Tokyo: Japan’s second- largest minicar maker, Suzuki Motor Corp., plans to reduce production costs in India as slower growth in sales this year threatens profitability in its biggest market. The company is targeting to cut costs by Re1 for each of about 20,000 components used in its car, spokesman Takuma Mizuyoshi said on Wednesday. Suzuki will work with vendors to trim the weight of each part by 1g, translating into a total reduction of about 20kg.
Suzuki and other auto makers face slowing growth in Asia’s third largest economy as interest rates at a seven-year high and inflation near a 16-year level squeeze spending.
Suzuki owns 54% of Maruti Suzuki India Ltd. Maruti boosted sales 5.8% in the six months to 30 September, slower than the 19.3% pace in the same period a year earlier.
Deutsche names Varma as global markets head
Hong Kong: Germany’s biggest bank, Deutsche Bank AG, appointed Munish Varma as head of global markets for India to boost sales and trading, said in a press release.
Varma joins from London where he was head of global principal finance in Europe, focusing on illiquid asset trading and principal investments, according to today’s release. He will report to Gunit Chadha, chief executive officer of India and Loh Boon Chye, head of global markets in Asia excluding Japan, the release said. Varma joined Deutsche Bank in 1999. He replaces Pavan Sukdev.
RBI issues final mobile banking guidelines
Mumbai: The Reserve Bank of India (RBI) on Wednesday said bank customers can purchase goods worth up to Rs10,000 and transfer funds for up to Rs5,000 a day through mobile banking. Releasing its final operative guidelines on mobile banking transactions in the country, RBI also directed banks to put in place a monthly transaction limit based on their risk perception of customers. RBI asked banks to stop offering fund transfers through mobile banking till the guidelines were finalized.
— Anita Bhoir
Mahindra joint venture plan rejected by FIPB
Mumbai: The government on Wednesday rejected a plan by Mahindra Defence Systems, a unit of Mahindra and Mahindra Ltd, to set up a defence joint venture with an overseas company.
The Foreign Investment Promotion Board (FIPB) rejected the proposal to make defence equipment, the government said in an emailed statement, without naming the overseas partner.BAE Systems Plc., Europe’s biggest defense contractor, planned a venture with Mahindra to build a version of BAE’s mine-protected vehicle in India, the Mumbai-based company said in February.
India, Germany ink social security pact
New Delhi: India and Germany signed a pact on Wednesday that enables Indians working on contracts of up to four years in Germany not to pay social security tax in that country provided they continue to make such contributions back home.
The reciprocal agreement, signed in New Delhi, applies to Germans employed in India too. Overseas Indian affairs minister Vayalar Ravi said this agreement will benefit some 10,000 Indians employed in Germany and nearly 5,000 Germans working in India.
“This will also make Indian companies (in Germany) more competitive since exemption from social security contribution for their employees will substantially cut their costs,” he said.
— Liz Mathew
Satyam, IT stocks fall on Goldman downgrade
Bangalore: Satyam Computer Services Ltd led shares of Indian software-service providers lower in Mumbai trading after Goldman Sachs Group Inc. cut its recommendation on the industry.
Satyam tumbled as much as 16% to Rs235 on the Bombay Stock Exchange, the biggest intraday drop since 22 January. Tata Consultancy Services Ltd (TCS), Wipro Ltd, and Infosys Technologies Ltd all fell more than 7%.
Goldman said on Tuesday it cut its investment ratings on Satyam, TCS and Wipro as its analysts turned “cautious” on the Indian technology-services industry from “neutral.”
The report cited lower earnings expectations because of the turmoil in the financial markets.
Reliance MoU produced in Bombay high court
Mumbai: The Bombay high court on Wednesday admitted “relevant” portions of the closely guarded memorandum of understanding (MoU) of the Ambani family, hearing a dispute involving the sharing of gas from the Krishna-Godavari basin.
Ram Jethmalani, legal counsel for the Anil Ambani-owned Reliance Natural Resources Ltd (RNRL), submitted an affidavit in the court along with some portions of the MoU that pertain to the sharing of gas, in a sealed envelope.
Reliance Industries Ltd’s lawyer Harish Salve, who had so far argued that the MoU was not necessary for resolution of the dispute, on Wednesday said he would retain his right to cross examine the document, which had formed the basis of the division of Reliance businesses between the estranged brothers, Mukesh and Anil Ambani.
The two-member bench admitted the documents produced by RNRL, saying it was “only for the purpose of consideration by the court” and that the MoU would be kept in a sealed envelope in the custody of the court registrar.The hearings will resume from 15 October.
— Bhuma Shrivastava
Crude oil price falls to 10-month low
Singapore/Tokyo: Crude oil fell to a 10-month low as the worsening financial crisis looked set to constrain consumption in the US and other developed nations.
Oil dropped to its lowest since 6 December as global stock markets tumbled on concern the credit crisis will topple more banks and slowing growth will cut demand.
Crude oil for November delivery fell as much as $4.01 (Rs195.3), or 4.5%, to $86.05 a barrel in electronic trading on the New York Mercantile Exchange.
Futures have declined 40% from the record $147.27 reached 11 July. On Tuesday, crude oil rose $2.25 to $90.06 a barrel in New York.
Foreign investment in bonds may be hiked
New Delhi:India is considering a proposal to allow higher overseas investments in corporate bonds, said a finance ministry official who didn’t want to be named.
The government in May this year raised the limit on holdings of government bonds by overseas investors to $5 billion (Rs24,350 crore) from $3.2 billion as part of efforts aimed at broadening the debt market. The limit on the overseas ownership of corporate bonds was doubled to $3 billion. The government has no plans to sell bonds overseas, the official said in New Delhi on Wednesday. The government is considering a plan to relax rules on companies borrowing abroad, the official said. India plans to sell government bonds overseas to raise funds for banks and companies, the ‘Business Standard’ reported on Wednesday, citing officials it didn’t name.
US withdraws suit against Ranbaxy
Mumbai: The US department of justice said it is withdrawing its legal suit against Indian drug maker Ranbaxy Laboratories Ltd after the company produced most of the original documents related to internal audit at its drug raw material manufacturing plant at Paonta Sahib in India.
The US department had moved a district court in July saying Ranbaxy had refused to share actual audit details of this plant, citing client-attorney privilege.
A Tuesday filing by the US department in the district court said the company has “produced substantially all the documents that were at issue and have agreed to replace promptly any produced documents that are hereafter determined to be illegible or of poor quality”.
Ranbaxy is already facing an import ban by the US food and drug administration, or FDA, on more than 30 generic medicines made in two of its factories because of alleged deficiencies in manufacturing processes.
Meanwhile, Daiichi Sankyo Co. Ltd, Japan’s third biggest drug maker, stuck to a Rs198 billion ($4.1 billion) bid for Ranbaxy.
Ranbaxy shares on Bombay Stock Exchange rose some 9% to close at Rs279.25 on Wednesday.
— C.H. Unnikrishnan and Bloomberg
Indiabulls posts 76% decline in net profit
New Delhi: Indiabulls Real Estate Ltd, the country’s fourth largest real estate developer by market value, has reported a 76.60% decline in net profit to Rs7.99 crore for the quarter to September compared with Rs34.15 crore in the year-ago quarter.
Revenues in the latest quarter increased to Rs81.56 crore from a comparable Rs25.27 crore in the previous year.
Analysts attributed this drop in profits to writing off of expenses relating to a listing of a real estate investment trust of the company as also losses at a power unit. The write-off could not be independently verified by Mint but a senior company executive confirmed losses at the power subsidiary. Indiabulls has posted a loss before tax and interest of Rs6.77 crore from its power business compared with a loss of Rs18.44 lakh in the same quarter a year ago, the company said in a filing with the Bombay Stock Exchange.
Indiabulls’ group spokesperson Gagan Banga did not answer calls for comment.
— Staff Writer