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Issue 2 2011 July 25 - 30

RUPEE HITS THREE YEAR HIGH AGAINST DOLLAR . . . . 1

2G SCAM GETTINGMESSIER . . . . . . . . . . . . . . . . . . . . 2

IOB, PSB, Corporation Bankand others hike lending, depositrates ………..……..3 Weekly pulse

Global economy on the verge of a precipice The global economy seems to be teetering, again, on the verge of a very uncertain precipice - but unlike in 2008, thistime the trigger could come from any of a half dozen directions. American politicians could start a global economicand markets tsunami if they're unable to reach an agreement to raise the country's debt ceiling in the coming fewdays, and honour its sovereign debts. Add to this, the global economy is showing clear signs of sputtering down.Corporate second quarter results are awash with "warnings" and below expectation results, from top manufactur-ing, inancial services and technology companies.The US turned up some dismal employment data, well below expectations. Growth in Asia has slowed as in lationsoars, the UK could be poised to sink back into recession, and the future of the Euro is looking increasingly uncer-tain. Also, consumer con idence surveys in Europe are getting progressively gloomier.

Rupee hits near 3 year high on weak dollar and US debt fears

KNOWLEDGE IS LIKE MANURE.

IT DOES NO GOO D UNTIL IT IS SPREAD.

-CHINESE PROVERB

The rupee rose to analmost three - year highagainst the US dollarexpecting a rise in fund

lows due to higher in-terest rates comparedwith the US where theFederal Reserve is hold-

ing policy rates nearzero. But Indian export-ers, who usually seek the RBI's interventionto retain their competi-

tiveness, are not callingfor it yet as currenciesof competing nationshave appreciated more,protecting their relativeedge.

The climb of the rupee

this time around is not due to domestic factors,unlike in the past whenforeigners poured intoequities, but a global

trend where the dollaris sliding against multi-ple currencies due to apotential downgrade of US debt from AAA rat-ing. The US dollar, theglobal currency fortrade, hit a new low

against the currenciesof Australia and NewZealand and also theSwiss Franc



Zydus Cadila in talksto acquire brandsand manufacturingfacility of BiochemPharmaceuticals

Zydus Cadila is in talks to acquire the brandsand manufacturing facility of Biochem Phar-maceuticals. The deal is expected to makeZydus’s pockets lighter with Rs 300 -450crore but will boost Biochem's revenuegrowth. In fiscal 2009-10, Biochem reportedrevenues of Rs 241 crore.

Biochem makes popular antibiotics such as

Amicin or amikasin, which is used for der-matological treatment. It also has a smallportfolio of oncology products.

Ahmedabad-based drug maker Zydus Ca-dila, with a market cap of Rs 3,700 crore,has been on the lookout for companies thatare small in size and have specific productpipelines. In June, its US subsidiary ZydusPharma Inc. acquired the assets and manu-facturing facilities of Nesher Pharma, re-portedly for $60 million.

Smartphone shipmentsin the second quartersurely left Nokiabrooding. And its archrivals, Apple Inc. andSamsung Electronicssmug. Why?

Because both sur-passed Nokia insmartphone ship-ments.

Nokia, which (still - but how for how long?) re-mains the world's big-gest overall handset producer, has lost 47%in Helsinki stock trad-ing this year

Alas! But you can put the blame on the Sym-bian product lineswhich are just not enough to ight the iPh-one and handsets usingGoogle Inc's software.

2G scam getting messier

When the UPA government started the enquiry in-to the 2G scam, little did Prime Minis-ter Manmohan Singh and the then Finance MinisterP Chidamabaram knew that after some time for-mer telecom minister A Raja, the chief accusedwould rope them in, alleging that the issue of saleof equity by spectrum licencees was discussed withthem. Defending himself against corruption charg-es in 2G scam, the 47 - year - old DMK MP also saidthat there was nothing wrong in his decision of not auctioning 2G spectrum and that he was merelyfollowing the policies pursued by his predecessorsand the NDA government.

Rebellion in Karnataka BJP; MLAs, MPs back BS Yeddyurappa Karnataka Chief Minister BS Yeddyurappa, who was asked by the BJP leadership to step down, continued with hislast - ditch efforts to save his chair. High drama unfolded when a rebellion of sorts broke out in BJP in Karnataka withYeddyurappa loyalists pressing the high command to allow him to continue as chief minister, claiming he has thesupport of over half the party MLAs and MPs. In what appears to be a show of strength by 68 - year - old BS Yeddyur-appa that could delay electing his successor, his camp legislators told the party's central observers Rajnath Singhand Arun Jaitley, that it should reconsider the decision asking him to resign. A grim looking BJP could just focus onzeroing in on his successor.Sadanand Gowda and VS Acharya.

Apple,Samsungovertake Nokiain smartphoneshipments



Merck & Co. will eliminateup to 13,000 jobs, about14% of its work force, inhe latest cost - cutting effort

by a big drug maker copingwith an aging productineup.

The drug giant said the

ayoffs would be in additiono some 17,000 job cutsalready planned and wouldcut spending by an extra$1.3 billion when finishedat the end of 2015. Alsocontributing to the savingsare the closings of unspeci-fied offices and manufac-uring plants.

Merck to Cut 13,000 MoreJobs as Patents

Expire

Funding squeeze pushes India Inc into PE'sarms Private equity investment in India is emerging as a helping hand as rising borrowingcosts and dormant public markets push companies to cut deals with buyout irms inreturn for much - needed cash injections.

Private Equity simple means equity capital that is not quoted on a public exchange.Private equity consists of investors and funds that make investments directly intoprivate companies or conduct buyouts of public companies that result in a delistingof public equity.Unlike developed markets, India offers few buyout opportunities and the bulk of themoney is deployed as growth capital, with average deals in the range of $25 - $100million.

But more deals are emerging now as India's entrepreneurs slowly lower their valua-tion expectations and dip into a large pool of capital held by private equity.India has the highest deal count for private equity backed M&A in Asia, with 89 dealsworth $4.2 billion launched so far this year.

IOB, PSB, Corporation Bank and others hikelending, deposit rates

Several banks including Indian OverseasBank (IOB), Punjab &Sind Bank and Corpora-tion Bank have raised lending rate by up to50 basis points in line with other lend-ers. These 50 basis points can be translatedinto loans, including home and auto, becom-ing expensive, and depositors getting betterreturns on their savings.

Following the footsteps of RBI, who is busytackling in lation by hiking its key policy ratesto 50 basis point , IOB, Syndicate Bank andPunjab & Sind Bank raised lending rate by 50 basis points, while another public sec-tor lender Corporation Bank increased it by 40 basis points

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1 Down Two Steves, too good a fruit

2 Across Idea of this game struck whenone slice of pizza was missing

3 Across The street with graveyard andriver at two ends

4 Down

A form of Indian Service taxlevied for educa on. Known asEduca on ____

5 Down Russia's currency

6 Across One of the four big banks, rstpart of 2 worded name

Brain ScratcherFinX comes with thecrossword competition.First 3 correct entries getheir name featured on the

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