While the recent devastating earthquake and tsunami will have an impact on the automobile component industry, M&M sales are not likely to be affected, the company's automotive division president Pawan Goenka said
Mumbai: Auto major, Mahindra & Mahindra (M&M) today said there would be an impact on auto component supplies this month due to the calamity in Japan but it will not impact the sales of the company, reports PTI.
"Yes, imports of some automobile components from Japan are likely be affected this month (March) because of the recent earthquake and tsunami in Japan. But I do not think it (Japan situation) will have an impact on the sales of our company," M&M Automotive president, Pawan Goenka, told reporters here.
The Japan earthquake and tsunami have been devastating for the automobile industry and also hit the component supply industry.
Mr Goenka, who has been appointed as chairman of South Korea's Ssangyong Motor Company (SYMC) said the company plans to set up assembly unit for SYMC vehicles at Chakan near Pune by end-this year.
"We are planning to set up assembly unit for SYMC vehicles at Chakan near Pune by 2011," he said, adding the investment would be less than Rs100 crore.
Mahindra has taken control of the South Korean carmaker after buying a 70% stake in it.
M&M, which emerged as the preferred bidder for SsangYong in August 2010, will now hold a 70% stake in SYMC, for which it has shelled out $463-million (about Rs2,105 crore).
The company plans to launch two vehicles-the Rexton and Korando-C-in India by end-this year and also plans to set up operations of its finance arm, Mahindra Finance, in Korea to boost sales of Ssangyong.
"We will launch Rexton and Korando-C in India by 2011," he said, adding "We will send a team to Korea soon for setting up of our finance arm there."
"There are some regulatory issues to be sorted out before we can set up our finance arm there," he said.
Mr Goenka described today's rate hikes by the Reserve Bank of India (RBI) as "a matter of concern" as it could affect automobile sales.
The central bank today upped both its repo and reverse repo rates by 0.25% each to 6.75% and 5.75%, respectively.
Over the last few months, carmakers have jacked-up prices of cars following a rise in input costs.
"Commodity prices have been increasing of late and now we have the Japan calamity which will affect supplies of auto components. The RBI's rate hikes coming at this time is a matter of concern," Mr Goenka said.
The finance ministry's approval is subject to the condition that any shortfall on account of payment of 9.5% rate of return would be met by making adjustments in the interest rate in 2011-12
New Delhi: The finance ministry today approved higher interest rate of 9.5% to over 4.7 crore depositors with the Employees Provident Fund Organisation (EPFO) for 2010-11, reports PTI.
The EPFO had been paying 8.5% interest on PF deposits since 2005-06. In September last year, it had recommended an increase in interest rate to 9.5% for 2010-11 after discovering Rs1,731 crore surplus in their books of accounts.
"The finance ministry has ratified 9.5% rate of return on PF deposits for 2010-11. We have received a notification in this regard," Central Provident Fund commissioner Samirendra Chatterjee told PTI.
Mr Chatterjee further added that "Our calculations regarding Rs1,731 crore surplus in the interest suspense account were found correct by the finance ministry and so they approved this higher rate of return."
The finance ministry's approval is subject to the condition that any shortfall on account of payment of 9.5% rate of return would be met by making adjustments in the interest rate in 2011-12.
Mr Chatterjee, however, said that there would be no need for making any adjustment in the next fiscal as "EPFO calculations are correct regarding the discovery of a surplus of Rs1,731 crore in the interest suspense account."
The finance ministry has also asked the EPFO to update its subscriber accounts within the next six months.
EPFO's apex decision making body-the Central Board of Trustees (CBT)-in September last year had decided to provide 9.5% rate of return on retirement savings in 2010-11 after it found a surplus of Rs1,731 crore.
Refusing to ratify the said rate of return, the finance ministry had earlier argued that the surplus shown by the ministry was not real after Comptroller and Auditor General's (CAG) report has called the EPFO's so called surplus unverifiable.
According to sources, the finance ministry approved 9.5% interest after the intervention by finance minister Pranab Mukherjee.
The situation of one day up and the next day down is continuing. A big move (either up or down) is on its way
The market opened lower, tracking the Asian markets that were trading in the red on concerns over developments in Japan and West Asia, and their impact on the global recovery. Nervousness ahead of the Reserve Bank of India's (RBI) mid-quarter policy review also weighed on investors.
The indices made an attempt to push into the green in mid-morning trade, but the RBI's 25 basis point hike in key rates put pressure on the market, pushing it further southwards. Even the marginal fall in weekly food inflation numbers for the first week of March, which came out at around noon, was ignored by investors. The benchmarks slipped to their day's lows in the last half an hour and closed a little above those levels.
The market opened with a downward gap following sharp losses in the US yesterday and Asian markets today. During the day, the Sensex hit a high of 18,354 and the Nifty went up to 5,510 before the announcement of the credit policy. But after the credit policy announcement the Sensex went down to hit a low of 18,104 and the Nifty was down to 5,435. Eventually, the Sensex closed at 18,150, down 209 points and the Nifty closed at 5447, a loss of 65 points. The advance-decline ratio on the National Stock Exchange was 607:1050.
The market breadth on the key indices was negative. The Sensex had 22 losers and eight gainers at the end of the session. The 50-share Nifty closed with 35 stocks in the red and 15 in the green. Among the broader indices, the BSE Mid-cap index declined 0.29% and the BSE Small-cap index fell by 0.38%.
In the sectoral space, BSE Power (up 0.22%) and BSE Consumer Durables (up 0.08%) were the only two gainers. BSE Fast Moving Consumer Goods (down 1.54%), BSE IT (down 1.50%), BSE Auto (down 1.27%), BSE Metal (down 1.18%) and BSE TECk (down 1.15%) were the top losers.
The top Sensex gainers were Reliance Communications (up 3.50%), BHEL (up 1.98%), Reliance Infrastructure (up 1.16%), Cipla (up 0.98%) and Jaiprakash Associates (up 0.79%). Maruti Suzuki (down 4.44%), HDFC (down 3.68%), Hindalco Industries (down 2.49%), DLF (down 2.12%) and Infosys Technologies (down 1.79%) were the laggards on the index.
Home and auto loans may cost more as the RBI raised its short-term lending and borrowing rates by 25 basis points each, yet again today, with a view to check spiralling prices of essential commodities.
The short-term lending (repo) rate has been hiked to 6.75% and the short-term borrowing (reverse repo) rate to 5.75% with immediate effect. However, the central bank kept the cash reserve ratio (CRR) unchanged at 6%.
This is the eighth time since March 2010 that the RBI has resorted to a policy rate hike to tackle inflation, which is ruling above 8%, still above the comfort level of 5%-6%. Besides, the RBI has upped its March-end inflation forecast to 8% from 7% projected earlier.
In another development, food inflation fell to a three-and-a-half-month low of 9.42% for the week ended 5th March, from 9.52% in the previous week. The drop in food inflation, which is still above the comfort zone, is viewed as a breather for the government grappling with high price rise of essential commodities.
Markets in Asia settled in negative terrain, but recovered from the day's lows even as concerns over the nuclear situation in Japan continued. Shares of Tokyo Electric Power-traded for the first time since the earthquake-finished down 13%. The Nikkei 225, which had slipped 4% in early trade, pulled back to close 1.4% down.
The Shanghai Composite declined 1.14%, the Hang Seng fell 1.83%, the Jakarta Composite lost 1.34%, the KLSE Composite shed 0.02%, the Nikkei 225 declined 1.44%, the Straits Times slipped 0.69% and the Taiwan Weighted was 0.50% down. On the other hand, shipbuilding orders boosted the Seoul Composite as it ended 0.05% higher today.
Back home, foreign institutional investors were net sellers of stocks worth Rs134.52 crore on Wednesday. Domestic institutional investors were net buyers of equities worth Rs326.72 crore.
Gilead Sciences, a California based bio-pharmaceutical research firm along with its patent partner Roche Holding AG has sued Indian generic drug maker Natco Pharma (up 0.14%) for allegedly infringing a US patent for Tamiflu, which is used in the treatment of bird and swine-flu. Gilead has requested a federal court in Wilmington, Delaware, to block generic versions of Tamiflu until its patent expires in 2017.
In February, Natco filed an Abbreviated New Drug Application with USFDA under Para-IV with USFDA and alleged that Gilead's patent on the drug is invalid and sent a notice to Gilead to that effect.
Indian alumina and aluminium producer, Nalco (down 3.39%), has cut aluminium prices in the domestic market by Rs2,500 ($55.2) per tonne. The aluminium major has reduced the price to match with the falling LME (London Metal Exchange) prices.
The basic price of standard aluminium ingots and that of standard aluminium sow ingots has been cut to Rs1,40,200 a tonne and to Rs1,40,150 per tonne respectively. The new prices for all aluminium products, which came into effect from Wednesday, will remain valid till 31st March.
Ramky Infrastructure (down 0.45%) has secured new orders totalling Rs288.32 crore across water and waste water and building verticals. The first order, valued at Rs93.86 crore, is from the Bijapur city municipal council for rehabilitation of existing sewerage system and interception and extension of sewerage system to new areas (district 1A) and rehabilitation of primary storm water drain and for improvements of sewerage system in the city limits. The second order, valued at Rs 97.17 crore, is bagged from Lodha Developers, for civil construction works for its 'Casa Rio' housing project at Dombivali.