Home,auto interest rates not to go up immediately, say bankers
02 Nov 2010;deccanherald.com:Mumbai: Cost of home, auto and corporate loans may not go up immediately, even though the Reserve Bank today raised short-term key policy rates by 25 basis points to check high inflation, bankers said. "The transmission mechanism between RBI and rest of the financial system does not work very fast. It always works with a time lag," said SBI Chairman O P Bhatt. "So, whether it (hike by RBI) will raise pressure on the system. Eventually, it will. Whether there would be immediate reaction. Not likely," he said "There would be some banks who would be thinking of raising rates, it would be kicker for them. For other banks it may not be so. So there would be mixed reaction," he added. RBI today hiked its key short-term lending and borrowing rates by 25 basis points (0.25 per cent) each with immediate effect, in view of high inflation. Accordingly, the short term lending (repo) rate stands at 6.25 per cent, and the borrowing (reverse repo) rate at 5.25 per cent. Indian Bank Executive Director V Ramagopal said banks have already factored in the RBI. So, there would not be immediate impact of this on the interest rates, he said. However, if credit offtake picks up and liquidity tightens further, it would certainly lead to higher interest rates, Ramagopal added. Echoing similar view, Oriental Bank of Commerce Executive Director S C Sinha said, "I don't think there would be increase in interest rates as RBI move was already discounted." Going forward, interest rate would depend on liquidity situation, Sinha said, adding, RBI is doing its bit to ease liquidity and the position will further improve with government spending and Coal India money coming into system in days to come. IDBI Bank executive director Sushil Munhot interest rate would remain static for now. Credit growth in the coming days would decide the future course of action by banks. Some bankers feel that many lenders have already raised rates. So, even if there is little increase, it would be on case to case basis. RBI rate hike would not have impact on the base rate. However, Benchmark Prime Lending Rate (BPLR) would come in for a re-look, leading to revision in the portfolio linked to BPLR, Bank of Baroda Executive Director RK Bakshi said. The base rate revision by banks are due in January next year.
02 Nov 2010;business-standard.com:New Delhi: Energy demand to rise 40%, but oil fields to deliver 12% more. Prime Minister Manmohan Singh on Monday expressed concern over the mismatch in demand and supply in the energy sector. Expressing a note of caution, he said – while the demand for energy is expected to increase over 40 per cent during the next decade – the supply from maturing oil fields is expected to rise only 12 per cent. Inaugurating the 9th International Oil & Gas Conference and Exhibition (Petrotech 2010) here, Singh said the country was witnessing supply side uncertainties. “Developing domestic sources involves huge capital investment. Like other emerging economies, India needs adequate supplies of energy at affordable prices to meet the demands of a rapidly growing economy,” he added. Singh underscored the need to build strong economic partnerships with other oil-producing countries and their oil and gas industries for mutual benefit. Rather candidly, he said: “Oil and gas today are not seen merely as commodities to be traded freely. They are often used by countries to meet their political objectives.” Events like Petrotech 2010 do help India to pursue oil diplomacy bilaterally with participating countries, but government-owned companies have not made any major acquisitions after the 2008 purchase of Imperial Energy by ONGC Videsh Ltd. Adding another dimension to diplomacy, Singh said: “We also seek to work together with other countries, especially those that are active in the oil and gas space, to tackle the problem of climate change.” He said energy-endowed countries have problems in augmenting production because of various reasons, including a lack of required technology and sometimes political uncertainty. “Emerging energy technologies have to be adequately tapped to manage carbon emissions. We also need a rethink on the traditional energy basket that is presently loaded in favour of fossil fuels,” he said. No dual pricing: Deora The PM’s note of caution on supply concerns was followed by Petroleum Minister Murli Deora’s observation later in the day that pricing was another major concern for the government. “Some people ask why subsidy is given to those who do not need it? There are proposals by which we are trying to resolve this matter. It is under consideration. But it is not possible to have dual prices. You cannot have one design (of petrol price) for the industrialist and another for the farmer.” Deora also said the government has a commitment to see that kerosene or LPG, which is subsidised, must reach “the poorest of the poor”.
Daimler to replicate India outsouring model in other plants
02 Nov 2010;deccanherald.com:Chennai: German auto group Daimler, setting up a 36,000 per annum truck unit near here, sees localisation as the key for growth in the price-sensitive commercial vehicle market and would replicate the Indian outsourcing and production model in plants elsewhere. "Our trucks will roll out with 85 percent localisation in terms of material value in 2012. What is unique here is the low in-house component production. For example, overseas the vehicle frames are made in-house. In India, it is outsourced. Only fuel injection systems and electronic components will be imported," Daimler India Vice President (Procurement and Logistics, Commercial Vehicles) Erich Nesselhauf told IANS. Already around 30 prototypes of light and heavy duty trucks with nearly 80 percent local components are hurtling down at the company's 5.93 km test track near here. The results are analysed and modifications suggested by around 150 engineers at the company's research and development (R&D) wing. Thanks to the focus on sourcing, the company's production cost will be competitive to Indian companies, said Nesselhauf. Unlike many other overseas auto makers who brought their vendors here, Daimler India decided to utilise the Indian makers, adopting a mix of single and multiple vendor policy. "Only a few components like starter motors, wheels and tyres will be sourced off the shelf. Even fasteners have to be modified a bit to suit our quality standards. There are some common parts for making different models that help in cutting the cost," said Nesselhauf. Operating in various markets, the German company knew the benchmark costs of each component and hired around 125 experienced engineers from other auto manufacturers. In prospective vendors, the truck company looked at their quality certifications, their capability to handle varied projects as well as their financial strength. Once everything is sorted out, Daimler India signs up a three-year supply contract, expecting the vendors to bring down their price over the period. "It was tough negotiating the rates with them. They had a clear idea of the costs as well as the processes involved in making the product and how it will be used," a vendor told IANS on the condition of anonymity. Daimler India has signed up around 250 vendors, many of whom will be locating their production facility here. "The top five vendors will be investing around 80 million euros (Rs.492 crore). Of the top five, one is a global vendor and the remaining four are Indian companies. Vendors have started construction work as their equipment needs some lead time for supplies," Nesselhauf said. "We will maintain 3-5 days' inventory based on the parts and their lead time," he added. "Supplying to us is one of the fastest routes to our global sourcing network. Already some Indian companies have started shipping out truck components to our global needs," Nesselhauf said. On the technological assistance rendered to the vendors, he said: "Wherever needed we have sent the vendors to Germany/Japan for training or brought our experts here so that the suppliers can meet our standards." Concurring with him Pankaj Mittal, CEO of Motherson Sumi Systems Ltd, told IANS: "A German expert in plastic components came to our plant and explained in detail the processes so that we got the clarity in eliminating the waste. He told us the best ways to make the tools." Motherson Sumi will be supplying wiring harness and plastic components to Daimler India. In order to be sure about the component quality Daimler India at times checked the vendor's supply chain. "For example, in the case of cylinder blocks we go to the castings company and help them to scale up in the quality ladder. Similarly in the forgings we check the entire composition," Nesselhauf said. "You might have heard these practices by car makers. But we are the first one to do in the trucks segment," he claimed.
02 Nov 2010;dailypioneer.com:New Delhi: Auto sales soared to a record level in October on the back of festive demand coupled with easy availability of money. While market leaders like like Maruti Suzuki, Hyundai and Hero Honda posted record sales, Tata Motors also saw its sales climb 21.26 per cent in October. Maruti Suzuki India clocked its highest-ever monthly sales of 1,18,908 units, translating into a robust 39.21 per cent growth vis-a-vis the year-ago period. The previous sales record of 1,08,006 units was registered in September, 2010. Arch rival Hyundai Motor India also reported its best-ever monthly domestic sales of 34,725 units in October, a 22.70 per cent jump compared to the same month last year. HMIL’s previous best of 31,751 units was registered just a month earlier, in September. “The market has been on an upswing for the last few months, but the introduction of the new Next Gen i10 has really pepped up things for HMIL with the new i10 sales growing as much as 26 per cent in the last two months,” HMIL Director (Marketing and Sales) Arvind Saxena said. Auto-maker Tata Motors also saw its sales climb 21.26 per cent during October to 64,757 units, while another homegrown firm, Mahindra & Mahindra, reported a 34.38 per cent jump in total sales to 34,495 units. General Motors India saw its sales rise 35.59 per cent to 10,051 units in October this year, while car-maker Ford India reported an over two-fold jump in October sales to 9,026 units on the back of a good response to its small car, Figo. Toyota Kirloskar Motor also registered a 16.85 per cent jump in sales to 6,602 units during October, 2010. On the two-wheeler front, market leader Hero Honda posted its highest-ever monthly sales of 5,05,553 units in October, up 42.75 per cent vis-a-vis the same month last year. TVS Motor Company’s sales grew by 46 per cent year-on-year to 1,91,822 units in October, 2009 while India Yamaha Motor reported a 19.21 per cent increase in total sales to 37,251 units.
02 Nov 2010;timesofindia.indiatimes.com:NEW DELHI: State-owned Oil and Natural Gas Corporation (ONGC) on Monday said it has suggested to the government that the company's stock be split ahead of a planned follow-on public offering in March 2011. "We would like that ONGC is widely held. It would be better to have more retail investors . The current price of over Rs 1,300 is a case for share split," ONGC chirman and MD R S Sharma said on the sidelines of the Petrotech-2010 oil and gas conference here. ONGC, he said, has sent its written recommendation for a share-split to the government. "Today, ONGC is priced at Rs 10 per share. We have suggested that it can be split into two," Sharma added. He said that ONGC will be ready for an FPO in last quarter of current fiscal. "We are in readiness. We know the process and will not be found wanting." Besides, Sharma said the process of appointing five independent directors on the ONGC board is on and the company will shortly meet the market regulator Sebi's listing requirements. ONGC has six functional directors besides chairman and managing director. It also has two government-appointed nominee directors taking the total strength to nine.
BPCL, HPCL, IOC gain on Rs 3000 crore compensation
01 Nov 2010;economictimes.indiatimes.com:MUMBAI: Shares of oil marketing companies like BPCL, HPCL and Indian Oil Corporation were in action on reports that the government has agreed to give additional Rs 3000 crore as subsidy to compensate for losses they incurred on the sale of fuel during the first half of the current fiscal. At 10:20 am; BPCL was at Rs 745.50, up Rs 15.30 or 2.10 per cent. The scrip touched a high of Rs 748.50 and low of Rs 734 in trade so far. Around 23,000 shares were traded in the counter on the BSE. Shares of HPCL moved 2.43 per cent higher to Rs 498.65. The scrip touched intraday high of Rs 499 and low of Rs 491. Around 23,000 shares were traded in the counter on the BSE. IOC advanced 1.92 per cent higher to Rs 426.60, up 1.92 per cent on the BSE. The stock gyrated between high of Rs 427.50 and low of Rs 420 in trade so far. Over 11000 shares were traded in the counter.
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