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Satyam Computer proposes buyback, will have limited impact

Satyam Computers has entered into damage control mode, proposing a buyback to return cash to shareholders. The IT services major recently proposed a buyout of two group firms –Maytas Properties and Maytas Infra- in the construction and infrastructure business. The move angered shareholders who went on a selling spree, from which its shares are yet to recover.
 

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Rail freight traffic in November up by just 1.3%

More evidence of the slowdown, not that anyone needs it. The Indian Railways play a key role in the transportation of certain petroleum products, cement and clinker, coal, iron ore and agricultural products. In FY08, volume traffic growth was high at 9% but FY09 has seen growth decelerate. In November’08, volume traffic is up by just 1.3% to 66.6mn tonnes and up by 6.5% to 534.6mn tonnes in the April-November period. Continue Reading →

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Tata Motors opens public fixed deposit tap

Company fixed deposits (FD) were once hot with companies and investors. They enticed investors with slightly higher interest rates and offered a little more to shareholders and investors. But as the fund raising options before corporates increased and India entered into a stable and falling interest rate regime, companies began to close their FD schemes. The main reasons were the slightly higher interest rates, commission to agents, administrative costs and compliance which made it unatttractive.

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Maruti Suzuki’s sales plummet in November

Maruti Suzuki’s sales flash for November’08 looks scary and explains why the auto industry is going on a production slowdown. It sold 52,711 cars during November 2008, down a fifth from the same period last year, and domestic sales were down 27% to 47,704 vehicles. In October –which people thought was a bad month– the respective figures were 7% and 8% respectively.
 

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Interest rates to go up, repo rate and CRR hiked by RBI

RBI’s quarterly policy announcement would have normally continued with its policy stance over the past few months. But anticipation of a change or a pause had built up, given the government winning the trust vote, and inflation easing (from 11.91% to 11.89%, how does that constitute easing). The changed political and supposedly economic environment would give it legroom to pause interest rate hikes.
 

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India’s monsoon forecast upgraded: good for farm and economy

The Indian weather bureau has updated its initial forecast for the Southwest Monsoon. In April 2008, the bureau had predicted that rainfall would be 99% of its long term average, plus or minus 5%. The long term average refers to a rainfall of 89 cms. The updated forecasts suggests rainfall to be near normal, and will be 100% if its long term average, plus or minus 4%.
 

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Funds become costlier, demand will get hit

Indian companies would have expected some action from the RBI to hike lending rates, but the pace of change must have left them worried. The RBI has hiked the repo rate –the rate at which RBI lends in the interbank market- by 50 basis points to 8.5% and has hiked the cash reserve ratio –the portion of deposits kept in reserve by banks- also by 50 basis points.
 

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Mutual fund investors escape loads on reinvested units

Mutual fund investors in India recently got a reprieve from entry loads, on investments made directly and not through an intermediary. Now, Sebi has given them another piece of good news; a bright spot in an otherwise gloomy equity environment. MF investors will not have to suffer entry loads on bonus units and units given on dividend reinvested.
 

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