Indian link to hit Net cables

The cables hit by snags that have sliced the country’s digital pathway to half count three Indian companies among their owners.

One cable stretches from France through the Mediterranean and Red Seas, then around India to Singapore and is owned by 16 companies along its route, including Bharti Airtel and VSNL.

The second, known as the Flag System, runs from Britain to Japan and is owned by Reliance Communications.

A spokesman said Bharti was working closely with cable operators to “restore normalcy as soon as possible”.

In the evening, VSNL said: “Connectivity has been restored to a large number of our customers.”

Reliance claimed its services were not hampered. “The traffic on the route was immediately restored on another route,” a spokesperson said.

Rajesh Chharia, president of the Internet Service Providers Association of India, said most firms were “trying to restore their connections through the Pacific Region… making Internet access slow”.

Internet was slow in large swathes of Asia and north Africa, with the capacity in Egypt cut to less than half.

“Work has been affected to a certain extent,” said Shankar Ghosh, centre head, Tech Mahindra, in Calcutta. Few other big companies were willing to admit on record that they had been hit.

How long this somewhat degraded Internet connectivity will last will depend on how fast a cable-repairing ship can sail to a point in the Mediterranean about 10km off the coast of Alexandria and repair the undersea cables.

The crew will use onboard instrumentation to pinpoint the exact segment where the damage has occurred. The mode of repair will depend on the nature of the damage and depth of the cables.

In deep water, the damaged segment is removed with submersible instruments, splicing the cable at two points to extract the segment, and a repaired or entirely new segment is placed in its position. Repair can take several days.

Expect investor friendly moves up to Budget: Demeter Adv

Ashwini Agarwal:



Q: What’s your sense for February, is the worst over?



A: In the short run, you could say so because on purely looking at the money flow, you probably have a situation where refunds from some of the large IPOs that have happened earlier this month, start coming in. Also, I guess in the run up to the budget, people are expecting some sort of investor friendly measures, maybe a tax cut or removal of some of the cesses that we pay on our income taxes. When that happens, you could see a little bit of an up side.



January has been a great month to look back and realize how heady we all were towards the end of last year and what unrealistic expectations and as we view the quarter results that have just come up, the numbers are mostly inline or behind expectations for the Indian companies. There is a growing realization that the US economy is possibly in a shape, which is worse than what all of us were hoping for towards the end of 2007. All the data points that I can see, point to some amount of headwind to grow in India, which is not linked to the US but possibly liked to the base effect of the fact that we have grown so fast for 3-4 years. But you look at sales like auto, cements and it does point to some slowing. It is not a crisis situation, we are not in a de-growth zone but I don’t know how far slower growth expectations are priced, that will continue to hover over the market as a dark shadow in the weeks to come



Q: So even if we don’t go down to below those levels, we will not go up in hurry if we are in a range bound situation or are you saying that the lows of last week could actually be violated?



A: The lows of last week were really poor, I mean you are talking about sub 15,000 on the sensex, you hope that we don’t see those levels again, but if you ask me? I think we will see some amount of upward bias to trading in early February support by the liquidity that’s coming back into the market after the IPO refunds are delivered to the investors and in expectations to the budget, but on a more thematic basis, I think over the next few months, the markets sprinted down as compared to trended up. How much does it grind lower totally depends upon what is the verdict on India’s growth at this point in time, everybody is very confident about growth. My sense is that growth will still be there but it will be slightly less than what all of us are forecasting right now that needs to get priced in.



Q: What is the sense you are getting about how to play this market from here?



A: There are some sectors where valuations cease to matter. What has happened over the last few weeks is going to get people sit up and notice what are the underlined stories, how do you value those stories and what you should pay for them.



Despite the correction seen, I still find it difficult to accept the valuations in some of the sectors. The companies are doing well and will deliver growth in an absolute sense. But what you are paying for this growth is way too much even today.



I expect markets to continue to be volatile and with a downward bias over the next three months or so. Thereafter, we will have to look at things all over again.



Q: What is your sense of the stock listing tomorrow-Future Capital?



A: You have put me in a spot there. I am not able to comment on that stock at all because of confidentiality and conflict reasons.



Q: Which sectors do you expect to have leadership over the next few months?



A: Some of the areas which have started to look good are a lot of beaten down health care names and some of the smaller pharmaceutical companies. These are companies that have taken a lot of pain. Valuations are extremely attractive. These stocks have done nothing over the last two years or so.



These will start coming back gradually but surely. Technology is finally showing some signs of life again. But despite my belief that these are good business models over the long-term, I don't know in the short run if the entire pain is over or not. They are inextricably linked to what happens in the US. So, to that extent, one has to still wait and see whether tech finally breaks out of what it has been doing for the last two-years.



The other area where the interest will be there is steel. It is one commodity, which is still looking fairly interesting from a demand supply perspective globally. Companies have struggled in the latest set of results because of cost issues. But hopefully, with the correction already in place, that is an area where I would continue to feel that there is some more momentum to go.



Consumer stocks, where some growth may be visible, will come back. Banks will continue to do reasonably well because valuations are not too expensive. So, those are some of the sectors that are looking interesting.



Q: You said the froth may not be entirely skimmed from many of the sectors. Three sectors which ran up and have corrected the most are power, oil refining and real estate. Which of these would you rank in order of still containing some froth?



A: Power still has some froth, if you look at the valuations of NTPC and Power Finance Corporation. These are just two examples and we own neither of them.



The issue is that fundamentally great and stable businesses are supposed to trade at reasonable dividend yields with some growth. But these are trading with growth businesses and are being valued on PE and regulated return businesses.



In real estate, there are islands of value. You have to be a little careful. There is potentially some supply-related issue in select areas like Banglore or Delhi. There are some companies which are now very cheap and looking interesting. So, I don’t think it is a sector that has got a lot of room for downside.



But in real estate, if markets go down significantly more than what I anticipate now, you will see the ripple effect on real estate prices as well. So, when you buy real estate stocks, be very clear that what you are buying into is a huge wealth effect. Hypothetically, if markets go down over the next 18 months, you will have a situation where real estate stocks will give you a lot of pain because they will move to deep discounts. Even the NAV will itself move down. So, they are risky stocks per se. That is what all investors have to remember.

Tata Chemicals to buy US firm for Rs 4,000cr

Homi Khusrokhan, managing director, Tata Chemicals, in Mumbai this afternoon. Tata Chemicals announced a $1bn deal to acquire 100% stake in General Chemical Industrial Products Inc.

Tata Chemicals (TCL) has signed definitive agreements to acquire US-based soda ash maker General Chemical Industries Products Inc (GCIP) for $1.05 billion (about Rs 4,000 crore) to become the second largest producer of soda ash in the world.

The announcement was made exactly a year after Tata Steel, another Tata group company, acquired British steel major Corus.

TCL is now the third largest manufacturer of soda ash and sodium bicarbonate in the world with a production capacity of close to 3 million tonne per annum (MTPA). The acquisition will add another 2.5 MTPA to take its total capacity to 5.5 MTPA - next only to US-based FMC Chemicals.

The company had bought 63.5% stake in UK-based Brunner Mond Group for about Rs 508 crore in December 2005. It also holds a 33% stake in Indo Maroc Phosphore S.A. (IMACID), Morocco, which is engaged in the manufacture of phosphoric acid.

Soda ash contributed 40% of TCL's revenues of Rs 4,563 crore for the first nine months of 2007-08. The rest of the revenues are from its fertiliser and inorganic chemicals businesses."

This is a historic occasion for Tata Chemicals. The acquisition will help us access markets in North America, Latin Americ and the Far East," said Homi Khusrokhan, managing director, TCL, at a press conference in Mumbai today.

GCIP's subsidiary General Chemical (Soda Ash) Partners (GCSAP) has mining and manufacturing facilities located at Green River basin in Wyoming, USA. The Green River basin is the largest and most economical natural soda ash mine (trona) in the world. GCSAP shares the Green River basin with three other producers of soda ash, OCI Chemical Corporation, FMC Corporation and Solvay Mineral.

TCL signed an agreement to acquire 100% equity of the privately held GCIP from Herbinger Capital Partners, a private equity player with majority shareholding. The acquisition, subject to US regulatiory clearances, will be done through debt and equity funding, said TCL executives.

A profit-making and debt-free company, GCIP is estimated to have a turnover of over $400 million, said TCL executives.

The Gujarat-based soap and personal care producer Nirma had acquired Searles Valley Minerals (SVM), one of the top five producers of natural soda ash in the US with a turnover of $ 300 million, in November 2007.

Reliance IPO Allotement Status

Reliance Power IPO was over subscribed heavily, but less than 15 times in retail section. Reliance Power IPO allotment in is confirmed one lot to each retail investor for those who have applied for 15 lots. Due to the partial payment option available, most of the retail investors have applied for all 15 lots allowed by investing only Rs. 25875. This saved a lot of money to be pumped into market due to this mega IPO or you might have had seen larger fall in the market on 21st and 22nd Jan. Reliance Power IPO Allotment Status will be available in the first or second week of Feb 2008. We will update the Reliance Power IPO Allotment details as soon as that are finalized.
Meanwhile, you can also go through the strategies retail investor should have taken while applying for Reliance power IPO. This also explains the lock-in period for part payments after the IPO shares list into market.

Update: Click here for Reliance Power IPO allotment status. The information on Reliance Power shall appear there any time soon.

Buniness - Stocks set for weak start

NEW YORK (CNNMoney.com) -- Stocks looked set for a rough open Thursday as investors battled concerns about troubled bond insurers and shrugged off another Federal Reserve rate cut.
Less than three hours before the market open, Nasdaq and S&P futures were lower, indicating a weak start for stocks.
Just after midnight Thursday, bond insurer MBIA (MBI) reported its fourth-quarter results, posting a net loss of $2.3 billion that was far worse than forecasts. The loss was due primarily to a $3.5 billion writedown on its portfolio of insured credit derivatives. Its report followed an announcement late Wednesday night that it had received a $500 million infusion from private-equity firm Warburg Pincus. Shares of MBIA were sharply lower in early Frankfurt trading.
Bond insurers have been hit hard by the subprime crisis after insuring securities backed by mortgages and other loans made to borrowers with weak credit.
Fears that companies like Ambac (ABK) and MBIA could get downgraded by ratings agencies sparked a bout of selling late Wednesday, because losing their AAA credit ratings could cripple their businesses.
The firms have wide influence on the broader markets, guaranteeing more than $2 trillion in debt. There are some reports that Wall Street could be hit with as much as $40 billion in additional writedowns if the insurers are downgraded.
Stocks, which had rallied after the Fed cut rates by another half point Wednesday, turned around and finished the session lower on concerns about the insurers.
Investors will get another rash of economic readings Thursday, including one on personal income and spending from the Commerce Department, along with a look at the fourth-quarter employment cost index and weekly initial jobless claims from the Labor Department.
Investors are also likely looking ahead to Friday's much anticipated January employment report, which is forecast to show a modest net gain of only 65,000 jobs on U.S. payrolls, with unemployment expected to remain at 5 percent.
After the bell Wednesday, online retailer Amazon (AMZN, Fortune 500) reported earnings that beat analysts' expectations, thanks to a strong holiday shopping season. But shares of Amazon fell 12 percent in after-hours trading as it reported thinner-than-expected profit margins.
Starbucks (SBUX, Fortune 500) shares slipped 1 percent in after-hours trading Wednesday after it announced it would trim the number of new stores it plans to open this year and close some U.S. locations. It also cut its first-quarter earnings guidance.
Drugmaker Eli Lilly (LLY, Fortune 500) is in advanced settlement talks with federal investigators as it tries to head off an indictment over its marketing of antipsychotic drug Zyprexa, according to published reports. The reports said the firm could face substantial fines over charges that it failed to warn patients of the drug's potential side effects and marketed it for uses not approved by the FDA.
Investors are looking ahead to earnings due Thursday from drugmakers Bristol-Myers (BMY, Fortune 500) and Wyeth (WYE, Fortune 500) before the open, and Internet bellwether Google (GOOG, Fortune 500) after the market closes.
In global trade, Asian stocks ended the session mixed and European stocks tumbled in morning trading

Britney Spears Rushed To Hospital Again

For the second time this month, Britney Spears was rushed to the hospital by ambulance early Thursday morning. According to reports in the Los Angeles Times, Spears, 26, was physically removed from her home by police and put into an ambulance at around 1 a.m. PT, then escorted to the UCLA Medical Center by a phalanx of more than a dozen motorcycle officers, two police cruisers and two police helicopters.

The action came as a result of yet another call for a "5150" hold for a mental-health evaluation, which means that Spears is considered a threat to herself or those around her, authorities told the paper. The motorcycles and a Los Angeles Fire Department ambulance swept through the gates of Spears' hilltop home in Studio City shortly after 1 a.m. California time, with a police helicopter hovering overhead, and removed the singer eight minutes later. Officers inside the home reportedly radioing to commanders that "the package is on the way out."
According to the Times, the winding street leading up to Spears' home, the Summit, was jammed with paparazzi vehicles for several hours prior to the arrival of the police.
On January 3, Spears was placed on a 72-hour mental health evaluation hold when police were called to her house after she would not give up custody of her two children to a representative for ex-husband Kevin Federline, who had come to pick them up; she was released two days later. Unlike that incident, during which Spears' trip from her home to the ambulance and ride to the hospital was swarmed by paparazzi, officials blocked vehicles from following them this time.
The Times reported that authorities said the action was prompted by a call they received from Spears' psychiatrist, and though it was unclear exactly when they received the call, the paper said it was apparent the operation had been carefully planned over a period of time. It was the second time police had rushed to the singer's home this week, following an incident Monday night when someone reported that a group of paparazzi were trespassing in the singer's gated community. No trespassers were found, but a number of paparazzi were given citations for illegal parking.
According to TMZ, Spears' psychiatrist was alarmed by her recent reckless driving and conduct, decided that the singer needed to be put on another 5150 hold, and he was the one who called police. The site reported that the plan to hospitalize Spears had been launched days ago and was abandoned at the last minute on Wednesday, then put into place early Thursday and was so intricate that the Federal Aviation Administration had to be contacted to clear airspace on the route to the hospital.
The troubled singer lost custody of sons Sean Preston, 2 and Jayden James, 1, on January 4 after her hospitalization following her refusal to hand the children back to Federline.