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Tuesday, January 29, 2008

Indian FDI in US surges to $2.2 billion

New Delhi: After making India the second largest investor in the UK, Indian companies and entities are turning their focus to the US. In 2006-’07, Indian FDI into the US was $2.2 billion while US investment in India was $850 million (minus the Mauritius route), according to US ambassador David Mulford.
Talking to reporters on the state of health of the Indo-US relationship, Mulford said the investments reflected the boo
ming confidence of Indian companies which are now looking at the world as their oyster. Of course, the rising rupee and falling dollar have also had their effect on bilateral trade, impacting the balance favourably from the US point of view. With a $50 billion trade, Mulford said the figures estimated that the growth of US exports to India had gone up by 75% last year, while Indian exports had risen 40-42%. FDI in US: India lags behind
New Delhi: After the UK, Indian companies are making big investments in the US. The average increase in the Indian FDI into the US has been about 75% every year since 2002. India also has the highest annual growth average in Asian investment in the US, the closest being South Korea. However, despite India having breached the billion-dollar mark, Indian investments are way below others. For instance, Japan’s investments in the US are $210 billion, Aus
tralia’s $25.7 billion and South Korea’s $9 billion. China also invests more than India but as analysts pointed out that the Chinese have been at it for much longer.
But India’s rate of growth in FDI has been on a gallop. Indian investments have largely been in sectors like professional, scientific and technical services, manufacturing and depository institutions.
In the UK, India had raced ahead in 2006-07 to become the second largest investor in the country, second only to the US,
at well over 1 billion pounds. With over 500 Indian companies operating in the UK, the country has established its presence in sectors like IT and ITes, and now manufacturing. Mulford, on his part, said after the open skies agreement with the US, India had bought 154 planes from Boeing in the past two years for $23 billion. Significantly, he said, hi-tech exports from the US to India were now to the tune of $7.1 billion, a huge gain from the time the Next Steps in Strategic Partnership (NSSP) began.

Sebi to review IPO process next month

Mumbai: The mechanism for initial public offers (IPOs) is being reviewed for the purpose of cutting down time and cost, market regulator securities and exchange board of India (Sebi) said on Monday. “A sub committee of primary market advisory committee has gone through various issues and it has submitted its report. This will be considered by PMAC sometime in February,’’ Sebi chief M Damodaran said, while debunking reports that Sebi had virtually decided to reduce the days
from 21 now to less than five for allotment of shares from the time of an IPO closes. “PMAC has been looking at various things. This is for simplification of processes to cut down time and cost. Once PMAC makes its recommendations, then Sebi will consider it. It will take some time,’’ he said. “It is not what has appeared in today’s papers. Today’s papers seem to give an impression... Two things they say—one that it is already (decided), it is not. In the next meeting they will still look at alternatives. Number two, they (papers) said, we are doing it because some particular issue has sucked up a lot of money. But it has been with the PMAC’s sub-committee for some time.
They have been looking (at it) for at least the last six months.’’ Damodaran said the time frame could not just be reduced to zero from being very long, as India was a continent size market and interests of retail investors will also have to be taken care of. He said that in many countries, retail investors were not allowed to participate in IPOs where only mutual funds come in. Retail investors participate in the secondary market and that is why they take lesser time, Damodaran added.
“It will be a retrograde step to say that retail investors (in India) should not be allowed to invest in IPOs. They need time,’’ he said while emphasising that the review of the processes was intended to save on time and cost. AGENCIES

Short selling from Feb 1
New Delhi: Notwithstanding volatility in the market, Sebi said short-selling by institutional investors would be introduced from february 1 and there is no change in the deadline. AGENCIES

‘Earth is getting soft in the middle’

Material In The Lower Mantle Makes Sound Travel More Slowly, Thereby Suggesting It Is Softer


New York: Scientists claim to have uncovered evidence that our planet Earth is getting soft in the middle.
The researchers in the United States have carried out a study and found that material in part of the planet’s lower mantle has unusual electronic characteristics which make sound propagate more slowly, suggesting it is softer.
“What’s most important for seismology is the acoustic properties — the propagation of sound. We determined the elas
ticity of ferropericlase (mineral) through the pressure induced high-spin to low-spin transition.
“We did this by measuring the velocity of acoustic waves propagating in different directions in a single crystal of the material and found that over an extended pressure range (from about 395,000 to 590,000 atmospheres), the material became ‘softer’ — that is, the waves slowed down more than expected from previous work.
“Thus, at high temperature corresponding distributions will
become very broad, which will result in a wide range of depth having subtly anomalous properties that perhaps extend through most of the lower mantle,” the ‘ScienceDaily' quoted lead researcher Alexander Goncharov as saying.
In fact, Goncharov and his colleagues at the Carnegie Institution’s Geophysical Laboratory analysed the composition and density of the material after watching the velocity of seismic waves as they travel through Earth. PTI

Is our scarred planet entering a new epoch?

Human activity has altered life on Earth so much that that scientists are proposing to change the name of the geological epoch we are living through from the Holocene to the Anthropocene.
“With more than half of all soils on Earth now being cultivated for food crops, grazed, or periodically logged for wood, how to sustain Earth’s soils is becoming a major scientific and policy issue,” Daniel Richter, a soil scientist at Duke Uni
versity said. “Society’s most important scientific questions include the future of Earth’s soil.”
The name, Anthropocene, was coined in an off-the-cuff remark, by the Nobel prize-winning chemist, Paul Crutzen, in 2002. He suggested that the environmental effect of increased human population and economic development meant the Earth was entering a new era. But scientists want to redefine our epoch to reflect humanity’s impact on the planet. AGENCIES

Saturday, January 12, 2008

THIN MARGINS WORRY DEALERS

TATA Nano is likely to be the biggest bonanza for its dealers, who are facing skidding passenger vehicle sales. In the past 24 hours, dealers’ phones haven’t stopped ringing with queries about the small wonder.
Tata Motors is giving final touches to its comprehensive distribution plans and has roped in dealers to set the ball rolling in 7-8 months.
For Yadur Kapur, owner of A-One Motors, it’s like going down memory lane. “It has generated as much as interest as Indica. The promise of Rs 1-lakh car has been fulfilled, and we are now waiting to hear from Tata Motors on how to distribute and sell these cars. While we are in negotiations, it is too early to decipher the broad contours of the new distribution system,” he said.
“I think it will change the landscape of the Indian passenger car market and distribution channels across dealerships,” said Federation of Automobile Dealers’ Association secretary-general Gulshan Ahuja.
“We are not clear about the pricing yet and, therefore, I can’t comment about dealer margins. However, it’s clear that it is going to be a volume game for Nano as far as distribution strategy goes. We are getting enquiries from all sorts of customers. Even customers who own premium cars such as Tata Safari want to buy it as a second car,” Mumbaibased dealership Fortune Motors’ MD Anil Behl said.
While dealers try to get a hang of the nuances of the distribution strategy, some are not worried about margins and believe the Nano would be a hit in India. “There was a huge gap between the price of a two-wheeler and an entry-level car in India. Nano would meet the demand of this consumer segment,” said Vasan Motors’ Dilip Shah.
Others agree that margins could become a sore point. “This car will generate huge volumes, but margins will be thin. We expect to deliver around 20 cars daily compared to 4-7 cars now,” said a Tata Motors dealer.

Nano may expand mkt by 65%: Crisil

TATA Nano’s launch could expand the Indian car market by 65%, according to rating agency Crisil. The low price makes the car affordable for families with incomes of Rs 1 lakh per annum, the agency said.
The increase in the market is expected to push up car sales by 20% over the previous year. “The unveiling of Tata Nano, the cheapest car in the world, triggers an important event in the car market. Based on the statement by company officials, Crisil Research estimates the consumer price of the car at around Rs 1.3 lakh. This brings down the cost of ownership of an entry level car in India by 30%,” the company said in a report.
Crisil said the launch will prompt other players to enter the mini car category over the next few years. These launches will entice a section of twowheeler owners (currently nearly 50 million) to upgrade to cars.
Crisil has prepared these estimates by projecting the income demographic transition pattern in India and the cost of ownership of existing and new entry-level cars. Given the shape of the income distribution pyramid in India, the new price point translates into a 65% increase in the number of families that can afford a car. At the significantly redefined threshold for car ownership in India, annual car sales have the potential to increase by 20% over the sales expected in 2007-08.