The Mint Report for 29 December 2009

The Mint Report for 29 December 2009

New Delhi: India and China may be competing in many areas, but the two countries are also cooperating more in India’s power sector. Chinese companies are looking to partner with India’s government-run companies to protect their interests from troubles in the relationship between the two countries. Already, a Chinese company TBEA is in talks with Bhel for jointly making equipment in India. And in November, Larsen and Toubro began talking to Dongfang Electric Corp. for jointly working on hydroelectric projects.

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In a separate development, two government-run companies, ONGC and GAIL India plan to buy a stake in a Chinese pipeline. They’re looking to take a 12.5% stake in the $2 billion natural gas pipeline from Myanmar to China. The government is now likely to consider the proposal from ONGC and GAIL.

The RBI says the focus of it monetary policy is shifting. It now wants to use its monetary policy to manage the country’s economic recovery and contain soaring food inflation. The RBI is concerned the spike in food prices could lead to broad price pressures.

India’s largest lender, State Bank of India, has said there will be no hike in lending rates over the next six months. The bank said that while there were still inflationary pressures, there was also a surplus of liquidity in the market.

Civil aviation minister Praful Patel had encouraging words for the industry. He said the improvement in air traffic since October could lead to greater stability in the sector in 2010.

Max India says it will sell some its stake to a unit of Goldman Sachs. The company will offload a 9.4% stake to Goldman Sachs Capital Partners for about $115 million.

Jindal Power has filed offer papers for its IPO with market regulator Sebi. The company says it plans to raise Rs7,200 crore through the IPO and that it wants to use the money finance the development of its power projects.