Silver surges to record levels in futures trade

New Delhi: Silver prices surged to record levels in futures trade today by adding Rs662, or 2.08%, to Rs32,400 per kg on brisk buying by speculators, driven by firming global and spot market trends, reports PTI.

Market analysts said that the white metal prices spurted on reports of a firming overseas trend, as investors kept buying amid fears that the global economic recovery might falter.

They said the industrial units and coins manufacturers buying for the coming festivals and marriage season mainly kept the market in a bullish mood.

Demand for precious metals like silver and gold normally pick up in domestic markets here during the festival season. Silver on the Multi-Commodity Exchange for July-month contract shot up by Rs662, or 2.08%, to Rs32,400 per kg, with a trading volume of three lots. The precious metal has never touched such high levels above Rs32,000 per kg.

The metal in December month contract rose by Rs150, or 0.47%, to Rs31,607 per kg, with a business volume of 5,734 lots, while March contract added Rs145, or 0.45%, to Rs31,707 per kg, with a business turnover of 230 lots.


Deregulation of interest rates on savings accounts on radar: RBI

Mumbai: The Reserve Bank of India (RBI) today said deregulation of interest rates on savings accounts is on its radar and it will soon be examining the possibility of implementing the same, reports PTI.

"Deregulation of interest rate is on our radar. A working group will soon be set up to examine the possibility of deregulating interest rates," RBI's deputy governor, Usha Thorat, said while addressing a banking conference organised by FICCI and IBA here.

"We have to examine whether the deregulation can help bring more people into the formal banking system," she said.

At 3.5% per annum, interest on savings accounts is the only regulated rate in the banking system presently and a highly contentious one given its impact on the common man.

For achieving the goal of financial inclusion, there is a need for a higher number of tie-ups between banks and the non-banking financial companies (NBFCs) who have better delivery systems to ensure better last mile connectivity, Ms Thorat said.

The senior RBI official also said that the apex bank is in the process of "tweaking" regulations on securitisation to ensure the growth of the securitised market in an orderly manner.

Banks should also ensure that there is no excessive borrowing as such borrowings can lead to the formation of bubbles which can deter stability, she said.

Looking at the high growth in credit in recent years, Ms Thorat advised banks to do more "forward looking provisions" to cover their non-performing assets (NPAs) whose increase is "inevitable" in the future.

In her address, Ms Thorat laid a greater stress on rating agencies and asked them to provide a "holistic approach" while rating as it has a direct link to the bank's assets.

She also highlighted the need for development finance institutions to launch more ventures like the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) which offers collateral-free loans for the benefit of small farmers, landless agricultural labourers, those engaged in allied activities related to agriculture and ones affected by natural calamities.


M&A activity slows down in August to $4.2 billion

New Delhi: India Inc's merger and acquisition activity seems to be fading as the month of August was the leanest since September 2009 with total deal volume of $4.2 billion, reports PTI.

According to research firm VCCEdge, August saw the lowest deals in the last 11 months which could be much better if "Vedanta's proposed $9.6-billion deal for Cairn India would have gone through."

"March and June 2010 had seen some large deals which resulted in deal value greater than $14 billion during these two months. August was much lower in comparison," it added.

In July this year, the total value of M&A deals was about $5.4 billion.

However, merger and acquisition activity in August this year zoomed over seven fold compared to the same month last year when only deals worth $629 million took place, the report noted. For the year so far, total merger and acquisition deal value stands at $54 billion.

Besides, there has also been a smart jump in the number of deals to 58 in the month against 34 in the year-ago period.

The period saw as many as 10 domestic deals worth $442 million, compared to 8 deals valued at $39 million in the year-ago period.

The VCCEdge report noted that energy, industrials and consumer discretionary were the most targeted sectors in the month with deals worth $3.10 billion, $325 million and $310 million respectively.

Adani Enterprise's acquisition of the coal assets of Linc Energy for $2.7 billion was the biggest buyout of the month, accounting for more than half of the total deal value followed by two buyouts made by Reliance Industries.

The country's most valued firm RIL purchased shale acreage in central and north east Pennsylvania for $392 million and also marked its entry into the hospitality sector with the acquisition of 14.12% stake in the promoter of Oberoi Group of hotels and resorts, EIH, for $220 million, the report pointed out.

The top five deals alone accounted for 85% of total M&A deal activity in August 2010, VCCEdge said.


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