German government steps in, under pressure from the US and Israel, to prevent new payments for oil through German bank
Berlin: Chancellor Angela Merkel has put a stop to plans that have irked Washington and Israel, for India to channel oil payments to Iran through the German central bank, a business daily reported today.
According to the Handelsblatt business daily, India-under US pressure to break direct commercial links with the Islamic republic-intended to place money for its Iranian oil imports in an account with the Bundesbank.
The Bundesbank would then transfer the money-about nine billion euros ($12.8 billion) annually-to the European-Iranian Trade Bank AG (EIH), based in the northern German city of Hamburg, the paper had said.
The German government had said it was powerless to stop the deal because EIH, also known as EIHB, was not subject to sanctions, because the bank was not involved in financing Iran's controversial nuclear activities.
The New York Times last week quoted an unnamed US Treasury official as saying the United States was "concerned" and that Washington wanted "to work with all our allies to isolate EIH."
Israel and Jewish groups were also reported to be annoyed. But now, Berlin has stepped in, the Handelsblatt cited high-ranking German government officials as saying on Tuesday. Payments for oil already delivered can go ahead, but no new transactions will take place, the paper said.
Contacted by AFP, neither the Bundesbank nor the German economy ministry were immediately available for comment.
Germany has long been under fire for its close business ties with Iran, with the country's exports there totalling 3.8 billion euros in 2010, according to official figures.
Sales generated by German industrial giant Siemens in its last business year, which ended 30th September, rose more than 20% to 680 million euros, The Wall Street Journal reported today.
The rally is losing momentum. The reversal can be as sharp as the rally
The market opened flat on the back of mixed cues from the global arena. The Sensex was up 29 points at 19,731 at the opening and the Nifty gained 16 points at 5,924. The indices scaled the day's high in the first few minutes of trading with the Sensex at 19,770 and the Nifty at 5,929. However, the market could not sustain the gains and slipped into the red thereafter on profit booking. Amid sharp volatility, the indices made a feeble attempt to push into positive territory in mid-morning trade, but sellers had strong control and ensured that the market stayed in the red.
Trading remained range-bound in the noon session, with the benchmarks touching the day's lows at around 12.40pm. Erasing most of the gains accrued yesterday, the Sensex tanked 179 points to 19,524 and the Nifty was down 52 points at 5,856 at the intra-day lows. The indices crawled into the green for a brief moment in the last half hour, but soon slipped and closed almost unchanged, albeit with a mixed bias. The Sensex ended 15 points lower at 19,687 and the Nifty settled two points up at 5,910.
The broader markets made up for the sluggishness on the Sensex, with the BSE Mid-cap index gaining 0.79% and the BSE Small-cap index surging 1.38%.
In the sectoral space, BSE Capital Goods (up 1.58%), BSE Metal (up 1.21%), BSE TECk (up 0.61%), BSE Realty (up 0.60%) and BSE IT (up 0.51%) were the major gainers. The index losers were BSE Oil & Gas (down 0.46%), BSE Fast Moving Consumer Goods (down 0.40%) and BSE Bankex (down 0.23%).
Reliance Communications (up 1.88%), Hindalco (up 1.76%), BHEL (up 1.57%), Sterlite Industries (up 1.07%) and Cipla (up 0.85%) were the top Sensex gainers. Tata Power (down 1.29%), Infosys Technologies (down 0.91%), Bajaj Auto (down 0.90%), Mahindra & Mahindra (down 0.69%) and Jindal Steel (down 0.58%) were the top losers on the benchmark.
In the absence of any fundamentals to back the eight-day rally which ended last Thursday, and with policymakers concerned about high inflation, the market is bound to see come correction, going ahead.
The Asian pack settled mostly lower, even as three key markets were closed on account of local holidays. Concerns of increasing radiation risks as Japanese workers began dumping radioactive water from the damaged nuclear power plant weighed on investors. On the other hand, hopes of 'in-line' corporate earnings kept spirits afloat.
The Jakarta Composite declined 0.38%, the KLSE Composite lost 0.15% and the Nikkei 225 fell 1.06%. On the positive side, Straits Times gained 0.20% and Seoul Composite surged 0.69%. Markets in China, Hong Kong and Taiwan were closed today.
Back home, foreign institutional investors were net buyers of stocks worth Rs604.51 crore on Monday, whereas domestic institutional investors were net sellers of equities worth Rs389.33 crore.
Wind turbine maker Suzlon (down 1.11%) has raised its stake in German subsidiary REPower to over 95% and is now only a step away from making it a wholly-owned subsidiary by acquiring the remaining stake in the entity. Suzlon, through its subsidiary AE-Rotor Holding BV (AERH), directly and indirectly has a 95.16% stake in REpower, the company informed the Bombay Stock Exchange.
The revival in demand for the Nano in the last four months has encouraged Tata Motors (up 1.97%) to double production of the small car by up to 20,000 units a month this fiscal. Last month, the Nano sold 8,707 units, near its all-time peak of 9,000 units in July last year. Though the Sanand plant currently produces 9,000-10,000 units a month, its annual installed capacity is 2.5 lakh units.
Electrosteel Castings (ECL) (up 5.51%) has entered into a joint venture agreement with Brisbane-registered Dart Energy for exploration, development, production and sale of coal bed methane (CBM) from ECL's captive coal mine at Parbatpur in the Jharia Basin of Jharkhand.
The venture will extract methane from the 8.8-sq km mining lease area of ECL. Dart will operate the methane development and extraction exercise and will have 30% stake in the JV, while ECL will hold the balance 70% of equity in the unit.
Future Group company sets target of 100 stores in 12 months; aims to leverage its wide customer base countrywide through financial outlets that will be integrated with its large format stores
Future Capital Holdings, part of Future Group, today announced plans to launch 100 financial superstores in 12 months that will help grow its financial services business faster, by reaching more customers.
The company, which specialises in loans for homes, consumer durables, as well as loans for small and medium enterprises, has set a target to disburse Rs1,000 crore of secured loans for 2011-12 and have 100,000 customers through the stores, building a very strong fee income business through wealth management, broking and insurance businesses.
"We are planning to launch 100 such financial branches by 2012 that will meet all four basic financial needs of the customer-borrowing, investment, protection and financial planning," said V Vaidyanathan, vice-chairman and managing director, Future Group. "We will offer loans for homes, properties, gold loans. Protection for these loans will also be offered through our insurance products. To provide alternate investments to our customers we have tied up with mutual funds. And lastly, financial planning will be delivered through broking and wealth management."
The stores will be integrated with the group's retail outlets like Big Bazaar, E-zone and Hometown. The company has 200 large stores across these formats. In the first phase, it will open 100 financial superstores at these establishments, on the basis of customer footfalls, customer intersection and expectations.
The concept of retail financial stores is new in India, but it has been a highly successful model abroad, in countries like the US, Europe, Brazil and Mexico. An example is Wal-Mart, which has over 1,000 Wal-Mart money centres across its network of retail stores, providing money orders, transfers, etc.
"We are in the process of tying up with banks and our role would be as a distributor. We are mainly looking at public sector banks," Mr Vaidyanathan said. He said that the loan business was doing well. "In fact, our loan book has increased by about 100% this year, from Rs1,500 crore last year to Rs3,000 crore this year. Next year we target Rs5,000 crore. Our loan business is on the right track and of course it is funded by loans from the banking system," Mr Vaidyanathan said.
When asked about over-the-counter loan disbursals, Mr Vaidyanathan said, "For businesses like property loans it cannot be done over the counter, since verification is required and this can take 4-5 days. It may also take a little longer. Though the principal amount can be sanctioned, the loan cannot be disbursed. But for consumer durables loans we have tied up with credit bureaus and credit scoring companies, so these activities can be done over the counter."
The company's wealth management and broking service will be looked after by the company's wholly-owned subsidiary FCH Centrum Wealth Managers.
The company also said that about 300 people will be recruited for the financial retail stores.