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Today's Hot Stories - April 05, 2010

10 Headlines for Today

(1) Women's Reservation Bill: Parties meet today
(2) Why Big B, not Ambani as Gujarat mascot: Congress
(3) Dozens of miners pulled alive from China
(4) Sensex opens higher by 117 points
(5) 'India is an interesting place for doing business': L N Mittal
(6) Six of top 10 companies lose Rs 16,000 cr in m-cap
(7) Delhi Daredevils beat Royal Challengers Bangalore by 37 runs
(8) Shoaib charged with cruelty, cheating
(9) Roddick wins Miami Masters title
(10) Naxalism country's first enemy: Chidambaram

5 Stories for Today

(1) Geithner leaves for India to launch economic partnership
(2) Magnitude-7.2 quake strikes near U.S.-Mexico border
(3) India Inc's M&As touch $19bn in 2010
(4) Heartening rebound in world trade
(5) Six of top 10 companies lose Rs 16,000 cr in m-cap

(1) Geithner leaves for India to launch economic partnership

U.S. Treasury Secretary Timothy Geithner has left for New Delhi to launch the India-U.S. Economic and Financial Partnership which according to him would set the pace and put and economic relationship between the two countries on a new trajectory.

“The newly-formed Partnership aims to strengthen bilateral engagement and understanding on macroeconomic, financial sector and infrastructure-related issues,” said the Treasury Department as Mr. Geithner left for India accompanied by the Federal Reserve Vice-Chairman Donald Kohn and a number of other senior officials from the administration on Sunday evening.

On Tuesday, Mr. Geithner is scheduled to meet his Indian counterpart Pranab Mukherjee in New Delhi, and the two leaders would lead their respective countries in a discussion of bilateral and global macroeconomic and financial-sector issues.

The discussions would be carried forward in greater depth in a number of working groups that will take place in the afternoon with a number of Indian officials and U.S. senior officials.

Mr. Geithner and Mr. Mukherjee are scheduled to address a joint press conference later in the day.

In the afternoon, Mr. Geithner would have discussions with Prime Minister Manmohan Singh and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

The day is likely to conclude with a moderated discussion with Mr. Ahluwalia before an audience of leading public officials and business representatives, focus on post-crisis prospects for financial and economic reform, followed by a small dinner with Indian thought and opinion leaders.

On Wednesday, Mr. Geithner will travel to Mumbai to hold a roundtable discussion with U.S. financial companies and Indian entrepreneurs to explore successful strategies and business models being utilised in India to expand banking services to underserviced areas.

In his pre-trip interview with a group of Indian media, Mr. Geithner said “India is economically and strategically important” for the U.S. and the main purpose of his visit to New Delhi and Mumbai is to “establish a long-term” relationship with India.

“One reason I am going to India is to get a better sense of what is happening there — in the economy and the broad reform process in the financial sector. As always I am going to make sure that the leaders in India get to understand directly from me how we are managing our challenges here and how thing feel here,” he said.

“I think that in anytime we have these kinds of conversations with a major partner, we spend a lot of time talking about the basic economic challenges in both countries. In the India case, it is more important and a little different cause not just because India is so important to us economically and strategically but it is going to be important because we’re at a point in the broaden G20 progress, it is very important that the two countries work closely together in trying to set the agenda of reform in that processes,” he said.

There is a huge amount of promise in that framework for cooperation of international, economic and financial issues, he added.

(2) Magnitude-7.2 quake strikes near U.S.-Mexico border

One of the strongest earthquakes to hit Southern California in decades shook tens of millions of people in two countries and three States on Sunday, swaying buildings from Los Angeles to Phoenix to Las Vegas. At least one person in Mexico was killed and others were feared trapped in their homes.

The 7.2-magnitude quake struck at 3.40 pm PDT (6.20 am IST), about 30 km southeast of the border city of Mexicali, Mexico, according to the U.S. Geological Survey. Three aftershocks of magnitudes 5.1, 4.5 and 4.3 followed within the hour. The earthquake was felt the hardest in Mexicali, a bustling commerce centre along the border.

Baja California State Civil Protection Director Alfredo Escobedo said a man was killed when his home collapsed just outside of Mexicali, and that there were reports of more people trapped in homes in the area. Rescue teams with dogs and digging equipment were rushing to the city from nearby Tijuana.

The parking garage at Mexicali’s city hall also collapsed, Mr. Escobedo said, but no one there was hurt.

There was substantial damage on the other side of the border in Calexico, California. There was structural damage and broken windows in an older section of town, as well as leaking gas lines and damage to the water system, but that no one was hurt. There also were scattered reports of stuck elevators in California and Mexico, but for most people who felt it, the quake was just a scare.

No tsunami warning was issued, but hundreds of people on Tijuana’s crowded beach feared the worst and fled when they felt the ground shake, said Capt. Juan Manuel Hernandez, the city fire department’s chief of aquatic rescue. The beach filled up again within an hour.

The quake was centred in an area has been seismically active lately but until Sunday the earthquakes had been largely of around magnitude-3.0.

The main quake was initially reported as magnitude 6.9. The updated magnitude was still an estimate, but if it holds it would be California’s largest temblor since the 7.3-magnitude Landers quake hit in 1992, Ms. Jones said. There were at least two other 7.2-magnitude quakes in the last 20 years.

The main quake was felt hundreds of miles away in Phoenix, where residents rarely feel the earth shake. The quake was felt in the fire and medical dispatch centre in downtown Las Vegas, but there were no reports of damage or injuries.

Strong shaking was reported across much of Southern California. The earthquake rattled buildings on the west side of Los Angeles and in the San Fernando Valley, interrupting Easter dinners. Some stalled elevators were reported, water sloshed out of swimming pools and wine jiggled in glasses.

Power outages were rare, and mostly brief. Most of the 3,000 customers who lost power in southwestern Arizona, and the more than 5,000 who went dark in Southern California, regained power within minutes, utility officials said.

(3) India Inc's M&As touch $19bn in 2010

Driven by Bharti Airtel’s $10.7-billion takeover deal for the African assets of Kuwait’s Zain Telecom, the total value of merger and acquisition (M&A) deals in the country in the first quarter of 2010 has nearly quadrupled to $19 billion.

The financial research platform of VCCircle, the value of M&A deals in India rose to $19.2 billion in the first quarter of this year, up from $5.2 billion a year ago.

The number of domestic transactions doubled from 39 deals worth $2.2 billion in Q1 of 2009 to 80 deals worth $4 billion in the same period of this year. Further, there were 51 outbound deals in the period under consideration, while the figure stood at 24 a year ago. In terms of value, the increase was more than seven times, primarily due to the Bharti Zain deal.

The number of inbound deals also rose to 29 in first three months of 2010 from 24 deals in the same period of 2009. Going forward, the value and volume of Indian M&A activity is likely to increase as investor confidence and liquidity returns to the market.

(4) Heartening rebound in world trade

The World Trade Organization, in a recent report, has said that global trade is set to rebound in 2010 by 9.5 per cent, after witnessing the sharpest decline in 70 years during 2009.

Exports from developed countries are expected to increase by 7.5 per cent in volume terms over the rest of the year (2010). Exports from the rest of the world (including developing economies) will go up by 11 per cent.

These projections are in line with the overall growth estimates for the current year.

All international organisations expect the developing economies to be in the forefront of global economic recovery. A robust expansion in global trade is one of the key ingredients of the economic recovery.

To place this in its proper perspective, it must be noted that while trade is expanding at a fast clip this year, it will not be quite sufficient to recover the ground lost in 2009. Last year, trade contracted by 12.2 per cent, the largest decline since World War II.

The WTO, which compares trade volumes rather than the value of trade — there will be no distortions due to exchange rate or commodity price variations — says it will take another year of fast trade volume growth to surpass the level of 2008. On a positive note, a report prepared jointly by the WTO, the Organisation for Economic Co-operation and Development (OECD) and the United Nations Conference on Trade and Development (UNCTAD) says that the feared surge in protectionism has not happened even as economic recovery is proceeding apace.

However, in the U.S. and a few other developed countries, it has been mostly a jobless recovery. If the recovery does not make a dent in unemployment numbers, there will be a clamour for protection. But on the whole the multilateral system of trade under the WTO has enabled an orderly conduct of trade both during the recession and the recovery phase.

The decline in trade volumes during 2009 was larger than the 10 per cent forecast earlier by the WTO. In dollar terms, the extent of fall was greater than the fall in volume terms (-23 per cent). To a large extent, that was due to fall in the prices of oil and other primary commodities. The U.S. dollar is used extensively in invoicing trade in these commodities.The principal cause has been a sharp fall in global demand. In rich countries, private demand was weak, a direct consequence of the financial crisis.

Also, trade finance practically dried up and that in turn weakened demand further. This was aggravated by the synchronised decline across many countries.

No region or group of countries was spared. Exports and imports of countries fell at the same time. Also, at the height of the recession, households postponed buying of consumer durables and corporates deferred investing in capital goods.

Two other factors that aggravated the decline were the large global supply chains and the fact that some products have a disproportionately large share of world trade compared with their share in overall output.

The spread of global supply chains most probably exaggerated the fall in trade. This is because goods cross national boundaries several times in their production process leading to inflated trade statistics, both during trade booms and sharp declines.

Some products, notably consumer durables, account for a significant percentage of trade. But their contribution to the GDP is much less. A decline in the trade of such goods has a significant impact on trade statistics but much less on gross output.

World trade and output are now in a recovery phase. According to the WTO, without any further upheavals in the global economy, world merchandise trade should resume its normal upward trajectory through the end of 2010, although some deviation from its previous trend line will persist for a long time.

The WTO concedes that its trade forecasts may be overoptimistic.

There may be large appreciation or depreciation of currencies and the resultant volatility in foreign exchange markets is not good for orderly trade. There could be a further rise in oil prices.

(5) Six of top 10 companies lose Rs 16,000 cr in m-cap

In a truncated session past week, six out of top-10 valued firms lost a sum of over Rs 16,000 crore from their market valuation, with TCS losing the most. The valuation of leading outsourcing firm TCS declined by Rs 3,474.03 crore taking its total market capitalisation (m-cap) to Rs 1,58,092.83 for the week ended April 3. Shares of the company also slipped by 2.15% during the week to close at Rs 807.75 on Thursday on the Bombay Stock Exchange (BSE). The markets remained shut on the last day of the past week on account of Good Friday, thus, trading for only four sessions. Meanwhile, four state-run firms -- ONGC, NTPC, SBI and BHEL -- added Rs 10,593.86 crore to their m-cap. Reliance Industries, continued to be the numero uno firm in terms of its m-cap, inspite of its valuation falling by Rs 1,749.63 crore to Rs 3,57,659.64 crore. Software exporter TCS was at fourth place and state-owned trading firm MMTC inched up to the fifth place from sixth even with a loss of Rs 845.25 crore. IT bellwether Infosys Technologies slipped to the sixth place from fifth after losing Rs 6,016.2 crore from its m-cap at the end of the week, with its total market valuation at Rs 1,53,290.27 crore. The country's telecom giant Bharti Airtel slipped to the tenth spot from the ninth after losing Rs 3,038.01 crore from its m-cap taking its total market valuation to Rs 1,4,742.07 crore.

Mining giant NMDC, which slipped to the ninth place from eighth past week, lost Rs 1,407.47 crore from its m-cap, taking its valuation to Rs 1,16,859.53 crore. Meanwhile, m-cap gainers like state-run oil firm ONGC and power producer NTPC together added Rs 5,686.89 crore to their market valuation. ONGC, the second most-valued firm in terms of its m-cap, gained Rs 1,069.43 crore, taking its valuation to Rs 2,32,056.7 crore, while NTPC added Rs 4,617.46 crore taking its market-capitalisation to Rs 1,71,381.89 crore. The country's largest public sector lender SBI also saw its valuation swell by Rs 1,964.96 crore to Rs 1,33,559.71 crore. Power equipment maker BHEL jumped to the eighth place from tenth after adding Rs 2,942.01 crore to its valuation taking it to Rs 1,18,419.78 crore. Meanwhile, the benchmark index Sensex gained 47.86 points or 0.27% in the past four trading sessions to settle at 17,692.62 on Thursday on the BSE.




           
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