Sahara may buy Hollywood icon, MGM

Source :Boston/New Delhi:Financial ExpressAgencies : Monday, Sep 20, 2010 at 1051 hrs IST

Diversified business house Sahara India Pariwar is in talks to acquire Hollywood-based film production and distribution major Metro-Goldwyn-Mayer (MGM) Inc.


Though details on the Sahara-MGM deal were not available, media reports suggest that the Lucknow-based corporate major has made a bid of about USD 2 billion to buy the debt of the Hollywood studio.


When contacted, a Sahara spokesperson said that talks are on, but it is too early to comment on the issue.


"On mutual interest, discussions are on, but it is too early to comment on the issue," Sahara India Pariwar Head of Corporate Communications Abhijit Sarkar said.


MGM, however, could not be reached for the comment. Sahara India Pariwar has a presence in the finance, infrastructure and housing, media and entertainment, consumer products, 
manufacturing, services and trading businesses.


Metro-Goldwyn-Mayer Inc is an independent, privately-held motion picture, television, home video and theatrical production and distribution company.


MGM is owned by an investor consortium comprised of Providence Equity Partners, TPG, Sony Corporation of America, Comcast Corporation, DLJ Merchant Banking Partners and Quadrangle Group. MGM has about USD 4 billion in debt.


The company owns the world's largest library of modern films, comprising approximately 4,000 titles, and over 10,400 episodes of television programming, as per details available on its website.


Its film library has received 205 Academy Awards, one of the largest award winning collections in the world, and includes numerous successful film franchises, including James Bond, The Pink Panther and Rocky.


The studio is facing possible bankruptcy and several companies have shown an interest in acquiring it. Earlier, there were reports that the Anil Ambani Group is interested in acquiring the debt-ridden Hollywood studio.


Spyglass Entertainment, Time Warner Inc and Lions Gate Entertainment Corp are also reported to be interested in acquiring the firm.

Microsoft launches Web browser IE9

Source:San Francisco: Financial express :agencies :Saturday, Sep 18, 2010 

 Microsoft Corp released the latest version of its Web browser, saying that it would work at faster speeds, deliver better graphics and be less obtrusive to users.

Internet Explorer 9, unlike previous versions and many competing browsers, pushes itself into the background.

"People go to the Web for site, not the browser," said Dean Hachamovitch, general manager for IE, at a press event in San Francisco. "Today Web sites are boxed in, the box is the browser."

IE9 is available in a public beta, or trial version, in more than 30 languages.

 Many of the world's most popular sites including Facebook, Amazon.com, Time Warner Inc's CNN, eBay and Twitter are taking advantage of IE9's new features.

The browser has become one of the most important programs on a PC. As people watch more video and use sites such as Facebook, Twitter and YouTube, browser makers are making their latest versions quicker and better at handling graphics.

Microsoft is promising a faster, cleaner, more secure version of its browser, one that will support evolving Web technologies, such HTML5, a standard for presenting content.

It is also more tightly integrated with the company's Bing search engine, which the company hopes will begin to eat away at the dominance of Google.

In IE9, the rendering of graphics and text has shifted to the graphics card from the CPU, accelerating speed and visuals. As a result, Microsoft said sites will look and perform more like applications that are installed directly on a PC.

IE9's tight integration with Microsoft's Windows operating system, which runs on most of the world's PCs, enables IE9 to use a computer's hardware in a way that rival browsers cannot, said Forrester Research analyst Peter O'Neill.

"This is going to make the Windows platform more attractive, and Microsoft hopes, help stop people from leaking away to other browsers," he said.

IE has been the market leader for many years, but has been losing share to Mozilla's Firefox and Google's Chrome.

IE had 51 percent of the worldwide browser market last month, according to StatCounter, compared to Firefox's 31 percent and Chrome's 11 percent. Apple Inc's Safari and Opera Software's browser had about 4 percent and 2 percent.

Overseas investors play the market a lot more than SEBI data show

RBI numbers point to even bigger swings.

Source : Business line :Lokeshwarri S.K:BL Research Bureau:Chaeeai:sep 20,2010

If investors went by the SEBI data alone, then it would seem that Foreign Institutional Investors (FIIs) pulled out almost $12 billion from Indian equity in 2008, making equity prices spiral down hopelessly. But, do you know that depletion in portfolio investment of external investors was a more staggering $34.8 billion in that year, according to the RBI data on such investments?

The numbers put out by SEBI are widely followed, because the data are published every day, making it a major sentiment-driver in the Indian stock market. On the other hand, the International Investment Position (IIP) report published by the RBI is quarterly and comes with a lag of one quarter, thus giving it little short-term interest.

As the above-mentioned figures show, portfolio investments by FIIs reported by the RBI at the end of every quarter, and the cumulative FII investment reported by SEBI on the same date, invariably differ as shown in the adjacent graph. The difference tends to widen in times of greater volatility and is narrower in more sedate periods.

In 2007, the year of the raging bull market, FII investments in equity increased by $43 billion, according to the IIP report. SEBI reported a more modest growth of $18 billion in that period.

The sharp appreciation of the rupee in 2007, RBI's apprehensions about managing humungous inflows, SEBI's clamping down on overseas derivative instruments et al, can be understood better against the backdrop of RBI's numbers than against SEBI's.

In the quarter to June 2009, when stock prices rose vertically after the UPA Government came to power, the IIP report showed a jump of $12.5 billion in FII portfolio position, while the increase in FII investment, according to SEBI, was half that number, at $6 billion.

Again, if we consider the quarter to December 2008, when the credit crisis was the most acute, following the Lehman collapse and hedge funds going on a selling spree, IIP reported erosion in FII position of $9.2 billion while SEBI reported a much lower number at $3.3 billion.

Why different

The most important reason for the difference in the numbers reported by RBI and SEBI is that they differ in the point of capture. While the IIP report is based on the transactions put through by FIIs in their custodial accounts held with banks and hence the inflow or outflow is captured when the money enters or leaves the country, SEBI data arebased on the actual purchase and sales of securities in primary or secondary market.

It is, therefore, possible that un-invested funds lying in custodial accounts would account for part of the difference. Profit booked by FIIs in the stock exchanges that have not been re-invested would also increase the FII portfolio investments as reported by the central bank. Similarly, losses booked in stock exchanges would deflate this number.

The other reason for the difference is that SEBI data captures only fund flow in to cash segment of the exchanges and does not account for the margin money that FIIs hold for trading in derivatives. This portion of FII funds is short-term money and could see greater inflow and outflow in times of turbulence. Fluctuation in the Indian rupee could be yet another cause for this disparity.

NHB mulls early refinance to housing finance cos

Source : Business Line :K.Ram Kumar:Mumbai, Sept.20,2010 Low and lower middle income segments to benefit.

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Normally, housing finance companies can tap NHB for refinance at concessional interest rates in respect of home loans, given by them only after their business stabilises i.e. two to three years after kicking off operations.

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To encourage flow of housing finance to low-income households, the National Housing Bank is examining the possibility of giving concessional refinance to housing finance companies, set up exclusively to fund the home ownership dream of these households, within a year of commencement of operations.

Normally, HFCs can tap NHB for refinance at concessional interest rates in respect of home loans, given by them only after their business stabilises i.e. two to three years after kicking off operations.

The proposal to offer refinance to HFCs, catering solely to the home loan needs of those in the low and lower middle income segments, early on is expected to have a beneficial ripple effect. For one, HFCs, based on refinance backing, will lend more.

 For another, knowing that home loan is available to those in the low income bracket, builders will be encouraged to construct affordable dwelling units.

Low and lower middle income households are those with a monthly income of Rs 3,000-20,000. A low-income housing unit is one whose maximum selling price does not exceed Rs 15 lakh.

Concessional refinance, according Mr R.V.Verma, Chairman and Manging Director, NHB, will galvanise all key players in the housing ecosystem — lenders as well as builders — to do more for low income housing.

“Since low and lower middle income households are not able to get home loans, builders are not creating affordable dwelling units.

 However, this situation is expected to reverse as housing finance companies focused on giving home loans to these households are coming up. Availability of early refinance to these companies will encourage flow of housing finance,” said Mr Verma.

Low and lower middle income households are a good credit bet for lenders, emphasised the NHB chief. Unlike the well-heeled, most of these households, subject to finance being available, will be able to buy a house only once in a lifetime. So, they will do their utmost to diligently service the home loan.

Credit delivery network

NHB regulates HFCs, extends refinance in respect of the home loans extended by primary lending institutions, and promotes housing finance institutions to improve/strengthen the credit delivery network for housing finance in the country.

The provision of affordable housing is one of the most formidable challenges that the country faces, according to the report of the high-level committee on affordable housing for all. Approximately 42.8 million persons or about 15.2 per cent of India's urban population live in slum settlements.

According to the Census of India, 35 per cent of urban households live in single room dwelling units and 68 per cent of such households have four members or more. 

The 11th Five-Year Plan has estimated an urban housing shortage of 24.7 million units with 99 per cent of the shortage pertaining to the economically weaker sections and the lower income groups.

Banks press pause button on power loans

Source : Business line :Priya Nair:Mumbai, Sept. 19.2010

The power sector could run into a funding crunch as banks are going slow on lending.

Many lenders have hit the sectoral credit exposure limit and concerns have emerged over environmental and coal mining clearances.

As a precautionary measure, banks are laying down conditions such as tying up coal linkages. Some are even insisting that the coal supply should be only from within India and not from countries such as Indonesia and Australia, from where a lot of companies are now trying to source coal.

Problems

But, domestic coal production is beset with its own set of problems like obtaining clearances from the Ministry of Environment, which can take ages or may not come at all.

A senior official from a public sector bank said that currently, disbursements are only for power distribution and transmission projects.

Agreeing that disbursements are not happening, even though sanctions are in place, Mr M.D. Mallya, Chairman and Managing Director of Bank of Baroda, said the bank looks into factors such as the capability of the promoter to ensure supply of coal and back-up plans in case supply gets affected.

“Coal linkage is the most important factor for a power company to succeed. After all, coal is the raw material,” he said.

BoB's exposure to the power sector would be around 7-8 per cent of it total loan book, which still leaves it with some room to lend, Mr Mallya added.

Power and roads account for a major part of the total infrastructure lending for most banks.

Additional plants

According to a report by India Infoline, as of July, India had 87 gigawatt of coal-based power generation capacity and work on an additional 90 GW of plants is under way. 

However, a senior bank official said that about 50,000 MW of power projects could be left in limbo, following the Ministry of Environment and Forests' recent classification of certain coal blocks as ‘no-go' areas or areas where there is a dense cover of forests and mining cannot be done.

An official from Union Bank of India also said the bank is restricting loans to the power sector and insisting that coal linkages, power purchase guarantees and security coverage need to be in place before sanctioning the loan.

“There is demand for funds and projects are coming up, but power companies are facing uncertainties with regard to clearances due to the Environment Ministry's rules.

 So, financial closures of these projects are not happening and sanctions are not getting converted into disbursements,'' he said.

The power segment comprises over 20 per cent of Union Bank's total advances. If the sanctions get converted, the bank will exceed its limits, he added.

U.S. sees 14 bank failures on average in every month of 2010

Source : Business Line and PTI :NEW YORK, September 19, 2010

Official data shows that 125 banks have collapsed this year; seven went out of business this month

In signs of persisting financial woes in the world’s largest economy, a whopping 125 American banks have bitten the dust in just nine months.

On average, 14 banks went belly up in every month of 2010 and the total failures are expected to surpass last year’s figure of 140.

The number of ‘problem’ banks, those which are at risk of failure, soared to 829 in the June quarter, the highest in 17 years.

The latest official data shows that 125 banks have collapsed this year and out of them, seven went out of business in September.

Last Friday, authorities shut down six entities - Bank of Ellijay, ISN Bank, The Peoples Bank, Maritime Savings Bank, Bramble Savings Bank and First Commerce Community Bank.

According to the Federal Deposit Insurance Corporation (FDIC), these failures would cost the federal agency more than $ 347 million. FDIC insures deposits at over 8,000 U.S. banks.

Small and medium banks were the most badly hit, with soaring unemployment levels resulting in increased defaults.

Despite stimulus measures and incentives for the labour market, the jobless rate stood at 9.6 per cent in August.

In August, 10 banks closed down, while the collapses were much higher at 22 in July. The highest number of collapses this year happened in April, when 23 entities went belly up.

“Without question, the industry still faces challenges.

 Earnings remain low by historical standards and the number of unprofitable institutions, problem banks and failures remains high...,” FDIC chairperson Sheila C. Bair had said in August.

Nokia launches dual SIM set

Source:PTI :the Hindu :CHENNAI, September 20, 2010

Handsets major Nokia on Monday launched its first dual SIM set — Nokia C1.

The set, available in three colours, will cost Rs. 1,999, the company’s Director (Sales) Vipul Sabharwal told reporters here.

The company would launch five or six models of dual SIM in the nest six to nine months, he said. The set launched today would cater to the needs of low-end customers and future sets would meet the requirements of middle and high-end customers, he said.

He said the mobile handset market in India was the second largest in the world, next only to the United States. He said Nokia did not have proposals to introduce CDMA sets in the Indian market at present.

Six US banks collapse as Community & Southern acquires three

Source ;Bloomberg and BS / San Francisco September 19, 2010, 0:52 IST Georgia’s Community & Southern Bank picked up $800 million in deposits as it acquired three of the six US banks that collapsed this week, bringing the year’s failure count to 125. Banks in Georgia, New Jersey, Ohio and Wisconsin were closed by regulators, according to statements posted yesterday on the website of the Federal Deposit Insurance Corp., which was named receiver.  This week’s failures cost the agency’s deposit- insurance fund $347.6 million.

“Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage,” the FDIC said in each of the statements.


 Banks are failing at a faster pace than last year, which saw the most failures since 1992, as real estate values remain depressed and economic recovery stays sluggish. 


Regulators closed 140 banks last year. 


The FDIC’s list of “problem” banks climbed to 829 lenders with $403 billion in assets at the end of the second quarter, a seven per cent increase from the 775 on the list in the first quarter, the FDIC said last month.



Community & Southern Chief Executive Officer Patrick Frawley paid a one per cent premium to acquire Douglasville, Georgia’s First Commerce Community Bank, and Bank of Ellijay, based in the Georgia town of the same name, the FDIC said. The acquirer paid a premium of 1.25 per cent for deposits of Winder, Georgia-based Peoples Bank.


Frawley’s bank, based in Carrollton, Georgia, is the newest bank in Georgia and had about $1.8 billion in assets and 21 branches in the west and northern parts of the state as of last month, according to a statement.

Anand Sinha to replace Usha Thorat as RBI dy governor

Source ;BS Reporter / New Delhi September 20, 2010, 0:53 IST

Reserve Bank of India (RBI) Executive Director Anand Sinha is set to replace Usha Thorat as deputy governor.

Finance Minister Pranab Mukherjee has recommended Sinha’s candidature to the Appointments Committee of the Cabinet (ACC).





A selection committee headed by RBI Governor D Subbarao had also recommended Sinha as the number one candidate on the panel, ahead of VK Sharma, the senior-most executive director.



Earlier this month, the committee had interviewed six of the seven executive directors for the job that falls due in November. The seventh executive director, C Krishnan, who was also called, declined to appear before the committee.


A deputy governor is appointed for a period of five years or till the age of 62, whichever is earlier.


Sinha, if cleared by ACC, will be the fourth deputy governor in the central bank. Of the four, two are RBI officers. Shyamala Gopinath, who was given a second term last year, is an RBI officer like Thorat, while Subir Gokarn is an economist and KC Chakrabarty a former public sector bank chief.


Unlike Gopinath, the government decided against giving an extension to Thorat, who oversees the department of banking operations and development, banking supervision, currency management, rural planning and credit department, among others. However, Sinha may not get the same departments as Thorat.

VA Tech Wabag sets IPO price band at Rs 1,230-1,310/share

Source ; BS :Reuters / Mumbai September 20, 2010, 11:55 IST

VA Tech Wabag, a player in water treatment industry, has fixed a price band of Rs 1,230-1,310 a share for its Rs 472 crore initial public offer, two bankers advising the deal said on Monday.

The offer opens on Wednesday and closes on Friday, they said, adding that the book for anchor investors will open on Tuesday. Bidding for retail investors will be extended for one more day, closing on Sept 27.


The book running lead managers to the issue are Enam Securities and IDFC Deutsche Equities (India)