Gold drops on weak global cues

Heavy selling in global markets has resulted in gold prices crashing to a seven-week low

Gold prices tumbled by Rs170 to a seven-week low of Rs16,450 per 10 grams in the bullion market here today on hectic selling triggered by negative global cues, reports PTI.

Standard gold and ornaments plunged by Rs170 each to Rs16,450 and Rs 16,300 per 10 grams, respectively. The metal has lost Rs 320 in the last three trading sessions.

Sovereign also weakened, shedding Rs50 to trade at Rs13,950 per eight-gram piece.

Selling pressure gathered momentum as gold fell the most since 12th February in New York last evening, losing $15.30 to close at $1,087.50 an ounce.

Traders refraining from purchasing gold on hopes of a further fall in prices, which also dampened the sentiment, market analysts said.

In line with the general weak trend, silver ready dropped by Rs275 to Rs26,550 per kg and weekly-based delivery by Rs220 to Rs26,250 per kg.

Silver coins lost Rs100 to Rs33,100 for buying and Rs33,200 for selling of 100 pieces.

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    Bharti clinches Zain's African assets for $10.70 billion

    India’s largest telecom player has finalised the deal with the Kuwaiti firm; funds for financing the acquisition have been arranged

    Telecom major Bharti has clinched a $10.70- billion deal to acquire the African operations of Kuwaiti firm Zain, which today announced that "definitive agreements" would be signed soon, reports PTI.

    "The Board is pleased to report that due diligence process has been completed and the parties are finalising definitive agreements, which are expected to be signed in the coming days," Zain said in a statement a day after its Board meeting.

    Bharti, which had announced on Sunday the tying up of $8.30 billion for upfront payment, did not comment immediately, though sources said that top officials have flown to Kuwait to work out the details.

    The money for funding the buy has been arranged from a clutch of foreign banks and the State Bank of India with Standard Chartered Bank committing the highest amount of $1.30 billion followed by $0.9 billion from Barclays.

    In all, $7.5 billion debt would be dollar-denominated and the remaining $1 billion will be in a rupee loan from SBI.

    Having failed twice to acquire another South African giant MTN in the past two years, Bharti had been continuously looking for global acquisitions. Zain's Board reviewed the "latest developments and negotiations" on 24th March, the last day of the exclusive agreement for negotiations.

    "Upon signing (the agreements), the parties will move towards getting any required approval," the statement said, while taking cognisance of the reports that Bharti has already secured the entire financing requirement of $8.3 billion for the transaction.

    The sale of Zain Africa BV would not include Zain's operations in Sudan and Zain's investment in Morocco, the statement said.

    Bharti would have to pay another $700 million after a year besides taking the loan liability of $1.70 billion of the acquired company after it signs the deal.

    With the acquisition, Bharti Airtel will enter the world's fastest growing market in Africa. The two businesses combined will have more than 165 million subscribers with total revenue of $13 billion.

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    SBI may tweak its 8% home loan scheme after 31st March

    An official from the state-run lender has hinted that it may make changes to its teaser home loan rates from the next fiscal

    The country's largest lender, State Bank of India, has hinted that it may consider retaining its much-talked-about 8% home loan scheme, albeit with slight modifications in the product, reports PTI.

    "I suppose there can be modifications (in the products), which will be in tune with our liquidity position. Normally, we don't kill any product," a top SBI official told PTI here.

    SBI was the first to rollout the dual-rate special home-loan schemes or 'teaser' schemes in the market, at a time when credit demand in the domestic market was abysmally low after the global financial turmoil dented confidence and discouraged individuals and corporates to borrow.

    Most of SBI's competitors, including mortgage lender Housing Development Finance Corporation and ICICI Bank, had followed SBI by launching similar schemes, but later withdrew them, partly owing to the Reserve Bank of India's disapproval of such products and drying liquidity.

    "I think it is the best home-loan product in the market. It is a very successful product. The way it helped other sectors to grow like steel and cement and contributed to the overall economic growth is tremendous," the official told PTI.

    However, the RBI was not happy with banks offering 'teaser' schemes as it was concerned about the ability of borrowers to service the interest rates when they reverted to the normal level after the expiry of the offer period.

    RBI deputy governors, Usha Thorat and K C Chakrabarty, had openly expressed their concerns about the scheme. "Teaser rates by banks are a cause of concern. Banks must ensure that borrowers can service higher rates when rates return to normal," Ms Thorat had said.

    Mr Chakrabarty, on the other hand, asked banks to extend the benefit of cheaper home loans to previous customers as well.

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