Solving Global Financial Crisis - PM Manmohan Singh's Medicine

Prime Minister Manmohan Singh today used the forum of the Seventh Asia Europe Meeting (ASEM-7) to concede for the first time that the international financial crisis was beginning to have a grave impact on India for no fault of its own.  “Our stock markets and the exchange rate of the rupee are under pressure due to capital outflow of foreign institutional investors. Sooner or later, the real economy is bound to experience the pain,” he said. 

He put on his professorial hat to tell Asian and European leaders that a “collective international effort” to the international financial crisis must involve infrastructure investments in developing countries as a “counter-cyclical device” as well as the creation of a “global monitoring authority to promote global supervision” of cross-border investment, trade and banking.

In candid and even hard-hitting remarks to the first closed session of the Asia-Europe Meeting summit which got under way here on Friday, Dr. Singh said globalisation without the structure of global financial governance had led to severe problems. “Clearly there has been a massive failure of regulatory and supervisory powers. Speculators have had a free run for far too long a period,” he said. “International institutions like the IMF have also not covered themselves with glory. There has been an unacceptable failure of effective multilateral supervision of major developed economies and in particular of what has been going on in their financial markets.”

Source - The Hindu, The Telegraph

Ten Blue Chip Stocks

With the Sensex now in four digits (8701 on 24/10/08)and most of the stocks down to one-third of their last year’s value, investors with a long-term horizon can use the market crash as an opportunity to accumulate blue-chip stocks.

ETIG has identified 10 scrips that a long-term investor can start accumulating in the current slump. The following stocks have been selected based on their current valuations and relative historical earnings multiples.

ACC, Castrol India, Kesoram Industries, LIC Housing Finance, Madras Cements, Petronet LNG, SAIL, SKF, Tata Steel & Tata Chemicals

Source - ET

Ten Blue Chip Stocks Data

	Company	As on 24/10/2008 - Sensex 8701	PE	Dividend Yield	High	Low	Book Value
1	SAIL	74.75	4.10	2.41%	293	81	55.84
2	SKF	177.5	5.82	3.38%	490	150	103.4
3	Petronet LNG	37.15	5.87	4.04%	122	36	21.58
4	Kesoram	124.55	1.49	4.42%	675	125	213.5
5	Madras Cement	64.7	1.89	4.64%	252	72	40.08
6	ACC	423.15	5.52	4.73%	1155	420	221.28
7	LIC Housing Finance	192.15	4.22	5.20%	402	192	215.65
8	Castrol India	280.25	15.91	5.53%	374	215	34.79
9	Tata Chemicals	128.25	3.16	7.02%	440	141	151.92
10	Tata Steel	178.3	2.78	8.97%	970	205	191.27

Tata Motors aquires Miljo Grenland Innovasjon

Auto manufacturer Tata Motors has acquired majority stake in Norwegian innovative solutions maker for electric vehicles Miljo Grenland Innovasjon, with which it is developing the electric Indica in the country.

The company's UK subsidiary Tata Motors European Technical Centre Plc has acquired 50.3 per cent holding in Miljo for 12 million krone (Rs 9.40 crores), Tata Motors said in a statement.

“Miljo will produce electric vehicles based on Tata Motors' products, besides manufacturing of state-of-the-art super polymer lithium ion batteries and the development of related technologies,'' the company said.

The investment would help it realise its strategy to develop convenient, affordable and sustainable mobility solutions through electric and hybrid vehicles, it added.

The first such vehicle to be developed by the company would be the electric version of Indica. It is scheduled for launch in Europe next year. The car -- Indica EV -- would be capable of carrying four people with a predicted range of up to 200 km and ac celeration of 0-60 kmph in less than 10 seconds.
Source - PTI

TCS signs Rs 1000 crore deal to implement passport project

Getting a passport would soon become easier with lower processing time and online filing. Tata Consultancy Services (TCS) on Monday 13th Oct signed
a Rs 1,000-crore, six-year deal with the external affairs ministry to implement the Passport Seva Project that envisages issuance of new passports within three working days and a ‘tatkal’ one the same day, after police verification.

The project, which would also allow online filing of passport applications, is the largest mission mode project under the National E-Governance Programme.

Following the signing of the master services agreement with the ministry on Monday, TCS shares rose 10.1% on the BSE to close at Rs 575.80. “This project reiterates TCS’ commitment to help government deliver citizen services more efficiently through technology and process improvements,” CEO and MD S Ramadorai said.

The Passport Seva Project involves setting up of 77 new passport filing centres, called Passport Seva Kendras (PSKs), and increasing the number of passport counters from the current 345 to 1,250. While the pilots would be operational in Bangalore and Chandigarh by June 2009, the national rollout would be complete by the first week of January 2010. TCS would work with other technology providers such as Adobe, IBM, Nortel, EMC, CMC and Tata Teleservices to deploy the infrastructure at the PSKs.

Currently, only about 3.5% of Indian citizens hold a passport. The Central Passport Organisation issued 50 lakh passports in 2007 and the number is expected to cross one crore by 2011.

The external affairs ministry would set up a special purpose vehicle (SPV) to manage the passport project. All fiduciary services such as verification, grant and dispatch of the passport would be done by the ministry. TCS would be responsible for setting up a data centre, disaster recovery centre, networking between all passport offices and ensuring an online passport filing system.

It would also set up a network connecting the police with the passport offices to ensure quick movement of verification information. A call centre would also be set up to answer queries about the process or status of a passport application.

The external affairs ministry had signed a letter of intent with TCS in July this year after a bidding process involving five other companies including Wipro, 3i Infotech and Spanco.
Source - ET

Infosys declares 200% interim dividend

The board of Infosys Technologies has declared interim dividend at the rate of 200%. (Rs 10 per share) for the first half April - September of this fiscal 2008-09
This was declared at the board meeting held on 10 October 2008. Buoyed by its record performance in topline and bottomline during the first two quarters of this fiscal, the IT bellwether said in a statement that the interim dividend for FY 2009 was higher by Rs.4 per share or 80 percent over the same period of the last fiscal

Mamta helps Modi win NANO

Nano — "an orphan without a home", as Tata Group chairman Ratan Tata called it — has finally found its home 25 km from Ahmedabad, at Sanand. The capacity of the new plant is expected to be higher than that of the abandoned Singur plant and the Tatas have set an extremely tight time-frame of around 12 months to commission it.

While the Tatas' decision to move from Singur to Sanand was formally announced at a joint news conference by Gujarat Chief Minister Narendra Modi and Tata in Gandhinagar on Tuesday, Tata told TOI in an exclusive interview that he was extremely impressed with Modi's seriousness of intent and the speed with which his government moved to seal the deal.

Tata Motors MD Ravi Kant said it took Gujarat just 10 days to tie up all the loose ends — make the land ready for possession, get all clearances and approvals and offer a final deal. Tata said his company decided to take up the offer "late last evening", and he was here the next day to sign an MoU with the state government.

The signs of the Tatas moving to Gujarat were available earlier, though. TOI had reported that Gujarat would be Nano's destination the very day Tata announced his decision to move from Singur.

The deal given by Gujarat is just as good as the one offered by West Bengal and, in some respects, better. As against 1,000 acres on initial offer in West Bengal, Gujarat has given 1,100 acres. This land is unencumbered and would be sold to Tata Motors on prevailing market rates.

Ravi Kant said the Sanand plant was being planned for a capacity of 5 lakh cars a year, up from the Singur plant's proposed capacity of 3 lakh cars. Tata said, as promised, he was planning to meet the deadline of the last quarter of this year for launching the Nano, although the first cars would roll out of the Tata plants in Pantnagar, Uttarakhand and Pune, Maharashtra.

A visibly relieved Tata told TOI that he had not come to Gujarat to merely build a car plant but to contribute to the state as a responsible corporate citizen. He later announced that the Tatas would take up agriculture and marine biology research in the state as well as build an ITI near the Nano plant for training workers.

Clearly, what's West Bengal's loss is Gujarat's gain. Although Tata said he was sad to leave Singur, he seemed happy to have left behind the game of political brinkmanship started by Mamata Banerjee. "There is a bad M and a good M and we have made the transition," he said in an obvious reference to Mamata and Modi.

Source - The Times of India

This too shall pass by Kaushik

October 6th, 2008 (with permission from Galatime )

There is just way too much doom & gloom in the financial markets, so here is a list of things to keep in mind before dumping your entire equity portfolio:

Equities offer the best long-term inflation-adjusted returns across all asset classes.
There are times to buy (be greedy) and times to sell (panic). This is not a time to panic, all evidence to the contrary. The time to sell was October 07 - January 08.
Indian companies aren't going to suddenly stop revenues or earning profits. There will be sector-specific bumps, but then, there's cycles in everything.
Only 3-5% of Indian retail wealth is invested in the stock market. Similarly, a very small % of companies are listed on the stock exchanges. Imagine a time when 20-30% of wealth is in equities, and 10 times as many companies are publicly traded. There will be tons of opportunities to make money via trading & investing over the next several years.
Things like FDs and gold should be used strategically to hold cash while waiting for great risk/reward opportunities. Switching your assets wholesale to these asset classes for the long-term may not be that great an idea.
The next few months will offer great opportunities for stock picking. For those with no time or inclination to do so, there is always the index fund route. Either ways, there will be good entry points for both traders as well as investors soon. Keep your gun-powder dry.
Overhead matters a lot - it is important to cut down on brokerage costs, expense fees, mutual fund loads, unnecessary transactions and taxes. If you pay attention to all of these, you can further boost your returns.
Ignore what the media says. The media gets paid to get your attention, not to generate absolute returns.
Ignore what (most) fund managers say - they get paid as a % of AUM, not if they generate absolute returns.
Don't panic. Be patient. Making money is about 3 things:

Probabilities - Are the odds in your favor?
Money management - Do you know your risk?
Luck - Shit happens.

Source - Kaushik Gala - Galatime