India May Extend Duty-Free Imports of Raw Sugar

India, the world’s biggest sugar consumer, may extend duty-free imports of raw sugar by eight months to March, bolstering local supplies and global prices, an industry official said. The cabinet may approve a proposal from the food ministry in the next 15 to 20 days, said the official, who asked to remain unidentified as the information is confidential. The government may also include private traders in its plan to allow state-run companies to import as much as 1 million tons of white sugar by the end of this year, the official said. Increased purchases by India may sustain a rally that’s made raw sugar the second-best performing commodity in the UBS Bloomberg CMCI Index in the past year. Raw sugar has advanced 34 percent this year on forecasts of a global deficit, driven mainly by the drop in India’s production.

FIIs pull out Rs 1,700 cr from Indian markets

Foreign institutional investors (FIIs) on Friday pulled out a net Rs 29 crore from the Indian stock markets, taking their total outflow during the week to nearly Rs 1,700 crore. In today's trade, FIIs were gross purchasers of shares worth Rs 1,848.44 crore, while they sold equities valued at Rs 1,877.52 crore resulting in a net sell of Rs 29.08 crore, according to the provisional data available with the Bombay Stock Exchange. During the week, the overseas investors have pulled out nearly Rs 1,700 crore from the Indian stock markets, as per the latest data available with the market regulator Securities and Exchange Board of India (SEBI). However, domestic institutional investors continued their investment in the stocks of Indian companies and in today's trade pumped in a net Rs 413.20 crore. Besides, proprietors and non-resident Indians (NRIs) were also enthusiastic about the equity market and purchased shares worth Rs 89.65 crore and Rs 0.10 crore respectively, the BSE data shows. Meanwhile, brokers, on behalf of their clients, followed FIIs trend and sold shares worth Rs 182.47 crore. The BSE's benchmark index Sensex, composed of 30 bluechip stocks, today gained 256 points or 1.8 per cent to close at 14,521.89 points.

RBI to buy back bonds worth Rs 6,000 cr

Government bonds traded range bound ahead of RBI’s move to buy back securities worth Rs 6,000 crores from traders today. On Friday, RBI will sell bonds worth Rs 15,000 crore. Dealers expect action to remain range bound in the coming days till the budget, when they expect some clarity to emerge on the government’s borrowing programme. The most commonly traded bond - the 5 year bond - however traded lower unaffected by the buy back news. Its yield traded at 6.64% at 12 45pm, 3 basis points higher than its previous close. When yields rise, prices fall. The benchmark 6.05% paper only had trades worth Rs 20 crore. "The concern with OMO is that RBI has not been buying the whole amount that it says it will pick up from traders," saya RVS Shridhar, head of markets at Axis Bank. "This is giving only mixed signal to the market. We will have to wait for the auction results. As for higher borrowings, market has been preparing for greater front loading of bond auctions," he added. The rupee rose marginally on Thursday from one-month lows on Wednesday, although downswing in shares affected sentiment. At 12 45pm, the rupee was at 48.09 against the dollar, just above Wednesday's close of 48.13. The dollar was steady against the euro on Thursday, trading lower after US inflation data further made in unlikely that Federal Reserve would raise interest rates by year end.

Buy at least 5% renewable energy: CERC orders state utilities

The Central Electricity Regulatory Commission (CERC) today said that all power state utilities in the country will have to purchase at minimum five per cent of their grid purchase from renewable energy sources from 2009-10 onwards and 15 per cent by 2020. In his special address at Green Power 2009, an international conference and exposition on renewable energy, organised by Confederation of Indian Industry at Chennai today Pramod Deo, chairperson and chief executive, CERC said that the regulator in carrying out of an internal action plan on global climate change. The Cerc will determine the active minimal buy standard for renewal energy which will help bring down emission from the electrical energy sector. “While the minimum purchase standard will be fixed, from 2009-10 onwards all electrical energy utilities in the country will have to buy renewable energy. There will be one per cent increase in the purchase of renewable energy for every year for the next 10 years,” he said. He added, currently 20 state electrical energy regulative commissions (SERCs) have already determined the percentage of energy that has to be bought from renewable sources. “While Karnataka and Tamil Nadu are currently buying 10 per cent of their grid purchase from renewable sources, Maharashtra has reached four percent target,” he said. “A minimal renewable energy purchase obligation also has to be fixed,” he said. Deo further revealed that the ministry of new and renewable energy is also carrying on a feasibility study for introducing renewable energy certificates. “One certificate will be equal to 1 Mw of renewable energy generated. The certificates can be traded to meet the mandatory targets of renewable energy purchase,” he said. He added, though the certificate to all forms of renewable energy the government is thinking of introducing separate certificate for solar energy. The certificate will be valid for one year and it can be traded through the power exchanges. “Whether trading companies will be allowed to do trading, we are currently thinking about it, he said. The new system is likely come into place from April 2010, said Deo and it will be bought by those states which are facing deficit currently. A registry from National [i] Load Despatch Centre would handle.

LIC turns back on QIPs of private cos

While the queue for qualified institutional placements (QIPs) may be growing longer, sources inform that the country's biggest domestic investor, Life Insurance Corporation of India (LIC) has turned its back on the QIPs of private entities. This is with regard to the biggest institutional investor of the country—LIC. What we understand from our sources is that LIC has taken a call of not investing in the QIPs of private listed companies. They will be sticking only to the public sector units (PSUs) as of now. They prefer the open market route for the same. What we understand is the rational or the reasoning is that LIC is not comfortable with the price discovery through the QIP route. Also, LIC does not want to get into any controversy later, being a public sector unit that whether they were bias towards one entity or not.

India eligible for a pie of ADB's $3 bn additional funds

The Asian Development Bank (ADB) has said India can access part of the $3 billion additional funds allocated by the bank to help developing nations in tackling the global economic crisis. The bank has come up with the 'Countercyclical Support Facility' (CSF) aimed at helping developing nations in their effort to ramp up their fiscal spending. "Eligible countries can now apply for access to the funds. India, as an ordinary capital resources (OCR) designated country, is eligible to apply for access to the $3 billion CSF," an ADB spokesperson told PTI in an e-mailed statement. The amount for each country from the facility would be capped at $500 million. The programme would provide short- term, fast-disbursing loans. On Tuesday, the bank had said the facility would "support Developing Member Countries aiming to ramp up fiscal spending to counter the crisis, but who lack the financial means to do so amid tight global credit conditions and a sharp increase in funding costs". The loans under the new facility would have a lower cost than charged for loans disbursed during the East Asian crisis. The loans could be repaid in eight years. "Loans under the new facility will have a five-year tenure, with a three-year grace period, and will cost around 200 basis points over ADB's financing cost, pricing that is lower than its special program loans facility set up to help the region in the wake of the 1997-1998 Asian financial crisis," ADB had said. The bank has laid out a set of conditions for nations to access the CSF. They include significant slowdown in growth, exports and remittances, fiscal constraints and difficulty in sourcing finance from international capital markets on favourable terms. Further, the countries would also have to "put in place a specific countercyclical development programme, to be supported by CSF, which includes investment in public infrastructure, or a social safety net scheme targeting the poor and vulnerable", ADB had said. The ADB's board of directors have approved additional funds worth $3.4 billion to help developing nations in responding to the global economic turmoil. Out of the total amount, the multilateral lending agency would offer $400 million to the Asian Development Fund. India is not eligible for the extra $400 million since the fund is for giving grants and loans at very low interest rates to poorest borrowing countries to help them reduce poverty. ADB spokesperson said India is not "eligible to apply for grants or loans through the Asian Development Fund, which is open only to ADF designated countries".

Unitech sees sale of 20 mn sqft developable area in FY'10

The country's second largest real estate player, Unitech, today said it expects a sale of 20 million sq ft of developable area during the current fiscal. "Asset sales are doing very well. The valuation are better than our expectations and it is also happening faster. Our target is to sell 20 million sq ft in this fiscal," Unitech Managing Director Sanjay Chandra told reporters after an extra general body meeting here. The company has already sold 400 apartments comprising about 4 million sqft of area, during the fiscal so far, he added. Chandra said the company has also increased prices by 2 per cent in its two projects in Gurgaon. "We have increased the prices in our ongoing projects just two weeks ago ... We will evaluate whether there is a need for raising the prices in other projects as well." The firm also received shareholders' approval for raising capital through issue of 100 crore shares in next 12 months. "We do not have any intention to raise capital immediately as we are in a comfortable position ... Debt is not an issue anymore," Chandra said. The company has rescheduled its outstanding Rs 7,800 crore debt into long-term ones and further plans to reduce it by Rs 900 crore within this month, he added. On its asset sales plan, Chandra said: "The company targets to sell properties worth Rs 1,700 crore in this fiscal, of which Rs 1,000 crore has already been raised by selling two hotels and an office space in Saket." Besides, Unitech would also raise Rs 1,150 crore by issuing warrants to its promoters. "After the issue, the promoters stake will increase to 61 per cent from 51 per cent at present. They will have to infuse 25 per cent of the total money immediately," Chandra said, adding that the entire transaction will be completed within 18 months.