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This issue of towards has been dedicated to the theme “infallible Economy, terror-
free society”.
We believe that a resilient economy and terror –free society are the two most
important ingredients for a prosperous, developed and strong India in the global
arena. We can not boost or enjoy the economic growth unless our society is fear-
free and every one has equal opportunity to grow and bloom.
Rising Crude has been most disturbing element to the global economy. We are
presenting an in-depth analysis of crude oil in this issue. We have also included all
other regular columns of World economy, Indian economy and Corporate Analysis.
Our guest Mrs Anu Garg, HR, K. Raheja Corporate Services has contributed a very
beautiful article on Forgiveness, a tender human feeling which is very much lacking
in our day-to day life.
JP Morgan Chase Bank has lowered its forecast for 2008 from 39 to 40 per dollar. This
has been on the back of a widening current account deficit and fund outflow.
Given the central bank’s stance of non-intervention and the slowdown in capital
inflows, the rupee is only likely to weaken in the near term.
There is very little scope for the rupee to appreciate, in the absence of high foreign
portfolio inflows. Though chances of inflows resuming are quite high, considering the
drop in global risk aversion, Inflows haven’t picked up yet because of the inflationary
and growth concerns surrounding the economy.
The forecast for the Indian oil demand is set at 0.14 mb/d for the entire year. The industrial,
transport, and agricultural sectors are pushing the oil demand higher.
Indian Economy: In years to come
The World Bank warned that is expects the cost of staple foods such as rice to stay high for a
number of years. World Bank Managing Director Juan Jose Daboub told reporters that the
recent spike in food prices was not a short-term, temporary phenomenon that would go away
within months.
FDI in India
Foreign Direct Investment into India has surged to over USD 25 billion in 2007-08 and the
country's Foreign Exchange Reserve crossed USD 341 billion
4 advantages:
Earlier we cried,
now the tears have dried
our eyes open and red,
we are but, dead.
We have indeed become immune; we hardly seem to bat an eyelid; I guess our
senses are numb. Yesterday Hubli, today Jaipur,
tomorrow.........where?????????????
Our apathy is shameful.
Ajith Nambiar
These words are from a much unknown person named Ajith Nambiar, I do not know
him…I just got these lines on net, on an unknown blog….
But these lines tell a lot….and what tells so profound is about the world, we live in…….
How many more lives will have to be crucified on hypocrisy and malicious agendas of
perpetrators of barbarism, cruelty and shamelessness?
And how many times our shameless, corrupt and irresponsible government will shed
its crocodile tears with a very shallow promise that the harbingers of terrorism and
cruelty will not be let free….
It is utter shame and inattentiveness on the part of government and our very own
elected institution that every time few headless and criminal minded beasts rape the
common civil society and just escape away without being caught….
Terrorism needs no stronger word to condemn. But this condemnation should not
limit to perpetrators of these heinous acts.
Rather if one scrutinizes the events that lead to series of happenings and activities
around it…few telling truths only get exposed.
Our soldiers die guarding our borders against terrorists and infiltrators at, within
and beyond our borders….and more often than not…..sacrifice for motherland….
When a terrorist gets killed, our very own Mehbuba mufti and Farooq Abdullah visit
their home to console the family: News on 14th May…all media publications and
channels…..
When our own people like Sarabjit Singh get caught in Pakistan….and trialed on
utterly false claim of terrorism(which their own system denies several times),do you
know ,what our Minister of Homes Affeirs, Mr Sivraj Patil says?
These are the words of our Minister no.2 in North Block, responsible for nation’s
security.
Our politicians and people at the helm of affairs are much more responsible for the sorry state of
affairs, we are in…..
And statistics are very dangerous. Do you know that more than 2 crore Bangladeshis have been
imported by Governments of West Bengal , Assam and Former Prime Minister V.P.Singh in various
parts of country…….
Only because they could turn to their vote Bank…..Entire Assam has seen significant demographic
changes…..same in most of the West Bengal….
Left front Government in past 20+ years has distributed Ration Cards, Voter ID cards and
permanent resident certificates…..Mr V.P.Singh has stood at the Charminar maidan and
distributed Voter ID cards to millions of Bangladeshis……just to convert a vote bank….
More than 1 crore Bangladeshis vote for left front government in West Bengal to perpetuate their
throne there.
Whenever our security agencies and forces ask for more muscles and power to deal with terror
points, they are deliberately stopped from doing so…….We do not have a single legislature to fight
with terror suspects…….POTA was withdrawn, TADA was repealed……
It might look to you as a mere political stunt to win elections and gain extra political and tactical
millage….But believe me…game is not so simple….it is far more heinous and meticulously worked
out…….
There are people. at the top echelons of power corridors ho would leave no stone unturned to
destroy, spoil or more accurately sell off this country….so many times…the interest of this country
has been compromised ,sold for personal benefits and vote bank politics…….
And why to blame them…? What are I and You doing ….? Nothing...Literally nothing……
Remember tomorrow, it could be your city, your people, your mom, dad, brother, sister…or simply
you…..
For if Borders are not tight guarded, our Air-Conditioned homes are next to be infiltrated.
For…it is not for the great cause of nation, but for very own survival of yours…i am calling
you….do something…time is really running out…..save your life..And also of your loved ones.
There are people who are thirsty of your blood…their thirst for blood and appetite for power is
ever-ending…….save this nation …save yourself.
World Economy at a glance
Global Commodity price movements
IMF food price index fell by 0.2% while World Bank food The better than expected data and signs
prices rose by2.2%The slower growth of the food price that the Fed’s easing cycle is at an end,
index was mainly caused by the negative 17% m-o-m helped lift the dollar from its lows
growth in Wheat in April on expectation of higher global versus the Euro and Yen.
USA:
Lessened negative sentiment prevalent in the first quarter; US slowdown is expected to be mild.
Continued deep contraction in the Housing sector and easing but still existent financial market
tensions.
Slowdown might be U-shaped rather than V-shaped and recovery might not be forthcoming before
2009.
According to Fed Senior Loans Officer’s Survey: Share of bank tightening credit conditions for
companies & consumers approached a record 70% in April compared to 45% in January.
0.6% seasonally adjusted growth.
Continued strength in exports (+5.5%)
A build in industrial inventories, positive outlook.
Housing sector still in deep recession:
Residential investments fell by 26.7%,Subtracting 1.23 % from growth in Q1,
New and existing homes sales slipped further in March,
New home sales fell 8.5% on the month (36% YOY),
Seasonally adjusted annual rate of 526,000, down 13.3% from year earlier.
The National Association of Realtors (NAR) Reporting: Existing home sales fell by 2% in March to
an annual pace of 4.93 million or 19.3% below 6.11 million a year earlier.
Supply available for 10 months demand, compared to an average 6 months
1st Quarter GDP : Marked slowdown in private consumption expenditure growth of 1%,the slowest
pace since 2001.
Retail sales (50% of private consumption) fell by 0.2% in April.
Excluding Autos( -- 2.8% in April backed by 0.5% fall in March) & Parts, sales rose by higher-than-
expected 0.5%=> + Outlook
In April, Cars & LCVs sold at an annual pace of 14.4 million in April, Lowest in a decade.( Negative
Industrial Outlook)
Consumer confidence continued to fall: Cons.Con.Index at 5 year low 62.3, down from 65.9 in March
(base 1985=100).
Present Situation Index : decreased to 80.7 from 90.6
Expectation Index virtually unchanged at 50.1 versus 49.4 in March.
Payrolls in April fell for the 4th month continuously. Although with milder pace(20,000 compared
with 80,000)
Unemployment rate dropped by 0.1% to 5%.
ISM Index for Non-Manufacturing Sector (Services), representing bulk of the economy, surprised on
the upside.
The overall diffusion Index in April rose to 52 from 49.6 in March, rising above 505 levels, 1st time in
3 months. The index covers retail, transportation, health care, finance, real estate and construction.
The service sector employment sub-index rose an encouraging 3.9 points to 50.8
ISM Manufacturing Index (12% of GDP) stagnated at 48.6, below the 50% threshold.
Overall, the better-than – expected data and possible end of Fed’s easing cycle helped Dollar to
appreciate versus Euro and Yen.
Other World:
Japan:
Bank of Japan remains concerned about Japanese economic prospects; monetary policy to remain
on watch.
Benchmark rate at 0.5%
Virtuous cycle of higher production feeding into Income and spending has been weakening.
Growth forecast: 1.5% (below 2.1% earlier)
Euro Zone:
Economic slowdown evident as retail sales contract while German exports fall for a second
month.
Russia:
China:
GDP growth in 1st quarter of 2008 10.6 %.( Slowdown from 11.9%)
Inflation 8.5% in April.
Trade surplus narrowed as export slowed down to 22% in April from 31% in March.
Shipments to the US 11% (DOWN from 16% in March).
Industrial Output at 15.7% growth (March 17.8%).
towards….?
World Economy is at Cross-road. And only one path goes ahead from here. World
leaders, Analysts and think tanks are clueless about the short-term outlook of World
Economy. We have never been so uncertain about
our future. It seems to come out of the tunnel of
credit crunch and subprime issues, at
Where is the global Economy heading…..? least for the time being. However
before it could fully be salvaged from
Towards…an uncertain future which is hostage to so many factors the repercussions of US Capital systems
wrong- doings, it found itself in an
and outcomes….
entirely new set of issues.
We, team towards…? Have tried to analyze various variables of Crude oil at all time exponential peak of
global economy. $138+ /bbl.
disruptions in West Africa and Europe. Global food crisis getting prolonged
pushing more than 1 billion people at
the verge of hunger crisis.
The weakening US dollar and economic uncertainty added
to market volatility, along with sharp downward revisions On a technical note, we would be
tracking various parameters of global
to demand forecasts which were offset by signs of healthy
economy in our coming issues,
demand in China. beginning with current issue.
95% of the growth in demand for oil since 2003 has come from emerging parts of global economies,
such as India and China that are far less efficient in the use of oil than the developed economies.
There is a huge increase in oil consumption on account of an explosion in the use of private transport
in the developing economies.
Oil is priced in US dollars. The dollar has depreciated by 25% in real effective terms since 2002.
A falling dollar reduces returns in dollar denominated financial assets which causes a switch to
commodities as an investment class.
The imbalance between global supply and demand was modest in 2007 by mere 0.2 million barrels a
day or 0.2% of total supply.
Crude Worries:
Sanctions on Iran have meant that no new outside funds have come to bolster the current production
of around 4 millions bpd.
Iraqi Oil wells, despite US efforts, have not been able to reach production levels of the pre-war era.
England and Norway are seeing a downward production of their North Sea reserve.
Venezuela does not have the will and expertise to increase production.
Russia, which increased production by 4 millions bpd from 1996 to 2007, is unable to produce more.
Its production, which peaked at 9.9 million bpd, is gradually dipping. Russia has been biggest
contribution to growth in Crude capacity outside OPEC over past many years.
On a YOY basis, all major Oil producers are seeing a dip in their production capacity.
BP’s production fell by 2%, Shell’s Fell by 6%, and Exxon Mobile by 10%.
Rising unrest in Nigeria and nationalization of Oil fields in Venezuela and Russia are adding to crude
worries and supply concerns.
Retail Prices (Cents Per Gallon)
Crude Oil Spot and Estimated Contract Prices (Dollars per Barrel)
more
Crude Oil Spot Prices
Most Recent Year
dataAgo
Non-OPEC supply is expected to average 50.18 mb/d in 2008, an increase of 0.74 mb/d over the
previous year. On a quarterly basis, on-OPEC supply is expected to average 49.86 mb/d, 49.76 mb/d
and 51.16 mb/d respectively.
Total OECD oil supply is expected to reach 19.90 mb/d, a drop of 0.25 mb/d from the previous year.
On quarterly basis, OECD supply is expected to average 20.13 mb/d, 19.69 mb/d, 19.46 mb/d and
20.33 mb/d respectively.
According to preliminary data, total OECD supply averaged 20.04 mb/d in April.
Corporate Radar
Monnet Ispat
Monnet Global, the overseas subsidiary of steel maker Monnet Ispat and Energy (MIEL), is set
to acquire mining rights for a 250 MT coal reserve in Indonesia from PT Anzawara. The deal
would enable the company to start coal trading and look for lucrative markets in China, South
East Asia and India. Company has reached an understanding with PT Anzawara to sign a 25
year agreement to exploit coal resources for sales both in local and overseas markets. The deal
would involve a royalty payment to the original mining lease holders. It is expected that the
mine would yield a production of 1 MT by July this year. This would progressively increase to 3
MT in next couple of years.
While the company would trade this coal initially, it is also looking at option of setting up a
coastal power plant based on the imported Indonesian thermal coal from its mines. Company
sources said that more acquisitions of coal and iron ore mining assets were likely in coming
months in Africa and South East Asia. The company expects to pump in over $ 400 million into
its overseas subsidiary to manage funds for these acquisitions.
Monnet Global currently has a capital of $100 million.
The acquisitions of coal mines would serve the company’s 2 power plants that are likely to
come up in Maharashtra and Andhra Pradesh with a joint capacity of 4,000 MW. The power
plants would entail an investment of close to Rs 15,000 crore. MIEL has commissioned a
power plant of 1,000 MW in Orissa with an investment of Rs 4,200 crore. It expects a total
power plant capacity of 5000 MW by 2014-15.
Monnet Ispat is also diversifying its metal business by starting manufacture of long and flat
(branded products) steel products besides sponge iron.
The company’s turnover has almost doubled to Rs 1,200 crore during 2007-08 as against Rs
670 crore during the previous year.
Monnet Ispat (MIL) promoted jointly by Sandeep Jajodia and Jindal Strips in 1990 to
manufacture sponge iron has set up a plant to manufacture 1 lac tonnes of sponge iron per
annum at Village Kurd in the state of Madhya Pradesh.
Shareholding:
Promoter: 39.29%
Bihar Sponge
The company manufactures sponge iron with an installed capacity of 2.10 lakh tonnes in
Jharkhand. Company had been suffering on account of high prices of coal and iron ore. The
company is supposed to have been allotted an iron ore mine spread over 406 acres, which will
be operational by August. This is expected to save on raw material costs to the tune of Rs
3,000 per tonne as iron ore prices are expected to rise further. The company is likely to
increase its capacity of sponge iron.
TATA Steel and Vale have announced to undertake a large scale expansion of the Carborough
Downs Coal mines in Queensland, Australia with total capex of A$ 401 MILLION. It is being
done to ensure annual production of 4.9 million tonnes raw material to yield 3.7 MT of coking
coal and PCI coal from 3rd quarter of 2009. This step by TATA Steel is in accordance with the
company’s stated strategy of progressing towards raw material security for its global business.
The decision on expansion of production at Carborough Down Coal mines gives TATA Steel an
opportunity to explore larger areas for coal deposits.
Fiat group has announced to set up an international purchasing office in New Delhi that can
support its global production facilities in Europe, North America and Latin America. Company is
sourcing auto parts worth Euro 30 million at present from India and by 2010; the target is to
increase the number to Euro 50 million.
India, along with China at presents roughly around 12 – 15 % cost advantage over European or
American facilities.
BHEL
Heavy Electricals Ltd, India's state-run energy equipment maker, has taken over engineering
firm Bharat Heavy Plate and Vessels Ltd. The company also signed a memorandum of
understanding with Andhra Pradesh Power Generation Corp Ltd for setting up a 125 megawatt
coal-based power plant.
The government on Sunday notified imposition of up to 15 per cent export duty on various
steel products to contain rise of prices of alloy, a move that will hit the industry hard. Exports
of cold rolled (CR) coils, hot rolled (HR) coils and galvanised sheets would be allowed only after
paying a duty of 15 per cent, 10 per cent and five per cent respectively and this would come
into effect from midnight today. Consequent rise in steel prices have been contributing over
21 per cent to the current inflation in the country. Demand for steel growing at around 12 per
cent annually, the Government has planned to create more than 250 million tonnes of
additional steel making capacity.
TATA Nano to be run on Cuban roads
Joining the list of nations that are keen to have the Nano ply on their roads, Cuba said the
world's cheapest car from the house of Tatas has huge potential in the Caribbean nation.
Cuban Deputy Minister of Foreign Trade Eduardo Escandell Amador, who is leading a 19-
member delegation to India, would meet senior officials from Tata Motors in Mumbai next
week to explore business tie-ups. Besides Nano, Ramos said there is huge potential for Tata
trucks and buses in that country. Cuba is looking at increasing its trade with India to 300
million dollars over the next three years on the back of enhanced cooperation in sectors like
auto, power, oil and gas.
Telecom sector revenue to touch $35 bn by 2010: Assocham & PWC research
Current revenue: $ 22 billion in 2007.
During 11th plan, the sector would attract investment upto $76.6 billion.
Rollout of the 3G services will make sector more attractive with high speed data transfer
facilities.
Praj Industries Ltd, a leading biofuels technology company with a number of processes and
systems for ethanol and biodiesel production to its credit, has received a contract for supply of
key equipment to Vivergo Fuels, UK through its subsidiary, BioCnergy Europa B V (a joint
venture with Aker Solutions, Netherlands).The plant is designed to produce approximately 400
million litres of fuel ethanol a year (1,200,000 litres per day).The contract value for Praj is
approximately Rs 120 crore (GBP 15 million). This will be the fourth bioethanol plant by Praj in
Western Europe. Coal Ministry & SAIL forming SPV to explore and buy coal assets abroad
IMPL has technology based consumer and trade focussed business model positioned as an
"Online Technology Infomediary" in India. This business model focuses on the target age group
of 15-35 and the Company finds this highly synergistic to its business. The acquisition by
UNVML of IT Nation was through a combination of acquisition of equity shares from the
existing promoters of IT Nation and subscription to fresh equity shares of IT Nation.
Post completion of acquisition process UNMVL will hold 80% of IMPL.
Geojit Financial
Future growth: Overseas Business Ventures and distribution business:Growing at more than
100% a year.
ITC Q4 Results
The Company has posted a profit after tax of Rs 7356.40 million for the quarter ended March
31, 2008 as compared to Rs 6506.90 million for the quarter ended March 31, 2007. Total
Income has increased from Rs 34741.40 million for the quarter ended March 31, 2007 to Rs
40980.70 million for the quarter ended March 31, 2008. For the FY 2008, The Company has
posted a profit after tax of Rs 31201.00 million for the year ended March 31, 2008 as
compared to Rs 26999.70 million for the year ended March 31, 2007. Total Income has
increased from Rs 125007.80 million for the year ended March 31, 2007 to Rs 145584.30
million for the year ended March 31, 2008.
Consolidated Result: The Group has posted a net profit (after Minority Interest) of Rs 31577.60
million for the year ended March 31, 2008 as compared to Rs 27552.60 million for the year
ended March 31, 2007. Total Income has increased from Rs 130294.80 million for the year
ended March 31, 2007 to Rs 152452.90 million for the year ended March 31, 2008.
Marcator Line
Company on May 23, 2008 has taken delivery of a 2008 built vessel (Dredger). This is the
fourth Dredger in its fleet. Mercator reports close to 3-fold jump in Net Profit to Rs 370 Crore,
supported by growing fleet, buoyant shipping demand and firm freight rates in Dry Carriers
Segment
HDIL
The Group has posted a net profit of Rs 14098.40 million for the year ended March 31, 2008 as
compared to Rs 5480.00 million for the year ended March 31, 2007. Total Revenue has
increased from Rs 12247.90 million for the year ended March 31, 2007 to Rs 24332.90 million
for the year ended March 31, 2008.
Guest Column
Forgiveness- A Catch-22
Forgiveness is probably a “physiological dilemma” for all of us. One can be in a big mental
catch-22 situation where own ego makes this simple looking word “forgive” more complex than
it is.
I am emphasizing here more on this word because one simple word makes a lot of change in
life.
Forgiveness makes life Easy and Quick
More over it requires no Therapy or Digging up the past.
To experience this feeling of forgiveness requires to see the world quite differently and to open
to a whole new way of looking at life. It is to become free, joyous and empowered.
Although forgiveness brings many benefits, particularly to the ‘forgiver,’ to forgive is not always
easy. In fact, many people who would like to let go of anger and forgive, are stumped with the
question of how to forgive. While everyone may have an unique perspective on this.
The following strategies have been proven effective for a variety of people.
People don’t need to know that you’ve forgiven them; forgiveness is more for you than for the
other person.
In contemplating how to forgive someone, it may or may not help to express your feelings to
the other person. If the relationship is important to you and you would like to maintain it, it
may be very useful for you to tell the other person -- in non-threatening language -- how their
actions affected you. if the person is no longer in your life, if you want to cut off the
relationship, or if you have reason to believe that things will get much worse if you address the
situation directly, you may want to just write a letter and tear it up (or burn it) and move on. It
still may help to put your feelings into words as part of letting go.
The way you write about it and what you choose to focus on can make all the difference - it
means go for positive
Research shows that journaling about the benefits you’ve gotten from a negative situation
rather than focusing on the emotions you have surrounding the event, or writing about
something unrelated -- can actually help you to forgive and move on more easily.
Instead of seeing them as ‘the enemy,’ try to understand the factors that they were dealing
with. Were they going through a particularly difficult time in their lives? Have you ever made
similar mistakes? Try to remember the other person’s good qualities, assume that their motives
were not to purposely cause you pain (unless you have clear indicators otherwise), and you
may find it easier to forgive.
‘Sometimes it’s difficult to forgive if you feel that forgiveness leaves you open to the future
repeats of same negative treatment. It’s important to understand that forgiveness is not the
same as condoning the offending action, and its ok (and sometimes vital) to include self-
protective plans for the future as part of your forgiveness process. For example, if you have a
co-worker who continually steals your ideas, belittles you in front of the group, or gossips about
you, such ongoing negative behavior can be difficult to forgive. In fact, blanket forgiveness of
someone who is continually hurting you isn’t necessarily a good idea for your emotional health
anyway. However, if you make a plan to address the behavior with human resources, move to
another department, or switch jobs to get out of the negative situation, releasing your anger
and trying to forgive will bring the benefits of forgiveness without opening you up to further
abuse. You don’t need to hold a grudge in order to protect yourself.
Using the very simple technology of forgiveness, will help you let go of the anger, blame,
resentment and judgment around the situations that have kept your energy blocked. You will
come to see how, even though it doesn't always feel like it, the universe is truly supporting you
in healing your victim stories so you can become who you were meant to be, and that the
universe is constantly moving you in the direction of healing and spiritual growth. You may even
become open to seeing that the people who seem to be the biggest problems in your life are
the very ones who are your greatest teachers, and who are offering you healing opportunities.
From the moment your awareness is 'turned on,' all the pain of the past will evaporate, your
life will begin to work better, your relationships will improve and you will be so much happier.
You will be forever changed by this experience, for it is profound and long lasting.
After forgiveness comes reconciliation, the ability to be in the presence of the other person
without feeling angry or vulnerable. It is the highest point of healing. Reconciliation may or may
not take place following forgiveness, since it requires direct contact with the other person to
eliminate old patterns and create a basis for healthy emotional interaction.
Anu Garg
HR, K. Raheja Corporate Services
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