The Hindu Business Line : Weekly News Round-up

The cash reserve ratio (CRR), the portion of deposits banks have to keep with RBI, is reduced by 100 basis points from 6.5 per cent to 5.5 per cent of net demand and time liabilities.

This will be effected in two stages, first by 50 basis points retrospectively from the fortnight beginning October 25, and then by a further 50 basis points with effect from November 8.

The measure is expected to release around Rs 40,000 crore into the banking system.

Public Sector oil refining and marketing company Bharat Petroleum Corporation Ltd has reported a whopping loss of Rs 2,625 crore for the second quarter ended September 30, 2008. The company had made a profit of Rs 1,038.16 crore in the corresponding period in the previous year.

The losses were said to be on account of high crude prices and large under-recovery on sale of petrol, diesel and other products. The company had also suffered an exchange rate loss of Rs 714 crore during the quarter.

Net sales for the quarter were up by 50 per cent to Rs 37,850 crore from Rs 25,170 crore in the year ago quarter.

The annual wholesale price index-based inflation slipped to 10.68 per cent during the week ended October 18, slower than the previous week's annual rise of 11.07 per cent. Inflation has dropped below the 11 per cent mark for the first time since May this year.

In the `Primary Articles' group, 15 out of a total 98 articles showed a decline in the current week, which included wheat, arhar, urad, moong, raw cotton, raw rubber, potatoes, groundnut seed, papaya, banana, apples, cashew nuts and corriander.

Telenor of Norway has signed an agreement to acquire 60 per cent stake in Unitech Ltd's telecom venture, Unitech Wireless, for Rs 6,120 crore.

Unitech had acquired the telecom licence for Rs 1,650 crore, in February this year. The latest transaction pegs the enterprise value of Unitech Wireless at Rs 11,620 crore. The company has a pan-India telecom licence and spectrum in 13 circles. Telenor is the world's seventh largest telecom operator with over 159 million subscribers across 12 markets.

SEBI on Monday relaxed the creeping acquisition norms which would enable the promoters of a company to increase their stake in the company by buying up to five per cent of the company's equity annually.

Promoters can increase their stake up to 75 per cent through creeping acquisition route, instead of 55 per cent earlier. However, they will have to buy shares through normal market purchase and not through bulk, block or negotiated deals.

This move is seen by marketmen as another step to improve investor sentiment.

Suzlon Energy Ltd has suspended its plans for a rights issue to raise Rs 1,800 crore, citing the current market conditions. The funds were, earlier, to be used for buying 22.48 per cent stake of Martifer, a Portuguese construction major, in REpower Systems, the German wind power company.

Broking firm Religare Enterprises, promoted by Malvinder Singh of Ranbaxy, announced on Thursday that it planned to go in for a rights issue of shares to raise Rs 1,802 crore.

The rights issue of two shares for every three shares held by shareholders will be at a price of Rs 355 a share.

ONGC reported a 6 per cent dip in net profit and a 13 per cent increase in sales revenue for the second quarter of this year over the same period last year.

Net profit for the second quarter ended September 2008 declined to Rs 4,808 crore as compared with Rs 5,098 cr. However, revenues were up at Rs 17,492 crore against Rs 15,464 crore in the previous year quarter.

The basic customs duty of five per cent on aviation turbine fuel has been completely removed. The sale price of ATF has also been reduced by 15-17 per cent across the four metros. This will help bring down costs of domestic airlines. In the near term, it will reduce their losses. In the medium term it may lead to fare reductions.

Compiled by M J Madhavan
Podcast byB L Sudarsan