Wednesday, September 30, 2009

India keen on tie-ups with leading global universities

The Ministry for Human Resource Development (MHRD) is keen to tie up with the worlds leading universities to ensure that its innovation universities are a class apart from the pack. During his visit to the US in late October, the minister for human resource development Kapil Sibal would like to firm up MoUs with leading US universities to collaborate with the proposed innovation universities. Among the American universities that are being approached are Yale, Standford and MIT. The government plans to set up 14 innovation universities over the next few years.

The government proposes to set up these universities as global centres of innovation and would like to draw on the talent and expertise of leading universities. We are looking for a collaboration for two or three of the innovation universities, a senior ministry official said. India has had a history of collaborating with leading international universities to set up her own world class institutions. The Iits and Iims were set up in collaboration and partnership with leading international institutes. The nature of the partnership will be different. We are better equipped now than we were when the IITs were set up, the official said. The exact nature of the partnership is still being worked out.

Mr Sibal, who will be travelling to the US ahead of Prime Minister Manmohan Singhs state visit in November, will leading a delegation to put in place the India-US Education Council. As part of the preparation, last week Mr Sibal met with Timothy Roemer, the US Ambassador to India. Sources said that discussions centred on chartered schools, vocational education options and twinning programmes at the higher education level.

The human resource development minister has been actively seeking tie-up partnerships with foreign education institutions. Earlier this month, possible areas of collaboration were discussed by UKs trade and investment minister Mervyn Davies and Mr Sibal. The British minister had indicated teacher training as one of the possible areas of collaboration.

At last weeks meeting Mr Sibal and Mr Roemer are understood to have also discussed the legislation that would permit foreign education institutions and universities to set up campus in India. A legislative proposal detailing out the legal and regulatory framework for foreign education providers is pending with the Cabinet Secretariat for approval by the Cabinet. The ministry would like the Bill to be introduced in Parliament during the winter session, so that it can be in place by the next academic session.

Source: The Economic Times

Monday, September 28, 2009

Mutual Funds get step-motherly treatment from distributors

Distributors of mutual funds, are selling more of fixed income products, ever since SEBI (Securities & Exchange Board of India) introduced the abolition of entry load on mutual funds. Under the new norms investors must pay fees separately to the distributor as compared to the earlier practice where commission were paid out of entry loads charged by the mutual funds. If initial trends are anything to go by distributors are now earning more from selling fixed income products compared to mutual funds, in the changed environment .

In recent months banks have slashed interest rates on bank fixed deposits leading to a revival in interest in small savings, post offices and GOI (Government of India) bonds. Company fixed deposits which made a comeback due to reputed corporates like Tatas and Mahindras raising money, along with NCDs (non-convertible debentures) from Shriram Transport Finance and L&T Finance, have found favour with investors. As per distributors corporate fixed deposits worth Rs. 600 crore (Rs. 6 billion) per month are being sold. Shriram Transport Finance and L&T Finance both raised Rs. 1,000 crore (Rs. 10 billion) each, through NCD issues in August and September. Compared to this, fresh sales in mutual funds are down. For the month of August 2009, equity mutual funds registered fresh sales of Rs. 4,184 crore (Rs. 41.84 billion) against Rs. 8,885 crore (Rs. 88.85 billion) in July 2009, a drop of 52.9%. Contribution of fixed income products in our product mix has gone up from 10% to 20% year on year for the month of August 2009, says Rajiv Deep Bajaj, vice- chairman and managing director, Bajaj Capital.

On the other hand, contribution from mutual funds, which was 20% in 2008-09 , slipped to about 10% since the regulation was introduced on August 1, 2009. Distributors on an average would earn as much as 3% upfront commissions through entry load and trail fees from sales of mutual funds. This fee is now down to about 1%, including both upfront and trail, for smaller players, making selling of mutual funds unremunerative. On the other hand the company fixed deposits are assuring at least 1% upfront commissions. Sales of mutual funds are down by 40%, and investors are buying more of fixed deposits and non convertible debentures. As the equity valuations go up, investors are seeking fixed income products. This makes the product easy to sell for distributors in tough times.

Source: The Economic Times

Atom-powered devices to enter India in a big way

Intel Corp, the worlds top chipmaker, expects its Atom processor to power a host of devices in the Indian market, in addition to the no-frills netbook or the nettop. These could be a mix of mobile banking devices, mobile internet devices (MID), point-of-sales terminals to even outdoor display terminals. Intel confirmed that a multitude of vendors were developing a spate of new applications in India. Talking to the Economic Times, Intel Technology India director (Marketing-South Asia) Prakash Bagri said Atom has the potential to power products like MID, mobile banking devices, GPS monitoring devices, personal healthcare gadgets, point-of-sales terminals, and even outdoor display terminals. Atom fits well in the embedded space and devices which deliver internet-centric experience or needs to be powered by internet. A lot of such devices are under development and may hit India soon, Mr. Bagri said.

Elaborating, Mr. Bagri said at least 35 vendors are developing MIDs with Atom. MIDs have a huge potential in India, once there is availability of a robust mobile data network. This will be possible when 3G and WiMax services comes into full play, he said. Incidentally, the company has just globally unveiled the Atom processor CE4100, the newest system-on-chip in a family of media processors designed to bring internet content and services to digital TVs, DVD players and advanced set-top boxes. Intel has lately seen huge success with the Atom that created a completely new category of entry-level computers. Sales of netbooks and nettops are growing upwards of 100% quarter-on-quarter in India. Such performance was visible even during the slowdown when computer sales in India saw a degrowth, said Mr. Bagri.

Despite Atoms success, Intel has no plans to discontinue its previous entry-level Celeron processor. While Atom allows us to come up with newer kinds of form factors, Celeron has its own set of distinct users, both in the enterprise and consumer segment. Hence, there is a fair chance that both processors can co-exist in the market, said Mr. Bagri. He, however, admitted that India has always been a major market for the Pentium processor family. The same trend is now seen in the Core range of processors. In fact, a lot of Pentium consumers are now upgrading to the Core family, he said. Intel is also going to focus on rolling out newer processors based on its super-fast Nehalem microarchitecture . It plans to roll out several such processors in India over the next 4-5 quarters across the entire range of desktop, laptop and server. As part of this, it recently unveiled in India a series of such processors which will bring this microarchitecture to mainstream desktop and entry server markets.

Source: The Economic Times

Relief for private foreign universities: Quota law not binding

Foreign universities and education providers setting up campuses in India are unlikely to be required to provide for reservations for Scheduled Castes (SCs), Scheduled Tribes (STs) and other backward classes (OBC). Even as Minister for Human Resource Development Kapil Sibal said that reservation laws as applicable to Indian institutions would apply to foreign universities setting up campuses in India. Only government education institutions are required by law to provide for reservation quotas; private unaided institutions are not required to set aside seats for SCs, STs and OBCs. Reservation laws as applicable to Indian institutes will be applicable to the foreign institutes. There will be no discrimination, Mr. Sibal said. Mr. Sibal said that he favours 100 per cent ownership of the Indian campuses by the foreign universities, a clear indication that the Indian campuses of foreign universities are likely to be private entities. This would mean that the campuses of these foreign education providers are likely to be exempt from adhering to reservation laws.

The Cabinet is expected to take up the legislation allowing foreign universities and education providers to set up campuses in India shortly. Mr. Sibal said that some well known foreign universities had already approached the Ministry with proposal for setting up of campuses. The minister hopes that the foreign universities may start operations by next year. Foreign education providers will be required to take clearance from the accreditation committee for quality control before being allowed to set up campuses in India. All foreign universities will be required to be accredited in their country of origin and be in existence for at least 10 years before setting up campus in India. Mr. Sibal favours the idea of foreign universities having 100 per cent ownership of their campuses in India. If there is 100 per cent ownership of private sector here, why not 100 per cent ownership of foreign universities, the minister said.

The minister accepted that that there would be objections from political parties to the provision of 100 per cent ownership to the foreign universities. The Left has been among the most vociferous opponents of the proposal to allow foreign universities to set up campuses in India. Mr. Sibal said, "There will be objection. There is no process of change without objections. And I welcome objections. I welcome dialogue".

Foreign education institutes will not be allowed to repatriate surplus income generated at their campuses in India. The surplus has to be spent for the expansion of the campus within the country. To ensure that no fly-by-night operators come to India, the aspiring institutes will have to go through the accreditation procedure of the country. The foreign education providers will be regulated by University Grants Commission (UGC) and any successive regulatory body.

Source: The Economic Times

Wednesday, September 23, 2009

2 Indian Americans win $500,000 MacArthur fellowships

Two Indian Americans, one a computer scientist and the other a mathematician, are among 24 winners of the prestigious MacArthur fellowships offering talented individuals unprecedented freedom and opportunity to reflect, create, and explore. Computer vision technologist Maneesh Agrawala, 37, and applied mathematics specialist L. Mahadevan, 44, will each receive $500,000 support over the next five years. MacArthur fellowships come without stipulations and reporting requirements. The unusual level of independence afforded to Fellows underscores the spirit of freedom intrinsic to creative endeavours.

Working at the intersection of visualisation, human-computer interaction, and computer graphics, Agrawala, draws on cognitive psychology to identify the key perceptual and design principles underlying graphic illustrations. Agrawala's novel approach to visualisation and computer communication in these and many other projects is transforming how we use, synthesise, and comprehend the ever-increasing volume of digital information we encounter in our daily lives. "Through these fellowships, we celebrate and support exceptional men and women of all ages and in all fields who dream, explore, take risks, invent, and build in new and unexpected ways in the interest of shaping a better future for us all," said MacArthur President Robert Gallucci.

Mahadevan is a mathematician who applies complex mathematical analyses to a variety of seemingly simple, but vexing, questions across the physical and biological sciences -how cloth folds when draped, how skin wrinkles, how flags flutter, how Venus flytraps snap close. He also considers properties of materials at larger scales, such as cell shape, adhesion, and migration in developmental biology, avalanche dynamics, or the role of water in determining the tensile characteristics of plants. Mahadevan received a BTech (1986) from the Indian Institute of Technology in Madras, an MS (1987) from the University of Texas at Austin, and an MS (1992) and PhD (1995) from Stanford University. Since 2003, he has been affiliated with Harvard University, where he is currently the De Valpine Professor of Applied MathematiHe holds visiting professorships at the University of Oxford's Mathematics Institute and the National Center for Biological Sciences in Bangalore, India.

The inaugural class of MacArthur Fellows was named in 1981. Including this year's Fellows, 805 people, ranging in age from 18 to 82 at the time of their selection, have been named MacArthur Fellows since the inception of the programme.

Source: The Economic Times

IITs need some regulation: Union HRD Minister

Responding strongly to the Indian Institute of Technology (IIT) faculty's threat to go on a hunger strike over service conditions, Union Human Resource Development (HRD) Minister Kapil Sibal said the government was not diluting the autonomy of the IITs but some regulations are necessary. Expressing anguish, he said: "We don't expect prospective Nobel laureates to go on hunger strike. Is this the conduct of faculty belonging to institutions of eminence?" On September 21, over 1,300 teachers of IITs decided to go on a hunger strike on September 24 to protest the government's apathy towards their demand for a higher pay package.

They have two major contentions -- the pay package of assistant and associate professors and a cap of 40 per cent on the number of professors who can be promoted to the next level. No reputed university in the world give tenures to freshers, the minister said. "All good universities expect you to teach for some years before giving you a tenure...three years teaching experience is needed before you can become a full-time faculty at the IITs. What's wrong with that?" Sibal asked.

Both the IITs and the IIMs have called the new pay regime "insufficient either for retention of existing talent, or for attracting new ones". "A higher grade pay for professors has been introduced this year. The Govardhan Mehta Committee had suggested a much lower percentage. At All India Institute of Medical Science, only 25 per cent of professors will move to a higher grade pay," Sibal said.He added that a proposal to introduce performance-related incentive scheme was under consideration by the ministry.

"The directors of the IITs and the IIMs have been asked to send me a proposal. I am willing for the government to incrementally let go if they give us a five-year vision and goal post and achieve it," Sibal said. But the IIT faculty did not appear convinced by the minister's arguments. "We respect the minister for his passionate education reforms. But perhaps he is misinformed. The IIT autonomy is sacred to us. We just want our cadre to be flexible as it has been all these years," said S.S. Murthy, president of IIT Delhi faculty association.

Source: The Hindustan Times

IIM, IIT faculty oppose HRD proposals on pay hike and autonomy

Professors of premier Indian Institutes of Management (IIMs) and Indian Institutes of Technology (IITs) are up in arms and have come together for the first time to reject the latest proposals of the Ministry of Human Resource Development (MHRD) on pay scales and autonomy, describing them as "infringement" on academic freedom. The faculties of IITs and IIMs are working on a joint charter of demands to be handed to HRD minister Kapil Sibal that includes better hikes and more autonomy. "It is for the first time that IIT professors and IIM professors are sitting down together to discuss what is there in the Sixth Pay Commission and how it is affecting us," said Bharat Sheth, a professor at IIT-Mumbai. The IIM-A faculty council has already met in Ahmedabad on Saturday and opposed the HRD ministry's order on pay structure and asked the institute director to delay its implementation by a month, before future course of action is decided by them.

"The faculty council has termed the recent Union HRD ministry orders on pay structure as infringement on academic freedom and has asked the institute director to postpone its implementation by a month," a senior faculty council member and IIM-A professor said after the council's meeting, voicing disappointment. The council voiced its disappointed at the response of the MHRD to the memorandum, seeking a pay hike that IIM and IIT professors had earlier submitted to the ministry. IIM-A also decided to take up the issue with other IIMs and IITs and premier institutions like the IISc, Bangalore.

Dr Sheth said the issue was not of money and pay, but autonomy, flexibility and hiring. "Other institutions like the NITs and IISc are also affected and we are having discussions with them also,"he said. Sheth said the unhappiness in the prestigious Centrally Funded Technical Institutions (CFTIs) stems from the fact that the MHRD is trying to micromanage these institutions. The ministry's plans are going to be "very detrimental" to the future of these institutions, he said.

The MHRD has recently come out with a fresh notification on the pay structure of CFTIs, which said the post of lecturer-cum-post-doctoral fellows will be re-designated as assistant professor. They will be appointed on contract basis, it stated. The government also put 40% cap on promotion of professor to senior grade on the basis of performance, which led to wide resentment amongst the IIM-A faculty. "The notification that prescribes limit to the number of professors (40%) that can exist as a proportion of the professors in the institute drawing highest grade pay is totally uncalled for," a senior faculty council member said. "Promotion of the professors should be based only on academic merit. It should be regardless of how many professors already exists in any pay grade," the member said, adding, the new order also imposes a cap on the number of domestic and international conferences a professor can attend during a year.

Source: Financial Express / PTI

UGC disagrees with Yashpal Committee report

Three months after the Yashpal Committee gave its report and the government having already moved forward to create the National Commission for Higher Education and Research (NCHER), the University Grants Commission (UGC) has said the panel’s “recommendations do not appear to be in accordance with the thinking of the framers of our Constitution”. UGC has also said that the committee “missed the historic opportunity to undertake a comprehensive review of the higher education system, and of the functioning of UGC which is overdue since the report of the education commission (1964-66)”.

Asked for his comments, UGC Chairman Sukhdeo Thorat, who was a member of the Yashpal Committee, said, “It is a confidential communication to the ministry. I have been advised not to talk.” UGC employees have been protesting against the creation of NCHER asking what will happen to them once the new body comes into being. UGC’s comments sent to HRD ministry late last week and accessed by the leading national daily, The Times of India, not only finds fault with the way the committee dealt with its terms of reference but also the methodology adopted and the concept of NCHER and the powers proposed to be given to it.

Agreeing that higher education needs reform, UGC says, “Creation of a single regulatory authority by subsuming the existing regulatory bodies, as suggested by the committee, does not appear to be the only viable alternative.” On the methodology, UGC points out that the full committee met only twice, “a period too short for any committee to document a full discourse on the evolving deliberations”. UGC also said that the committee held consultations with a select group of stakeholders and bypassed an empirical study of the higher education system. It also said that no discussion took place with the regulatory bodies. UGC has specially pointed out that “it was entitled to have interaction with the members of the committee but this was somehow not undertaken by the committee.”

Disagreeing with the concept of NCHER, UGC has given two alternatives. One, create an inter-coordination council of higher education of all bodies, while retaining all the present regulatory bodies with necessary reforms in their regulatory framework. Two, reform UGC with a governing body comprising a full-time chairman with members from various streams. It should also have a governing council consisting of chairpersons of other regulatory bodies and state higher education councils.

Source: The Times of India (The news item is by Akshaya Mukul)

MCI move to impact medical research in India

In a move which will have far-reaching impact on research in medicine in India, the Medical Council of India (MCI) has made authenticated research mandatory for promotions of faculty in all the 299 medical colleges in the country. While the minimum service period required for promotion from assistant professor to associate professor rank has been reduced from 5 years to 4 years, at least two research papers would be mandatory to get the promotion. As for promotions from associate professor to professor level, the service period comes down from 4 years to 3 years, but 4 research papers would be required to get the promotion. This change in MCI regulations, which was notified recently, would come as a shock to some 20,000 assistant professors and associate professors, who have hardly carried out any research. The research will have to be of quality level to make it into any one of around 300 journals in India which are indexed by a UN certifying agency.

Only 10 per cent of journals brought out in India have qualified for the International Standard Serial Number (ISSN) number given out by the Paris-based agency. There are 6800 index journals worldwide and, according to date available with MCI, content generated from India is just 1.2 % — a sad commentary on the lack of research activities in India which has the highest number of medical colleges in the world. “This notification will come into effect immediately and we hope this would revive research activities across all government and private colleges. The MCI regulation earlier was that research is desirable. Now we have said research is mandatory,” said MCI chairman Ketan Desai.

Source: The Times of India

India to explore PPP mode for education

In a clear move to promote public-private partnership (PPP) in school education, the Ministry of Human Resource Development (HRD) has set up a roundtable consisting of educationists and representatives of the private sector. Though the mandate of the 11-member roundtable, which will hold its first meeting on September 25, is to suggest ways in which school education can be revamped, sources said, “The ministry wants a synergy between government and private sector. There are big plans in school education and such a roundtable will help thrash out issues.” The ministry has already proposed the setting up of 6,000 model schools out of which 2,500 will come up in the PPP mode.

The roundtable consists of Arun Kapur, Director, Vasant Valley School; Rakesh Bharti Mittal, Bharti Foundation; Devi Kar, Principal, Modern High School, Kolkata; Anita Rampal, Central Institute of Education, Delhi University; Harpal Singh, Fortis; Manju Bharatram, Chairman, Shriram Schools; Harsh Sethi, Consulting Editor, Seminar; Anil Bordia, former Education Secretary, Government of India; Krishna Kumar, Director, NCERT; Cyrus Vakil, Director, Mahindra United World College of India, Pune; and Sailesh Shirali, former Principal, Rishi Valley School.

Though most of the members said they would comment only after the first meeting, Ms. Manju Bharatram said, “I would like certain issues to be clarified. There are certain questions about the Right to Education (RTE) law and public-private partnership.” She said as far as inclusive education was concerned there are three ministries — HRD, labour and social justice — involved in various aspects of vocational education. “Should it not come under one ministry?” she asked.

In case of RTE, she said private schools would like to be involved in the framing of rules. In general, she said, there is a need to change many laws that govern running of schools in the country. In case of Delhi, she said, rules were made in 1973. “A more flexible environment is needed be it in curriculum or school administration,” she said.

Source: The Times of India (This news item is by Akshaya Mukul)

Tuesday, September 22, 2009

IIT professors protest - to teach on empty stomach

The faculty of premier Indian Institutes of Technology (IITs) all over the country will teach but on an empty stomach on September 24 in protest against the pay revision announced by the Ministry of Human Resource Development (MHRD) on September 16. But their protest has not gone down well with the IIT directors who label it as an “ego issue”. The matter seems to have hit a logjam.

On September 25, a meeting between IIT faculty and directors has been called to sort out the issue. “The IIT faculty is raising ego-based issues not data-based issues. They want the moon,” one IIT director said. The All India IIT Faculty Federation (AIIITFF), however, says their protest is not about money. “There is a big misconception about our protest,” one IIT-Bombay faculty member said. In fact, the teachers point out that the pay commission recommendations have gone beyond the mandate and “infringe on the autonomy” of IITs.

“We have a flexible cadre system that cannot accept regulations on the number of people hired at any level. Specifications such as 10% of the total faculty has to be hired at the level of ‘assistant professors on contract’, only 40% of professors with six years of experience at that level can advance to the next academic grade pay (AGP), etc. go against this spirit and cannot be accepted,” AIIITFF said in a statement. “How is it about money?” one faculty member asked. But one IIT director said, “There is no way that autonomy of IITs can be affected by the government order. Every professor in IIT has enough independence.” It is also pointed out that the faculty bypassed the directors and directly approached HRD minister Kapil Sibal.

AIIITFF has also pointed out that there is an open selection policy for all advancements in career, wherein the candidates are judged on academic criteria like teaching effectiveness, sponsored/consultancy projects undertaken, masters and PhD thesis guidance, research publications and corporate responsibilities. “Those who meet the criteria advance to the next level.” There is no space for defining in advance limits to how many people can be promoted, AIIITFF said.

In a somewhat related development, the Board of Indian Institute of Management, Ahmedabad will meet on September 25 to take a decision on the implementation of a new government order on pay structure that has been opposed by the faculty members, sources said. The IIM-A faculty council during its meeting held on Saturday had opposed the government order on pay revision and asked IIM-A director Samir Barua to delay its implementation by a month.

Source: The Times of India

Students to pay more for B-schools using CAT score

The Indian Institutes of Management (IIMs) are laughing all the way to the bank. After hiking tuition fee for two years in a row, the premier management institutes have escalated fees for hundreds of other B-schools that use CAT (Common Admission Test) scores for admitting students. Officials of these other institutes feel the additional bill, charged to close to 150 institutes that admit students on the basis of the CAT, will eventually be passed on to applicants.

Close to 150 B-schools have signed an MoU with the IIMs to use CAT scores to admit students this year and, so for IIMs, B-school admissions are big business. Registration charges have been hiked from Rs. 75,000 to Rs. 200,000 for every B-schools that wishes to take its students on the basis of CAT scores. This translates to an earning of Rs. 3 crore (Rs. 30 million) for the IIMs but, over and above this, IIMs will also pocket Rs. 200 for letting out individual scorecards (up from Rs. 150 charged earlier).

CAT’s popularity has gone up after the HRD ministry listed it as one of the five entrance tests to determine B-school admissions (the others are XAT, ATMA, MAT and state CETs); most top-ranked B-schools now have CAT as the base test for admitting students. Departments of several universities, like the Osmania University, the University of Lucknow, the Punjab Agricultural University, the Banaras Hindu University, the Rajasthan Agricultural University and the University of Hyderabad, accept CAT scores. Some non-business management schools, like the University of Petroleum and Energy Studies, National Power Training Institute and National Insurance Academy, also swear by the CAT. So CAT has been IIMs’ golden goose. An RTI response revealed that the IIMs raked in Rs 28.36 crore (Rs. 283.6 million) in 2007-08, up from Rs. 24.16 crore the previous year, from CAT.

Source: The Times of India

National Higher Education Finance Corporation proposed

In a major step aimed at attracting serious players in higher education and ensuring that existing ones do not face financial constraints for expansion, the Ministry of Human Resource Development (MHRD) has mooted the idea of a National Higher Education Finance Corporation (NHEFC).

Union HRD minister Kapil Sibal told India's leading national daily, The Times of India, that such a body is needed for higher education. He said the ministry is examining the proposal and an internal note has been circulated. ‘‘It is difficult to finance new higher educational institutes through plan expenditure alone,’’ he said, adding that a final decision is yet to be taken. But sources said NHEFC could be on top of the ministry’s next 100 days’ agenda.

NHEFC, which will have an authorized share capital of Rs. 10,000 crore (Rs. 100 billion), proposes to directly finance any university duly recognized under law for its creation or improvement of infrastructure. It will grant loans and advances to any scheduled public sector bank or such other financial institutions approved by the corporation for refinancing of educational loans to students. It will also provide venture capital to a university to incubate any scientific or technological idea or product that has emerged as an outcome of any research undertaken by the university.

The proposed NHEFC will also set up an endowment and corpus management fund of higher educational institutions which can manage the endowment funds of the universities and higher educational institutions and provide a higher return than bank deposits. Aimed at philanthropy, NHEFC will directly support at concessional rate establishment of any higher educational institution that has raised at least 25% of its project cost through charitable donations or contributions.

The internal note estimates that the requirement of funds for expansion of higher education will be around Rs. 60,000 crore (Rs. 600 billion) in 2009-10 which will go up to Rs. 1,55,000 crore (Rs. 1550 billion) in 2016-17 to achieve the objective of 25% Gross Enrolment Ratio. NHEFC can be set up through an Act of Parliament or can be a professionally managed corporation under section 25 of the Companies Act.

Source: The Times of India

Screening test for foreign medical degree holders

A graduate from a premier medical school like Harvard or Johns Hopkins cannot practice in India until you clear a screening test conducted by the Medical Council of India (MCI), the Supreme Court has ruled. The screening test will also be mandatory for students who have got MBBS degrees from a country with which India has a reciprocity agreement.

Under the agreement, foreign nationals with medical degrees from their countries could practice in India without appearing in the screening test and Indians with MBBS degrees from home could practice there. But the new SC ruling has changed the rules. From now, even if an Indian student gets a medical degree from a foreign country covered under the reciprocity clause, he will have to clear the MCI’s screening test to practice in India.

At present, certain medical qualifications of UK, Australia, Canada, Italy, Japan, New Zealand, South Africa, Ireland, Nepal, Pakistan and Bangladesh are covered under the reciprocity clause. The worst affected would be Indian students who had made a beeline for medical colleges in Nepal after the MCI refused to recognize medical degrees from institutes in erstwhile USSR countries. Now, Indians with degrees from these countries too must clear MCI’s test.

Nepal students worst affected by SC ruling New Delhi: Indian students from colleges in Nepal will be badly affected by the SC ruling which has made screening test mandatory for students who have MBBS degrees from abroad. Dismissing their plea against the screening test, a Bench comprising Chief Justice K G Balakrishnan and Justices P Sathasivam and J M Panchal said, ‘‘Appellants have to appear in the screening test conducted by the National Board of Examination in terms of the Screening Test Regulations made by the MCI.’’ Accepting the argument of senior advocate Maninder Singh, who appeared on behalf of MCI, the Bench clarified that the screening test was mandatory for all Indian students who wanted to practice in India after obtaining MBBS degrees from foreign universities. ‘‘A person who is a citizen of India and obtains a medical qualification granted by any medical institution in any country outside India...shall not be entitled to be enrolled on the medical register maintained by a state medical council or to have his name entered in the Indian medical register after March 15, 2002, unless he qualifies the screening test prescribed,’’ said Justice Panchal, writing the judgment for the Bench.

The screening test applicability from March 15, 2002, was envisaged keeping in mind the fact that a large number of private agencies started sponsoring students for medical studies in institutions outside India for commercial considerations. ‘‘It was noticed that such students also included those who did not fulfil the minimum eligibility requirements for admission to medical courses in India. Serious aberrations were noticed in the standards of medical education in some foreign countries, which were not on par with standards of medical education available in India,’’ the SC said justifying its ruling. It was therefore felt necessary by Parliament to make a provision to enable MCI to conduct a screening test to satisfy the regulatory body about the adequacy of knowledge and skills acquired by citizens of India, who obtained medical qualifications from universities or medical institutions outside India.

Source: The Times of India

Asia resilient to crisis: ADB

Asia has proved to be more resilient than expected to the global financial crisis with economic growth rebounding after governments adopted supportive monetary and fiscal policies, the Asian Development Bank said today (September 22). The Manila-based multilateral bank raised its estimate of average growth in developing Asian economies to 3.9 per cent in 2009 from a forecast of 3.4 per cent made in March. It also raised the 2010 growth forecast to 6.4 per cent from 6.0 per cent.

But it stressed a regional recovery was not yet on solid footing, and said policymakers risked derailing growth if they withdraw stimulus policies too early. "Underpinning the resurgence was the impetus to demand from expansionary fiscal and monetary actions taken by governments throughout the region, especially China and India," the ADB said in its updated annual outlook, adding that Indonesia and Vietnam also saw solid economic growth. "Tax cuts, greater public spending, targeted assistance and easy monetary policies boosted consumption and investment."

The ADB said growth in China in 2009 should come in at 8.2 per cent, up from its March forecast of 7.0 per cent. Growth should surge to 8.9 per cent in 2010, it said. Many Asian economies have pinned their hopes on a strong rebound in China amid persistently weak consumer demand in U.S. and European export markets. For India, growth was projected at 6.0 per cent this year and 7.0 per cent next year, up from the previous forecasts of 5.0 per cent and 6.5 per cent, respectively. "In short, the 2010 outlook is for growth to come back strongly relative to 2009, giving a V-shaped trajectory to developing Asia's recovery from the world recession," it said.

Nevertheless, the forecast 2009 growth will still be the lowest since 1998, at the time of the Asian financial crisis. "Developing Asia will only be able to regain a high-growth trajectory if the global economy is growing closer to its potential," the ADB said. "With external demand from the main industrial countries still relatively weak, it will be difficult for developing Asia to return to the high growth rates of 2006/7."

On Inflation and Monetary Policy, the ADB said the resumption of growth had taken place against a backdrop of low inflation or even mild deflation. Its forecast for average inflation across the region is 1.5 per cent for 2009, from its previous forecast of 2.4 per cent. It said the threat of inflation remained muted, although it was likely to tick up to 3.4 per cent in 2010. "This is not the time for an exit from expansionary policies -- the recovery remains fragile and subject to serious downside risks," the ADB said, referring to massive amounts of stimulus that many countries introduced during the global crisis. "Pulling away the carpet of fiscal and monetary support before the recovery has a firm foothold may lead to a double-dip decline instead of the expected V-shaped rebound." However, it added: "Central bankers in the region will want to put a tight watch on monetary policies so as not to encourage asset bubbles that would inflate prices to levels that are no longer justified by fundamentals."

Source: The Economic Times

ADB optimistic about India's growth

The Asian Development Bank (ADB) hiked its growth forecast for India today (September 22), saying pump-priming measures and aggressive monetary easing had boosted the outlook for the region's third-largest economy. The ADB projected India's economy would expand by six per cent in 2009, up from a five per cent estimate given in March, and grow by seven per cent in 2010, a revision from its earlier forecast of 6.5 per cent. "The government's strong fiscal stimulus, complementing the Reserve Bank of India's aggressive monetary policy easing, has successfully brought last year's economic slowdown to an end," ADB chief economist Jong-Wha Lee said.

The Manila-based bank attributed its optimism in its 2009 update to a rise in public spending, better capital inflows, stronger industrial output and signs of improved business confidence. Agricultural output in 2009 is expected to be "stunted" by a bad monsoon and exports will be weak, the ADB said. But India's "adroit economic management in the form of fiscal stimulus packages and accommodative monetary policy has minimised damage from the global financial crisis", it added. This is "supporting a relatively strong economic expansion again", the ADB said.

India logged 6.1 per cent growth in the first quarter of 2009, a modest rise on the previous two quarters, the ADB noted. The upturn reflected a recovery in industrial growth to five per cent from less than two per cent in the previous six months. Weak farm production in the second and third quarters is likely to weigh on growth, although a rebound is expected in the final quarter.

The report said growth in 2009 would be driven by government spending, and the combination of fiscal policies and renewed investor confidence should sustain expansion in private consumption and investment. In 2010, forecasts for better rainfall, a rebound in exports as the recession ends in industrial economies, and stronger investor confidence will underpin further economic growth. One potential threat to the economy is domestic food price inflation, which may create a dilemma for the central bank, the ADB said. The Reserve Bank of India will have to keep inflation expectations in check but at the same time not "choke off a recovery", it said.

Source: The Economic Times

Investors keep faith in Gold ETFs

Despite the equity market upsurge and a rise in gold prices, the yellow metal does not seem to have lost any sheen as an investment avenue, investors continuing to repose their faith in gold. As a result, inflows into gold ETFs and sales of gold coins have gone up of late. Demand for gold increases during the festive season starting Dussera, as the period is regarded auspicious for buying the yellow metal.

With increasing awareness among people of gold as an investment option, even asset management companies (AMCs) are seeing a pick-up in demand for gold exchange-traded funds (GETFs), whose units are traded on NSE. “We recorded the highest volumes on September 16, when 95,000 units were purchased. People are gradually coming to accept the idea that GETFs are the best form of investing in gold. Expectations of high inflation have also played a role in pushing up demand,” informed Sanjiv Shah, executive director of Benchmark Asset Management Company.

Investors looking at GETFs and coins would do well to keep in mind certain factors. The former’s pricing structure is transparent and returns yielded by all gold ETFs are identical, thus simplifying the decision-making process. In case of gold coins, however, one needs to evaluate the mark-up on the coins — depending on whether the seller is a bank, an NBFC or a jewellery house — their purity and, also, the margin that a resale would entail. Banks sell coins of 99.99% fineness. “Most of these coins/bars are manufactured at PAMP Refinery Switzerland. A coin comes along with tamper-proof packaging and international assay certification,” says Seshan Ramakrishnan, head, retail liabilities product group at HDFC Bank. On such coins, banks charge a premium of nearly 10% over the market rate, based on the bank’s fixed fee; consignor’s making charges, value-added tax and customs duty. All these charges again, vary depending upon the weight of the coin. Hence, if you a buy a 10-gram coin instead of 5-gram one, you could be paying a higher premium. Banks import coins on a consignment basis from overseas gold refineries. “Banks assure purity of the gold they sell and make them available in pilfer-proof packaging. Not all jewellers sell high-purity gold coins in such packing. However, some reputed jewellers do so, and in that sense are alternate sources for coins,” says KVS Manian, group head, retail liabilities of Kotak Mahindra Bank. However, as per existing stipulations, banks cannot buy back these gold coins. If investors want to sell a coin purchased from a bank, they will have to turn to jewellery stores.

Source: The Economic Times

Facebook shuts down thorny marketing tool

Facebook is closing an uncomfortable chapter in its five-year history. The social network says it will shut down Beacon, a program that tracks users' activities on other Web sites. When it launched in 2007, Beacon was immediately attacked by users as a privacy violation. It tracked purchases Facebook users made on other sites and sent alerts about them to their Facebook friends. Facebook later let users turn Beacon off, and CEO Mark Zuckerberg publicly apologized for it.

Beacon never really caught on, and Facebook agreed to end it as part of a class-action lawsuit settlement. The Palo Alto, California-based Facebook company will also pay $9.5 million to create a foundation to promote online privacy, safety and security. The proposed settlement must still be approved by a judge.

Pay package woes: IIT faculty to go on hunger strike

Nearly 1,500 faculty members, including professors, at the premier Indian Institutes of Technology (IITs) will go on a hunger strike on September 24 to protest against the Ministry of Human Resource Development (MHRD) pay structure for centrally-funded technical institutions (CFTIs). The HRD ministry had notified the pay structure for CFTIs, including IITs and IIMs, on August 18. But IIT faculty opposed certain provisions, including 40% cap on promotion of professors to senior grade. MHRD had agreed to all their demands, including removing cap on promotions.

The IIT Faculty Federation is of the view that the government’s move would impact the autonomy and flexibility of IITs. Besides the hunger strike, the federation plans to meet with IIT directors and hold another meeting with alumni to decide on the course of action. “We will observe strike on September 24. But we will not boycott work. Classes will go on. We will protest against the pay structure that puts a number of curbs on the IIT system,” Prof. M. Thenmozhi, President of the Federation, said. The faculty federation argues that the new structure puts restriction on promotions and lacks performance-based incentives.

In the meantime, Indian Institute of Management (IIM)-Ahmedabad Board has decided to meet on September 25 to deal with the situation arising out of faculty members rejecting the MHRD's latest order on pay structure of CFTIs. Sources in the ministry argue that all the demands made by the faculty have been addressed. “IIT directors met with the HRD Minister and expressed their satisfaction. All their demands were met,” a senior official said.

The ministry has dismissed the charge that there was an attempt at interference. “IITs and IIMs have a much better deal than their UGC counterparts. They will get in six years what a UGC appointee would in 15 years. Is it wrong to want the best as faculty,” a senior member of the ministry asked. Prof. Thenmozhi said that the federation would seek an appointment with HRD minister Kapil Sibal on the issue and submit a fresh memorandum on their demands.

Source: The Economic Times

Dell buys Perot Systems in a $ 3.9 billion deal

World's second largest PC maker Dell Inc today entered into an agreement to acquire computer services firm Perot Systems for $3.9 billion, making it one of the biggest deals in the IT space since global financial turmoil hit the sector. The terms of the agreement between the two-iconic brand were approved by the boards of directors of both companies, a statement from Dell said.

Under the terms of the agreement, Dell would commence a tender offer to acquire all of the outstanding Class A common stock of Perot Systems for $30 per share in cash. The deal would see an entity with $8 billion in services revenue. "This significantly expands Dell's enterprise -solutions capabilities. The acquisition makes great sense because of the obvious ways our businesses complement each other," Michael Dell, CEO and founder of Dell said.

Analysts feel Dell's move on Perot is partly motivated by a desire to expand its foothold in computer services. The expanded Dell would be able to provide a broader range of IT services and solutions and also supply its computer systems to Perot Systems customers. This is a second biggest deal in the IT space this year. In April, US business software company Oracle Corporation had announced to buy Silicon Valley rival Sun Microsystems for $7.4 billion. On Nasdaq, Dell shares were quoted over 3.8 per cent down at $16.05 in early trade.

"Dell's move is in line with its competitors. HP last year acquired EDS for a larger play in services. Even IBM and Fujistsu have strong hold in services. Dell though had a services division, they have not been growing at the desired level, said Diptarup Chakraborti, Principal Research Analyst with Gartner. Analysts feel as the overall, business has slowed significantly in recent years, Dell has been exploring more profitable growth areas such as services. Chakraborti said that revenues from hardware with is highly commoditised business were also plateauing. The acquisition comes after Dell lost its No 1 position in the US as a PC maker to HP.

The computer giant expects the transaction, which is subject to customary government approvals and the satisfaction of other customary conditions, to close in November-January. Over the past four quarters Dell and Perot Systems had a combined $16 billion in enterprise-hardware and IT-services revenue. Once the acquisition is complete, Perot Systems would become Dell's services unit and would be led by Peter Altabef, the CEO of Perot Systems.

Source: The Economic Times / PTI

Yahoo on $ 500 million expansion

Yahoo Inc hopes to get up to $500 million for a unit that hosts websites for small companies, after putting it on the market for several months, two people familiar with the matter said. Yahoo has received interest from corporate buyers and private equity firms, one of the sources familiar with the situation said. It is unclear if any party has made an offer. But some potential corporate buyers who have looked at the asset in recent months have decided not to bid because they think the price is too high, a second source said.

"Yahoo's price expectations are higher than what buyers were willing to pay," this person said, adding that Yahoo was seeking $350 million to $500 million. "People would like to own this asset, but not at the asking price." As part of its strategy to shed assets that are no longer core to its brand, Yahoo put the unit called Yahoo Small Business up for sale about six months ago, along with Hot Jobs, its online job classified site, the sources said. The sources spoke on condition of anonymity because the sale process has not been made public.

A Yahoo spokeswoman said the company does not comment on rumors or speculation. The small business division provides domains, e-mail, Web hosting and other merchant services to customers. Sunnyvale, California-based Yahoo, which posted $7.2 billion in revenue last year, does not break out the unit's performance.

Source: The Economic Times / Reuters

Sunday, September 13, 2009

Gold funds give attractive return to investors

The equity markets may be on a roll but gold has dazzled everyone bringing stellar returns to investors. Gold funds that invest in gold mining companies and overseas equity funds that have an exposure to such companies, have outperformed every other asset category in the last one year.

AIG World Gold Fund topped the performance chart with a 51.7% return in one year (up to September 7). The other two gold funds — DSP BlackRock World Gold Fund (44.4%) and Birla Sun Life Global Precious Metal (17.7% in year-to-date) — also gave good returns. Sensex and nifty moved up 10.5% and 9.8% respectively during the period.

Gold funds beat the benchmark equity indices in the three-month and one-month periods as well. They have spurted 10.5% to 11.9% in the past week alone. Incidentally, these funds have outperformed even gold exchange traded funds (ETFs) that gained about 36% in the past year.

Gold ETFs, which invest only in the physical units of gold, get only the benefit of an upturn in the prices of the yellow metal. However, gold funds cash in on the improvement in fortunes of mining firms, which give higher returns than the yellow metal during a bull run, say industry observers. Gold funds also managed to beat ETFs in the short run when gold prices jumped in March this year.

Gold prices have spurted over the past few days on the back of renewed concerns about the sharp rally in equity markets and inflation fears due to excess liquidity in the system, say market observers. Spot prices of the yellow metal crossed the $1000-an-ounce mark on Tuesday, the highest since March 2008, according to Reuters data.

Source: The Economic Times

14 stocks to watch out for in this rising market

The Indian stock markets have run up a lot over the last couple of months and valuations are also looking a bit on the higher side. Though sentiments and momentum in the market are very strong, yet it makes sense for investors to pick and chose their stocks carefully. It is, therefore, imperative to stick to companies which enjoy leadership position in their respective industry and are still quoting at decent valuations.

The Economic Times short-listed 14 such stocks as recommended by Angel Broking, Invest Shoppe India Ltd and Motilal Oswal Financial Services Ltd. These stocks look attractive at the moment and may be considered for buying for future gains.

TULIP TELECOM: Strong technical advantages in its segment of operations, continuing engagements with high-value clientele with big technology spends and bright prospects for new business segments give Tulip IT an edge in the domestic market. Buy this stock with a price target of Rs. 1375 with a one year time horizon.

PUNJAB NATIONAL BANK: Apart from robust growth in fund-based income, the bank’s other income has grown at a healthy pace. The technology initiatives along with prudent lending practices would also help towards keeping costs under check and maintain asset quality. This stock is attractive at its current market price of Rs. 705.

RELIANCE INDUSTRIES: Considering it has successfully executed its two mega ventures(KG basin gas and RPL refinery) it is expected that these will be key drivers of profitability over the next few years. Considering this, the target price for the stock stands at Rs. 2,475, providing an upside potential of 20% from current levels.

CAIRN INDIA: The company is set to emerge as one of India’s leading petroleum producer - and possibly the largest onshore producer - once its oilfields in Rajasthan reach peak production in coming years. Higher production will boost revenue in the coming quarters. This stock can be bought and held for a period of 1-2years with target price of Rs. 375.

ALLIED DIGITAL SERVICES: Allied Digital Services (ADSL) is riding on high-growth domestic markets of system integration (SI); IT infrastructure management services (IMS) and remote infrastructure management (RIM). RIM is expected to be $13-15 billion opportunity for the Indian IT industry by 2013 from the current $3.6 billion, as per the latest Nasscom and McKinsey report. At the current market price of Rs. 470, it is quite an attractive investment bet.

USHA MARTIN: The company is the world’s second largest steel wire rope manufacturer. It is integrated as it has coal and iron ore mines. The company has started exporting iron ore again as it becomes economically viable at current prices. This stock can be bought with price target of Rs. 90.

MADHUCON PROJECTS: The company has a good mix of assets, which yield consistent returns and cash flows and which will facilitate it to continue investing in the high-growth businesses of real estate, power and coal. This stock can be bought with a price target of Rs. 305.

APOLLO TYRES: India’s premier tyre company is currently ramping up its capacities through both green and brown-field additions, entailing an investment of Rs 1,000 crores. It is well-positioned to take advantage of the revival in the domestic and global auto industries. With current market price of Rs. 42, the stock is attractive and can be held with a price target of Rs. 53.

IPCA LABORATORIES: The company is a market leader in anti-malarials and rheumatoid arthritis segment, has grown at steady pace in the past, posting a CAGR of 15.7% in net sales and a CAGR of 24.1% in net profit over FY2005-08 primarily driven by its domestic formulations segment. The stock can be bought at its current market price of Rs. 740 with a price target of Rs. 855.

BAYER CROPSCIENCE: The company is a subsidiary of Bayer AG Group, which is a world leader in agrichemicals, enjoys 23% market share in the Indian market. There exists substantial opportunity for company to grow its domestic business in near future. At Rs. 349, the stock is very attractive and can be held with a price target of Rs. 501.

AXIS BANK: Axis Bank’s planned equity dilution of about 17% is a precursor to marketshare gains at a faster growth rate of 8-10 percentage points above the industry over the next few years. The stock can be bought with a 12-month price target of Rs. 1,106.

BHARTI AIRTEL: The company is India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBUs) -- Mobile Services, Airtel Telemedia Services & Enterprise Services. The current market price of Rs. 425 is attractive for future gains.

GVK POWER & INFRASTRUCTURE: Since January 2009, there have been several positive developments that improved returns on project SPVs and addressed liquidity issues for the company. It is an attractive stock at its current market price of Rs. 50.

BAJAJ AUTO: The company's August total volumes grew by 6% YoY to 213,072 units (v/s est 205,000), with improvement in both domestic sales (~6% growth) and exports (~5.7% growth). Bajaj's domestic sales were at 137,908 units, whereas exports were at 75,164 units. Bajaj Auto 1QFY10 results are above estimates, driven by higher export realizations and higher operating leverage. The stock is an attractive addition to equity portfolio at its current market price of Rs. 1,271.

Disclaimer: These stock recommendations are those of the respective broking and financial advisory firms and in no way represent the recommendations of The Economic Times. Investors are, therefore, advised to exercise caution and do their own research before going in for any stock pick.

Source: The Economic Times

Investors gained most from equity in past 17 years - ET analysis

Investors betting on Indian equity market during this turbulent time have actually posted gains which were unheard of during the post-liberalisation era. The Sensex, the benchmark index of BSE, posted a return of 64% during the first 36 weeks of the current calendar year increasing their kitty by whopping Rs 946,757 cr. Incidentally, this is the highest return during the same period for the last 17 years, a SundayET analysis reveals. It was only during the year 1991 when the Sensex appreciated by 81% in the first 36 weeks. Also, during 1992, the Sensex had given almost equal return with a marginal decline by around 0.1%.

The best five performing stocks in this list are Sterlite Industries, Tata Motors, Jaiprakash Associates, Mahindra & Mahindra and Maruti Suzuki India. First four stocks gave a return of more than 200% each, whereas, Maruti Suzuki India appreciated by 171% during first 36 weeks of CY09. Interestingly, these are the same stocks, which under performed during the same period a year ago. For instance, Jaiprakash Associates and Sterlite Industries lost 60% and 51% during the same period last year.

According to Waqar Naqvi, CEO of Taurus Asset Management Company, the central banks across the world pumped in huge liquidity which led many global investors unlocking their reserves. “India became a major beneficiary in the process thanks to its less exposure to the global export. In fact, the Indian economy is mostly dependent on domestic consumption. The political stability further buoyed the sentiments,” he said.

Interestingly, during the last 36 weeks, none of the Sensex stocks ended in red. However, the under performers are Hindustan Unilever, NTPC, Sun Pharmaceutical Industries, Bharti Airtel and Reliance Communications. Hindustan Unilever appreciated by merely 5%, whereas, the share price of NTPC went up by 13% during the same period. Out of these, three stocks — Reliance Communications, Bharti Airtel and NTPC — gave negative return during the same period a year ago. Due to their defensive nature Sun Pharmaceutical Industries and Hindustan Unilever appreciated by around 31% and 15% during the same period last year despite the fall in the broader index, the Sensex.

Source: The Economic Times

Saturday, September 12, 2009

National Commission for Higher Education and Research: Draft note prepared

A draft cabinet note for the creation of an overarching regulatory body in the higher education section has been prepared and circulated across ministries for consultations, Kapil Sibal, Union minister for human resource development, said at a press conference on Thursday, September 10, 2009. Sibal said the ministry would try and introduce the Bill for the creation of the National Commission for Higher Education and Research (NCHER) in the next session of Parliament. A task force to aid and suggest measures for setting up a regulatory body has also been set up.

NCHER is being set up on the recommendation of the Yash Pal committee. The committee, which was set up to suggest reforms in the higher education sector, had also recommended that the commission be a constitutional entity to ensure the absolute autonomy along the lines of the Election Commission of India. The suggestion has however been rejected by the Prime Minister’s Office, which has been studying the ministry’s proposal to amend the Constitution for setting up the regulatory body, saying the it should not be used for regulatory purposes. “It has been a setback because our report (on NCHER) wanted to leave no loopholes that would put the regulator at the risk of political influence,’’ a member of the Yash Pal committee said.

NCHER, once set up, will replace and subsume the University Grants Commission, the All India Council for Technical Education and the National Council for Teachers Education, which have thus far regulated the higher education sector in India. The HRD ministry had earlier proposed bringing a Bill to set up the NCHER after the Constitution was amended.

Source: PTI / Mint

Motorola launches Google’s Android based handset

Amid fierce competition in the fast growing handset market, US-based mobile phone maker Motorola on Friday (September 11) announced the launch of its new device Motorola CLIQ, which will run on Google’s Android operating system. The development is being seen as a step towards breaking the monopoly of global software giant Microsoft, whose Windows operating system is used in most of the high-end devices.

The CLIQ is the first touch screen Android device from the stable of the US firm which is witnessing sagging revenues amid steeper competition from handset majors like Apple’s iPhone, Windows based devices and Nokia. The phone would be compatible to 3G and Wi-Fi services. Though the company did not talk as to when the device will hit the Indian shores, it is expected that the phone will be available across the globe from the fourth quarter.

Android is a Linux-based operating system for mobile devices that was introduced in November last year. It allows developers to write managed code in the Java language, controlling the device via Google-developed Java libraries. With the CLIQ, Motorola would also debut its application called MotoBlur which allows users to synchronise their contacts, posts, feeds, messages, e-mails and photos from sources as diverse as Facebook, Twitter, MySpace, Gmail, corporate e-mail and have them appear on the device’s screen, Christy Wyatt, Vice-President, Software Platforms and Ecosystem, Motorola Inc said.

Source: PTI

Friday, September 11, 2009

Reserve Bank of India: Economy not reverting to trend yet

The Indian economy is unlikely to revert to its trend growth rate soon as recession in advanced economies would eat into global growth and world trade, Reserve Bank of India (RBI) deputy governor Usha Thorat said on Friday, September 11, 2009. Thorat, speaking in Hyderabad, said draft guidelines for repurchase agreements (repos) in corporate bonds would be posted shortly on the central bank's website. As well, the central bank was looking at allowing banks to issue long-term bonds with incentives for investors so banks could better manage their asset and liabilities, she said. The RBI expects the economy to grow about 6 per cent in the financial year ending March 2010.

Oil India IPO subscribed 31 times; QIBs bid the most

Oil India’s initial share sale to raise Rs. 2,782 crore (Rs. 27.82 billion) received demand for as much as Rs. 86,000 crore (Rs.860 billion), as its shares are seen offering profits since its valuation is lower than rivals ONGC and Cairn India. The 2.65-crore share sale that ended on Thursday (September 10) was subscribed 31 times, with institutional investors making maximum bids, while retail investors, who were burnt in the past IPOs, such as NHPC and Adani Power, were less enthusiastic.

“OIL is offering shares at a valuation that translates into a EV/2P reserves (enterprise value divided by proven and probable reserves) of $4.1 compared to $5.4 for ONGC, $12.8 for Cairn and $7-8 for most international players,” said a note by brokerage house HDFC Securities to clients. For oil companies, the enterprise value to proven and probable reserves are used as a gauge for valuation. For manufacturing companies price-to-earnings multiple is used as a metric.

The institutional portion of the issue was subscribed 54 times, the non-institutional (mostly high net worth individuals and some corporates) nearly 11 times, with almost the entire bids coming on the last day, and the retail portion nearly two times. Oil India, the second company from the government stable to raise funds after NHPC since the Manmohan Singh government returned to power triggering reform hopes, invited bids in a price band of Rs 950-1,050. In unofficial trading, the so-called grey market, shares are trading at a premium of Rs 35- 40, some brokers, who did not want to be identified, said. The date of listing is still not known.

“Higher production of oil and gas, going forward, growing accretion to acreage, lower subsidy burden due to soft crude oil prices, high success ratio and operational efficiency, greater use of better technology (eg horizontal well technology), upsides from pipeline and downstream business, upside from likely revision in gas APM (administered price mechanism) prices, better financial and return ratios — all this could mean that the difference in valuation attracted by ONGC and OIL could narrow,” the HDFC Securities note said. Till Wednesday, most brokers were of the opinion that the retail portion may not be fully subscribed since their investments in NHPC and Adani Power have already eroded in value.

Earlier story: Oil India $570 million IPO oversubscribed 31 times
State-owned explorer Oil India's $570 million IPO was subscribed nearly 31 times on Thursday (September 10), quelling fears investor appetite for new offerings had waned in the wake of a tepid market debut for two recent big listings. Robust demand for Oil India's IPO also boosted hopes the government will look to sell more stakes in state firms as it looks to raise funds and cut a widening budget deficit. The 26.4 million share offering, priced at a discount to peers, was subscribed 30.81 times by 6:00 p.m. (1230 GMT) on the final day, according to the National Stock Exchange's website.

The portion of the IPO allotted to institutions was oversubscribed more than 50 times, with most bids coming at the higher end of the range of 950 to 1,050 rupees, a banker involved in the deal said. Oil India's IPO follows recent offerings from state hydropower producer NHPC and private utility Adani Power, which had together raised $1.9 billion.
Analysts say Oil India's strong fundamentals, bright long-term growth prospects and better record for discoveries over larger state-run rival Oil and Natural Gas Corp will draw investors to the company. "The valuations for Oil India are much cheaper than peers, and its exploration pipeline also looks better than ONGC," Sonam Udasi, vice president at BRICS Securities, said. "Even if the overall market is weak, we could see a strong listing. We think the shares could see a premium of 20 to 25 per cent on the listing day."

Oil India, which is primarily into exploration, development, production and transportation of crude oil and natural gas onshore in India, is also exploring crude oil and natural gas in Egypt, Gabon, Iran, Libya, Nigeria, Timor Leste and Yemen. The company's market value after the offering would be $4.8 to $5.3 billion based on the indicative price band, according to Macquarie analyst Jal Irani. JM Financial, Morgan Stanley India, Citigroup Global Markets India and HSBC Securities and Capital Markets are the lead managers to the Oil India issue. The IPO had been fully covered within 30 minutes of opening on Monday, three banking sources had told Reuters.

Source: Reuters / The Economic Times

Abolition of entry load hits mutual fund sales

Abolition of entry loads on equity mutual fund schemes has sharply hit sales of equity schemes in the very first month of the new rule coming into effect. Industry sources admit this is the fallout of the recent SEBI regulations scrapping entry loads completely and introducing a variable load structure for all mutual fund investments with effect from August 1, 2009.

Equity assets have recorded a net outflow to the tune of Rs. 142 crore (Rs. 1.42 billion) in August, despite a 5% increase in the overall industry’s assets under management (AUM) to Rs. 7,56,638 crore (Rs. 7566.38 billion). "Around 80-90% drop in the equity assets can be attributed to the scrapping of entry loads as independent financial advisors (IFAs) did not sell equity products in August, 2009,” said a senior official at a fund house. "Even banks have slowed down the sale of equity mutual products drastically, as their sales persons have also seen a sharp decline in their commission structure," he added.

Thus, the share of equity assets in the total industry AUM has slipped further to just about 24%, including ELSS, from over 25% of assets until last month. ULIPs, on the other hand, are now expected to see aggressive push, both by distributors and producers of these products.

While the industry had been patting itself on the back for recording over Rs 7.5 lakh crore in AUM, the fact remains that it has been driven largely by inflows into debt schemes. Banks have been a major contributor to the rise in industry AUM. For the fortnight ended August 14, 2009, banks had deployed about Rs. 1,56,900 crore (Rs. 1569 billion) with mutual funds.

Source: The Economic Times

Oil India $570 million IPO oversubscribed 31 times

State-owned explorer Oil India's $570 million IPO was subscribed nearly 31 times on Thursday (September 10), quelling fears investor appetite for new offerings had waned in the wake of a tepid market debut for two recent big listings. Robust demand for Oil India's IPO also boosted hopes the government will look to sell more stakes in state firms as it looks to raise funds and cut a widening budget deficit. The 26.4 million share offering, priced at a discount to peers, was subscribed 30.81 times by 6:00 p.m. (1230 GMT) on the final day, according to the National Stock Exchange's website.

The portion of the IPO allotted to institutions was oversubscribed more than 50 times, with most bids coming at the higher end of the range of 950 to 1,050 rupees, a banker involved in the deal said. Oil India's IPO follows recent offerings from state hydropower producer NHPC and private utility Adani Power, which had together raised $1.9 billion.

Analysts say Oil India's strong fundamentals, bright long-term growth prospects and better record for discoveries over larger state-run rival Oil and Natural Gas Corp will draw investors to the company. "The valuations for Oil India are much cheaper than peers, and its exploration pipeline also looks better than ONGC," Sonam Udasi, vice president at BRICS Securities, said. "Even if the overall market is weak, we could see a strong listing. We think the shares could see a premium of 20 to 25 per cent on the listing day."

Oil India, which is primarily into exploration, development, production and transportation of crude oil and natural gas onshore in India, is also exploring crude oil and natural gas in Egypt, Gabon, Iran, Libya, Nigeria, Timor Leste and Yemen. The company's market value after the offering would be $4.8 to $5.3 billion based on the indicative price band, according to Macquarie analyst Jal Irani. JM Financial, Morgan Stanley India, Citigroup Global Markets India and HSBC Securities and Capital Markets are the lead managers to the Oil India issue. The IPO had been fully covered within 30 minutes of opening on Monday, three banking sources had told Reuters.

Source: Reuters / The Economic Times

Review of "deemed" varsities deemed to be a failure

Indian HRD minister Kapil Sibal may be happy with his achievements in the first 100 days of the government but the review of deemed universities by two separate committees of MHRD and UGC is turning out to be a whitewash, reports The Times of India.

While the MHRD's review committee is still on the job, the UGC review panel has already given satisfactory reports to more than 30 deemed universities. If this is not enough, UGC has even been holding its full commission meeting to approve the review committee’s reports. On Thursday (September 10) too, UGC met where satisfactory reports to 30 deemed universities came up for approval. Ironically, MHRD’s representative who sat in the UGC meeting on Thursday is the convenor of the MHRD's review committee. Barring one case, the commission accepted all reports of review committee on deemed universities. Names of more and more deemed universities that have been given clean chit were added even after agenda of the meeting was circulated. After the commission accepts the review committee report, it is sent to the Ministry.

The Times of India has accessed documents that show satisfactory report to 13 deemed universities by UGC’s review committee. This includes Shanmugha Arts, Science, Technology and Research Academy (SASTRA) deemed to be university, Tamil Nadu; Atal Bihari Vajpayee Indian Institute of Information Technology and Management, Gwalior, Madhya Pradesh; Dr D Y Patil Vidyapeeth, Pimpri, Pune, Maharashtra; Graphics Era University, Dehradun, Uttarakhand; Vellore Institute of Technology, Vellore, TN; Karunya Institute of Technology and Sciences, Coimbatore; Jagadguru Sri Shivarathreeswar University, Mysore; and Periyar Maniammai Institute of Science and Technology, Vallam, Thanjavur, Tamil Nadu.

This has created a piquant situation that might put MHRD’s review committee in a bind. What if a deemed university not found worth ‘deemed’ status by the MHRD review committee has already been found satisfactory by the UGC committee? How will this contradiction be resolved? After all, deemed status is given by the MHRD only on the advice of UGC. Will the MHRD review committee disregard clean-chit given to deemed universities by the UGC?

MHRD's review committee did not make visits to deemed universities. Instead, a detailed questionnaire was sent to them after which 81 deemed universities gave detailed presentation to the committee. The panel consists of P N Tandon, formerly of AIIMS; Goverdhan Mehta of Indian Institute of Science; M Anandakrishnan of IIT Madras and Mrinal Miri, eminent social scientist. Joint Secretary, Higher Education, MHRD is the convenor of the committee.

Task Force on proposed higher education regulator

The process of replacing the University Grants Commission (UGC), All India Council for Technical Education (AICTE) and National Council for Teacher Education (NCTE) by the proposed National Commission for Higher Education and Research (NCHER) has commenced. The task of establishing a national testing scheme on the lines of GRE for university admission has also been initiated by the Government of India.

A task force, set up by the Ministry of Human Resource Development (MHRD) for the purpose, will also advise the government on the creation of 14 world class innovation universities. MHRD has already moved a concept note on the innovation universities and is seeking the views of stakeholders.

Parallel to the Bill being framed for the NCHER, the task force will oversee how the transition to the new regulatory body will take place. The task force consists of IIT-Madras Director M. Anandkrishnan, social scientist Mrinal Miri, Planning Commission member Sayeda Hamid, scientist Govardhan Mehta and a member of the Planning Commission to be inducted later. Hamid was named as a member of the task force in her individual capacity and not as member of Planning Commission.

The task force will advise the MHRD on how the interest of employees of the existing regulatory bodies can be protected and what the proposed NCHER should be like. The task force will also advise the government on the NCHER Bill. UGC employees have already begun protesting against the move to set up NCHER on the ground that they were not consulted by the Yashpal Committee that recommended winding up of UGC.

Another major issue before the task force will be to evolve the national testing scheme for college admission. To be based on the pattern of GRE, the test will be open to all the aspirants of university education. The test will be held more than once a year. Students would be permitted to send their best test score to the university of their choice. The national testing scheme was proposed by the Yashpal Committee on Renovation and Rejuvenation of Higher Education.

Blog Archive