 |  | | |  | Business South Asia | | | | | | | Updated at 1430 GMT on 20th August 2001
Sri Lankan authorities positive on insurance talks
Sri Lankan shipping officials say negotiations with insurers in London are progressing well on reducing war-risk insurance premiums for ships calling at Colombo. Higher charges were imposed on ships docking at the port following the rebel attack on the nearby airport. Authorities are worried about the economy which is dependent on trade. They now say premiums will be cut sharply after talks with insurance company officials. 20/08/01.
Companies realise value of Bollywood audiences
The notion of companies associating their products with successful movies is common in many countries. But India's large corporations are only just catching on to the power of cinema when it comes to capturing consumers attention and increasing sales. Until now it was only sports like cricket which could attract major sponsorship deals but the huge box office success of some recent films have made leading business names sit up and take notice of Bollywood as a promising promotional avenue. Sanjeev Srivastava reports from Bombay. 20/08/01.
Credit rating agencies worry about Indian economy
The thoughts of economic strategists at Standard & Poor's and Moody's are widely followed by international investors for guidance. Both credit rating agencies have downgraded their outlook for India, citing concerns that the Government is borrowing too much money. They have expressed concerns about the future value of the Indian rupee currency. Earlier today (Thursday) the Governor of the Reserve Bank of India, Bimal Jalan, indicated that a cut in interest rates is unlikely, but he insisted that the central bank will move if the economy needs help. 9/8/01
Small gain for main index of shares in Bombay
Thursday proved to be a slow day the Bombay Stock Exchange. The Sensex rose half of one per cent, gaining 17 points to close at 3,319. Catch a report from Imran Contractor, the director of research at Milan Mahendra Brokers, who says the session was dominated mainly by trading in two stocks. 9/8/01
Liberalisation and India's rural poor
Ten years ago India embarked on the Ninth Plan of liberalisation and economic reform. An important element was the introduction of major rural development programmes to try and alleviate poverty. But there are doubts about whether the vast sums spent - and those sums are now falling anyway - have really achieved all they set out to. There remains about 50 million families classified as "rural poor", and about a quarter of the people who have benefitted from poverty alleviation programmes have incomes above the poverty line anyway. Also there is evidence that the lower castes aren't getting as much as they should. 08/08/01
'We will survive' says airline chief
The head of SriLankan Airlines says he's confident the company can survive, despite losing a third of its 12 aircraft in the attack by Tamil Tigers on the country's only international airport last month. The airline has had to suspend half its flights, lay-off staff and close some overseas offices. The number of tourists visiting the country is still well down after several foreign governments advised against travel there. 07/08/01
Pakistan spending plans
Pakistan will next week announce it's going to spend at least one billion US dollars on infrastructure projects. It was only last month that the international financial community praised the efforts of Pakistan under its leader General Musharraf, who seized power in a bloodless coup in 1999, for keeping to a programme of tight controls on expenditure. The concern now is that too much spending may tip Pakistan back over the edge. 06/08/01
India industry protests to Congress over steel imports
A delegation from the Confederation of Indian Industry, led by India's Steel Secretary NN Khanna is in Washington to protest about America's unilateral action against steel imports from India. Its among several nations that have been targetted with anti-dumping measures. The result is that the market for Indian steel exports is virtually closed -- and the representatives from industry are lobbying members of the Bush Adminisration and Congress, asking them to pull back from even more drastic action. 3/08/01
Bollywood building worldwide
Bollywood's film industry is already the biggest in the world -- its worth at least 500 million dollars a year. And its set to earn more with films being made specifically to appeal to audiences outside India. More slick production values has increased the cost of making current block-busters, but the returns are also larger from an export market which is building around the world. Glossy premieres are being held in international capitals like London where there are large Asian audiences. 3/08/01
Huge telecoms potential says Reliance
Reliance Industries, India's largest private sector company with an annual turnover of $11bn, is probably better known for its petro chemicals and manufacturing, which are classic old economy staples. But it's increasingly recognising the potential in the new economy. This week, apart from reporting a healthy 14% rise in last quarter profits, it won one of 17 new licenses the government auctioned for companies to operate new mobile phone networks, though it had bid for 15. But Reliance says there are many oppportunities, too, in the fixed network.2/08/01
India's small investors get green light to cash in UTI savings
United Trust of India's flagship investment fund ranks as one of the biggest savings schemes in the world. It counts some 20 million small investors. But since the begining of July, they haven't been allowed take their cash out of the fund because too many people had done so in the preceding months. India's authorities feared the state-owned UTI would collapse as everyone pulled out their money, at a time when the country's share markets have been declining. A huge public outcry turned the matter into a political scandal. And today small investors were finally given the green light to take out part of their savings.
New threat to global trade talks?
The Director-General of the World Trade Organisation, Mike Moore, has warned its members that they are in danger of being condemned to a long period of irrelevance. He addressed them just 100 days ahead of the WTO's next meeting in Qatar, which is supposed to launch a new round of trade negotations. However, the organisation's 142 members can't even agree on an agenda for talks. Developing nations want an undertaking from the richer nations that they will implement earlier agreements before anyone sits down at a table. The developed countries want to widen the agenda to include debates on the environment and competition. The differences seem as stark as they were at the last meeting in Seattle in 1999, which of course ended in failure to agree on anything. 31/7/01.
India - a decade after economic reforms
Ten years ago this week, the then Indian finance minister, Dr. Manmohan Singh, delivered his budget speech which heralded the beginning of the reform of South Asia's largest economy. Shackled by socialist controls, inhibited by fear of imports, distorted by the impact of politics on investment decisions, he admitted the country was in deep crisis and announced the first moves towards liberalisation. These were only intended to be a start, but because the pace of reform has not been maintained, India is still not attracting the international investment it needs to realise its economic potential. 31/07/01
India's high-tech industry bucks global trend
A string of company results in recent weeks has shown the India's Information Technology sector bucking the worldwide downward trend in quite a startling fashion. Now research from the industry consultants, Gartner, is claiming that the high levels of profitability may be a direct result of the economic gloom in the United States. What's more, Garner is predicting the sector as a whole is likely to continue to grow at an average annual rate of twenty-five percent for at least another three years. The research found that companies facing difficult economic conditions within the US believe the quality of the Indian workforce is comparable to the domestic market, at a much lower cost.
30/07/01
Economic sanctions over 1998 nuclear testing to end?
Pakistan is following India in stepping up the calls for the US to lift the economic sanctions it imposed against both countries in the wake of the testing of nuclear warheads more than three years ago. America's Assistant Secretary of State for South Asia, Christina Rocca, is in Islamabad this week. It seems certain that the issue will be raised in talks with both the President, General Pervez Musharraf and Foreign Minister Abdul Satter. Events appear already to be moving in the right direction for India, following the statement last week by General Henry H Shelton, the chairman of the US Joint Chiefs of Staff that the days of sanctions were numbered.
30/07/01
Pakistan to build world's largest IT call centre
Pakistan is planning to build the world's largest Information Technology call centre in Lahore. The move is part of a wider push to promote Pakistan as an international centre of excellence for IT. The plans were announced by the Minister for Science and Technology Dr Ata-ur-Rahman who is hoping it will boost the level of investment in the sector. Until now Pakistan hasn't been able to mirror the explosion in computer software and high tech companies that we've seen in India but its hoped that projects like this will help shift the balance. 27/07/01
Can UTI win back investors' trust?
India's biggest mutual fund the Unit Trust of india has been in the news for all the wrong reasons in recent months.
UTI's flagship savings scheme the US-64 has twenty million investors. It ranks as the largest mutual fund in the world.
But the scheme's savers were in for a rude shock earlier this month when they were told they couldn't withdraw the cash they'd invested in the fund. That ban followed a drastic fall in the US 64 fund's value because of a number of questionable investment decisions by the UTI top brass.
Now the Indian police is investigating those decisions. Senior officials of the fund including UTI's former chairman, P.S.Subramanyam were arrested last week for duping investors.
A senior bureaucrat from the Indian finance ministry M. Damordaran has now been appointed UTI's new chairman. 26/07/01
Lowest close in two weeks for main Bombay share index
Continuing uncertainty over the crisis surrounding Unit Trust of India kept shares lower at the Bombay Stock Exchange on Wednesday. 25/7/01.
World Bank encouraged by Pakistan's economic reforms
Last November the IMF resumed lending to Pakistan and today the World Bank has signalled its confidence in the abilities of Pakistan's efforts to revive its economy. Earlier today, in Islamabad, the bank revealed that it is considering issuing up to $500,000 worth of different loans, for various projects. The institution's latest report says that although there is a long way to go, the Government's economic reforms seem to be working. 25/7/01.
Light volumes of share trading in Bombay
Tuesday saw another slow trading session at the Bombay Stock Exchange, with many investors standing back, pending a clearer situation about the ongoing investigation into Unit Trust of India. The main index that tracks shares in the country's leading 30 firms closed slightly higher at 33-35. 24/7/01.
Hindustan Lever to focus on marketing fewer key products
The fortunes of India's biggest company are often a signal about the state of the country's economy. Hindustan Lever sells more than 100 consumer products, ranging from tea to soap. On Tuesday the group posted profits of 4.67 billion rupees, about $10 million, that is 63 per cent higher than the year before. The company has conceded that demand for consumer products in rural India has dropped, largely because of successive years of falling agricutural production. Hindustan Lever's new strategy is to focus its marketing on a core of key so called premium brands. 24/7/01.
Indian stockbrokers strike
Share trading came to a virtual halt at India's main financial markets on Monday, as brokers took strike action to protest at the introduction of a new system that bans trading on the margins. By lunchtime only 100,000 shares had changed hands at the Bombay Stock Exchange, compared with average daily volumes of up to two million shares. 23/7/01
Arrest of former UTI chairman upsets investors
The news just doesn't get any better for the millions of nervous investors in India's biggest mutual fund. The Government has launched an investigation into the way that Unit Trust of India has been managed, but that could be superceded by the enquiries of the Federal Police. On Saturday the former chairman of UTI, PS Subramaniam, was arrested and remanded in custody, until July the 27th. Mr Subramanian and two executive directors of UTI, were detained after the Central Bueau of Investigation registered a case accusing them of causing a wrongful loss of 328 million rupees, about $7 million dollars, over investments in a software company, Cyberspace. Unit Trust of India manages more than 12 billion dollars worth of assets and its troubles have rattled the financial markets. 23/7/01.
Homes raided in UTI scandal
India's Central Bureau of Investigation has raided the homes of a number of executives in connection with the scandal at the country's largest fund manager, Unit Trust of India. At the beginning of the month UTI stunned investors when it announced a six month freeze on payments on it flagship US 64 fund which has around 20 million investors. The case caused an outcry across India, and the government pledged to launch a thorough inquiry. 20.07.01
AES threatens to pull out of power venture
The American energy company AES has threatened to pull out of a troubled distribution venture in Orissa in eastern India. It plans to sell its stake in CESCO unless certain conditions are met. 20.07.01
Ban on Bangladesh natural gas exports challenged
Oil companies involved in the exploitation of natural gas in Bangladesh are hoping for an easing of the ban on gas exports when a new Government is elected in October. A Californian company, UNOCAL, has risked the wrath of the current government by signing a memorandum of understanding with West Bengal for the supply of gas from Bangladesh. The agreement is pretty meaningless with the ban on exports in place. 19/7/01
Brokers go on strike
Indian stock brokers, operating in 16 markets are to strike for one day on Monday. They are protesting against being forced by a new system, introduced earlier this month, to settle their debts more quickly. Under India's previous system, they could postpone final payment for shares bought; and this was thought to encourage more speculation, and indeed market manipulation. Now they have to pay up swiftly in cash, and a tax on turnover is being introduced to control excessive buying and selling.18/7/01
PIA which is in urgent need of money to keep going, says it's hopeful of striking a deal with a group of state run banks. The company is negotiating for a six billion rupee or 9.36 million dollar bridging loan - it's due to get a 20 billion rupee rescue package from the government but not quickly enough to cope with immediate liabilities. The airline hopes the loan will be finalised in the next week.17/07/01.
Small Indian investors not happy with UTI relief plan
The Unit Trust of India (UTI) has said it will permit limited redemptions of units in its flagship fund -the US64- beginning August 1. The move is aimed at easing the impact on small investors of its earlier decision to suspend redemptions entirely for the remainder of 2001. But small investors say the system is still unfair. 16/07/01
Markets hope for positive summit
With the scenic backdrop of the Taj Mahal, this weekend's summit between the leaders of India and Pakistan will prove groundbreaking. When India's prime minister, Atal Behari Vapayee, meets Pakistan's president, General Pervez Musharraf, in the northern Indian city of Agra, political considerations will dominate the agenda. However the business communities, on both sides of the border, have high hopes that any positive outcome from the summit will encourage economic development. Hear Sanjay Kanal, a specialist in Asian equities with ABN Amro in London, tell the BBC's Russell Padmore making cross border trade more legitimate, would dramatically increase tax revenues for the Governments of both countries. 13/7/01.
Bombay stocks end the week flat
At the start of Friday's trading session at the Bombay Stock Exchange traders pushed the main index of shares much higher, encouraged by big gains in New York on Thursday. However the newly introduced settlement system encouraged many brokers to close their positions before the weekend and that drove the market back down again. The main 30 share index finished just one point higher. 13/7/01.
Brokers demonstrate at Bombay Stock Exchange
At four o clock after trading, brokers angry about slim volumes and a fall in commissions of 90 basis points, made their way to the headquarters of SEBI, the market regulator, where they held an angry demonstration. They say this is in no way a response to the strict new trading conditions forced on them after a government investigation into alleged insider dealing on the Bombay thirty, including the abolition of so called "carry forward" trading. But say they are being hit by a double whammy of low rates and falling trade. And they are not ruling out strike action next week. 12/7/01
US power firm Enron in talks with Indian officials
In India the chairman of the US power giant, Enron, Kenneth Lay, has just ended a round of talks with government officials aimed at resolving the long-running dispute over its troubled electricity plant in Maharashtra state, in the west of India. Enron's Indian subsidiary, and the Maharashtra state energy board have been arguing for more than six months about eledtricity payments. The state is arguing that the electricity from the plant costs far too much. 12/7/01.
Infosys results beat expectations
India's software giant, Infosys, has reported a 50 percent rise in profits - higher than had been expected. This rise comes despite exposure to the technology slowdown in the United States. 10/07/01
Markets wait for quarterly results from Infosys
With so many technology sector companies issuing profits warnings and announcing job losses, quarterly results from India's second biggest software exporter, Infosys, will be closely watched on Tuesday. Many analysts are forecasting just a slight growth in sales and revenues for the Bangalore based group, which does about three quarters of its business in north America. The ailing groups Cisco and Nortel are among its clients and as they cut back on production Infosys could suffer. 9/07/01
Torrential rains dampen enthusiasm at Stock Exchange
Heavy rain in Bombay caused many traders to stay at home on Monday. The main index of shares closed lower, after a session marked by low trading volumes. 9/7/01.
A possible rescue for Unit Trust of India
The Indian Government expects a report from the Unit Trust of India on its finances next week. Government Ministers are also putting pressure on management to resume payments to smaller investors. There are increasing expectations that the Government will have to move in to bail out the Fund, which put a ban on redemptions from its largest investment trust on Monday. 6/7/01
Hinduja's could lose battle to buy stake in Air India
The battle to win a stake in Air India, when it is privatised, could take a new twist on Friday, if the Indian Government decides to rule out one of the bidders on security grounds. The Government is selling up to 40 percent in the financially troubled carrier. Two groups are competing for a stake - Singapore Airlines in partnership with the Tata conglomerate, one of India's largest industrial groups, is hoping to beat off a rival bid from the Madras based truck and bus-maker Ashok Leyland - that company is controlled by the Hinduja family of entrepreneurs. The Indian Government has been outlining some rules that it will apply to the sale. 5/7/01
Sluggish trading at Bombay Stock Exchange
The index of shares in India's main companies finished flat for a second successive session on Thursday. Volumes were light as nervous traders put off investment decisions, pending moves from the government to bail out the country's largest mutual fund company, United Trust of India.5/7/01.
Iran-India gas pipeline will feature on summit agenda
The prospect of a pipeline connecting India with the wealth of gas resources in Iran will be discussed at next week's summit between the Government's of Pakistan and India. As the Indian economy grows gaining access to cheap sources of power is crucial. India does not have viable gas reserves and has to rely on costly imports of LNG, or liquified natural gas. However a building a pipeline, more than 2,500 kilometres long, that connects India with Iran's South Pars gas field, will mean constructing one to run across Pakistan, a sensitive prospect in the light of the hostility between both nations.5/7/01.
UTI chairman quits after Goverment announces investigation
The controversy over the troubled mutual fund United Trust of India has led to the resignation of its chairman PS Subramanyam. He quit after the Government said it would investigate the conduct of the country's largest investment fund, which has around 40 million investors. Those who have money in UTI's US-64 scheme have been told that the fund will not allow them to redeem their investments for six months. United Trust of India is trying to prevent a run on its reserves caused by millions of frightened investors trying to cash in their holdings. UTI has appointed an existing director K G Vassal, as chairman to replace P S Subramanyam. The resignation has done little to reassure investors who cannot get their money out of UTI until the end of the year. 4/7/01.
Trading suspended after mistakes cause big rise in index
The UTI controversy and a technical glitch caused India's main financial market to suffer a lacklustre day on Wednesday. 4/7/01.
India's finance minister tries to calm nervous UTI investors
The Indian Government has reassured thousands of private investors, who have put money into Unit Trust of India, that they should not panic. UTI's flagship investment scheme US 64 has run into trouble, essentially because there is uncertainty as to the current value of its assets. Unit Trust of India, which was set up in the 1960's and is administered by the Government, operates in much the same manner as American mutual funds. It buys and sells shares and then passes on part of the profits to its investors. These include big investment banks, as well as thousands of ordinary investors. Today UTI frightened investors by announcing it would stop all redemptions for six months. This means the fund is trying to prevent possible collapse being brought about by too many nervous people trying to cash in their investments. 3/7/01.
Developments at UTI make Bombay Stock Exchange nervous
The main index of shares in India's leading companies fell more than three percent on Tuesday. 3/7/01
Bombay Stock Exchange ends 100-year-old system
For a century India's main stockmarket has used a much criticised system of settling transactions in shares, by allowing part of the money involved to be carried forward. This meant that traders could effectively buy a stock, paying just the margin call and then later sell at profit - if it increased in value. This tradition has been abused by unscrupulous traders who continued buying shares trying to artificially send their value higher. It might have taken a hundred years but finally today the Bombay Stock Exchange has adopted the international standard of share trading and abandoned the carry forward system. 2/7/01.
Main index of shares in Bombay slips lower
The first day of the new settlement system caused traders to hesitate in Bombay, which drove the market lower. 2/7/01.
Indian economic growth slower than expected in fiscal 2001
Economic growth is falling far short of the 8% Prime Minster Atal Bhari Vajpayee says the country needs to end poverty within a decade. Gross domestic product - or GDP, the broadest measure of economic growth - expanded just 3.8% in the the 4th quarter of the fiscal year ending in March 2001. Compare that with expectations that it would grow by 4.7%. For the whole year ending in March 2001 meanwhile, economic growth expanded 5.2%. The economy grew by 6.4% the previous year. 29/06/01
Merger set to create India's largest cellphone operator
Competition in India's fast-growing mobile telecoms sector is intense. The sector was opened up to private firms in the early 1990's and since then there has been a wave of consolidation as companies have sought strength in numbers. Now, BPL Communications and Birla-AT&T-Tata have announced the biggest deal so far. The two companies are planning a merger which will create the country's largest cellular company. The announcement was made just a day before the deadline for lodging bids in an auction for new mobile licences, which will authorise new operators in India's 28 regional mobile telephone "circles". 28/06/01
African brewer to expand holdings in India
South African Breweries, Africa's largest industrial group, has announced its to take a controlling share in India's Mysore breweries. It is the second time SAB has bought into an Indian brewing firm - it already controls the Nawabganj brewery. The deal will help the company increase its market share in the states of Maharashtra, Karnataka and Andhra Pradesh. SAB says it plans to expand furrther into India, despite the BJP-led government's known opposition towards increased alcohol consumption. 28/06/01
New Competition Bill attracts widespread criticism
It is the latest piece in India's economic reform jigsaw - but the government's planned Competition Bill is already attracting sharp criticism. The draft Bill will set up a new 10 member competition commission for India, which will vet all mergers and acquisitions where the assets of one company exceeds 10 billion rupees, or 150 million dollars, or where turnover exceeds 30 billion rupees. It has already been approved by the cabinet and is expected to begin its passage through parliament in late July. But it is expected to face sharp criticism from anti-reform elements in the government. 27/06/01
Unit Trust of India faces crisis
Once it was seen as one of the safest investments around. Now investors are apparently scrambling to withdraw their money. The Unit Trust of India is the country's largest mutual fund manager - and the largest single investor in Indian markets. It controls 600 billion rupees' worth of investments in Indian markets, a quarter of that through its main fund, US-64. Although Indian markets have fallen heavily in recent months, UTI investors have been protected because the published repurchase price isn't directly linked to the value of the fund's assets. But all that will change when the fund shifts to market based pricing in February. Dhirendra Kumar, of the tracking firm Value Research, believes that has been a catalyst for the current crisis. 26/06/01
Pakistan's state run energy utility has clocked up massive losses once again
The World Bank has joined the chorus of concern over the mounting losses being incurred by the Water and Power Development Corporation, which some analysts put at up to a quarter of total production every year. 25/06/01
Nine Broadcasting to close TV operations in India
The media company Nine Broadcasting - backed by Australian media mogul Kerry Packer is shutting down its television operations in India. Its programmes which are currently seen on DD Metro will go off the air in September. 22/06/01
Scrutiny of SEBI
At least ten people have committed suicide as a result of the slump in Indian share prices which followed this years budget. Now SEBI, The Securities and Exchange Board of India, the body which regulates stock exchanges has published the first part of its report into the price fixing which led to the slump. 21/06/01
Developing Nations challenge international patent laws
At the World Trade Organisation in Geneva, developing nations are challenging current patent law. They're accusing international companies of virtually stealing the properties of plants or seeds that have been put to agricultural or therapeutic uses by people in Africa or Asia for centuries. By taking out a patent, the companies can establish a monopoly on natural products which many in the developing world believe are common property.20/06/01
Hotmail founder's latest venture collapses
The downturn in the US economy has claimed another high-profile victim. Arzoo dot com - the latest venture from hotmail co-founder Subeer Bhatia - has closed down. The California-based business is thought to have suffered from strong competition and cost cutting among potential customers - despite the best efforts of its high-profile founder. 20/06/01
India's reform process runs out of steam
India embarked on the painful road to economic reform almost exactly ten years ago. But now many commentators believe the process has run out of steam. A series of recent scandals have paralysed the BJP-led government - and the giant American power company Enron's decision to give notice that it may abandon a three billion dollar electricity generation project has worried foreign investors.19/06/01
Daewoo India chief resigns
The chief executive of the car company Daewoo India, Young Chang Kim has resigned after the company's losses nearly trebled to 340 crore, about 70 million dollars, and gross sales slid by seven percent. The company maintains Mr Kim's departure was down to personal and health reasons. However, some of Daewoo India's customers complained of late payments. And perhaps most embarrassing of all the firm invested heavily in a factory to make engines and gearboxes which are not actually compatible with its own cars. Daewoo India is still majority controlled by its South Korean parent company Daewoo International, which recently went bankrupt. 18/06/01
Bombay businesses call for end to Enron row
Could an end finally be in sight to the bitter long-running dispute between the US power company Enron, and the Indian state of Maharashtra? The state's business community certainly hope so, in fact they're calling for an immediate out-of-court settlement - as part of a programme to revive the state's falling growth. 15/06/01
Pakistan postpones interest free banking
The Supreme Court in Pakistan has ruled that the introduction of interest free banking should be postponed for a year. It was meant to be introduced at the end of the month but local banks said it was impossible to make the necessary changes in time. 14/06/01
Petrol prices rise 14% in Pakistan
Pakistan's government has put up the cost of petrol by between 9.4 and 14.5% -- the rises have already come into effect. Until now the government has fixed fuel prices for petroleum products every 3 months, depending on the international oil price. But from July, the the oil marketing companies will decide price changes every fortnight. Pakistan's Petroleum Secretary, Abdullah Yousaf, says the de-regulation of the price setting mechanism is a significant step towards to de-regulation of the petroleum sector as a whole. 14/06/01
Enron pours cold water over tariff cut talk for Dabhol plant
Indian government officials have said that the Indian subsidiary of the US power company Enron has offered to lower the price at which it sells electricity to the Maharashtra State Electricity Board. Authorities have hailed the move as a sign that the bitter row between the two sides may soon be resolved. But Enron says there are still many other issues which need to be discussed before a resolution is agreed. 13/06/01
Drugs merger sparks fear of price-rise for Aids treatments
The American drug giant Bristol-Myers Squibb is to buy the pharmaceuticals arm of DuPont for 7.8 billion dollars in cash. The sum which has surprised many analysts, who had been predicting a payment of just six billion dollars. The sale will give Bristol Myers control over a bigger chunk of the market in Aids drugs. Du Pont makes the Sustiva, a treatment for the virus, and has been developing others. Aids campaigners have said the planned tie-up will reduce competition in the market, thus also reducing the likelyhood of cheaper drugs for the developing world. 8/6/01
Further challenge to BRAC
The campaign is to continue against the acquisition of 50 per cent of a bank's shares by BRAC -- one of Bangladesh's biggest Non-Governmental organisations. This is despite a Supreme Court decision that the charity, which was founded to help small businesses develop in Bangladesh, can legally buy into a commercial bank. 8/6/01
Bangladesh Finance Minister proposes election friendly budget
Finance Minister S.A.M.S. Kibria has proposed a 52 billion taka surplus for the coming year. He is also planning to increase import duty on rice to 25% from 15%.07.06.01
Pakistan's government throws PIA 20 billion rupee lifeline
Pakistan's military led government has approved an emergency rescue package for Pakistan International Airlines - the country's national carrier. It has agreed to help the company, which is in serious financial difficulty, to raise 20 billion rupees or 320 million dollars in order to keep its planes in the air.07.06.01
Indian government "will cede control" of Air India
The Indian government has confirmed that it will handover control of Air India once it is privatised. This follows recent concerns that the government could use the stake it's retaining to meddle in the company. Under the privatisation plan, 40 percent will be sold to a strategic partner and a further 20 percent offered to airline employees and investors. 06/06/01
Infosys boldly goes where others fear to tread
The Indian software company Infosys is yet again bucking the global trend and, at a time when most are retrenching, has announced yet more business deals. On Tuesday the company said it was teaming up with TIBCO Software and the US financial services firm American Express to create a business software company. Then on Wednesday it said it was expanding its existing links with Japan's Toshiba to build information infrastructure across the world. 06/06/01
Indian Stock market regulator upholds CSFB ban
The Securities and Exchange board of India has upheld its ban on the stockbroking activities of the swiss bank Credit Suisse First Boston. CSFB is the most high profile institution to be censured for its role in March's dramatic stock market fall. It all began soon after the finance minster of India had delivered a budget widely praised as pro-business. Between March 1st and mid-April, the Bombay index fell by a fifth. The Securities and Exchange Board of India was called in by the finance minister to find out why. And, in what became known as a wild bear hunt, Credit Suisse First Boston became the first foreign firm ever to face a stockbroking ban. CSFB appealed, but the ban has now been upheld....and all rests on a parliamentary decision. 05/06/01
Emerging markets benefit from India's red tape?
The Indo-American Chamber of Business says bureaucracy and red tape are forcing foreign investors to shun India for emerging economies like China. The Chamber, which promotes trade between the two countries, is calling for reform of what it sees as a cobweb of rules, regulation and state intervention. Four major foreign power companies have pulled out of projects in India, worth some $3bn, in recent months, all citing long delays and the slow pace of reforms. 04/06/01
India to draw up guidelines for companies bidding for sensitive contracts
Indian authorities are trying to draw up new guidelines for companies bidding for contracts in sensitive areas of the economy. It seems that despite giving the lowest quote for new Indian airport security systems a Chinese company is unhappy that it was refused the contract.
01/06/01
Indian Oil to raise half a billion dollars from bond issue
India's biggest oil refiner, Indian Oil, says it plans to raise up to five hundred million dollars by selling bonds, mainly to investors outside India. The company plans to use the money to expand and modernise three refineries to keep pace with demand. Listen to Indian Oil's spokesman, D.K. Das, who says demand for petroleum products is growing at an unprecedented rate in India. One reason for that is the country's chronic shortage of energy. That won't be a surprise to anyone who's suffered a power cut in Delhi during the summer, when your air conditioner abruptly goes off leaving you to sweat it out in forty degree heat. And the lack of power is a major factor stifling India's industrial development. 31/05/01
Novartis buys Indian firm's idea for new diabetes drug
Diabetes is an increasingly common ailment around the world. One of India's biggest drugs companies, Dr Reddy's Laboratories, has just sold a molecule it's been working on, to be used for the development of a new treatment for diabetes to the multinational pharmaceutical giant Novartis. The price was fifty five million dollars. Dr Reddy's is big in India -- it's just announced annual turnover of 30 billion dollars -- but says Novartis has the resources to proceed with the research it's begun and develop a new anti-diabetes drug. 31/05/01
Crucial stake in Sri Lanka Telecom to be sold
The government has confirmed it's to sell off a controlling share in Sri Lanka Telecom or SLT. Telecommunications Minister Nimal Siripala de Silva said SLT needed new partners in a joint venture to push through technological advances. Japan's NTT already owns 35% of SLT, and there's speculation it may try and increase its share. 30/05/01
Enron power plant - open or closed?
There's confusion over whether US company Enron's power station in India's industrial heartland of Maharashtra State is still operating. For months it's been at the centre of a major row between Enron and the local government over the cost of the electricity produced at the plant. The State Electricity Board is claiming it stopped operating on Tuesday afternoon, but Enron won't confirm this. 30/05/01
Mahindra & Mahindra report 60% drop in profits
One of India's best known vehicle makers Mahindra and Mahindra has reported a sharp drop in profits. They were down just over 60% in the fourth quarter as it faces weaker demand and increasing competition form abroad. The most significant rival is Toyota's Qualis which has stolen a large portion of the market for multi utility vehicles or jeeps. 29/05/01
Enron row with Maharashtra state deepens
Relations are worsening ahead of fresh talks to save the two-point-nine billion dollar Enron power plant in India's Maharashtra state. The US power giant says it's merely attending tomorrow's negotiations with the Maharashtra State Electricity Board as a matter of courtesy. Last week, the company said it would refuse to sell electricity to the Government because of its demands for the price of power to be lowered. In apparent retaliation, the Maharashtra authorities last week said they were terminating their contract to buy power from Enron.
28/05/01
Bumper Bangladeshi rice harvest bad news for India
The Bangladeshi Government is almost completely banning the importation of rice into the country. Officials say the decision is aimed at protecting local growers, following a bumper harvest in the country. India stands to lose most from the move, with shipments outlawed through all but one crossing between the two countries. The latest restriction follows the recent introduction of a seven-point-five percent duty on imports of rice, in an effort to protect Bangladesh's dwindling foreign exchange reserves.
28/05/01
Bangladesh Bank devalues taka by 5%
As of Friday, the Bangaldeshi taka is worth 5% less against the US dollar than it was on Thursday. That's after the Bangladesh central bank devalued the currency downward to between 56.50 and 57.50 to the US dollar. On Thursday it was worth between 53.85 and 54.15 to the dollar. No official reason was given but analysts say the devaluation should help boost exports and therefore top up the country's dwindling foreign exchange reserves. 25/05/01
The suspension of Air India's Managing Director threatens privatisation
The privatisation of Air India has appeared extemely problematic for some time. Now its beginning to look as if it could be cancelled. One of the men pushing for the sale of 40 per cent of the loss-making airline has been suspended, amid allegations of overpayments to a London general sales agent. Air India's Managing Director, Michael Mascarenhas, has been quoted as saying that the suspension of himself and another Air India official were: "a clearly motivated move; framed with obvious intent".
24/5/01
Zee Telefilms searches for a partner
India's largest private television network, Zee Telefilms is to sell a stake to an international media company to help it expand its operations around the world. Zee says it wants to be able to market some of its products to people outside the South Asian diaspora. Zee has been struggling lately in its core Indian market, because of strong competion from Star TV -- which is controlled by Rupert Murdoch. But its shares have been lifted by the announcement that it is looking for a partner with international expertise.
24/5/01
Drought could cut Indian growth by up to three per cent
India's Finance Minister, Yashwant Sinha says the drought in some parts of the country is likely to have an "adverse impact" on the economy. Foodgrain production could drop by as much as 12 million tonnes. Agriculture accounts for a quarter of India's gross domestic product -- growth in the last financial year was affected by poor rainfall in the western and central parts of India. The Centre for Monitoring the Indian Economy has produced a report on the impact of the drought. 23/5/01
Indian state of Karnataka reopens talks on power contracts
Karnataka,home to the country's high-tech hub of Bangalore, is calling 11 private power producers back to the negotiating table.The Karnataka State Power Transmission company, which has a monopoly on distribution of electricity in the state, wants to lower rates for the power it agreed to buy from these private power producers. The move comes on the heels of the bitter wrangle in Maharashtra state involving the US power company Enron. 22/05/01
India's biggest foreign investor set to pull out
Enron, the US power engineer which has been enmeshed in acrimonious relationship with the Indian state of Maharshtra for eight years, says it has started the process that will lead to it quitting india. Enron is the biggest single foreign investor in India and, if it leaves, this could send a dangerous message to other foreign investors, particularly in the power sector. Hear an interview with the BBC's Business Correspondent Mark Gregory. 21/05/01
South Asian business leaders challenge political barriers
A top level trade delegation from India has arrived in Pakistan to try to rebuild business links between the two countries. All bilateral contacts have been frozen since India and Pakistan fought a border conflict in Kashmir in 1999. But Indian companies are keen to sell more of their products in Pakistan. And from Pakistan's point of view, Indian imports would be cheaper than those from more distant countries.
Hear a report by the BBC's Duncan Bartlett. 21/05/01
"Painful reforms must continue" - Vajpayee
India's prime minister has pledged to press ahead with changes to the law which will make it easier for firms to fire their workers. Premier Atal Vajpayee says the reforms are vital for the health of the Indian economy. The reforms would remove the obligation for firms employing up to 1,000 workers to seek government approval before laying off workers. Previously only firms with fewer than 100 workers were allowed to cut staff without government approval. In an address to a Labour conference in Delhi, Mr Vajpayee admitted the change would cause pain, but insisted there there was no turning back on his reforms. But Bharatiya Mazdoor Sangh leader Harsubhai Dave demanded an entire review of the 10-year-old reform programme, including privatisation, which he said had led to lay-offs of thousands of workers and the closure of state-owned enterprises. 18/5/01
Asian woman wins top UK business award
The only Asian woman to sit on the board of a major UK company has won an award for her success in business. Yasmin Jetha, who is a director of the Abbey National, received the honour at the Asian Women of Achievement Awards in London. Interviewed by the BBC, she said she felt the best way to get ahead in business was to seize opportunities with both hands when they come along. She also emphasised that respecting colleagues was of key importance. 18/05/01
Corruption report handed to ministers
India's Finance Ministry has finally received a crucial report into allegations of corruptions at the country's major Stock Exchanges. The Securities and Exchange Board has handed over documents naming traders and brokerage houses which it believes manipulated the market. The report points the finger at one of Bombay's best known financial figures, Ketan Parekh, who is already under arrest and facing criminal charges for allegedly defrauding banks. Other brokers mentioned in the report include Shilesh Shah Group, Ajay Kayan Group, Radha Krishan Damani Group and Nirmal Bank.
Pakistan grants software firms a tax "holiday"
Pakistan is taking steps to help its fledgling computer software industry catch up with its counterparts elsewhere in Asia, particularly the high tech firms in India. The government's allowing an income tax exemption for software exports for the next 15 years. The authorities particularly hope it will encourage foreign companies to set up new software houses in Pakistan, where the sector's been largely ignored in the past.
Indian shares dive as "carry forward" scrapped
Share prices in India suffered one of their sharpest falls of the year at the start of trading on Tuesday. The main Bombay index dropped four percent after the authorities announced a ban on the carry-forward system, which is used in 90 percent of deals. The existing system, which allows traders an ununusally long time before they have to pay for their shares, will be abandoned from July this year. Prices later recovered and the index closed up a quarter of a percent at 35/77. But the authorities say the measure's necessary as part of a clampdown on corruption and to stop wild swings in share prices. 15/05/01
Indian business guru gets top job at Kellogg
An Indian's won the top job at one of the world's best known management schools in the United States. Dipak Jain is to become dean of Chicago's Kellogg Graduate School of Management. He was previously the school's associate dean of academic affairs. Mr Jain is also involved in the Indian School of Business in Hyderabad, where he spends five days a month. He says India's "people-first" approach to management is a philosophy he wishes to encourage more people in the United States to adopt. 15/05/01
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