Iceland near to Icesave debt deal

Iceland's Prime Minister Johanna Sigurdardottir says a deal, with the UK and Netherlands, is near over savings accounts frozen when its banks failed.

She said agreement is being negotiated on the Icesave accounts of Landsbanki, which collapsed with other main Icelandic banks in October.

The deal would give Iceland seven years to reimburse the frozen savings.

The total debt owed on the accounts is estimated at about 640bn Icelandic crowns ($5.28bn: £3.2bn).

The money would be repaid at 5.5% interest, Ms Sigurdardottir said.

"This is a much more agreeable solution than we were looking at in the winter," she said.

"The interest rates are lower, we'll have longer time to pay out and last, but not least, it means the assets of Landsbanki in the UK will cover most of the debt."

Tech Mahindra makes changes in Satyam open offer

IT firm Tech Mahindra has extended the date for approaching the shareholders of Satyam Computer regarding its Rs 1,154-crore open offer for the purchase of a 20 per cent stake in the scam-hit firm, a move which comes days after market regulator SEBI cleared the open offer.

In a filing to the Bombay Stock Exchange, Satyam Computer said the last date by which letter of offer will be dispatched to the shareholders has been revised to 9th June, from the earlier scheduled date of 3rd June.



Further, the last date of withdrawal by shareholders has also been revised to 26th June, from the earlier 27th June.



"Dates for all other activities of the schedule remains unchanged," the filing added.



The Securities and Exchange Board of India (SEBI) had received the open offer for its consideration on May 6, and issued its 'observations' on May 27.



Through Venturbay Consultant, its acquisition vehicle for the Satyam Computer purchase, Tech Mahindra had announced an open offer on April 22 for buying an additional 20 per cent

from the shareholders of the IT firm.



The open offer was made pursuant to Tech Mahindra buying a 31 per cent stake in Satyam for Rs 1,756 crore through the issue of preferential shares after an auction process conducted by the government-appointed board of Satyam.

Sensex, Nifty hit 10-month highs as bourses progress rapidly

Indian bourses progressed rapidly with key indices Sensex and Nifty hitting nearly ten-month highs as investors were heartened by new UPA Government's economic agenda, unveiled by President Pratibha Patil in the week under review.

The markets achieved new highs in sustained volatility and the Sensex closed past the 15,000-psychological level for the first time since 2nd September, 2008.


Accentuated interest of investors in second-line stocks pushed up the Smallcap and Midcap indices by a whopping 7.88 per cent and 6.98 per cent, respectively, outperforming the bellwether Sensex.


In the week to 6th June, the 30-stock BSE barometer ended the week at 15,103.55, a net rise of 478.30 points, or 3.27 per cent, over the week.


Investors were virtually confident that the economic reforms will get a strong push in the first year in the light of a political stability in the country.


Addressing Parliament on 4th June, Patil disclosed that the Government would focus on revival in economy which has already showed signs of recovery with a good expansion in the manufacturing activity in May 2009.



Patil said the government will focus on reforms in financial and infrastructure sectors as also disinvestment of public sector undertakings while sticking to fiscal prudence.


India's infrastructure sector output grew 4.3 per cent in April, indicating a gradual economic recovery.


Inflation, too, remained low at 0.48 per cent for the week ended 23rd May.


The broader 50-share Nifty of the National Stock Exchange advanced by 137.95 points, or 3.10 per cent, to end the week at 4,586.90 from its previous weekend's close.


Foreign Institutional Investors, the principal market moving factor, remained consistent net buyers in equity.



Hence, the capital inflows in equity stood at USD 427 million in the initial four days of the week.


Analysts said the market is strongly bullish and may witness a pre-Budget rally.



The full Budget is likely to be presented on 3rd July by Finance Minister Pranab Mukherjee.


Sectorial indices such as the BSE Consumet Durables Index soared by about ten per cent and the BSE Capital Goods index by 8.40 per cent.


The trading volume for the week was high at Rs 1,30,005 crore on the NSE and Rs 45,288 crore on the BSE compared to Rs 1,11,845 crore and Rs 36,674 crore respectively.

Oil price rally comes to a halt

Oil prices have fallen back with investors growing more cautious as oil approaches the $70-a-barrel mark.

US light, sweet crude oil was down 86 cents at $67.69 a barrel, while Brent crude fell 61 cents to $67.56.

US President Barack Obama has begun a tour of the Middle East, where he will raise the issue of volatile oil prices with Saudi Arabia's King Abdullah.

He is also expected to reassure Saudi that demand for oil will not dry up. Earlier, oil prices had reached $68.64.

"The Saudis want to be assured that there will be a future for oil consumption. They want security of demand," said Simon Wardell, senior oil analyst at Global Insight.

"Obama for his part will be persuading them to continue investing in new production, which is not likely to have too much impact on spot prices in the near term, but will come five or 10 years down the road."

Weaker dollar

The price of oil had initially risen in early trading on Wednesday.

The weakening dollar had pushed up oil prices, which tend to rise when the US currency falls.

In recent weeks, the dollar has declined against a range of currencies, hitting a seven-month low against sterling on Wednesday.

"The continuing softening of the dollar will go on adding strength to oil and equities," said Peter McGuire of Commodity Warrants Australia.

"I think $70 is possible by the end of the week and $74 to $75 by the end of the month."

Oil had briefly touched $69 a barrel on Tuesday, a new seven-month high, before closing at $68.55.

Although the oil price has more than doubled since January, when it was trading at $32.70 a barrel, it is still well below the record $147 a barrel seen in July last year.

Rs 150 cr spent to buy speed boats by Maharashtra Govt

In the aftermath of 26/11 terror attacks, Maharashtra government has set aside Rs 150 crore to buy 28 hi-tech speed boats for patrolling the sea.

The first boat, equipped with bullet-proof jackets and sophisticated communication systems, was provided to the Thane (rural) police and was tested at the Versova creek on Ghodbunder Road in neighbouring Thane on Monday.


Thane Superintendent of police said, "We are expecting to get one more such boat and it would be used for coastal patrolling. Coastal belts like Utan and Pali fall under our jurisdiction."


The government has made a proposal for acquiring 28 such boats after the November 26 terror attacks, carried out by a group of ten terrorists who entered the city via the sea.


The boats, manufactured by Goa Shipyard Ltd, have a 550 horsepower capacity and will be equipped with bullet-proof jackets along with weapons.



The boats will have ultra-modern navigation tools and Global Positioning System (GPS) for constant communication with the police control room, Pandey said.

India need not import LWR after 2050: Kakodkar

India need not import light water reactors (LWRs) after 2050 as it would by then have a matured fast breeder technology and be ready to use Thorium technology, said Atomic Energy Commission chairman Anil Kakodkar.

Indian nuclear community should not have any confusion regarding this as there are talks going around about using Thorium even before the fast breeder technology is matured, Kakodkar said, delivering Tata Institute of Fundamental Research Foundation day lecture.

Although country has large amount of Thorium and would be a priority for long time in the future, India has to follow the well thought out plan of three-stage programme of Homi J Bhabha as Thorium does not provide fast growth.

India needs fast growth and such growth can be sustained by fast breeder reactors (FBRs) with a multiplier effect.

"If you deploy thorium out of turn (before stage II maturity), which does not support growth out of turn, then you will not get large generating capacity," he said, talking on 'Developing Nuclear Technology for our energy independence: the grand challenge', in Mumbai on Monday.

Sensex down 182 pts in early trade

The Bombay Stock Exchange benchmark Sensex opened 182 points down on Thursday, tracking a weak global trend, on profit-selling by funds at prevailing higher levels after the recent hefty gains.

The 30-share barometer, which touched the 15,000 mark in intra-day trade yesterday after nine months, fell 181.86 points to 14,689.04 in the first five minutes of the day's trade.



The wide-based National Stock Exchange index Nifty was also down 54.35 points at 4,476.35.



Marketmen said selling pressure picked up on the domestic bourses, in line with a weak trend in the global markets, with investors locking in cash after a strong rally.

Rupee weakens by 17 paise against USD

The Indian rupee depreciated by 17paise to 47.24 against the dollar in early trade on Thursday as banks bought the currency (dollar) on behalf of importers and after the USD stabilised against a basket of currencies in Asian markets.

At the Interbank Foreign Exchange (Forex) market, the local unit, which had ended six paise costlier at 47.07/08 on Wednesday, fell further to quote at 47.24.



Besides the greenback strengthening against other Asian currencies, expectations of a weak opening in the equity markets, in tandem with other Asian bourses, affected the rupee sentiment, forex dealers said.



The Asian markets are trading low by 1.5 per cent in early trade on Thursday.

Indian growth unexpectedly strong

India's economy grew 5.8% in the first three months of the year compared with the same period last year, which was better than had been expected.

The official gross domestic product figure was down from 8.6% annual growth seen in the first quarter of 2008.

Although growth has slowed from last year, the economy is still expanding faster than most other countries.

It grew 6.7% in the full financial year, which was down from a rate of 9% in the year to the end of March 2008.

'Growth bottomed out'

"The GDP growth number justifies the claim that India is dealing with the global crisis from a position of strength," said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai.

"This means that growth has bottomed out, or at least the deceleration has stopped."

The figures are good news for the newly-elected Congress-led government, which has made reviving growth its top priority.

Among the sectors showing an improvement was farm output, which grew at an annualised rate of 2.7% in the first three months of 2009 having contracted 0.8% in the previous quarter.

Construction grew 6.8% in the period compared with 4.2% in the previous quarter.

But the manufacturing sector contracted an annual 1.4%, having grown 0.9% in the previous three months.

Obama 'helped' Opel rescue deal

German Chancellor Angela Merkel has revealed the US president helped swing a deal to save carmaker Opel from the imminent bankruptcy of its parent firm.

She said Barack Obama helped clear some hurdles threatening the transaction during a phone conversation.

Earlier, Germany agreed the deal with Magna International, a Canadian car parts maker, to take over Opel, part of the European wing of US carmaker GM.

It should protect Opel if GM files for bankruptcy protection in the US.

GM is expected to do this as early as Monday.

Marathon talks

"I spoke on the phone with the American president yesterday [Friday] and we were in agreement that we had to do everything possible to come up with a good results for this complicated task," Mrs Merkel told reporters in Berlin. "That conversation clearly influenced the negotiations last night," she said, adding that Mr Obama helped clear some hurdles over the financing of the rescue deal.

The deal was announced early on Saturday by German Finance Minister Peer Steinbrueck, following marathon talks between German politicians, US government officials and executives from General Motors and Magna.

"A solution has been found to keep Opel running," Mr Steinbrueck said.

He said that although it was impossible to exclude all risk, the deal agreed would safeguard Opel's sites in Germany and preserve "the highest possible numbers of jobs" there.

Berlin is expected to provide an immediate loan facility of 1.5bn euros ($2.1bn, £1.3bn).

The Canadian company has said it will put more than 500m euros ($700m; £435m) into Opel, which employs more than 25,000 people in Germany.

Significant numbers of workers are also spread around Spain, Belgium, Poland and the UK, where Opel cars are branded as Vauxhall for British customers.

Magna's bid was backed by Russia's state-run bank Sberbank and Russian magnate Oleg Deripaska's truck firm Gaz. The consortium hopes to see GM expand its reach into the Russian market.

Before the announcement of the deal, Magna said it planned to cut 2,500 jobs in Germany, about 10% of Opel's workforce in that country. Italy's Fiat, a former potential bidder, had said it would cut 10,000 jobs.

GM operations in Europe will now be placed under the care of a trustee to shield them from the parent company's filing for bankruptcy protection in the US.

GM ready to file for bankruptcy

Car giant General Motors is expected to file for bankruptcy protection later on Monday, marking the biggest failure of an industrial company in US history.

The stricken firm had until 1 June to present a viable revival plan in return for emergency government funding.

Reports say a majority of bondholders have now agreed to a deal giving them at least a 10% stake in what is likely to emerge as a much smaller company.

President Barack Obama is due to give full details at a news conference.

The BBC's Jonathan Beale, in Detroit, says Mr Obama is expected to announce $30bn (£18.5bn) in new funding for GM.

GM's sales have been hit hard by the financial crisis and the firm has received $20bn in state aid.

In return for more cash the federal government is reported to be receiving a stake of 60% in a new, leaner company due to be re-launched within 90 days.

Senior executives at General Motors have been making final preparations for completely restructuring what was once the world's largest car company, under judicial supervision.

A Chapter 11 bankruptcy filing by GM would rank as the third largest bankruptcy in US history following Lehman Brothers' collapse and the failure of telecoms giant WorldCom.

European deal

The restructuring is likely to drastically change General Motors, with some 20,000 workers thought likely to lose their jobs.Our correspondent says long-established subsidiaries Pontiac, Saturn and Hummer, as well as Saab, the remaining GM brand in Europe, are under threat as production plants are expected to close across the country.

GM's European arm is likely to be spared bankruptcy following a proposed deal by Canadian car parts maker Magna International to buy GM Europe's Vauxhall and Opel brands.

However, unions fear that jobs may be lost at Vauxhall plants in Luton and Ellesmere Port, which employ 5,500 people.

UK Business Secretary Lord Mandelson said he had received further assurance from GM Europe that Vauxhall production would remain in the UK.

Jobs may also go in Belgium, Poland and Spain.

GM, once the largest company in the world, has been losing market share since the early 1980s.It has been driven to bankruptcy because of high production costs and by the collapse in credit markets and consumer spending. It made losses of $30bn last year.

GM was also slow to move away from producing gas-guzzling SUVs when consumers were looking for more fuel-efficient vehicles.

Toyota sold more vehicles than GM in 2008, putting an end to the American company's 77-year reign as the world's biggest carmaker.