Rupee softens as oil cos buy

The rupee eased on Thursday after global crude prices inched up toward record highs, pushing up dollar demand from oil refiners to meet their month-end import commitments. The partially convertible rupee ended at 42.785/795 per dollar on Thursday off an intraday low of 42.93, and 0.12 percent weaker from its previous close of 42.73/74. It hit a 13-month low of 43.21 last week.

"The rupee weakened due to month-end dollar demand from oil companies, but a lot of state-run banks were selling below the 42.90 level," L. Subramanian, chief currency dealer at ICICI Bank, said. Oil was trading around $130 a barrel on Thursday after hitting a record $135 last week. India imports more than two-thirds of its oil needs and higher prices inflate the trade deficit. Refiners are the biggest buyers of dollars in the local market. A $10 per barrel increase in oil prices widens India’s trade deficit by $6-$7 billion, JP Morgan said.

India’s main stock index ended down 1.3 percent and equity outflows have also weighed on the rupee. Foreigners have sold $3.74 billion of stocks so far in 2008, with the index down 19.6 percent since the start of the year, after pumping in a record $17.4 billion in 2007. "State-run banks are not expected to allow the rupee to depreciate too much and 42.50 to 43 should be the range for the rupee in the next few days," Subramanian said. Dealers also said the central bank may have intervened in the market at 42.75-42.93 levels to prevent the rupee from falling sharply.

Want to attend meeting in two places at one time?

Business executives will soon be able to make presentations in distant countries through their virtual presence in the meeting halls, thanks to Australian telecommunications and media company Telstra’s new technology that can create a person’s hologram.

The company used a hologram to beam its Chief Technology Officer, Dr Hugh Bradlow, live into Adelaide from Melbourne to give a speech at a major function for senior business executives. Dr Bradlow addressed and interacted with the audience for around 15 minutes and conducted a realtime media conference following the function.

He revealed that their Musion Eyeliner System enabled them to beam his mobile three-dimensional image from one city to the other to give a live business presentation. “In Melbourne, we have a high definition video camera which is filming me as I stand here,” Dr Bradlow said. “That signal is being taped across the network and the far end is using a very smart optical projection system to create a holograph, or my virtual presence, in Adelaide.”

Dr Bradlow said that a big, flat panel LCD screen enabled him to see who he was talking to in Adelaide , and thus facilitated the real time interaction. “It has the look and feel of being in the same room together,” he said.

“You can envisage this being used in education, in entertainment, in news media as a holographic system, but the whole class of telepresence systems is going to be across all businesses ,” he added. David Thodey, Telstra’s group managing director for enterprise and government, added: “We’ve all seen this sort of thing in futuristic sci-fi movies, but the reality is that it can be done here.”

He also said that the new technology may start entering business houses in four to five years, and eventually in homes.

“In the next few years, as your broadband speeds start to go faster, a step from there to a hologram is not very far,” Thodey said. “I think it is at least four or five years away (for business) before that will be the case because the technology has to come down in price,” he added. “This next generation network is changing the way we live and work.”

Banking on weak rupee, Indian expats hike remittances

Buoyed by a decline in the value of rupee, Indian expats in Kuwait are turning all stops to send maximum remittances back home. The remittances by Indian expats there have increased substantially in last three weeks, media reports said.

While the rupee jumped by 12 per cent last year, the surge in oil prices and other factors led to its decline by 8.2 per cent in 2008. A Kuwaiti Dinar (KD), which fetched Rs 143.5 in January, is now pegged at Rs 162.

Titus E D, the director and general manager of Bahrain Exchange Company (BEC), said the current situation presented an opportune time for Indian expatriates."This is a win-win situation and NRIs should try to capitalise by remitting maximum money. The depreciation of rupee would not last for long. By the year end, I believe, the currency would rise against the dollar due to poor showing by the greenback," he told ’Arab Times’.

A substantial number of Indians are remitting their money through the door-to-door medium which is an efficient service, Titus said.A contract worker from Bihar said he remitted Rs 50,000 to his bank account in India recently.

"I borrowed KD 100 from friends since I did not want to miss out on this golden opportunity. Thanks to the weak rupee, the purchasing power of my family back home has increased substantially. I am planning to borrow more money to be sent home," he added. Another NRI worker, Mohammad Iqbal, said he had saved around KD 350 for his upcoming vacation and had already sent the entire amount to his bank account in Mumbai to capitalise on the weak rupee.

TDSAT directs BSNL to restore Airtel connection

Telecom tribunal TDSAT on Thursday asked public sector operator BSNL to restore connection to Bharti Airtel in parts of Bangalore, as sought by the latter, on payment of 65 per cent of the disputed sum.

The PSU had disconnected Bharti Airtel from its points of interconnection in Malleswaram, located in north-west Bangalore last week, over non payment of dues of Rs 66 crore.

During the proceedings on Thursday, TDSAT chairman Justice Arun Kumar directed BSNL to restore Airtel’s connection to its network within 48 hours of payment of Rs 35 crore.

BSNL had demanded "Rs 66.30 crore, out of which the petitioner (Airtel) has already paid Rs 4.7 crore... (It) would pay Rs 35 crore within two weeks from today and respondent (BSNL) is directed to restore POIs (point of interconnection)" Justice Kumar said.

If Airtel pays the amount earlier, then BSNL would have to restore POIs within 24 hours.

However, Justice Kumar declined Airtel’s plea for an immediate restoration as BSNL said it would not restore the connection without getting the money.

"It is a matter of disconnection. In such cases there is urgency to every one, even to us," submitted BSNL’s counsel, opposing Airtel’s plea to restore the POIs immediately on submission of an undertaking.

BSNL also rejected Airtel’s plea for restoration after payment of only 50 per cent of the disputed sum.

On this, TDSAT Chairmam told both telecom operators, "do not fight for a few crores".

India may end wheat, basmati rice export bans

India will review bans on exports of wheat and basmati rice, but shipments of other grades of rice will not be allowed at least until November, the country’s farm minister, Sharad Pawar, told Reuters.

India last exported wheat in the 2003/04 fiscal year and became an importer in the past two years, but a bumper crop has helped the government purchase from local farmers a record 24.8 million tonnes of the staple this year.

Pawar said on Thursday that a government panel, called the empowered group of ministers (EGOM), would soon consider lifting the ban on wheat exports.

"We will think. There is an EGOM. We will discuss it in the EGOM," Pawar said.

He said India had 5.8 million tonnes of wheat on April 1 against a target of 4 million tonnes and the record procurement had helped stocks swell so much that the government had enough supplies for 21 months for subsidised supply to the poor and other welfare schemes.

But controls on non-basmati rice exports would continue at least until November, when summer-sown paddy would be harvested as the government would take no chances with domestic supply, Pawar said.

The United Nations’ Food and Agriculture Organisation raised on Thursday its rice output forecast for 2008 by 1 million tonnes to 667 million tonnes on the back of improved outlook from Cambodia, but said food prices would remain high for a decade.

Pawar said he favoured lifting the ban only for basmati rice exports as the premium grade of grain was either exported or consumed by the rich, not used for subsidised supply to the poor.

"If farmers want to earn a little bit of money, basmati is the crop where they can earn some money. Not a single grain of basmati comes to my kitty for the public distribution system."

Pawar said rival suppliers may push out India from the international basmati market if exports were not resumed and that would hurt Indian farmers, who would find it difficult to regain their market share.

He said the government was keen, but not in a hurry, to help neighbouring countries, which have asked the Indian government to supply rice.

"For the time being, no. We are eager to help. I have got requests from many neighbouring countries. Procurement will take at least three months to get completed and then we will access the situation," he said.

Rice prices have eased from record highs set in late April on signs that global supplies will improve and expectations that Vietnam will lift export curbs from July. Cambodia decided on Monday to lift a two-month export ban.

Finance ministry, RBI not in favour of monthly inflation data

The finance ministry and Reserve Bank have reservations on the computation of inflation data on a monthly basis, a senior Government official said ON Thursday.

"Everybody from the committee (on new WPI series) has supported moving to a monthly data, except for the finance ministry and RBI, which want it on a weekly basis," Mr Pronab Sen, Secretary, Ministry of Statistics and Programme Implementation said here.

The Finance Minister, Mr P Chidambaram will have to meet the Reserve Bank to reach a consensus on the committee’s suggestions to have a new series of WPI on a monthly basis, he said on the sidelines of a function to release the results of the Fifth Econo mic Census.

A committee, headed by Planning Commission member, Mr Abhijit Sen that is formulating the new WPI series has advocated a monthly release of data with a two-week lag, Mr Pronab said.

Professing the need for a monthly data, he said weekly figures on wholesale prices released by the Government create huge volatility in both commodities and stock markets.

"Every body is reacting to the current weekly rather than the revised figures, which are a month old, and that creates volatility that is completely unnecessary," Mr Pronab added.

The Abijit Sen committee is expected to submit its report soon. The new series is likely to have a base year of 2004-05 instead of 1993-94, which is followed at present, and the number of items covered under the index would be increased to 900 from 450.

"Increase in the number of items would make the WPI more comprehensive," Mr Pronab added. The Government, in due course also plans to move towards a Producer Price Index, comprising the Wholesale Price Index and the proposed Service Price Index. - PTI

RComm jumps; Macquarie says MTN deal positive

Shares in Reliance Communications, which is in talks with South Africa’s MTN, rose more than 6 percent on Thursday after a brokerage said the deal was positive and it expected a rebound in the stock.

The stock rose as much as 6.5 percent to 587.70, taking it to its highest since last Friday, the last day of trading before the talks about a possible tie-up with MTN were announced. The stock had lost 3.6 percent on Monday.

Macquarie Research analysts referred to media reports of a share swap between Anil Dhirubhai Ambani Group (ADAG), 66 percent owner of Reliance Communications, and MTN, that would see MTN become the largest shareholder in Reliance Communications and ADAG in turn becoming the biggest controlling shareholder in MTN.

"This deal structure would require no equity dilution and/or issuance of new debt at RCOM, which makes the deal doable," Macquarie Research analysts said in a report.

Macquarie has an outperform rating on Reliance Communications stock with a 12-month price target of 865 rupees, 57 percent higher than its Wednesday closing price of 551.6 rupees.

"We see the deal as positive for RCOM due to the ramp-up in non-wireless businesses and we expect the sale of shares to MTN to be at a premium to RCOM’s current price," the report said.

A deal with MTN would help Reliance Communications’ international unit, Reliance Globalcom, to tap emerging markets in Africa and the Middle East for its non-wireless businesses.

If MTN acquired a stake of 15 percent or more in Reliance Communications, Indian law would require it to make an open offer for a further 20 percent.

"We believe the open offer is likely at a premium to RCOM’s current stock price," the analysts said.

Reliance Communications stepped into a gap left by India’s top mobile firm, Bharti Airtel, which said at the weekend it had ended talks with MTN after failing to agree how to structure a deal.

The Macquarie analysts said a merger of Bharti and MTN would have required significant equity dilution and debt issuance by the Indian mobile firm.

Separately, JPMorgan analysts said that given India’s 74 percent limit on foreign ownership in telecom companies, MTN would be able to acquire about 61 percent of Reliance Communications, and in turn ADAG would be able to own 33 percent stake in MTN Group.