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Today's Hot Stories - July 27, 2009

10 Headlines for Today

(1) Cracks at Noida Metro line, investigation ordered
(2) Indian journalist attacked in Australia
(3) Four police officers killed in Chechnya suicide blast
(4) Adani Power IPO to sizzle capital market this week
(5) Petronet to set up power plant in Kerala
(6) Ispat Industries incurs loss of Rs 214.9 crore in Q1
(7) McLaren's Lewis Hamilton completes a remarkable turnaround to win the Hungarian Grand Prix - his first victory in nine months
(8) Bangladesh beat West Indies by 52 runs in first one-day international in Dominica
(9) Renault team is suspended from next Grand Prix in Valencia, the FIA announces
(10) Laser rays now promise a cure for infants suffering from Retinopathy -- a non-inflammatory damage to the retina of the eye

5 Stories for Today

(1) India to have 3rd largest online population by 2013
(2) Sarah Palin resigns from the Alaska governorship
(3) ICICI Bank posts 21% rise in net profit for Q1 to Rs 878 crore
(4) Ericsson to acquire Nortel's wireless business for $1.13 billion
(5) After NHPC, government to divest 10 per cent stake in SJVNL

(1) India to have 3rd largest online population by 2013

The number of internet users worldwide is expected to touch 2.2 billion by 2013 and India is projected to have the third largest online population by then, a report by technology and market research firm Forrester Research said.

“The number of people online around the world will grow more than 45 per cent to 2.2 billion users by 2013 and Asia will continue to be the biggest Internet growth engine. India will be the third largest internet user base by 2013 with China and the U.S. taking the first two spots, respectively.” Globally, there were about 1.5 billion internet users in 2008.

Titled ‘Global Online Population Forecast, 2008 to 2013,’ the report said, “In some of the emerging markets in Asia such as China, India and Indonesia, the average annual growth rates will be 10 to 20 per cent over the next five years (2008-13).” The number of internet users In Indian was estimated to be 52 million in 2008.

In the next four years, about 43 per cent of internet users globally are anticipated to be from Asia, with China accounting for about half of that population.

“The shifting online population and growing spending power among Asian consumers means that Asian markets will represent a far greater percentage of the total in 2013 than they do today,” Forrester Research Senior Analyst Zia Daniell Wigder said.

“The percentage of the global online population located in North America will drop from 17 per cent to 13 per cent between 2008 and 2013, while Europe’s share will shrink from 26 to 22 per cent. The percentage of those in Asia will increase from 38 per cent to 43 per cent and Latin America will remain steady at about 11 per cent of the global total,” Forrester said.

The report said apart from China, other Asian countries with substantial online growth rates include India, Indonesia, Pakistan, and the Philippines.

“By contrast, growth rates in some of the more mature markets such as Japan and South Korea will rise by less than two per cent each year.”

(2) Sarah Palin resigns from the Alaska governorship

Former US vice-presidential candidate Sarah Palin has formally resigned as Alaska governor, 18 months before the end of her term in office.

She announced her resignation abruptly on 3 July, leading to speculation of a bid for the presidency in 2012.

She handed over to Alaska's Lieutenant Governor Sean Parnell at a picnic ceremony in Fairbanks, Alaska. Mrs Palin, who is dogged by ethics probes and legal bills, gave few clues about her political future.

But she reiterated her commitment to "keep championing Alaska".

p >"When I took the oath to serve you, I promised to steadfastly and doggedly guard the interests of this great state like that grizzly guards her cubs. As a mother naturally guards her own," she said.

"And I will keep that vow wherever the road may lead." Mrs Palin also took aim at the media, who she has accused of treating her and her family unfairly.

"How about, in honour of the American soldier, you quit making things up?" she said to the gathering of television camera crews and reporters at the event.

She added that her replacement, Mr Parnell, "has a very nice family too, so leave his kids alone!"

Mr Parnell, 46, has promised to pursue many of Mrs Palin's initiatives, including a controversial natural gas pipeline.

"We share the same core values," he told the crowd, saying the main focus for his administration would be the economy.

The correspondent Jane O'Brien in Washington says Mr Parnell is far more experienced and low-key than Mrs Palin.

This will come as a relief to Alaskan officials, as they can focus on the issues without the distraction of having a superstar running the show, she adds.

Although Mrs Palin's next steps remain unclear, reports say she is working on an autobiography and could host a television chat show.

But a spokeswoman for the Palin family earlier dismissed the claims.

"I cannot express enough there is no plan after July 26. There is absolutely no plan," Meghan Stapleton told the Associated Press news agency.

She said a major factor in her decision to quit as Alaska's governor was the mounting legal cost she and the state faced in fighting nearly 20 ethics charges. But she has insisted her opponents would not "find any dirt".

However, an independent state investigator says her legal-defence fund - formed to help pay more than $500,000 (£304,000) in lawyers' fees - is itself an ethics violation because it uses her government job for personal financial benefit.

Her popularity rating has fallen to 40% in the wake of her resignation, a Washington Post-ABC poll showed. But her supporters defend her as an outstanding leader with a strong Christian faith and unwavering support for her family.

(3) ICICI Bank posts 21% rise in net profit for Q1 to Rs 878 crore

Extreme cost-cutting and treasury profits enabled the country’s largest private lender, ICICI Bank, beat analyst estimates and post a 21% rise in net profit in the first quarter of FY10 (Apr-Mar), the bank said on Saturday. Net profit stood at Rs 878 crore for the quarter-ended June ‘09 against Rs 728 crore in the year-earlier quarter. The average net profit forecast by various banking analysts was around Rs 820 crore.

Besides profits from trading in government securities and equity, the bank was helped by a write-back of provisions made on credit derivatives as sentiment improved on Indian paper.

Profits rose even as the bank continued to shrink its balance sheet, avoiding high-cost deposits and unsecured advances. One reason for the higher profit was the Rs 367-crore savings in operating expenses during the quarter with overall operating expenses dropping 19.22% to Rs 1546 from Rs 1913 crore in the corresponding quarter of the previous fiscal.

“Instead of balance sheet size, we will focus on bringing down unsecured personal loans. We will however grow home, car and commercial vehicle loans on the retail side and working capital and infrastructure loans on the corporate side,” said Chanda Kochhar, MD & CEO, ICICI Bank. The bank’s advances declined by 9.2% while deposits came down by 10.3%.

With the reduction in outstanding loans, net interest income, which is the difference between income from loan and interest paid on deposit, dropped 5% to Rs 1985.28 crore. However, this decline was more than made up by the 35.86% rise in other income to Rs 2089.88 crore. Of this, treasury income was Rs 714 crore compared with a loss of Rs 594 crore in the year-ago quarter.

Despite slowdown in M&A and capital market activity, the bank reported a flat fee income of Rs 1319 crore. Ms Kochhar said the bank would cut costs further and look at increasing productivity from new branches.

Provisioning rose by 67% to Rs 1323.65 crore but this was due to a one-time restructuring exercise, she added. In a conference call with analysts, NS Kannan, CFO, said that except life insurance none of the bank’s subsidiaries would require capital infusion during the current fiscal. ICICI’s life insurance subsidiary, ICICI Prudential, is expected to break even towards the end of the next fiscal.

“Even though net interest income was slightly lower and provision coverage declined to 51%, we see these as minor negatives. Our main expectations were regarding execution of the bank’s present strategy, which continues to be commendable,” said Vaibhav Agrawal, Vice-President, research (banking) Angel Broking.

More branches, lower operating expenses and ratio of low- cost deposits improving to 30.4% are quite favorable. We believe by 2010, the bank will be very well positioned to benefit from the improving economic environment,” said Vaibhav Agrawal, vice-president, research (banking) Angel Broking. On Friday, the ICICI Bank scrip closed down 1% at Rs 766.85 on BSE.

The net interest margin was maintained at 2.4%. The decrease in net interest income was mainly due to a decrease in advances by 11.6%. Advances dropped to Rs 198101 crore from Rs 224145.9 crore in the corresponding quarter and Rs 218310.8 crore in the first quarter. Advances on retail loans fell to 47% against 55% in Q1 FY09 as the bank looks at running down its unsecured loans.

Ms Kochhar said that corporate and international advances rose both in absolute and percentage terms to 40% from 35% a year ago. Deposits fell to Rs 210236 crore from Rs 234460 crore in the year-ago quarter and Rs 218348 crore in the preceding quarter. Ms Kochhar said that savings accounts grew by Rs 3,500 crore from the previous quarter while current accounts dropped by Rs 2000 crore.

She added that the bank had taken high costs deposits in the third quarter of the previous fiscal which it will allow to run down when they mature in the third quarter of the current fiscal. Current account and savings accounts ratio improved to 30.4% from 27.6% last year and 28.7% in the preceding quarter. Capital adequacy ratio stood at 17.38% against 13.42% last year.

(4) Ericsson to acquire Nortel's wireless business for $1.13 billion

Ericsson is all set to acquire a major part of Nortel's North American wireless business for USD 1.13 billion, after the Swedish firm emerged as the successful bidder for the bankrupt Canadian company's CDMA and LTE technologies.

The purchase is structured as an asset sale at a cash purchase price of USD 1.13 billion on a cash and debt free basis, the two companies said in separate statements.

The acquisition significantly expands Ericsson's footprint in North America and also provides Nortel's customers with a strong and reliable supplier for the future, many of which have expressed support for this acquisition.

"Acquiring Nortel's North American CDMA business allows us to serve this important region better as we build relationships for the future migration to LTE," Ericsson President and CEO Carl-Henric Svanberg said.

Svanberg further said "by adding some 2500 highly skilled employees, of which about 400 are focused on LTE research and development, Ericsson reinforces and expands a long-term commitment to North America."

On July 25, Ericsson entered into an asset purchase agreement to acquire the parts of the Carrier Networks division of Nortel relating to CDMA and LTE technology in North America.

(5) After NHPC, government to divest 10 per cent stake in SJVNL

The Centre is mulling over offloading 10 per cent stake through a public offer in hydro power company Satluj Jal Vidyut Nigam this fiscal and is hoping to raise Rs 1200 crore.

After NHPC, Satluj Jal Vidyut Nigam will be the second hydro power company in which the government will divest its stake through initial pubic offer. SJVNL is a joint venture between the Centre and Himachal Pradesh government in the ratio of 75:25.

Earlier, the government has finalised the IPO of National Hydro Power Corporation. The government would offload five per cent of its shareholding in it hoping to raise Rs 840 crore plus the premium charged on each share of face value Rs 10. NHPC will raise Rs 1,680 crore by way of fresh equity.

"The public offering to offload government's 10 per cent shareholding may happen by the end of this fiscal. The state government (Himachal Pradesh) has already given a 'No Objection Certificate' (NoC) for the disinvestment," SJVNL Chairman and Managing Director H K Sharma said.

The company has announced an investment of over Rs 23,000 crore in the next 10 years to add 4,000 MW capacity to its existing 1500 MW.

"In the next ten years or so we will be investing over Rs 23000 crore for executing our projects (we have) projects of about 4000 MW capacity lined up for commissioning by 2020," Sharma said.

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