The Week in Review for 19 February 2010

The Week in Review for 19 February 2010
Comment E-mail Print Share
First Published: Fri, Feb 19 2010. 09 35 PM IST
Updated: Fri, Feb 19 2010. 09 35 PM IST
New Delhi: Six months after talks with South Africa’s MTN broke down, Bharti Airtel is zeroing in on a new opportunity. On Monday it issued a statement confirming it has started negotiations with Kuwait’s Zain Telecom about acquiring Zain’s African business. The potential deal will be worth $10.7 billion and will give Bharti access to 42 million customers in a total of 15 countries in Africa.
The announcement of talks to acquire Zain’s African operations did not do Bharti’s stock much good. It’s shares fell 13% over the next two days because investors were worried it was ready to pay too much for the potential acquisition. Bharti Airtel shares closed at Rs278.25 on the BSE on Friday.
In other news, the government has given in to demands from companies on adjusting the prices of their FCCBs or foreign currency convertible bonds. Under the new norms, companies will be able to price their FCCBs on par with qualified institutional placements. The move will also let companies negotiate pricing with investors, which could be good news for firms that have scrips trading below the conversion price.
There was some relief for troubled national carrier Air India on Thursday after the government approved an infusion of Rs800 crores for it. The government also announced that Air India plans to cut its fleet of 146 aircraft down to just 105 aircraft by March of next year. Air India is to receive a total of Rs5,000 crore in government support if it implements enough cost cutting measures.
Also this week, the government took a step towards providing fertilizer subsidies directly to farmers. On Thursday, the Union Cabinet approved a nutrient-based subsidy or NBS regime that will provide farmers fertilizers that are customized to meet their needs. The NBS will focus on giving what are called nutrient-based offsets that will help target subsidies more effectively. In recent times the government has been concerned about the excessive use of fertilizers that are reducing the effectiveness of soil. The NBS scheme is expected to come into effect on 1 April.
The petroleum ministry plans to put up fewer oil exploration blocks for bidding during its next round of auctions. For the coming round of NELP auctions it plans to only offer blocks that have a higher hydrocarbon reserve and are can to attract more bidders. During the earlier NELP round, the government received bids for just 36 of the 70 blocks it offered.
With just one week to go before the Union Budget, the Prime Minister’s Economic Advisory Council unveiled its projections for the coming fiscal year. The council expects the economy to grow at 8.2% in 2010-11 and then reach 9% by the following fiscal year. But there are risks involved. The council says volatility in financial markets and increasing demand for goods can cause a spike in commodity prices. It’s also worried that food inflation could spill over into general inflation in the coming fiscal year.
India’s wholesale price index rose 8.56% in January on a year on year basis. This is the highest figure for the index in 15 months.
Also this week, food inflation rose nearly 17.97% in the week ending 6 February compared to a year earlier, making it the fourth consecutive week if increase.
Tata Steel’s announced its third quarter numbers. Consolidated profits fell 42% to Rs472 crore in the quarter ending December. The company has been weighed down by falling prices and the poor performance of its European unit Corus.
State Bank of India could get into providing loans for buying trucks and buses. Mint has learnt it’s looking to acquire a 49% stake in Tata Motors Finance Limited. SBI has expanded its car loan business in recent times while other banks have tried to get out of the business.
Comment E-mail Print Share
First Published: Fri, Feb 19 2010. 09 35 PM IST