The Hindu Business Line : Weekly News Round-up

HCL Technologies came ahead in the race for the acquisition of the Axon Group, with the Board of the UK company last Thursday dropping its recommendation of Infosys' 600 pence a share offer. Axon said it would unanimously recommend HCL's 650 pence a share bid to its shareholders.

The decision to switch allegiance and recommend the HCL bid comes just days after the 60-hour period stipulated in the pact between Axon and Infosys lapsed without the latter improvising its offer.

After the news of ICICI Bank's UK branch investment in Lehman Brothers broke out, strong rumours were circulated about the financial problem of the bank from Monday evening. This drove thousands of the bank's customers to withdraw cash frantically from the bank's ATMs. The crowds swelled at the ATMs which continued till Tuesday evening.

Later, RBI issued a statement that the bank had sufficient liquidity, including in its current account with the central bank, to meet the requirements of its depositors and set at rest the rumours.

The trade deficit during April-August period of the current fiscal shot up to a $49.1 billion from a level of $34.5 billion in the corresponding months of the previous fiscal, even as the country's exports and imports registered a substantial growth 35.1 per cent and 37.7 per cent in dollar terms.

Latest provisional figures released by the Commerce Ministry showed that the country's exports during August 2008 at $16 billion were 26.9 per cent higher than level of $12.6 billion during August 2007, while imports during August at $29.9 billion showed 51.2 per cent growth against $19.8 billion in August 2007.

The US Congress approved a revised $700 billion package to bail out the beleaguered US financial sector. The House of Representatives on Friday had cleared the historic measure four days after it rejected an earlier plan that stunned the global markets.

The House okayed 263-171 in a make or break vote the unprecedented government intervention designed to pull the US economy out of the brink and sent it to President George W Bush for certain signature into law.

Earlier on Wednesday, Senators loaded the economic rescue bill with tax breaks and other sweeteners before passing it by a wide margin, 74-25, a month before the presidential and congressional elections.

Five years after the access deficit charge was introduced in the country - to compensate the state-owned Bharat Sanchar Nigam Ltd for its expenses on fulfilling social obligations - the Telecom Regulatory Authority of India has decided to completely remove the levy. While the charge was abolished on all domestic telephone calls in April, it has now been taken off for incoming international long distance calls as well in line with the earlier announced plans.

Jet Airways said it plans to raise capital through a stake sale of up to 10 per cent in an effort to bail out the airline. Mr Naresh Goyal, Chairman, said that the company was talking to renowned international funds for diluting up to 10 per cent stake. He also said the stake sale might go up to 15 to 20 per cent depending on the market conditions to strengthen the balance sheet.

After a gap of a fortnight, the national Capital was again the target of terror last week. A bomb blast in a flower market in South Delhi last Saturday afternoon claimed the life of a young boy and left at least 18 people injured, some of them seriously. The blast at the Mehrauli flower market occurred exactly two weeks after a series of blasts at commercial locations in the city, which killed more than 20 people and left about 60 others.

The rupee depreciated sharply against the dollar during the week due to meltdown in the equity market and strengthening of the dollar against other major currencies during the week. The rupee breached the psychologically important 47-mark and dropped to a five-year low of 47.27/28 before settling at 47.08/10 on Friday.

Compiled by M J Madhavan
Podcast by B L Sudarsan