Allahabad Bank plans to expand overseas operations

source:BL:Shobha Roy:Kolkata, Sept. 17,2010

Enthused by the performance of its branch in Hong Kong, Allahabad Bank plans to expand its overseas operations in a big way.

The bank plans to launch a second branch in Hong Kong and also establish its presence in Shanghai and Dhaka by the end of this financial year. At Shanghai, there will be a full-fledged branch and at Dhaka a representative office.

“Our Hong Kong branch is doing well. The business stands at about Rs 1,700-1,800 crore and last year we earned a profit of about Rs 12 crore. So we are very bullish about the overseas market. We plan to open one branch in Kowloon, Hong Kong, and another one in Shanghai.

We are planning to set up a representative office in Dhaka which will later be upgraded into a full fledged branch,” Mr J.P. Dua, CMD of Allahabad Bank, told Business Line.

The bank has applied to the Reserve Bank of India for approval. The overseas expansion plan would entail a total investment of about $40 million, he added.

“We are hopeful of getting the RBI approval soon, we will then apply seeking the permission of individual monetary authorities in these countries,” he said.

Allahabad Bank also has a representative office in Shenzhen, China. The bank would aim to take the share of overseas business to about five-to-seven per cent of the bank's total business in the next three years, he said.

According to RBI data available, eleven public sector banks and three private banks in the country together account for about 138 overseas branches in various countries as on March 31, 2009.

There are about 15 branches of various Indian banks in Hong Kong, four in China (one each of State Bank of India (SBI), Bank of India, Bank of Baroda and Canara Bank), four in Bangladesh (all SBI's branches), the RBI data say.

Rush of IPOs to beat SEBI results norm

Source :BL:

Tania Kishore Jaleel:

Mumbai, Sept. 17,2010

12 issues coming this month to raise Rs 4,000 cr.

A SEBI directive and a soaring secondary market have led to a flurry of initial public offerings aimed at making it before September 30.

Some Rs 4,000 crore will be raised through 12 IPOs that are being pushed through during this period. Since September 14, any given day of the month has seen at least two ongoing IPOs to date, and the rest of the month is going to be no different, at least until September 27.

"A big reason for this flood of offerings is because of the September 30 deadline set by SEBI," said Mr Sanjay Jain, Executive Director and Head of the Investment Banking Division at JM Financial Consultants. SEBI has said that if companies have issuances that hit the market after September 30, then they will have to publish their June quarter results. Those that enter the marker before that can file the DRHP with their March-end annual results.

What is interesting is that the June quarter results of many of the listed companies were below expectations, and that of yet-to-list companies are likely to be the same, said analysts. It is not a surprise then that they don't want to raise funds using their June quarter results.

Strong liquidity

The other reason for the spate of IPOs is the robust state of the stock market itself. "Liquidity is strong at the moment and stocks are looking up; this is one of the reasons why a lot of companies are ready to hit the markets now," said Mr S. Ramesh, Chief Operating Officer of Kotak Investment Banking.

The Sensex has risen close to six per cent over the last two weeks and reached a 34-month high of 19,600 during this time, and foreign institutional inflows too have been strong. FIIs have invested Rs 7,862 crore in the net in equities during the last week.

"Nobody is confident of the market, so now when there is liquidity many issuers want to take advantage of this window of opportunity," said Mr Jagannadham Thunuguntla, Head of Equity at SMC Capital.

No danger of crowding out

Some brokers believe that the Hindu religious period of Shraddh has also led to a lot of companies rushing to enter the market.

This is a span of time, running from September 24 to October 7, when Hindus do not make any purchases, and usually there is a drop in sales of cars, houses and other large assets.

Though the IPO market is currently abuzz with action, merchant bankers say that there is no danger of crowding out or bunching up of issues. "These are all small issues and liquidity will not get sucked out due to the number of issues. The total amount raised by all these issues is rather small," said Mr Apurva Shah, Managing Director, Corporate Finance, at Deutsche Equities India. The mega issues of Coal India and ONGC will hit the market after the second week of October and they will face no liquidity crunch, said brokers. Also, the turnaround of IPOs is now 12 days and investors get refunded quickly, said Mr Thunuguntla.

Tirupati Ink's follow-on offer closed on Friday, while Career Point Infosystems' second day is on. Eros International Media and Microsec Financial Services opened on Friday. Monday will see four companies announcing their issues all of which will close before September 27.

India, China likely to grow at a high rate: Geithner

Treasury Secretary Timothy Geithner in Washington on Thursday.

Source :PTI:The Hindu:WASHINGTON, September 17, 2010

India, China and other countries from the emerging markets are likely to grow at a high rate for sustained period of time as they have a long way to go to bring their people from agriculture into industry, U.S. Treasury Secretary Timothy Geithner told lawmakers.

“I think most economists would say that China is likely to be able to grow at a rate like 8 per cent for a sustained period of time because they have a long way to go to bring those people from agriculture into industry and to take advantage of the huge gap they still face between how people produce stuff in China and the frontier of technology,” Mr. Geithner said at a Congressional hearing on China.

“So that process of catching up would for China -- it’s true for India too, for many emerging markets -- justify some confidence of quite high levels of growth rate for a long period of time,” he said in response to a question.

He said that what matters to the U.S. and the world economy was the shape of growth, the pattern of growth, the growth strategy.

“To work for them over China it’s going to have to come from a rising middle class and from stronger domestic demand. It can’t come from the export-intensive model of the past. It’s just not a tenable strategy for them and they’re beginning that shift but they’re just at the beginning of that shift,” Mr. Geithner said.

The Treasury Secretary said the U.S. has been living through not just the devastating scars caused by the worst financial crisis, worse economic recession since the Great Depression, but a crisis that’s followed a large period of damaging underinvestment in the middle class, in education and public infrastructure, and terrible erosion in the basic fiscal position of the country.

“This is because we borrowed hundreds of billions of dollars to finance programs we weren’t prepared to pay for -- tax cuts for the rich. Those sets of policies have been terribly damaging to our country and they are going to take time for us to fix,” he said.

“The only credible long-term growth strategy for us as a country -- it’s going to have to rely on stronger investment in the U.S. and stronger export performance over time.

“And that’s not going to happen unless we restore what has been the great strength of the American economy over time, which is that -- the best place to innovate, the best place to come and build a company, the easiest place to come raise capital to finance some idea, and best universities, highest levels of sustained investment in basic science, research and development. Those are absolutely essential things for us to do,” Mr. Geithner said

Saraswat Bank plans to buy six co-operative banks

Source :The Hindu:pti:SEP 18 :2010

Having set a target to quadruple its total business to Rs.1 lakh crore by 2021, city-based Saraswat Co-operative Bank is eyeing to acquire up to six banks in the near future, a top official said.

“In all, over 66 banks have approached us. Twenty one of them are under our scanner, five are designated candidates and one will be acquired immediately,” bank's Chairman Eknath Thakur told reporters here on Friday.

Mr. Thakur mentioned two banks — Vadodara's Anyonya and Ichalkaranji Urban Cooperative Bank — as targets but said Saraswat's plans were meeting resistance because of legal issues in both cases.

Number of branches

The bank, which operates 203 branches now, also aspires to grow the total number of branches to 1,000 by 2021 through ‘organic and inorganic' growth, according to Mr. Thakur.

The biggest hurdle, Mr. Thakur said, was in the regulatory laws governing co-operative banks. “Capital is our biggest issue. We cannot hit the stock market... Raising Tier—I capital is the constraint. I am sure regulations will evolve and there will be newer instruments,” he said.

Saraswat Bank had suggested to the Reserve Bank of India to allow it to sell shares at a premium to investors, Mr. Thakur said, adding during exit, the bank could return the premium on the face value of the share the investor had paid earlier.

However, senior bank officials were tight-lipped when pointed out that such a system will not incentivise the investor, who has more profitable options to park his money which ensures in higher capital appreciation.

Lavasa eyes Rs 2,000-cr IPO

HT Correspondent, Hindustan Times:Mumbai, September 14, 2010: 23:24 IST


Lavasa Corporation, which is building an ambitious five-town Lavasa project in Pune district, on Tuesday filed the draft red herring prospectus with the Securities and Exchange Board of India to raise Rs 2,000 crore through its initial public offering. With around 10 per cent equity dilution the 



company will be valued at Rs 20,000 crore at the time of listing. The issue is expected to hit the market in November and will help the company reduce debt.


“The issue will help reduce the debt that currently stands at Rs 1,700 crore along with land expansion and project development,” said a source close to the development.


ICICI Securities, Kotak Mahindra Capital, Morgan Stanley India and Axis Bank are the book running lead manager to the issue.


The company plans to complete the first town in Lavasa in 2011 and the second by 2013-14.

CPIL IPO in Rs 295-310 price band

Source :HT Correspondent, Hindustan Times:Mumbai, September 14, 2010: 23:30 IST


Rajasthan-based Career Point Infosystems (CPIL), a tutorial services provider, has fixed price band of R295-310 per share for its proposed initial public offer (IPO), through which it plans to raise R115 crore. 


The company is entering the capital market on September 16, with a public issue of equity shares of R10 each for cash at a price, including a premium to be determined through a 100 per cent book-building process. 
The issue will close on September 21.


The proceeds from the public offering will be used for constructing and developing an integrated campus facility, expansion of classroom infrastructure and office facility and for acquisitions and other strategic initiatives.

BlackBerry told to give up its secrets by September 22

Source :Manoj Gairola, Hindustan Times :New Delhi, September 18, 2010: 01:09 IST


In a fresh move that could precipitate the existing stalemate between BlackBerry corporate e-mail service provider Research In Motion and the government over security issues, the Department of telecommunications (DoT) has asked the telecom service providers which offer BlackBerry services to install technical capability in their networks by the coming Wednesday to enable interception of these services.


The directive comes even as Jim Balsillie co-CEO of the Canadian firm, said the company had no capability to intercept enterprise (institutional) e-mails. 


The DoT notice, which effectively brings forward a two-month deadline the government earlier set BlackBerry, was sent to all the telecom service providers on Thursday, hours before Balsillie spoke to analysts in the US.


BlackBerry, commonly used by corporate executives for safe, closed-loop e-mails, has close to one million customers in India. Enterprise customers form about 50 per cent of the total subscriber base.


 “Please upgrade your technical capability for lawful interception facility of BlackBerry services, if not already upgraded. A compliance report that the network has been technically upgraded to intercept all BlackBerry services by law enforcement authorities must be provided to this office by September, 22, 2010,” said the DoT notice.

“RIM simply has no ability to read the encrypted information and has no master key to allow access,” Balsillie said.

IBM to manage Bharti Airtel's IT operations in Africa

Source :Hindustan Times :New Delhi, September 17, 2010

India's largest cellphone operator Bharti Airtel Friday said global technology major IBM will supply the computing technology and services for its telecom  network across 16 nations in sub-Saharan Africa. 

The two companies, whose partnership began in 2004, will finalise an agreement to this 

 

effect in the fourth quarter, the company said in a regulatory filing.

The deal will enable Bharti Airtel to provide innovative and affordable second and third generation mobile services across the continent.

"There are huge opportunities throughout Africa to transform how people communicate and how communities interact. Delivering on that opportunity through affordable mobile communications for everyone is our focus," said Sunil Bharti Mittal, chairman and managing director, Bharti Airtel.

Under the 10-year agreement, IBM will consolidate 16 different IT systems across Bharti Airtel's African operations into an integrated one and will oversee the management of all of the applications, data centre operations, servers, storage and desktop services.

"We are delighted to extend our successful relationship with IBM in South Asia to Africa. This transformational business delivery model, which will be a first in Africa's telecom industry, will bring enhanced efficiencies to our operations and help us deliver world-class mobile services to our customers," added Mittal.

According to a Deloitte report commissioned by the mobile communications industry association GSMA, only 40 out of every 100 Africans have a mobile phone. However, demand is growing at an average rate of 25 percent annually, and a 10 percent rise in mobile penetration could increase gross domestic product by 1.2 per cent in developing markets.

The partnership will enable the telecom operator to scale up its network and systems to cater to more than 100 million African customers by 2012.

Once the agreement is completed, IBM  will handle customer service for Bharti and provide the hardware, software and services to run everything from billing and call-traffic management to delivering new services like music and video.

Bharti Airtel a few months ago acquired most of the African assets of Kuwait’s mobile telecom company Zain.

Technology important to ensure financial inclusion: PM

Source : Hindustan Times :New Delhi, September 17, 2010

Prime Minister Manmohan Singh has called for better use of technology-driven models to ensure financial inclusion in the country and reach banking and social services to all sections of the society, even in remote villages. 


The directions came during a meeting he presided over to review the progress being made towards financial inclusion. 


The top brass of the Reserve Bank of India (RBI), including Governor D. Subbarao, attended, an official statement said on Friday.

The prime minister said every effort must be made to ensure that the schemes under the national rural jobs programme, pension and other social security measures reach even those in remote villages faster, more efficiently and with lesser intermediation cost.

The prime minister was briefed on the efforts being made to reach banking services by using information and communication technology to 73,000 rural habitations in the country having population of over 2,000 by March 2012.

“Only then will the rural hinterland become fully connected with the financial sector in India,” said the prime minister, who was himself the governor of the central bank before he became India's finance minister in 1991.

India presently has some 32,000 rural bank branches. In the federal budget tabled in February the government had committed to reach financial services to all villages that have a population of more than 2,000 people.

Reserve Bank deputy governors Usha Thorat and K.C. Chakrabarty, as also chairmen of the State Bank of India and Punjab National Bank, O.P. Bhatt and K.R. Kamath, were among those who attended the meeting