The Hindu Business Line : Weekly News Round-up

Public sector banks on Monday have brought cheer to small home loan seekers by cutting rates with immediate effect under a new package aimed at stimulating demand in the retail housing sector.

Loans up to Rs 20 lakh will now be available at 8.5-9.25 per cent a year for tenures up to 20 years. The offer will be valid only for new loans up to June 30, 2009.

The interest rate on these loans averaged around 10 per cent for most PSU banks previously.

The package which came with immediate effect, included lower margins (borrowers' contribution), waiving of processing and pre-payment charges and free life insurance cover for borrowers.

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Satyam Computer Services has called off the $1.6-billion twin deal to acquire Maytas Properties and Maytas Infra, controlled by the sons of the company's Chairman, Mr B. Ramalinga Raju on strong resentment from investment community.

It has also decided to put off all plans for further acquisitions or diversification for now.

The move by Satyam, which is sitting on a cash pile of Rs 8,235 crore, has taken the market by surprise as the IT major preferred to acquire infrastructure companies and not an IT company.

The volte-face came within hours of a sharp fall in the price of company's depository receipts listed on the New York Stock Exchange and strong resentment from investment community.

While admitting that the management had erred in not correctly anticipating the resentment of this magnitude, Satyam said that its first priority is to rebuild the investor confidence. ****

Bond prices saw a huge rally as inflation fell to 6.84 per cent for the week ended December 6, from 8 per cent in the earlier week and below the market expectation of 7.49 per cent.

Total traded volumes on the order matching system were higher at Rs 27,485 crore against Rs 18,410 crore.

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With the cut in fuel prices earlier this month coming into play, inflation slipped to its lowest in over nine months.

The annual Wholesale Price Index rose to 6.84 per cent during the week ended December 6, sharply below the previous week's annual rise of 8 per cent, almost entirely on account of the fuels sub-group.

The Rs 5 a litre cut in petrol prices and Rs 2 a litre reduction in diesel on December 6 helped bring down the year-on-year inflation rate in the fuels category to less than one per cent for the latest reported week, as against the annual inflation rate of 4.48 per cent during the previous week.

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HCL Technologies on Monday announced the completion of the œ440-million buyout of UK-based Axon Group. HCL has now merged Axon with its own SAP practice, and named the merged division HCL Axon. The division has 4,500 consultants, with Mr Steve Cardell as its President.

This is the largest paid acquisition in the history of the Indian IT industry, surpassing Wipro's $600-million acquisition of Infocrossing in 2007.

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Putting an end to days of speculation, the ICICI Bank board on Friday announced the appointment of Ms Chanda Kochhar as Managing Director and CEO and Mr K.V. Kamath as non-executive chairman for a period of five years, from May 1, 2009.

The bank is yet to take decision on a candidate to take over the current postion of Ms Kochhar as joint MD and CFO.

Compiled by M J Madhavan