Will MTN go back to Bharti?

The South African media has started speculating that the country’s telecom giant MTN could look at a "less controversial" deal with Bharti Airtel instead of RCOM, a group firm of Anil Ambani because of his feud with elder brother Mukesh.

The reports about such speculations are surfacing in South African and London media even after MTN and RCOM extended their exclusivity agreement for negotiations from July 8 till July 21.

"The original, less controversial merger with Bharti Airtel could be back on the cards," a report in South African daily The Times said, adding that this could be due to MTN wanting a "clean deal".

"Media frenzy surrounding MTN’s proposed merger with Reliance Communications is probably creating a useful smokescreen to allow it explore opportunities in other countries well away from the spotlight," another South African daily Business Day reported.

RCOM and MTN had first announced the start of their exclusive talks on May 26 after the South African firm’s talks fell apart for a possible deal with Sunil Mittal-led Bharti Airtel, RCOM’s rival telecom operator in India.

The Times, in its report, said that MTN’s board, which met last week, might "well conclude that the deal (with RCOM) has become too complicated and decide that it does not want its shareholders held hostage to an unwieldy legal battle in another jurisdiction".

The report quoted a Vunani Securities analyst as saying that MTN would want to take on a "clean" deal.

"MTN does not want to take on baggage. If this deal goes through, they will want another extension. Another possibility is that this extension is just a strategy to buy time to limit the damage already done," the analyst told the Times.

Noting that a withdrawal from the talks might not be "straightforward", the report quoted unnamed sources close to the development as saying that "Bharti is likely to be more flexible than Reliance (Communications)".

The Times report added that "MTN will definitely strike a deal -- not necessarily with Reliance -- because the SA company is on the acquisition trail."

The daily further quoted a Renaissance Asset Management director as saying that Reliance deal would "crumble" and "only if the Ambani brothers sort out their issues in good time will a deal be possible".

Govt bars new fuel pumps by state firms

The government has stopped state firms from building new fuel stations for two years to cut costs at companies losing heavily from having to sell fuel at prices far below market rates, an oil ministry source said on Monday.

In June, the government raised petrol and diesel prices by about 10 percent, its biggest increase in 12 years, but the hike lagged far behind the the recent rally in crude oil prices, which soared to a record above $147 a barrel on Friday.

"The petroleum secretary has asked (state) oil firms to immediately stop setting up new retail outlets for two years," the official, who did not wish to be identified, said.

Only those new stations in an advanced state of construction could be completed, he added.

Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp are losing millions of dollars a day, as they sell fuels at low prices set by the government to help protect the poor and fight inflation.

Upstream companies and the government partly subsidise their losses, adding to the strain on public finances.

The official said state-firms had expanded their retail network to compete with private firms like Reliance Industries and Essar Oil, but the latter have a negligible market share as they have to sell at sharply higher prices.

SEBI looking into over 3,500 corporate frauds

Market regulator SEBI on Friday said it is looking into over 3,500 corporate frauds allegedly held at stock exchanges and said it could set up a committee of IT experts to develop a mechanism to curb such activities taking place using skills acquired from information and communication technologies.

"SEBI is looking to 3,656 cases of corporte frauds at stock exchanges. In 2007, the regulator received complaints of 169 corporate frauds, majority of which were of market manipulation," SEBI Whole Time member T C Nair said.

He said the regulator was examining to the set up a committee of experts drawn from IT and communications field to examine ways to prevent corporate frauds.

At an Assocham conference on corporate fraud, Nair said the Securities and Exchange Board of India would come out with a circular within a month making it mandatory for stock exchanges to audit all transactions annually.

He said, "Lot of corporate frauds are feared to be happening through information and communication technologies. Sometimes fraudsters are ahead of regulator".

The success rate of the market regulator in detecting unfair trade practices in the capital market is about 80 per cent and currently SEBI is disposing off 3,656 cases of either corporate frauds or unfair trade practices, Nair said.

He said SEBI has decided to make it mandatory for stock exchanges and depositories to annually audit all their transactions as per new code of conduct.

SEBI would ensure that stock exchanges and depositories are safeguarded from unfair trade practices through this circular so that investors are not misled or deceived and disclosures of business transactions are recorded in a transparent manner in books of accounts, said Nair.

Addicted to first love!

Rekindling your first love can have irreversible consequences on your present relationships. Many adults find it difficult to resist when the sparks fly and they fall again for childhood sweethearts. First loves are indelibly etched into our minds, scientists say, but they warn that rekindling that old flame could have lasting, irreversible consequences, tearing apart marriages and leaving a trail of devastation.

"It’s not your average affair" said Nancy Kalish, a California State University-Sacramento psychologist, who has studied such relationships for 14 years. "It goes from the phone to the hotel. It’s that quick." Jeannie T. knows the feeling. "It was like lightning struck when we saw each other" she said, after bumping into sweetheart Ben at a 40th school reunion in Joplin, Missouri some months ago.

They hadn’t seen each other since Ben waved goodbye on a train platform in 1965 as he shipped off to Vietnam, but as soon as they saw each other again, the sparks flew. "He knelt down at my side and told me that leaving me was the hardest thing he had ever done," said Jeannie, now a Florida real estate agent.

A kind of panic set in, said 60-year-old Jeannie. "I needed to tell him what he meant to me. "However, she missed her chance at the reunion, when Ben’s wife of 37 years strolled in on their confession. That’s where the Internet came in. Mike T., Jeannie’s husband of 13 years, says as soon as his wife returned from the reunion, she and Ben were burning up the Internet, first by email and then via text messaging.

Researchers say their experiences are typical of adolescent sweethearts who fall head-over-heels in love again decades later. Adolescent hormones carve those first loves into our brains, said Rutgers University anthropologist Helen Fisher, author of the book “Why We Love". The lost love’s voice or touch triggers wanting, needing, craving in the same spots in the brain as those affected by cocaine.

Sounds like addiction? "It is more powerful than addiction," said Helen. Donna Hanover knows the feeling. After being dumped by her husband Rudolph Giuliani, she found another love, rekindling an adolescent romance after 30 years. She says," I felt an immediate chemistry between us, just as there had been when we were kids". She has published her story with 49 others, including clothing designer Nicole Miller, actors Carol Channing and Suzanne Pleshette in "My Boyfriend’s Back".

How to tide over high inflation

As Indian investors were getting used to the benefits of a growing economy, global oil prices decided to play spoilsport. Inflation, fuelled by high oil and commodity prices, is slowing down our economic growth. Attempts to control inflation are pinching consumers’ pockets.

Avoiding high interest rates on loans and reducing monthly household budgets looks impossible. Stock markets, which usually give good returns, are down, too. Still, with strategic investments, you can tide over a tough period. And prudent investments can cushion the rise in equated monthly instalments (EMIs) on loans. Here’s how.

Fixed deposits:

Better returns on bank fixed deposits are the positive fallout of Reserve Bank of India’s (RBI) recent rate hikes. Most FDs will now yield 10% to 11% a year. But that’s little comfort to investors, as inflation is expected to touch 12% and eat into returns.

Your strategy should be to encash at least part of your FDs and pay off loans, or make part prepayments, if their interest rates are being hiked. Topping your list should be expensive debt, like consumer durable loans and credit cards.

Shares:

A likely economic slowdown is worrying our markets. Rising crude prices and political uncertainty over the Indo-US nuclear deal have made markets jittery. Mutual funds’ net asset values (NAVs) have plunged, as have the number of corporates announcing dividends and bonuses for the first half of 2008. Experts are not ruling out a further fall in stock markets.

The most strategic stock investments now would be in sectors which would suffer the least from an interest rate hike. Sectors like pharmaceuticals and information technology (IT) benefit from rupee depreciation (due to rising oil prices and the weakening domestic fiscal situation). Using the same logic, interest-sensitive sectors like banking, real estate, automobiles, and infrastructure are expected to underperform in the near term.

On the flip side of the stock market decline are the bargains: good stocks may not be available at current prices in the future. For instance, despite the interest rate hike and the bleak outlook for the banking sector in the near term, several stocks are still being recommended.

“Although banks will remain under tremendous pressure for the next six months, interest rates will eventually come down in the medium term. Valuations of some of these interest rate-sensitive stocks are attractive now. These stocks can be expected to give above average returns in the next two to three years,” says Hitesh Agarwal, Head, Research, Angel Broking.

If you can study the fundamentals of individual stocks, investing directly is better than investing in mutual funds whose NAVs are falling. If you must invest in mutual funds, go for diversified rather than thematic schemes. A fund manager dealing with diversified funds can switch sectors if one is underperforming. In thematic funds, performance depends on a particular sector.

Also, with falling NAVs, you’d need to keep revisiting your investments and switch schemes if necessary. Gold has long been touted as a hedge against inflation. But neither gold nor any other commodity have been able to beat stocks where returns are concerned. This is in keeping with the logic that higher risks means higher returns.

If you still believe that commodity markets are the place to be in, heed the experts. “Timing will be crucial here,” says Prasad Baji, commodity analyst at Edelweiss Capital. “Investors would have to watch inflation and interest rates closely, as any cooling off could lead to a switch from commodities to equities. So, they’d have to exit commodities before equity prices firm up.”

Whatever strategies you use, don’t expect to make a quick buck. Get into stocks only if you’re willing to take a long-term and vigilant view.

Home loans:

Since RBI hiked interest rates, banks have raised rates by 50 to 75 basis points for existing and new home loan customers. Borrowers have three options. One, encash investments or use savings to pay off some of the principal loan. Two, opt for a higher EMI if you have the disposable income.

And three, extend the loan tenure. Paying off part of the principal is the best option, if you have enough money, as your EMI could remain the same. If you can’t pay a large amount immediately , but are sure of maintaining a higher disposable income each month, you can get your loan restructured and pay a higher EMI each month (this is in addition to what the interest rate hike has added).

By managing to pay an extra amount now you can avoid the option of increasing the loan tenure. Though prepayment looks tempting, using a personal loan or credit card loan to prepay a home loan can be expensive. Home loans will always be cheaper than other loans. An often repeated advice is to avoid increasing the tenure of a long-term home loan (15 years and above).

But if you have already used your savings, this may be the only option left to keep your monthly expenses within the limit. An extension in the tenure period will ensure a lower or at least the same EMI being paid each month. Also, hope the government works out means to ease the inflationary and interest rate pressures.

Budgeting:

Drawing up a monthly budget that maintains a fine balance between savings and expenses was never an easy task. With inflation climbing this task has become even more difficult. Your strategy should be to add some amount to the savings pool. After this, if you still have surplus money for investments, go for schemes that give compounded growth.

Brace yourself to cut expenses on all fronts. While buying essentials, pay cash and avoid credit cards. This will help you get a better deal. RBI Governor YV Reddy is confident that inflation will stabilise by September-October 2008.

Until that happens, Indian consumers and investors have no option but to match the rising costs with their budgets. Prudent fiscal management can help you get through these tough times.

Courtesy: www.timesofindia.com

Beijing 2008: China invites Sonia, not PM or Prez

Eighty heads of state and government will grace the Beijing Olympics in August but PM Manmohan Singh will not be among them.

Not because he is too busy, but because he was not invited. In fact, neither India’s head of state nor government have been invited, with the invitation going to its most important politician, Sonia Gandhi.

The Congress chief is unlikely to attend, leaving that job to sports minister M S Gill. But even if you are really charitable, it can’t be denied that it’s yet another Chinese snub of pretty large proportions, and no amount of earnest protestations from government functionaries about the wonderful state of Sino-Indian relations will change that.

In October 2007, when Sonia visited Beijing, she received a welcome fit for a head of state. It raised eyebrows in India because it showed where the Chinese government was focusing its attention. It was then that the Chinese leadership first extended an invitation to her to attend the Bejing Olympic Games.

Although the government was the first to deny it, the scale of Sonia’s visit prompted a delay in the prime minister’s visit to Beijing. He was initially supposed to make his summit visit at the end of 2007, but this had to be pushed to the new calendar year. In 2008, the Beijing Olympics acquiring a distinct political hue with the Tibetan protests. Consequently, India-China ties took on a strained look, made worse by China’s repeated incursions in Arunachal Pradesh and Sikkim.

China’s internal troubles did not stop it from keeping the Indian government is a state of permanent squirm — first with repeated claims to Arunachal and then by incursions into Sikkim. In fact, foreign minister Pranab Mukherjee was faced with a sudden cancellation of his meeting with Chinese premier Wen Jiabao.

Also by this time, China had invited pretty much every world leader to the Olympics, but maintained a silence on India. India wasn’t on the first list, or the second. While the Chinese government has invited the who’s who in terms of heads of government to the Games, in the case of India, it made a clear distinction between the head of government and the most powerful political leader in the ruling combine. When Mukherjee visited Beijing in June, the formal invitation was finally made — to Sonia. Officials, when questioned, evaded the issue.

The PM would not have gone, said officials trying to defend the lack of an invitation. In October, Singh will be in Beijing for the ASEM summit, which officials say will be his second visit there this year. So a third visit during the Olympics was not on his radar. But as with much of India-China thorny issues, this too is looking more and more like a post-facto justification. Sources requesting anonymity said the Chinese leadership, which also derives its strength from the party, merely looked at the Indian leadership through that perspective.

However, seen in almost any light, the Chinese decision is little short of a snub to the PM personally and his office.

Smoking can boost memory

Scientists attempting to create a nicotine pill to treat Alzheimer’s disease have suggested that smoking can help boost memory and concentration.

Nicotine has long been known to have a stimulating effect on the brain. However, the deadly side effects of cancer, stroke and heart disease, mean its benefits have been largely set aside by medical research.

Now researchers, who hope to develop drugs which copy the active ingredients in tobacco without causing heart disease, cancer, stroke or addiction, discovered that nicotine can boost the intelligence and recall ability of animals in laboratory experiments.

The researchers, who plan to present their latest findings at the Forum of European Neuroscience in Geneva, hope that the new drugs, which will be available in five years, may have fewer side effects than existing medicines for dementia.

However, the scientists stressed the new treatment at best will only give patients a few extra months of independent life instead of fully freeing them of Alzheimer’s disease.

"The substances that we call drugs have, in the majority of cases, do have a mixture of beneficial and harmful effects and nicotine no exception to this," Professor Ian Stoleman of Britain’s King’s College was quoted as saying by the Mail online.

Researchers led by Prof Stolerman studied how nicotine alters the brain’s circuitry to boost concentration and memory. In his study, he showed that the concentration power in rats went up by 5 per cent when injected with nicotine, the report said.