NEWS THAT YOU SHOULD KNOW

Corporate
Tatas buy back pledged shares in 4 group cos
The Tata group has bought back shares of at least four group companies that it had pledged with financial institutions, in a transaction worth about Rs 850 crore at current market price, signalling a healthy liquidity for the holding company of the Mumbai- based conglomerate. Besides freeing the shares from lenders, Tata Sons, the unlisted holding company, would infuse about Rs 1,800 crore by subscribing to preferential shares of two group companies, Tata Steel and Tata Chemicals. The Rs 2,700-crore fund outflow will likely be funded by recent share sales in top group companies and a high profile sale of equity stake in telecom subsidiary, Tata Teleservices, said people familiar with the development. 

Morgan Stanley buys Parkway shares
Morgan Stanley has bought about 4.5 lakh Parkway shares over the past two weeks and said it is buying the shares for a discretionary investment client. Fortis Indian rival, Apollo Hospitals, in which Khazanah owns about a 12% stake,has indicated its tacit backing of the Malaysian sovereign funds move. Apollo, which was displaced as Asias largest hospital chain by Fortis, last month said it is willing to work with Khazanah to expand the health care business in India and Asia. Fortis has four members on the Parkway board and contracts with three other directors who will vote against Khazanahs offer and wont sell their shares .Five of Parkways 12 board members who are considered independent for the purpose of the Khazanah bid said they concur with Morgan Stanleys advice. 

Trai caps cable tariff at Rs 250 for all channels
Consumers will have to pay up to Rs 250 plus taxes a month to watch a complete bouquet of channels on cable television,though operators have the option to charge lesser,says a proposal that is expected to get the governments blessings as early as next week. The proposal to cap cable tariffs was part of a broad consensus that emerged at a meeting between industry representatives and telecom regulator Trai on Wednesday, said people who attended the meeting. A plan to digitise all cable operations in three years was also debated, they said. Trai, which also regulates the broadcast sector, will issue a tariff order early next week, the persons said. Barring certain areas in Mumbai, Delhi and Kolkata where conditional access system (CAS) or digital cable signals are available, all other cable operators will have to follow the new tariff order.

Renuka seals Equipav deal at 25% discount
Shree Renuka Sugars has signed an agreement to acquire a majority stake in Brazilian firm Equipav SA Acar e lcool for Rs 1,151 crore, 25% lower than the price agreed earlier. Shree Renuka, Indias largest sugar refiner,will acquire a 50.3% stake in Equipav which has an annual cane crushing capacity of 10.5 million tonnes and ownership of 115,000 hectares of land. The transaction is expected to be closed in two weeks. The acquisition will consolidate Shree Renukas position in the worlds two largest sugar consuming countries,Brazil and India, said its managing director Narendra Murkumbi. Also, three-fourths of our cane requirement will come from our own land,a big advantage in the sugar business. On February 21,Shree Renuka announced that it would acquire at least 50.8% stake in Equipav for Rs 1,530 crore, subject to debt restructuring by Equipav. The companies extended the original 40-day deadline for completing the transaction by another 20 days but fresh bidding was invited when the deal could not be consummated because of differences over valuation. 

Market
Funds wail, but get an earful in return
A Forum by an industry body on mutual funds on Wednesday, where fund houses intended to pour out their woes to the Securities and Exchange Board of India or Sebi, hardly had any effect on the market regulator. On the contrary, Sebi chairman CB Bhave launched a scathing attack on the practices of the mutual fund industry. Mr Bhave was critical of the way fund houses do business and reiterated the need for them to focus on investors to grow. If you (mutual funds) are producing better returns than what an average investor investing himself in the stock market gets,then why is it that you are unable to convince investors that you are giving them better returns, said Mr Bhave, at a mutual fund summit organised by the Confederation of Indian Industry (CII). I mean, are investors so dumb as not to understand that they are getting better returns here (mutual funds) and yet would invest somewhere they would get lesser returns, he said. 

Chindia to lead emerging markets in HNI growth story
ASIA-PACIFIC and BRIC nations would likely be the powerhouses of high net worth individuals (HNIs) growth,according to a Merrill Lynch Global Wealth Management and Capgemini report .China and India will continue to lead the way in Asia-Pacific, with economic expansion and HNI growth likely to keep outpacing developed economies. After falling 14.2% in 2008 to 2.4 million,Asia-Pacifics HNI population rebounded in 2009 to reach 3 million,matching that of Europes HNI population for the first time, the report said. The Asia-Pacific regions wealth also surged 30.9% to $9.7 trillion, more than erasing 2008 losses and surpassing the $9.5 trillion in wealth held by Europes HNIs. This shift in rankings occurred because HNI gains in Europe, while numbers were far less than those in Asia-Pacific, which saw a continued robust growth in both economic and market drivers of wealth. Hong Kong and India led the growth in Asia-Pacific, after experiencing massive declines in their HNI bases and wealth in 2008, amid an outsized resurgence in their stock markets. While Hong Kong witnessed the highest growth of 104.4% in the HNI population, India was the second- largest contributor with a growth of 50.9% in the HNI population. 

Banking
Dealers see liquidity crunch easing by mid-July
Money market dealers say the liquidity crunch has reached its peak and the situation will ease from now with markets reaching equilibrium by mid-July. Given the situation, dealers also expect that RBI will extend the special liquidity facility where banks are allowed to use some of the bonds required to be held under the statutory liquidity requirement to borrow from RBI. On Wednesday, cash shortfall in the market reached its peak with banks borrowing Rs 70,175 crore up from Rs 64,125 crore on Tuesday. According to Hitendra Dave, managing director, Head Global Markets, HSBC, India: What we are seeing is the peak of the shortfall. It may last for another day or two. But I don't think, it would go beyond these numbers. He added that banks would be compelled to borrow until the third or fourth week of July since liquidity would only return when the government starts spending and the Centre has no mechanism to accelerate the spending 

IPO
MCX gets FMC nod for IPO
MCX has received Forward Markets Commissions (FMC) approval to go ahead with an initial public offering (IPO), even though the proposed sale of 10% shares to a government company failed to elicit any response,reports Our Bureau. The sale was to take place through the bidding process with a total of 81.6 lakh shares being put on the block at a floor price of Rs 563 per share or for Rs 459 crore. FMC had given approval for MCXs IPO subject to the condition that the bourse divests 10% of its paid-up capital to a government company. They called for quotations but nobody came forward to buy the stake. We do not want to bind them to this guideline now that they have gone through the process, so have given them a clean no-objection certificate, said BC Khatua, chairman of FMC. Mr Khatua also said that the bourse would have to comply with Sebis norms before it could list and that as a sectoral regulator FMCs job was to only give an NoC. 

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