will be equal to Korea’s current consumption or twice Canada’s, the report said.
Hindalco Industries Ltd., India’s largest aluminum maker, on Feb. 12 reported a 7.7 percent gain in third-quarter profit because of higher base metal prices and said global demand for the metal is expected to be “robust” for the rest of the year. Sterlite Industries Ltd., the nation’s top copper producer, last month reported a 60 percent jump in earnings.
China Spending
Commodities beat gains in stocks, bonds and the dollar in 2010 as China led the recovery from the first global recession since World War II. The rally in raw materials may be extended this year as the global economy recovers and infrastructure spending in China boosts demand for copper and other base metals, Jing Ulrich, chairwoman of China equities and commodities at JP Morgan Chase & Co. said yesterday in Singapore.
Copper on the London Metal Exchange reached a record $10,190 a metric ton yesterday, boosted by manufacturing growth in China and the U.S., the top two users.
“We are holding bullish for base metals prices,” said Sundeep Jain, an analyst at Karvy Comtrade Ltd. “Demand on the one side is robust from emerging markets, be it India or China, and on the other, supply is not able to catch up with demand.”
Growth in demand for base metals may jump 10 percent to 15 percent this year, said Sumit Verma, an analyst at broker Geojit Comtrade Ltd. That compares with an average annual increase of 6 percent for aluminum and copper, and 4.3 percent for zinc between 1972 and 2009, Barclays Capital said in November, predicting demand to jump 80 percent by 2015.
“Steel demand may double in the next five years and I will not be surprised if demand for non-ferrous metals such as copper and aluminum grow at twice the pace,” said Kunal Shah, head of commodity research with Nirmal Bang Securities Pvt. in Mumbai.
Prime Minister Manmohan Singh has proposed $1 trillion of spending in the five years through 2017 to upgrade the nation’s road, railway and power networks, which the finance ministry says shaves 2 percentage points from growth. Commodity demand in India has reached a “tipping point” and the nation may surpass the U.S. as the second-largest consumer of copper, aluminum and zinc in the early 2020’s, Barclays said.
“The drivers will be growth and development of key sectors of the economy like infrastructure, power, construction, energy and transportation,” Geojit’s Verma said in an e-mailed reply to questions. “The outlook for next five to 10 years is bullish.”
India’s economy will probably grow 8.6 percent in the year to March, the most in three years, the government’s statistics office said on Feb. 7. The nation expanded at 8.9 percent in the quarter ended Sept. 30, compared with the 9.8 percent growth in the three months ended Dec. 31 in China, the largest consumer of everything from copper to zinc and iron ore.
Record Sales
Rising salaries and economic expansion pushed car sales in India to a record last month. Deliveries climbed 26 percent to 184,332 vehicles in January, the 24th consecutive monthly year- on-year increase, according to figures released by the Society of Indian Automobile Manufacturers on Feb. 9.
Aluminum demand in India may climb an average 8 percent a year between 2009 and 2030, Barclays said, predicting growth in copper and zinc usage at 8.6 percent and 8.5 percent each. In absolute terms, the country’s aluminum demand growth from 2009 and 2015 will be equal to Korea’s current consumption or twice Canada’s, the report said.
Hindalco Industries Ltd., India’s largest aluminum maker, on Feb. 12 reported a 7.7 percent gain in third-quarter profit because of higher base metal prices and said global demand for the metal is expected to be “robust” for the rest of the year. Sterlite Industries Ltd., the nation’s top copper producer, last month reported a 60 percent jump in earnings.
China Spending
Commodities beat gains in stocks, bonds and the dollar in 2010 as China led the recovery from the first global recession since World War II. The rally in raw materials may be extended this year as the global economy recovers and infrastructure spending in China boosts demand for copper and other base metals, Jing Ulrich, chairwoman of China equities and commodities at JP Morgan Chase & Co. said yesterday in Singapore.
Copper on the London Metal Exchange reached a record $10,190 a metric ton yesterday, boosted by manufacturing growth in China and the U.S., the top two users.
“We are holding bullish for base metals prices,” said Sundeep Jain, an analyst at Karvy Comtrade Ltd. “Demand on the one side is robust from emerging markets, be it India or China, and on the other, supply is not able to catch up with demand.”
Monday, February 14, 2011
Headline inflation comes down to 8.23% in Jan, but pressure remains
NEW DELHI: Headline inflation eased in January marginally from the previous month but economists said it still remains sticky and is likely to remain above the Reserve Bank of India's (RBI) comfort level until March-end. Data released by the commerce and industry ministry on Monday showed inflation, as measured by the wholesale price index, stood at 8.23%, moderating marginally from December's 8.43%. It stood at 8.53% in the same month last year.
Finance minister Pranab Mukherjee said the problem of inflation continued to be challenging and added that the moderation was too small for him to be comfortable. He said even though overall food inflation was a matter of worry, it had come a long way from the peak. Food inflation rose to 20.21% in December 2009 and peaked in February 2010 at 20.22%. The FM said he expected overall inflation to come down close to 7% by March-end but cautioned that the target was still not good enough and the government would continue its fight against inflation.
Economists said with crude prices rising and upward pressure on food prices globally, inflationary expectations were likely to intensify. They said the RBI would continue its vigil against inflation and would raise interest rates to calm price pressures. The government also revised November's inflation to 8.08% from the previous estimate of 7.48%. "We think it may be around 7.30% by end-March. Next financial year, inflation is likely to decline very gradually," A Prasanna, chief economist at ICICI Primary Dealership, said. Rising prices have remained a headache for the government and RBI. RBI has raised interest rates seven times since March 2010 to tame inflation. Food prices have moderated in recent weeks due to better supplies. The index for primary articles group in Jan rose by 2.4% to 193.4 from 188.9 for the previous month. The index for food articles group rose by 2% to 190.7 from 186.9 for the previous month due to higher prices of fruits and vegetables and jowar (7% each), arhar and coffee (4% each), condiments and spices (3%), moong, barley, masur and mutton (2% each) and bajra, rice, egg, maize, beef & buffalo meat and wheat (1% each). However, the prices of poultry chicken (7%), fish-inland (6%) and tea and milk (1% each) declined.
Finance minister Pranab Mukherjee said the problem of inflation continued to be challenging and added that the moderation was too small for him to be comfortable. He said even though overall food inflation was a matter of worry, it had come a long way from the peak. Food inflation rose to 20.21% in December 2009 and peaked in February 2010 at 20.22%. The FM said he expected overall inflation to come down close to 7% by March-end but cautioned that the target was still not good enough and the government would continue its fight against inflation.
Economists said with crude prices rising and upward pressure on food prices globally, inflationary expectations were likely to intensify. They said the RBI would continue its vigil against inflation and would raise interest rates to calm price pressures. The government also revised November's inflation to 8.08% from the previous estimate of 7.48%. "We think it may be around 7.30% by end-March. Next financial year, inflation is likely to decline very gradually," A Prasanna, chief economist at ICICI Primary Dealership, said. Rising prices have remained a headache for the government and RBI. RBI has raised interest rates seven times since March 2010 to tame inflation. Food prices have moderated in recent weeks due to better supplies. The index for primary articles group in Jan rose by 2.4% to 193.4 from 188.9 for the previous month. The index for food articles group rose by 2% to 190.7 from 186.9 for the previous month due to higher prices of fruits and vegetables and jowar (7% each), arhar and coffee (4% each), condiments and spices (3%), moong, barley, masur and mutton (2% each) and bajra, rice, egg, maize, beef & buffalo meat and wheat (1% each). However, the prices of poultry chicken (7%), fish-inland (6%) and tea and milk (1% each) declined.
Henkel to divest Indian assets
MUMBAI/CHENNAI: Germany's Henkel AG has kick-started a process to sell its portfolio of Indian detergent and personal care brands, along with the manufacturing facility at Karaikal in Tamil Nadu. HSBC is advising the Dusseldorf-based FMCG giant to sell Henkel India's locally acquired brands such as Margo soap, Neem Active toothpaste and Chek detergent.
Henkel is also offering long-term licensing of international brands Henko, Pril and Fa to potential suitors, as it works towards exiting the laundry and personal care segments in India. Wipro and Godrej Consumer Products are the most likely suitors while Jyothy Laboratories could also join the race. HSBC is involved with restructuring of the India unit ahead of the sale, as the $17-billion German conglomerate wants to continue with hair colour (Schwarzkopf) and industrial business in the country. An HSBC spokesperson declined to comment. Email to Henkel India remained unanswered.
TOI first reported about Henkel AG and Spic planning to part ways to restructure the Indian business in its edition dated June 8, 2010. On January 20, TOI reported that the German parent was reviewing Henkel India, which could lead to a partial or full sale of the domestic operations. Henkel AG holds 50.97% stake in the India unit, which is listed on the local bourses. The domestic ally, AC Muthiah's Spic, has around 16% residual holding in the company.
Spic chairman AC Muthiah could not be reached for immediate comments. Muthiah is expected to go along with Henkel AG's decision to divest the assets and exit a nearly 25-year-old joint venture. Henkel India stock closed 4.98% up at Rs 31.60 on BSE on Monday.
Sources said investment bankers have had initial parleys with some of the obvious suitors in recent weeks. A detailed information memorandum will be pushed to the suitors for taking the sale process forward. Henkel India reported a Rs 483 crore revenue in fiscal year 2009 as per the filings with the stock exchanges.
Margo soap, Neem toothpaste and Chek detergent are brands that Henkel acquired from the erstwhile Calcutta Chemical Company almost a decade back. Margo is the biggest brand in its portfolio with an annual revenue of around Rs 95 crore. Sources said Godrej and Wipro could be more inclined to buy Henkel India's personal care brands as the latter's detergent and cleaning products portfolio has lagged behind global peers Unilever and Procter & Gamble significantly in the domestic market.
Initially, Henkel and Spic joined hands under a joint venture Spic Fine Chemicals, which was renamed as Henkel Spic India in the mid-90s. Subsequently, HSIL was merged with Henkel India (formerly Calcutta Chemical Co).
Henkel is also offering long-term licensing of international brands Henko, Pril and Fa to potential suitors, as it works towards exiting the laundry and personal care segments in India. Wipro and Godrej Consumer Products are the most likely suitors while Jyothy Laboratories could also join the race. HSBC is involved with restructuring of the India unit ahead of the sale, as the $17-billion German conglomerate wants to continue with hair colour (Schwarzkopf) and industrial business in the country. An HSBC spokesperson declined to comment. Email to Henkel India remained unanswered.
TOI first reported about Henkel AG and Spic planning to part ways to restructure the Indian business in its edition dated June 8, 2010. On January 20, TOI reported that the German parent was reviewing Henkel India, which could lead to a partial or full sale of the domestic operations. Henkel AG holds 50.97% stake in the India unit, which is listed on the local bourses. The domestic ally, AC Muthiah's Spic, has around 16% residual holding in the company.
Spic chairman AC Muthiah could not be reached for immediate comments. Muthiah is expected to go along with Henkel AG's decision to divest the assets and exit a nearly 25-year-old joint venture. Henkel India stock closed 4.98% up at Rs 31.60 on BSE on Monday.
Sources said investment bankers have had initial parleys with some of the obvious suitors in recent weeks. A detailed information memorandum will be pushed to the suitors for taking the sale process forward. Henkel India reported a Rs 483 crore revenue in fiscal year 2009 as per the filings with the stock exchanges.
Margo soap, Neem toothpaste and Chek detergent are brands that Henkel acquired from the erstwhile Calcutta Chemical Company almost a decade back. Margo is the biggest brand in its portfolio with an annual revenue of around Rs 95 crore. Sources said Godrej and Wipro could be more inclined to buy Henkel India's personal care brands as the latter's detergent and cleaning products portfolio has lagged behind global peers Unilever and Procter & Gamble significantly in the domestic market.
Initially, Henkel and Spic joined hands under a joint venture Spic Fine Chemicals, which was renamed as Henkel Spic India in the mid-90s. Subsequently, HSIL was merged with Henkel India (formerly Calcutta Chemical Co).
Nifty may test 5630 level in short term
Nifty finally managed to close above the 5400 mark on Monday with increased Nifty put call ratio. On Friday, Nifty put call ratio stood at 1.02, which has increased towards 1.14, showing a moderately firm outlook for the market.
The out-of-the-money call option writers got trapped on Monday, and their short covering helped the market to gain further momentum. The short-term target for the Nifty will be 5560 and 5630 (200 DMA), which could be the major hurdle later. Investors can buy 5500 February call options for a holding period of 2 days.
Aggressive traders can create synthetic long split strike price on Nifty by buying 5500 call option and selling 5400 put options.
China and India are the fastest growing economies in the world and both are facing the heat of inflation. The Chinese index has fallen below its 200-DMA at 2737 and tested a low of 2661.44 on 25th January 2011. Later it recovered and moved up on January 28, 2011. It is showing signs of upward journey.
It is interesting to note that the 6-months correlation of both Nifty and Shanghai Composite Index is positive (0.794), and is an early indication of reversal in our market trend.
On Monday, stoplosses of short positions got triggered on the back of frenzied buying in the banking, auto and capital goods sector. The Bank Nifty itself looks very strong and is likely to test 11147 in the short term, which can lift sentiment in the banking space.
CNXIT index is also firm with minor resistance at 6944. If it crosses this, then it may even test 7052 and 7470 in the short term. Infosys and TCS are looking extremely positive on the futures segment.
Risk-averse traders can buy SBI , L&T, RIL and BoI in the futures markets and buy at-the-money put options of the respective stocks for a safe hedging purpose.
(Alex Mathews, Head-research, Geojit BNP Paribas Fin Services)
The out-of-the-money call option writers got trapped on Monday, and their short covering helped the market to gain further momentum. The short-term target for the Nifty will be 5560 and 5630 (200 DMA), which could be the major hurdle later. Investors can buy 5500 February call options for a holding period of 2 days.
Aggressive traders can create synthetic long split strike price on Nifty by buying 5500 call option and selling 5400 put options.
China and India are the fastest growing economies in the world and both are facing the heat of inflation. The Chinese index has fallen below its 200-DMA at 2737 and tested a low of 2661.44 on 25th January 2011. Later it recovered and moved up on January 28, 2011. It is showing signs of upward journey.
It is interesting to note that the 6-months correlation of both Nifty and Shanghai Composite Index is positive (0.794), and is an early indication of reversal in our market trend.
On Monday, stoplosses of short positions got triggered on the back of frenzied buying in the banking, auto and capital goods sector. The Bank Nifty itself looks very strong and is likely to test 11147 in the short term, which can lift sentiment in the banking space.
CNXIT index is also firm with minor resistance at 6944. If it crosses this, then it may even test 7052 and 7470 in the short term. Infosys and TCS are looking extremely positive on the futures segment.
Risk-averse traders can buy SBI , L&T, RIL and BoI in the futures markets and buy at-the-money put options of the respective stocks for a safe hedging purpose.
(Alex Mathews, Head-research, Geojit BNP Paribas Fin Services)
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