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Events of the fornight

Events of the fornight

Caught at Silly Point: Former Pakistan captain Salman Butt and pacers Mohammad Asif and Mohammad Aamer became the first cricketers to be sent to prison for corruption, when a London court found them guilty of spot-fixing.

Salman Butt, Mohammad Asif and Mohammad Aamer Salman Butt, Mohammad Asif and Mohammad Aamer
Just Not Cricket!
Caught at Silly Point: Former Pakistan captain Salman Butt and pacers Mohammad Asif and Mohammad Aamer became the first cricketers to be sent to prison for corruption, when a London court found them guilty of spot-fixing. Mazhar Majeed, a bookie, got 32 months in jail. Millions of dollars are wagered on cricket every year, mostly illegally.

CORPORATE

  • The Supreme Court has granted bail to former Satyam Computer founder-chairman B. Ramalinga Raju, his brother B.Rama Raju, and former chief financial officer V Srinivas. In India's biggest accounting fraud, Raju admitted in January 2009 that he had falsified Satyam's books to the tune of some Rs 7,000 crore over several years. The court granted him bail after the Central Bureau of Investigation failed to file charges on time.
  • The 2G scam trial took another curious turn when Judge O.P. Saini dismissed DMK Member of Parliament Kanimozhi's bail application along with that of seven others. The order was panned by some lawyers, given that a chargesheet has already been filed and the next hearing is set for November 11.
  • Indian banks are in fine fettle. India's largest private sector bank, ICICI Bank, improved its asset quality and saw higher demand for loans from companies as also home and car buyers. ICICI Bank's net profit for July-September was up 21.59 per cent yearon-year at Rs 1,503 crore.
  • It's a hat-trick for Hindustan Unilever this earnings season. The FMCG major has recorded double-digit growth for the third straight quarter, reporting a 22 per cent rise in net profit at Rs 689 crore in the second quarter.
  • At Bharti Airtel, the mood was downcast. It reported a 38 per cent decline in net profit to Rs 1,027 crore, missing analyst estimates for the fifth straight quarter. New licence costs and interest charges dampened earnings.
  • Wipro Chairman Azim Premji sees no gloom and doom in the IT sector. Though lagging behind sector leaders TCS, Infosys and Cognizant, Wipro's IT services revenues stood at Rs 6,829 crore in the quarter ended September, a seven per cent increase on a sequential basis. Premji made bigger headlines when he hit out at the government for its stasis in decision making. Separately, as if to prove his own commitment, the Azim Premji Foundation has announced it will start 1,300 schools - two per district - imparting free education in the local language.
  • The G20 meet in Cannes took a dramatic turn when developed nations sought succour from emerging economies such as China and India to tide over the debt crisis. The developing bloc favours an International Monetary Fund-sponsored Eurozone package. Italy has agreed to let the IMF monitor the long-delayed reforms of its pensions and labour markets and privatisation programme.
  • The founder of WikiLeaks and whistleblower, Julian Assange, has lost his appeal against extradition to Sweden on allegations of sexual assault. Ever since the release of over 250,000 US embassy cables, WikiLeaks has been fighting a financial blockade by Visa, Bank of America and MasterCard, estimated to have cost Euro 50 million.
  • In the race for dominance in the global smartphone market, Samsung has overtaken Apple. In July-September, its shipments grew 44 per cent from the preceding quarter to 27.8 million units, rising four times from a year ago. Apple's iPhone sales shrank 16 per cent to 17.1 million units in the third quarter. Samsung had 23.8 per cent of the smartphone market in the quarter, 9 percentage points higher than Apple.
  • It is not just in India that airlines are facing rough weather from labour unions. Australia's Qantas Airways, the world's 10th largest airline, had to ground its entire fleet because of a labour dispute. It returned to the skies only after a court intervention. The grounding affected 108 planes in 22 countries. Not quite a G'day, mate.

ECONOMY

India's manufacturing output in October rose for the first time in six months. The festive season seems to have brought some cheer to the economy. The Purchasing Managers' Index rose to 52 from 50.4 in September, according to HSBC Holdings Plc and Markit Economics. An index reading of more than 50 indicates expansion. Core industries, however, performed below par in September. Eight crucial sectors, including coal, gas, fertiliser, among others, having a weight of almost 38 per cent in the index of industrial production grew just 2.3 per cent in September year-on-year - the lowest in two-and-a-half years.

Oil marketing companies
delivered another blow and hiked petrol prices by Rs 1.80 a litre on November 3. This is the third hike in less than six months. Food inflation touched 12.21 per cent.

Ahead of assembly polls in five states next year, it is time for affirmative action. A new policy, cleared by the Cabinet, targets 20 per cent of government purchases from micro and small units, which employ an estimated 60 million. Public sector units are expected to buy goods worth Rs 35,000 crore from small units, of which Rs 7,000 crore is to flow to scheduled caste/scheduled tribe entrepreneurs.

Pakistan has granted Most Favoured Nation, or MFN, status to India. This means trade treatment on par with other partners. The two-way trade is expected to jump from $2.6 billion per annum to $8 billion in five years. India granted MFN status to Pakistan in 1996.
 
500,000 Estimated small and medium businesses, or SMBs, to benefit from free Google India Web site, domain name, Webhosting facilities in three years. India has 40 million SMBs but only 400,000 have a presence on the web. Only 100,000 have a decent website, according to Rajan Anandan, MD and Vice President, Google India.

160% Jump in India's trade deficit with China to $23.9 billion, over five years to 2010/11. Chinese imports to India touched a high of $43.5 billion in 2010/11, up from $17.5 billion in 2006/07. Indian exports to China totalled $19.6 billion in 2010/11, rising from $8.3 billion five years ago. India hopes bilateral trade will hit $100 billion by 2015.
 
MARKETS

The European debt crisis has claimed the first US financial company. MF Global filed for bankruptcy protection after Moody's Investor Service cut its credit rankings. MF Global employed 2,870 people globally. However, MF Global's bankruptcy protection filing in the US may not have a major impact on the firm's Indian operations. It is spread across equity, debt and commodity broking in the institutional and retail space in India. It is also a member of both the premier bourses in the country - BSE and NSE.

State Bank of India Chairman Pratip Chaudhuri says big banks such as his will not hike interest rates of savings bank accounts even after the deregulation of rates by the Reserve Bank of India. SBI is separately planning to hike tenure of home loans up to 30 years as the average life of a new house is seen as 30 years.

COMING UP
India is taking another step towards better civil aviation safety and regulation with the setting up of a Civil Aviation Authority. This will handle regulation of air traffic services and licensing. Indian airports have a capacity to handle 225 million passengers now, and the number may rise to 500 million in 10 years. The authority will have powers to impose punitive measures and ensure ethical trade practices. It may also act as an ombudsman to deal with complaints against airlines