Industrial output down 0.5 percent yoy

India's industrial output likely shrunk in March from a year earlier, its third fall in four months, as the global economic slowdown hit exports and domestic demand remained soft, a poll showed.

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The median forecast in the poll of 13 analysts was for an annual decline of 0.5 in the index of industrial production (IIP) in March, the final month of the 2008/09 fiscal year.

Output fell an annual 1.2 per cent in February, according to provisional figures. Output rose 0.4 per cent in January and fell 0.6 per cent in December.

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"It's going to be flattish, near the trough. Exports remain weak and domestic demand is also subdued," said D.K. Joshi, principal economist at rating agency Crisil.

Some economists expect industrial output grew less than 4 per cent in India's fiscal year that just ended in March, less than half the 8.1 per cent growth rate of the previous year.

Economists expect output growth to improve in coming months as government stimulus measures and aggressive rates cuts by the central bank take hold, with demand for consumer goods, vehicles and building materials showing signs of picking up.

Macquarie Securities said industrial growth may reverse its weaker trend from April as motor vehicles, cement and steel are already showing signs of increased activity.

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A survey of purchasing managers showed expansion of manufacturing activities in April, its first uptick in five months.

Car sales, a gauge of consumer demand, rose 4.2 per cent in April from a year earlier, but sales of trucks and buses were down 11.3 per cent.

India's factory output sharply slowed last year as high borrowing costs and the global credit crunch forced firms to delay expansion plans and then cut output as demand for goods in overseas markets fell sharply.

Policymakers say the economy may have grown less than 7 per cent in 2008/09, slowing sharply from 9 per cent or more seen in previous three years. The central bank expects the growth rate to slow further to 6 per cent in 2009/10, which would be the weakest in seven years.

India grew 6.5 percent in FY09 , inflation to fall further - PM

India's economy grew an estimated 6.5 per cent in the just-ended 2008/09 fiscal year and consumer price inflation is expected to moderate in five to six months, Prime Minister Manmohan Singh said on Monday.

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A global economic slump and slowdown in domestic demand have weakened economic growth in Asia's third largest economy, but falls in commodity prices have helped moderate prices.

"The wholesale price inflation is already down to around 1 per cent and there is a time lag for the consumer price inflation to also fall," Singh told a news conference at Ludhiana. "But I am sure CPI inflation will moderate in five to six months," he said at the last lap of a month-long election campaign in the northern state of Punjab.

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India's wholesale price index rose 0.70 per cent in the 12 months to April 25, above the previous week's annual rise of 0.57 per cent.

World's top 10 most valuable brands list

Top 10 brands of world - Here is the list of top 10 biggest and most valuable brands of the 21st century. and most of the technology companies are present in the top ten spots.

Ranked 1 :

Company: Google

Value: $101.4 billion

Ranked 2 :

Company: Microsoft

Value: $77.3 billion

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Ranked 3 :

Company: Coca Cola

Value: $68.5 billion

Ranked 4 :

Company: IBM

Value: $67.5 billion

Ranked 5 :

Company: McDonald's

Value: $67.3 billion

Ranked 6 :

Company: Apple Inc

Value: $63.9 billion

Ranked 7 :

Company: China Mobile

Value: $62.2 billion

Ranked 8 :

Company: Energy major GE

Value: $59.9 billion

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Ranked 9 :

Company: Vodafone

Vaule: $50.2 billion

Ranked 10 :

Company: Marlboro

Value: 50.1 billion

Cheer India - Tata's more reputed then Google and microsoft

(10/may/2009 Indian Cos updates) - Among Indian companies, Tatas are followed by SBI (29), Infosys (39), Larsen & Toubro (47) and Maruti Suzuki (49th). There are 22 other Indian companies on the list of 600 largest companies, ranked in terms of their reputation.

"Corporate India has the best reputed companies. Of the 27 Indian companies ranked among the 600 largest in the world, almost 90 per cent received scores above the global mean, with five ranking among the Top 50," the Reputation Institute said in its annual study for 2009.

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Only the US had more number of companies in the top-50 (17 companies), the report noted. In terms of overall presence also, the US had five times the number of companies in the list than India. The list is made on the basis of admiration, trust and good feeling that consumers have towards a company.

Other Indian companies on the list include, Hindustan Unilever (70th rank), ITC (96), Canara Bank (103), HPCL (112), Indian Oil (113), Wipro (117), Reliance Group (133), Mahindra & Mahindra (138), Bharti Airtel (164), Bank of Baroda (175), BPCL (176) and Punjab National Bank (178).

The report did not clarify whether the Reliance group means the Mukesh Ambani Group or Anil Ambani group of companies. The report revealed that corporate trust is higher in the emerging markets, while companies in industrialised markets are trusted less.

"Proportionally, the largest companies in Brazil, Russia, India and China (BRIC) enjoy a stronger emotional connection with consumers than the largest companies in the industrialized world," it added.

Out of the 289 companies from the US, Japan, the UK, France and Germany, 45 per cent have reputations below the global average, while only 34 per cent of the 142 companies from BRIC nations have below-average reputations, with Chinese companies dragging down the BRIC average substantially.

Industrial and Commercial Bank of China saw the largest gain in reputation, 16.38 points from 2008 to 2009, while AIG lost the most reputation capital with a drop of 27.52 points.

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Internet giant Google has been ranked at the 23rd position, while Microsoft grabbed the 30th rank and Walt Disney was at 21st place. Nokia is at 45th, PepsiCo is 46th and GE is ranked 50th. In 2008, Toyota and Google were number one and two, they now rank 59th and 23rd, respectively.

source pti

Inflation at 0.65 percent on April 25, 2009

(Inflation Updates - April 2009) - Annual inflation rate is expected to have risen for the third consecutive week in late April, because of a sustained increase in food, mineral and manufacturing prices, a poll showed on Wednesday.

The median forecast of 11 analysts was for 0.65 per cent rise in the wholesale price index in the 12 months to April 25, up from 0.57 per cent rise the previous week.

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"Inflation is expected to rise largely due to the general rise in food prices. Inflation falling below zero per cent has been postponed for a while now, may be until early June," said Deepali Bhargava, an economist with ING Vysya Bank said.

The index had been on a downward trend since last September, after a fall in global commodity prices, but steadied in March and has moved upward in the past two readings.

The weekly wholesale price index is more closely watched than the monthly consumer price index (CPI) because it includes more products and is published on a more frequent basis.

RBI moves $5.7 bn to Indian government

(5-5-09 - RBI news) - The Reserve Bank of India said today it had transferred 280 billion rupees ($5.7 billion) from its intervention bonds to the government, a move that would ease the pressure on record market borrowings planned for 2009/10.

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The RBI has taken a series of steps to ensure the government's net borrowing plan of 3.09 trillion rupees in the fiscal year that began on April 1 would go through smoothly without disrupting markets and sending yields shooting up.

The government had borrowed a net 3.02 trillion rupees in 2008/09.

The 10-year bond yield briefly ticked 1 basis points lower to 6.25 percent on the announcement. It has dropped more than 100 basis points since hitting a four-month high of 7.37 percent in mid-March.

The Reserve Bank of India said the transfer, which was made on May 2, would form part of the government's borrowing plan for 2009/10. It aims to move a total of 330 billion rupees from the market stabilisation scheme (MSS) in this year.

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The outstanding amount under the MSS account was 427.73 billion rupees on May 2, the RBI said. It has also bought back federal bonds in recent weeks to ensure adequate investor appetite for new auctions.

In early March, the central bank had given 120 billion rupees from the MSS account to the government to meet a sudden surge of borrowings in the closing weeks of the 2008/09 fiscal year.

RBI offers 600 bn rupees at special repo

The Reserve Bank of India said it would conduct a special repo auction for 600 billion rupees on Monday. The reversal of the auction will be on May 18, it said in a statement.

The special repo facility was introduced on Oct. 14, 2008 on a daily basis, offering 200 billion rupees to meet liquidity needs of mutual funds.

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The central bank later increased the facility to 600 billion rupees to include liquidity needs of non-banking financial companies and housing finance companies. At its policy review on April 21, the central bank said the auction will be conducted on a weekly basis every Monday till March 2010.

posted under - RBI updates, indian economy updates, Reserve Bank of India, RBI, 

Economy poised for a rebound

The worst is over and the economy looks set for a rebound. This may sound contra-intuitive after dire predictions of a long and deep

slowdown, but economists and investment bankers interviewed by TOI see a revival as early as September, or latest by December. All of them see growth riding on the back of domestic demand rather than overseas business but caution that some sectors such as IT may take a little longer.

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The pace of rebound being projected ranges from an optimistic 8% of GDP to a cautious 6-7% in the last quarter. For the full fiscal, there's consensus on 6.5-7% except a CII forecast that pegged it at 6-6.5%. But a word of caution here will not be out of place. These figures could still go off the mark as the signs may be deceptive. This is just like when the specialists failed to see through the boom to see the bust coming.

"Green shoots of growth are showing in some sectors and we can certainly see a sustainable upward movement by the September-October busy season. Summer is lean period as activities usually slow down before picking up in September... or more in October," Ficci secretary-general Amit Mitra said.

Suresh Tendulkar, chairman of PM's Economic Advisory Council, was more optimistic and said recovery had started. "There have been some pressure on the bottomline and profit growth may not be as high as expected. But the way revenues have grown, it shows revival has started," he said.

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All of them identified infrastructure as the engine, driving demand in steel, cement and other manufactured items. "Infrastructure will spur the drawdown on inventories. That's happened in cement and is starting to happen in steel," said the investment banker.

Mahajan sees agriculture in a support role. "It will prompt rural demand but since there's a rigidity in the sector, it is not like the farm sector will carry the economy as a whole. A good monsoon and a good crop will certainly help the economic revival but that will not be the sole driver. After all, you already have good rural demand."

Mitra said steel and cement signified some turnaround in producer side. "FMCG never suffered. Activities in small housing are coming back. All these can be sustained if interest rates come down... projects become viable, start getting off the ground and (with low interest) propel consumer side interest."

Indian Cos Mergers and acquisitions at 4 year low

(Indian Economy Updates) - Mergers and acquisitions involving Indian firms in 2009 so far have been the lowest in four years for comparable periods, touching just $7.4 billions, thanks to the global economic slowdown.

M&A volume of $7.4 billion represents a massive 51 per cent decline from the corresponding period a year ago, global deal tracking firm Dealogic said.

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Out of $7.4-billion M&A deals involving Indian firms, inbound deals amounted to $1.6 billion where foreign firms bought stake in Indian companies.

"Inbound cross-border M&A fell to $1.6 billion via 70 deals so far this year, down 77 per cent from last year. The US remained the biggest investor in Indian firms with $483 million via 21 deals," Dealogic added.

Outbound M&A activity fell drastically to just $334 million through 34 deals, a 96 per cent fall from the same period last year. The US was the most targeted nation as M&As worth $157 million were carried out through 10 deals, compared to $1.6 billion via 29 deals last year to date.

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The oil and gas sector was the most active segment this year. The space cornered as many as six deals worth $2.1 billion. Besides the largest M&A transaction -- Reliance Industries' open offer to acquire the remaining 25 per cent of Reliance Petroleum for $1.7 billion also happened in this section.

The all-share merger deal valued at about Rs 8,500 crore between the two Mukesh Ambani group firms RIL and RPL has become probably the 10th-biggest ever for the country and the first billion-dollar deal this year.

According to Dealogic, Citi emerged as the top adviser on Indian M&A with $3.2 billion via three deals. Kotak Mahindra Bank followed suit with $2.3 billion through two deals and Morgan Stanley is in the third place with $2 billion via two transactions.

The top two India targeted deals were Reliance Industries' 25 per cent stake acquisition in Reliance Petroleum for $1,688 million and Quippo Telecom Infrastructure's 49 per cent stake acquisition in Wireless II Infoservices for $1296 million.