Tatas, Singapore Airlines not to raise loans in India to capitalise JV

The Tata Group and Singapore Airlines (SIA) have assured the government that the foreign car-rier would not raise any loan in India to capitalise the joint venture (JV) and further funding beyond its $49-million initial invest-ment will come in as per business requirements.

The joint proposal by the two companies submitted for approval of the Foreign Invest-ment Promotion Board (FIPB) makes a strong pitch on the ground that "SIA's investment in India and the operations of the JV company would have the potential for significant foreign exchange earnings in India". The proposal further states that better services at competitive rates would be provided by the new airline, in which the Tata Group would have a majority stake and management control.

The proposal, accessed by Mail Today, states, "The brand SIA is recognised worldwide and the expansion of SIA in India will signal the ability of the country to attract leading names from the international circuit to benefit the Indian market. High foreign investment inflow would further strengthen the civil aviation sector."

The two companies have also assured that the JV, branded Tata Singapore International Airlines, would provide "better services at competitive rates".

Airlines have been jacking up fares since 2011. The introduction of a new airline with a strong fleet would lead to increased competition and lower fares. The proposal also high-lights the job potential that the JV would offer. "Since the JV company will hire Indian resi-dents to assist in establishing its operations in India, this would create jobs especially for young people and provide for their training. This will enhance the development of Indian employ-ees and contributing to human resource development in India.

Further stating benefits that the JV will offer to the economy, the proposal states, "The JV com-pany activities may benefit from economies of scale offered by ven-dors to SIA in relation to procure-ment of aircraft, engineering serv-ices, spares and infrastructure."

The participation, therefore, of an internationally reputed full-service passenger service airline operator in the JV company would increase the competitiveness within the full service at competi-tive rates and overall development of full-service scheduled passenger airline services, the proposal adds.

Elections 2014 A worker looks at a Congress flag carrying a picture of its party chief Sonia Gandhi next to flags of Bharatiya Janata Party (BJP) inside an election campaigning material workshop in Ahmedabad October 10, 2012. REUTERS/Amit Dave/Files Social media not a game changer Political parties in India are relying more on social media ahead of the 2014 election as a way of increasing voter support, even though politicians in general do not expect such efforts to significantly influence election results. Full Article Tharoor on the digital presence of Gandhis BJP IT cell head on party’s social media plans Follow Reuters Facebook Twitter RSS YouTube Most Popular Most Shared Oracle CEO Larry Ellison skips keynote for America's Cup races 4:09am IST AIG CEO apologizes for comments equating bonus criticism and lynching 3:26am IST Sailing-Oracle looks to shut down Kiwi America's Cup challenge 1:28am IST UPDATE 1-Cruz brings Tea Party fight on Obamacare to U.S. Senate 4:05am IST UPDATE 3-Sailing-U.S. boat pulls even in historic America's Cup comeback 5:23am IST REUTERS SHOWCASE Tainted Politicians Tainted Politicians Cabinet moves to protect convicted politicians Full Article Energy Bill Energy Bill India shies from diesel hike, seeks $5 bln fuel savings. Full Article Deal Talk Deal Talk Kingfisher Air in talks with an investor, says Mallya. Full Article JLR R&D Centre JLR R&D Centre Jaguar Land Rover to open new $160 mln R&D centre in UK in 2016. Article BlackBerry Deal BlackBerry Deal By going private, BlackBerry may buy time to fix itself Full Article | "Not cool" Stronger is Better Stronger is Better Bewers tap India thirst for potent beer. Full Article Tracking the Rupee Tracking the Rupee Our special coverage on the rupee. Full Coverage Buy, Sell or Hold? Buy, Sell or Hold? Confused while buying stocks? Get buy, sell or hold recommendations from VantageTrade. Full Coverage Reuters India Mobile Reuters India Mobile Get the latest news on the go. Visit Reuters India on your mobile device. Full Coverage Asian shares slip, dollar steady in subdued trade

Asian shares slipped and the dollar inched higher in early Asian trade on Wednesday, as concerns about a possible U.S. government shutdown and uncertainty about the U.S. Federal Reserve's policy outlook made investors hesitant to take aggressive positions.
"Sentiment remained somewhat subdued as investors stayed cautious amid lingering uncertainty on the Fed's stance," analysts at Credit Agricole wrote in a note to clients.
"Adding to that uncertainty is the approaching deadlines for the U.S. fiscal struggle and we expect the market to place increasing focus on that front going forward," they said.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped about 0.1 percent, while Japan's Nikkei stock average .N225 was down 0.2 percent.
The dollar was narrowly higher against its Japanese currency, buying 98.76 yen, while it rose fractionally against a basket of six currencies to 80.588.
The euro was slightly down at $1.3472, with support cited at its August high of $1.3453, pressured by a disappointing German survey overnight.
The September Ifo survey of German business sentiment, released on Tuesday, showed a slight improvement from the previous month and touched a 17-month high, but still fell short of the consensus forecast.
The downbeat survey came a day after European Central Bank President Mario Draghi said the bank was prepared to do more to support the region's nascent recovery.
"It seems like an improvement in the euro zone economic data has stalled. In addition, now that Germany's election is over, the market could dust off the issues that had fallen out of focus, such as further aid to Greece," said Masafumi Yamamoto, forex strategist at Praevidentia Strategy.
On Wall Street on Tuesday, U.S. stocks mostly ended lower, extending their slide to a fourth session. The Dow Jones industrial average slipped 0.42 percent, the Standard & Poor's 500 Index 0.25 percent, and the Nasdaq Composite Index managed a modest gain of 0.08 percent.
Tea Party-backed U.S. senators are threatening to stall a bill to fund the U.S. Government.
New York Fed President William Dudley, in an interview on CNBC on Tuesday, defended the central bank's surprise decision last week to refrain from tapering its stimulus because the U.S. economy was weaker than the Fed thought in June. Dudley, a known dove, said he "wouldn't rule out" a stimulus reduction later this year.
U.S. economic data on Tuesday was mixed and lent credence to the Fed's decision to hold policy steady. U.S. home prices gained in July, but consumer confidence slipped in September, underscoring the possibility that higher interest rates and a sluggish economy could brake the housing market recovery.
On the commodities front, copper futures edged up 0.2 percent to $7,159.50, on track to snap a three-session losing streak fuelled by supply concerns and uncertainty about the Fed's policy outlook.
Oil prices firmed against a backdrop of hopeful signals that longstanding tensions in the Middle East could be thawing. U.S. President Barack Obama on Tuesday cautiously embraced overtures from Iran's new president as the basis for a possible nuclear deal, but a failed effort to arrange a simple handshake between the two leaders underscored entrenched distrust that will be hard to overcome.
Front-month Brent crude for November delivery rose about 0.1 percent to $108.79, while November U.S. crude added 0.2 percent to $103.37 a barrel.

Social media not a game changer in 2014 elections

 
By Aditya Kalra and David Lalmalsawma
Political parties in India are relying more on social media ahead of the 2014 election as a way of increasing voter support, even though politicians in general do not expect such efforts to significantly influence election results.
Parties are trying to ride the digital wave by conducting workshops to teach leaders and foot soldiers how to improve engagement on websites such as Facebook and Twitter.
The country of 1.2 billion people had around 165 million Internet users as of March, the third-largest in the world, according to data from India’s telecommunications regulator. But the number of social media users is likely to grow to about 80 million by mid-2014, a report released in February said.
For the Bharatiya Janata Party, India’s main opposition party, social media is helping as an “accelerator” in conveying their messages to the public.
“I don’t call it a game changer, but an accelerator in this election … it’s definitely setting a narrative, it is influencing a lot of people,” Arvind Gupta, head of the BJP’s IT division, said in an interview.
by research group IRIS Knowledge Foundation and the Internet and Mobile Association of India said social media could have a “high impact” on 160 of the 543 constituencies in the next election, and no contestant could afford to ignore this medium. The study said 316 constituencies will have “low” or “no impact”.
Congress minister Shashi Tharoor, who has more than 1.9 million Twitter followers, cautions against overstating the effect of social media.
“I think it can be a game influencer, but I wouldn’t go beyond that at this stage … social media happens to offer an additional way, not a substitute for any of the traditional means of campaigning,” Tharoor, one of the earliest adopters of Twitter in Indian politics, said in an interview.
(Also read: An interview with Tharoor on social media plans of Congress and the digital presence of the Gandhis)
For years, election campaigns in India have been designed around public rallies, popular welfare schemes and print, television or radio advertising. Digital efforts have only recently made it to the list.
Costly personal computers and a largely rural population meant lower Internet penetration in India, but the user base has been growing at a rapid pace as markets are now flooded with cheaper smartphones and tablets.
Politicians are learning the potential of the online medium, which already plays a big role in election campaigns in countries such as the United States.
Other than Twitter and Facebook, leaders in recent months have used platforms such as Google Hangout to connect with the public, with Gujarat Chief Minister Narendra Modi and Finance Minister P. Chidambaram among the early adopters.
Modi, who is also the BJP’s prime ministerial candidate for 2014, is among India’s famous social media celebrities with 4.4 million Facebook ‘likes’ and 2.3 million Twitter followers.
While BJP leaders such as Modi and president Rajnath Singh are on Twitter, top Congress leaders such as Sonia Gandhi and Rahul Gandhi, seen as the PM-choice-in-waiting, are not.
In recent years, Tharoor says he has encouraged Rahul Gandhi to try Twitter, but the 43-year-old Congress vice-president hasn’t shown interest.
“There’s no doubt to my mind that both the Gandhis tend to be fairly reticent when it comes to projecting themselves individually; they prefer to let their work talk for them,” Tharoor said.

BSE Sensex wipes off losses, up over 100 points

Wiping off its initial losses, the BSE benchmark Sensex gained over 100 points in morning trade on Tuesday. At 10.21 am, Sensex was up 101.76 points at 20002.72. Similarly, Nifty was up 43.35 points at 5933.10 during the same time.

The 30-share index, which lost 745.68 points in the previous two sessions, fell further by 118.18 points, or 0.59 per cent, to 19,782.78 in early trade as banking stocks slumped after international rating agencies downgraded the debt rating of the nation's top three public sector lenders.

Similarly, the wide-based National Stock Exchange Nifty declined by 34.75 points, or 0.59 per cent, to 5,855.00.

The BSE banking index suffered the most by falling 1.48 per cent to 11,458.48 with stocks of SBI declining by 2.75 per cent, Bank of Baroda by 2.35 per cent, Punjab National Bank by 2.59 per cent, ICICI Bank by 0.64 per cent, HDFC Bank by 1.03 per cent and Yes Bank by 1.73 per cent.

Meanwhile, in Asia, Hong Kong's Hang Seng index down by 1.08 per cent, while Japan's Nikkei fell 0.70 per cent in early trade.

The US Dow Jones Industrial Average ended 0.32 per cent lower in Monday's trade.

Gold price falls 0.36% in futures trade on global cues

Gold prices fell 0.36 per cent to Rs 29,678 per 10 gram in futures trade on Tuesday as speculators engaged in trimming positions.

Market analysts said the fall was mostly attributed to a weak trend overseas after a Federal Reserve official said policy makers may start reducing US fiscal stimulus as early as next month.

At the Multi Commodity Exchange, gold prices for delivery in December fell by Rs 108, or 0.36 per cent, to Rs 29,678 per 10 gram in business turnover of 253 lots.

Similarly, metal prices for delivery in October declined by Rs 99, or 0.33 per cent, to Rs 29,775 per ten gram in 2,235 lots.

Meanwhile, gold prices fell 0.4 per cent to settle at USD 1,327 an ounce in New York yesterday

Moody's concerns overblown, misplaced: SBI

 
Country's largest bank State Bank of India (SBI) on Tuesday dismissed the concerns raised by Moody's while downgrading its debt rating, saying that the issues cited by the global credit ratings agency are "overblown and misplaced".

"We had explained our views to Moody's, allaying their concerns on debts, deposits as well as recapitalisation, but still they went ahead with downgrade. We believe Moody's is overly concerned, and that is completely misplaced," SBI MD and CFO Arundhati Bhattacharya said.

At a press conference on Monday evening attended by all the four Managing Directors of the bank, she said: "What Moody's feels is their view and we don't subscribe to that. SBI is and will remain the banking champion of the nation. We have no difficulty in raising deposits with our nationwide presence nor do we have any means in raising funds.

"We still have the highest rating amongst the public sector banks when it comes to bank?s financial stability rating (BFSR) from Moody's."

The agency on Monday downgraded the senior unsecured debt and local currency deposit rating of SBI by a notch to 'Baa3' from 'Baa2', citing asset quality and recapitalisation concerns.

It said: "A combination of increasing pressure on credit fundamentals and ongoing reliance on fiscally constrained government to maintain capital at levels desired by regulators argue for appropriateness of supported debt and deposit ratings at a level no higher than the sovereign," it said.

Discounting the agency's fears on the bank's ability to recapitalised, Bhattacharya said: "We don't believe that Moody's concern on recapitalisation is right. They have their views, but that is not our views. We do believe that they are not completely right in its rating action. We have many ways to raise capital including bringing the government stake down from 62.3 per cent now to raise capital."

Even 4.5-5 per cent GDP growth in FY14 good for India: KPMG

 
Consulting firm KPMG has said achieving gross domestic product (GDP) growth of even 4.5 -5 per cent in 2013-14 "should be good" for India as there has been a gradual slowdown in the country's economic activity.

"Initially, the government was talking of much higher growth. We have gradually come down to now below 5 per cent. My own estimate is that if we are able to even sustain 4.5-5 per cent, between there, it should be good," said Akhil Bansal, Chief Operating Officer, KPMG India.

India's economic growth had slumped to decade low of 5 per cent in 2012-13, and during the first quarter of 2013-14 slowed down further to 4.4 per cent.

Bansal added that the government needs to improve the country's infrastructure to promote growth.

Earlier, speaking on 'Practice of Strategic Consulting in India: Opportunities and Challenges', he said strategic consulting industry in the country is expected to grow at over 20 per cent in the current financial year.

"Consulting is still in nascent stage in India... Strategic consulting is required. I do not see any reason why it should not grow by another 20 per cent plus this year as well," he said.

He said about 70-80 good consulting firms are operating in India, but it (industry) is still pretty small.

"The estimated market size in India is about $300 million, which is very small. But the good thing is the way it is growing. Last year the growth was at about 22 per cent in strategic consulting and it came in an year when the economy was slowing."