• Finmin thinks India ready for super monitor
• More investment leeway for foreign venture funds
• No more changes to Press Notes 2, 4: Finance ministry
• 3G spectrum bids to start at 3500cr,WiMAX 1750cr
• Trade policy offers exporters more sops
• Industrial output exceeds expectations, up 7% in July
• Bharti-MTN deal contours ‘may change’
• JSW in talks to buy coal mine in Swaziland; deal seen at $350 m
• Harley Davidson to launch today, sales to start 2010
• According to sources, the finance ministry is considering a proposal to give statutory powers to the high-level co-ordination committee (HLCC) on capital markets, a move that could transform it into a single, super regulator for the entire financial services sector in the likes of the UK’s Financial Services Authority (FSA). Finance minister is expected to discuss the proposal with RBI governor soon. Currently, the HLCC is a non-statutory body comprising representatives of all financial regulators, including the RBI, finance ministry, SEBI, IRDA and PFRDA who meet under the aegis of the HLCC to debate and sort out divergences in policy issues. (ET)
• In a move to not only make life easier for foreign funds and widen the scope for their risk capital, but also boost FDI in the country, RBI has, while giving green signal to some of the FVCFs, said that “if the FVC investor intends to make any private equity investments, then it may have to avail the FDI route”, which means that barring a few sensitive sectors, a FVCF registered in India is free to invest in almost any business in the country. Thus for buying into firms which are outside the 10 select investment options (such as infrastructure, bio-technology, nanotechnology, biofuel, IT-related activities for hardware and software development and few others) being offered, the fund will have to either approach the FIPB for FDIs where the board approval is required, or invest directly in areas where FDI is permitted under the automatic route. PwC’s Punit Shah has been quoted as “Of course, FVCs enjoy certain regulatory benefits under SEBI and FEMA regulations, such as exit and entry pricing and lock-in relaxations. These will not be available for its investments under FDI route, but RBI has certainly made things convenient for the foreign funds.” (ET)
• In a sharp divergence from its earlier opposition to Press Notes 2 and 4 that relaxed FDI in February 2009, the finance ministry has said that it is not planning to recommend further changes to the guidelines. The statement comes a few months after the department of economic affairs (DEA) in the finance ministry had raised objections to the new guidelines, saying they rendered sectoral FDI limits meaningless. Govt’s decision not to alter the Press Notes eases the way for the complex $23 billion share swap deal between Bharti, Indias largest telecom company, and South Africas MTN, one of the first major test cases of the new policy guidelines. (BS)
• The empowered group of ministers (EGoM) has fixed Rs 3,500 crore as the minimum bid price for the auction of 3G wireless spectrum, evoking dismay from telecom companies that see it as exorbitant. But telecom minister A Raja’s announcement that the government hopes to complete the auction of 3G radio frequencies within 90 days came as a relief for mobile firms, which have already begun preparations to launch the new service. The EGoM has also fixed the base price for WiMAX spectrum for wireless broadband services at Rs 1,750 crore and decided that a total of five players would be allowed to offer 3G services in every circle, of which one slot would be reserved for state-owned telcos BSNL & MTNL. (ET)
• Govt has announced the foreign trade policy for 2009-14 in New Delhi wherein it has allowed duty-free import of capital goods, extended the duty refund scheme for exporters, and cut transaction costs for them in a bid to reverse the decline in exports and double outbound sales of goods and services in five years. The new policy shifts focus to 26 new countries to counter the demand slump in traditional markets. The new policy assures stability and continuity of the existing schemes, at least for the next two years. The governments focus will be on export sectors with high employment. Key features of the policy are:
- Export growth targeted to increase 15% annually till March 2011, thereafter 25%
- DEPB scheme to continue till December 2010
- EPCG scheme at zero duty and export obligation relaxed to 50%
- 26 new markets added for incentives under Focus Market Scheme
• Govt has announced that industry output, as measured by the index of industrial production (IIP), grew 7 % in July, the same as the corresponding period in 2008, taking analysts by surprise as much for the magnitude of the growth as the early data release. The announcement was made by Commerce and Industry Minister Anand Sharma while announcing the new foreign trade policy. (BS)
• MTN CEO Phuthuma Nhleko has said that the contours of the deal with Bharti Airtel announced on May 25 may “very well change”, a possible indicator that some issues remain to be resolved even as the two companies attempt to finalise negotiations with regulators in South Africa and India. According to sources, the deal is on course to be completed before the end of September—the latest deadline set by the two companies—but some details relating to payment by Bharti Airtel to MTN and its shareholders remain to be finalised. (ET)
• Sajjan Jindal-owned JSW group is learnt to be in advanced talks to acquire a coal mine in Swaziland, Africa, at an estimated cost of $350 million (Rs 1,680 crore). The move is part of the group’s efforts to secure coal supplies for its forthcoming power projects and is also in line with recent steps by the Indian government to allow domestic companies to buy mines overseas. The group has been carrying out a detailed geological exploration in the EmaSwati Colliery (Mpaka Mine) and Maloma anthracite mine, in the eastern part of Swaziland, which has the major chunk of the country’s over-1-billion-tonne coal reserves. (ET)
• Iconic US cult bike maker Harley Davidson is set to enter Indian markets tomorrow, two years after it was first granted permission to start operations in the country. Sales will, however, begin only by 2010. As a first step, it is looking for local dealer partners to build customer relationships, the Harley-Davidson brand and its business in India for the long term. Harley Davidson was first granted permission to start operations in India in 2007 but it had to keep its plans in abeyance because of a crushing import duty of over 100 per cent. However, two years hence, the cruisers popularity seems to have far outweighed other considerations like price, which is expected to be multiples of lakhs. (BS)
