Mumbai, : The Indian rupee on Wednesday appreciated by 13 paise against the US dollar in early trade following increased dollar selling by exporters amid firm trend on the Asian equity markets. At the Interbank Foriegn Exchange (Forex) market, the domestic currency traded at 48.34/35 against the US currency, a rise of 13 paise over the previous close of 48.47/48 a dollar. The rupee had lost five paise at 48.47/48 yesterday after oil refiners bought US currency. Forex dealers said dollar weakness overseas supported the Indian rupee but some month-end dollar demand from importers and oil refiners capped gains in the rupee. Meanwhile, BSE Sensex was up 109.74 points at 9,825.90 in opening trade today, while Hong Kong Stock Exchange moved up by 1.2 per cent in early trade.

Geneva, : International airlines saw a huge 13.5 percent fall in cargo traffic in November and a drop of 4.6 percent in passengers as business shrank across the industry, the carriers' grouping IATA said on Tuesday. The figures, reflecting what IATA has dubbed a "chronic crisis" with revenues tumbling and hundreds of thousands of jobs at risk, marked the sharpest declines since the months after the September 2001 attacks in the United States. "The 13.5 percent drop in international cargo is shocking," said Giovanni Bisignani, Director General of the body, the International Air Transport Association which represents airlines operating 93 percent of cross-border flights. "As air cargo handles 35 percent of the value of goods traded internationally, it clearly shows the rapid fall in global trade and the broadening impact of the economic slowdown," he declared. "The industry is now shrinking by all measures." Although airlines had cut flight numbers by 1 percent in November in anticipation of falling demand, the actual drop in passengers had left planes operating with nearly 27 percent of seats empty against only 24 percent in November 2007. "We can expect deep losses in the fourth quarter," said Bisignani, who earlier this month forecast that total balance sheet deficits in 2008 of its some 230 members across the globe would reach USD 5 billion by the end of the year. The November figures, issued from IATA's Geneva headquarters, showed airlines in the Asia-Pacific area -- which accounts for nearly 45 pct of global air freight -- seeing the largest regional cargo traffic drop, a whopping 16.9 pct. Asia-Pacific, which includes the previously rapidly expanding China market, saw a decline of 9.7 percent in passenger numbers, also more than any other of the six world regions that IATA reports on separately. Carriers in North America -- which includes the United States, Canada and Mexico -- saw a decline of 14.4 percent in cargo a 4.8 percent in passengers, the last, IATA said, reflecting the near-collapse of the investment banking sector. Europe recorded an 11 percent slump in cargo and 3.4 percent in passengers as the major markets for its airlines -- intra-continental, the North Atlantic and Asia -- all sunk deeper into economic woes. At the start of December, IATA forecast that industry losses in 2009 were likely to total some USD 2.5 billion, despite a boost from falling oil prices after the hike in the middle of 2008 which had hit carriers hard. Commenting on the Tuesday figures, Bisignani did not suggest any revision of that prediction. But he said the overall economic gloom reflected by the November statistics would carry over into the coming year. "The industry is back in intensive care. Improved efficiency everywhere will he the theme for 2009," he declared.

BANGALORE: Bangalore continues to be the number one destination for IT/ITeS companies in the country. For all those who thought Chennai and Hyderabad were eating into Bangalore's status as the IT capital of India, here are some facts. The annual year-end report by global real estate consultants Cushman & Wakefield shows that Bangalore witnessed the highest commercial space absorption in the country of 10.4 million sqft - the highest in the country for the fifth consecutive year. Of that, IT and ITeS companies absorbed 88%, followed by automotive, telecommunications and other sectors. Leading the way was i-Flex Solution, which absorbed 1,100,000 sqft of commercial space in Whitefield, followed by 350,000 sqft of space each by ABB and ANZ IT in Whitefield and the Marathalli-Sarjapur belt. Chennai absorbed only 4.1 million sqft of commercial space of the 9.8 million sqft of supply this year, as against its absorption of 6.5 million sqft of space in 2007. Hyderabad witnessed a whopping 67% drop in commercial space absorption -- from last year's figure of 4 million sqft to only 1.3 million sqft this year. The total supply in the city amounted to nearly 3.8 million sqft. Mumbai and the National Capital Region (NCR) absorbed 8.5 million sqft and 8.6 million sqft of commercial space in 2008 respectively. "Bangalore & Mumbai were the only two cities that showed an increase in absorption from last year," reads the C&W report. Meanwhile, commercial rental rates in Bangalore appreciated between 4% and 9% in the peripheral areas and by a whopping 18% in the central business districts.

New York, : A USD 5 billion government bailout aimed at reviving General Motors Corp's ability to make car and truck loans has dealers hopeful that cash-strapped consumers will return to their showrooms. "A new car or home is wonderful, but a job is better."US sales of new vehicles, which are down about 16 percent through the end of November, are expected to drop again in 2009 as a result of the recession. Joe Piane, general sales manager at Ostrom Chevrolet in the Los Angeles suburb of Montebello, said his dealership's sales had been "devastated" since mid-October, when GMAC's lack of money prompted it to tighten credit. And even if the credit crunch eases, Piane believes consumers will be less likely to spend money they don't have. "I'm a believer that we never had a big economic boom. We just had a lending quagmire," he said. "I don't think business is ever going to be back to usual." Mark LaNeve, GM's vice president for GM North America vehicle sales, service and marketing, said GMAC's $5 billion in funding was crucial for the company to afford the zero-percent and low-interest financing on some vehicles. In addition to the USD 5 billion for GMAC, the Treasury Department also will also lend up to USD 1 billion to GM so that the company can purchase additional equity that GMAC is planning to offer as part of its effort to raise more capital. In exchange for the funding, the government will receive preferred shares that pay an 8 percent dividend and warrants to purchase additional shares in return for the money, the department said. The funding follows GMAC's approval as a bank holding company, which qualified it for the government aid and is expected to help GMAC avoid filing for bankruptcy protection. The Treasury did not require that GMAC engage in more lending as a condition for receiving the government investment, spokeswoman Brookly McLaughlin said. The USD 6 billion in total assistance means that Treasury has now committed more than the first USD 350 billion from the USD 700 billion bank rescue program also known as the Troubled Asset Relief Program, or TARP. Under the law governing the program, the administration must ask Congress for the second half of the funds and Congress can vote to block their release. A Treasury official said the financing for GMAC comes from the first USD 350 billion, since not all the allocated funds have been spent yet. For example, only about USD 162 billion from the USD 250 billion that was set aside in October for investment into the banks has been spent. But the official added, "it's clear that Congress will need to release the remainder of the TARP." The USD 5 billion investment in GMAC has already been completed. Treasury is seeking to finalize the USD 1 billion loan by January 16. This isn't the first time that the Bush administration has committed more than the first half of the bailout money. About USD 4 billion of the USD 17.4 billion in loans the administration promised on December 19 for GM and Chrysler LLC would have to be paid out of the second USD 350 billion. But it is far from guaranteed that Congress will release the extra money. Lawmakers from both parties have criticized the Treasury Department for lax oversight of the funds it provided to banks and for not using some of the money to prevent home foreclosures. Shares of GM closed up nearly 6 percent at USD 3.80.

Mumbai: India’s richest business houses would like to forget 2008 in a hurry. The market capitalisation of the top 20 business houses fell a whopping 65 per cent (Rs 16.73 lakh crore) over the previous year, courtesy the mayhem in the stock markets, performing far worse than the Bombay Stock Exchange’s benchmark Sensex (down 52.5 per cent) and the broadbased BSE-500 index (down 58.3 per cent). Predictably, the credit risk that began with the housing bubble has hurt real estate stocks the most. So no surprises that Ramesh Chandra, the biggest value creator in the bull markets, saw the market value of Unitech, his flagship realty firm, decline 92.2 per cent in one year, the most among the largest business groups by market capitalisation (m-cap). DLF is the other real estate firm to figure in the losers’ list with its m-cap eroding 74 per cent. The K P Singh-promoted firm ranks fourth in the list of firms that saw the biggest percentage fall in their m-cap. The sharp decline in metal prices hit the OP Jindal group hard, with a value erosion of 75.81 per cent in 2008. The market cap of four major steel and steel products firms in the group — Jindal Saw, Jindal Steel & Power, JSL and JSW Steel — fell 80 to 88 per cent. While the Adani group ranks third in the list, the other prominent loser is Anil Dhirubhai Ambani Group (ADAG), with a shareholder wealth erosion of 73.4 per cent. Reliance Industries, India’s largest private sector firm, couldn’t escape the global financial storm either. The company lost Rs 3.22 lakh crore (57.70 per cent) on account of domestic market volatility and economic slowdown. Overall, the top three business groups headed by Mukesh Ambani, Ratan Tata and Anil Ambani accounted for 44.5 per cent of the total value erosion of the top 20 business groups. The market cap ranking saw a dramatic change, with Unitech, Suzlon, the Bajaj group and Indiabulls exiting the top 20 list due to an over 84 per cent value erosion during the year. The four new entrants in the top 20 list are the Hero group, Cipla, Sun Pharmaceuticals and HCL Technologies. Brijmohan Lall Munjal, the patriarch of the Hero group, created wealth for his investors as his flagship and the biggest motorcycle firm, Hero Honda, appreciated 15 per cent. The Munjal group, which was ranked 42nd in 2007, climbed to the 12th slot as Hero Honda added a market cap of Rs 2,104 crore. Cipla and Sun Pharmaceuticals came into the top 20 list due to their relatively low market value erosion of 14.5 to 19 per cent. Only Sunil Mittal’s Bharti group with m-cap losses of 24.4 per cent has outperformed the BSE Sensex and BSE-500.

Mumbai, : Global rating agency Standard & Poor's on Wednesday lowered its credit rating on state-run refiner Indian Oil Corp 'on weak liquidity position and lack of timely support for losses'. S and P lowered the rating to 'BB from 'BBB-' at present, but said the outlook of the company as stable, the agency said in a release here. "The stable outlook on the rating incorporates expected near-term improvement in IOC's financial metrics and the government's ultimate support," S&P's credit analyst Mehul Sukkawala said. It reflects the deterioration in IOC's financial profile and liquidity position and delays in adequate support from the government, the release said. The liquidity crunch was primarily due to the time lag in issuance of oil bonds by the Indian government, it added. Lack of timeliness in subsidy and liquidity arrangement was negative as it has resulted in high volatility in IOC's financial and liquidity profile, the release said. IOC posted a loss of Rs 7,047.13-crore for the quarter ended September 30, primarily for selling fuel at subsidised rates against in spite of spiralling crude prices globally. Finance Ministry, on December 23, issued oil bonds worth Rs 22,000 crore for state-run refiners Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum, of which IOC's share stood at Rs 11,975.51 crore. With a view to support oil companies, the government had relaxed single-borrower limits for Indian banks to provide adequate credit to IOC and other oil marketing companies.

MUMBAI: It was a story of riches to rags. Lady luck deserted investors and punters during 2008 with stock markets losing over Rs 40 trillion, a figure that not many would know carries how many zeroes. Household names such as Tatas, Birlas and Ambanis, on whom small investors banked with their eyes shut, proved no guarantee for the safety of investment in the market where cumulative wealth of all listed companies got eroded by over 50% during the year. And analysts are predicting more troubled times ahead, at least till the first half of 2009. The industry's who's who are a part of the club where each member lost tens of thousands of rupees during the story of boom to bust, but the misery of lakhs of individual and small investors is manifold more. The lure of the stock market pulled in millions of investors during the boom period but for an overwhelming majority the story ended as a futile chase for a gold mine. Baffling the investors and analysts alike, the market that started the year with benchmark Sensex touching an all time high of 21,206.77 points, began melting from mid-January in tandem with global bourses on weak cues from the US subprime crisis that surfaced late 2007. The biggest public offer in India from Anil Ambani group company Reliance Power, which generated demand of Rs 7,50,000 crore, fell flat on its face at the time of listing in February to accelerate the fall in secondary market, even though corporate India declared unheard of profits. It was like a puzzle, even for the government which tried hard to re-instill the confidence in investors by saying time and again that fundamentals of the economy and market are good and they should not resort to panic selling. A classic case of panic selling was witnessed in the case of ICICI Bank, where investors panicked by rumours that the largest private lender was going bust. The scrip, which peaked at over Rs 1400 a share, came to less than Rs 300 at one time. The RBI and the government were pushed into an overdrive to assuage the fears that banking system in India was safe from the global meltdown - triggered by bankruptcy of Lehman Brothers in the US in September. What could make it even more painful is that observers of the market, which has registered a full-year fall for the first time in seven years, do not see any immediate respite from the meltdown. In the process, the total value of investors' holding in Indian stocks fell to just about Rs 30 trillion as the year 2008 drew to a close, from over Rs 72 trillion at 2007-end. This included promoters taking a hit of more than Rs 20 trillion on their stock wealth, while foreign investors emerged as the second biggest loser class with a plunge of close to Rs 10 trillion on their portfolio. Though smaller in comparison to the larger investor classes, retail investors also lost close to Rs 5 trillion -- which is possibly their biggest ever single-year loss. Stung by the sharp erosion in their wealth, foreign investors (FIIs) pulled out more than 13 billion dollars from the Indian stock market -- which is nearly three-fourth of over 17 billion dollars they had invested in previous year. On domestic front, the mutual funds saw their wealth plunging by nearly one-third or about Rs 1,50,000 crore. Looking back at the year, Religare Securities President (equity) Amitabh Chakraborty said, "There has been shortage of liquidity across system, and emerging markets, including India saw close to USD 14 billion outflow. Besides, redemption pressure in domestic funds aggravated the selling." "We went up too fast too soon and nobody believed that there ever could be a correction. Let us understand last year 2007 investments of 17 billion dollars and 2008 sales of 14 billion dollars - no way markets could go up. Driving force is FII. "Total equity investment of domestic mutual funds is under Rs 90,000 crore," Kejriwal Research and Investment Services managing director Arun Kejriwal said. The year 2008 would be remembered for the "yo-yo" ride the Sensex had as the Bombay Stock Exchange 30-share index climbed to its all-time intra-day high of 21,206.77 on January 10, and also witnessed its three-year low of 7,697.39 on October 27. "When the initial signs of sub-prime started appearing in US markets from late 2007, the financial markets started anticipating its impact and sent the markets crashing from early 2008," SMC Global Securities Director (Merchant Banking) Jagannadham Thunuguntla said. Later on with Bear Stearns sell-out overnight in April 2008, Lehman Brothers bankruptcy in September 2008, nationalisation of AIG/Fannie Mae/Freddie Mac in September 2008 have only validated the existing market fears. Hence, even though the event of the crisis may appear to have happened in September 2008, market was discounting this since the beginning of the year, Thunuguntla added. After their record investments in a single year of USD 17.4 billion in 2007, FIIs have pulled out as much as -- so far this year. The indices fell because FIIs pulled out, domestic funds sold since the last three months and retail and high net worth individuals (HNIs) have sold wherever they had the leverage. Big investment banks going bust with large proprietary books and P-note positions also added to the pressure, Religare's Chakraborty said

.

Pune, : Recessionary trends are affecting the Pune's auto sector including thousands of small ancillary units that have suffered setbacks in terms of reduced business. Pune's industrial belt of Pimpi- Chichwad witnessed the time-bound closure of Tata Motors plant in the last two months and its effect is spilling over to thousands of small ancillary units. The Tata Motors plant's three-day partial closure of its commercial vehicle sector ends today (December 31). Tata Motors and other auto-makers such as Bajaj, depends on 7,000 and more small ancillary units in the area for their sub-assemblies. A slump in demand for both four-wheeler and two-wheelers in auto sector and the resultant measures to match production accordingly has brought down the business of the dependent small industries to just 25 percent of what it used to be in October 2008, sources said. "It is becoming difficult for these small units to sustain themselves following reduced production resorted to by most of the major companies in the area which comprises, in addition to Tatas and Bajaj, Ruston Greaves, Kirloskar oil Engine Ltd, Atlas Copco etc," Nitin Bankar, Secretary, Pimpri-Chinchwad Small Industries Association told reporters today. The current scenario is affecting those units which employ an estimated 70,000 workers involved in the making of various auto components, he said. Bankar said that small industries were not in a position to retrench skilled workers in the wake of reduced job orders because it would be difficult to reclaim them once the things start looking up. To enable the small dependent units to tide over the prevailing situation, the government should declare exemption for them in the VAT and excise duties, he added.