HIGHLIGHTS - 2009/10 Budget

- Govt to sell stakes in RITES, Manganese Ore

- Infrastructure investments to be 9% of GDP.

- Increase agriculture growth by 4% every year

- First challenge is to lead the economy back to the 7% GDP growth

- NHAI support up by 23%

- To hike private partnerhip in all PSU's

- Budget makes subvention of 1% as incentive to farmers

- NREGA Outlay increased by 144%

- IIFCL, banks can support projects worth Rs 1,00,000 crore

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India is now flooded with $1 bn per week

In April, foreign institution investors (FIIs) poured $1.3 billion into Indian equities. They poured another $1.87 billion in the first half of May, before the election result. For May as a whole, the inflow was $4.14 billion, or a billion a week. 

This is part of a global phenomenon. Since April, $20 billion has flooded into all emerging markets. The Sensex is up 50% in 2009. But Russia is also up 63%, China 57%, Brazil 60%, and Argentina 45%. So, the dollar flood is not India-specific: it is part of a global rush into all emerging markets, especially the BRICs (Brazil, Russia, India and China). 

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GM shareholders lose $10 bn in one year

As the century-old auto maker General Motors negotiated many a road block in the past one year, investors bore the brunt of the financial rage as they became poorer by a staggering more than $10 billion. 

General Motors is now worth just a few millions in stock valuation whereas the auto maker boasted of a market capitalisation of nearly $11 billion, exactly a year ago. 

The steep slide in share prices in one year has seen investors lose paper wealth to the tune of more than $10 billion. The stock price of 750 cents on May 29 is also the all-time low for the company in more than 70 years. 

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Railways offer Rs 2.7 tn investment opportunity: BNP Paribas

Indian Railways sector offers an investment opportunity of a whopping Rs 2.7 lakh crore over the next five to eight years, a report says. "Opportunities in the Railway sector are close to Rs 2.7 trillion over the next five to eight years, of which the Rs 800-900 billion will be awarded in the next two years," global financial services provider BNP Paribas said in a report. 

The BNP Paribas report further said that out of the entire outlay Dedicated Freight Corridor (DFC) project, which envisages construction of 2,800 kms of rail corridor spanning seven states poses the largest investment opportunity of Rs 68,000 crore. 

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Warning signs: Acceleration in 483s, Warning Letters

The US FDA’s grip around drug manufacturers is getting tighter. While Form 483 observations were common earlier on, Indian players enjoyed a comfortable period of plant validations. In recent months, however, the FDA has pulled up several frontline Indian manufacturers, raising concerns on generic exports to the US. The US is one of India’s largest export destinations for generics and adverse reactions from the regulator carry the potential to dent medium‐term

revenues. With the US FDA strengthening its base in India, the pace of  483s and Warning Letters is unlikely to slow down. Considered a primary agency, actions by the FDA also often lay the path for crossborder regulatory alerts. On the bourses thus, these companies have felt the brunt of FDA setbacks. The FDA hiccups add a new dimension to the already challenging environment for generic companies.

In recent months many generic companies, including frontline Indian companies and their subsidiaries have been at the receiving end of the US FDA’s 483s and Warning Letters. While two companies – Caraco and Cipla ‐ have not proceeded beyond 483 observations, two – Ranbaxy and Lupin ‐ have snowballed to invoke Warning Letters. As the US FDA strengthens its base in India, the pace of 483s and Warning Letters is unlikely to slow down.

Sensex creates history; two upper circuits in one day

Sensex and Nifty hit upper circuit twice today and trading had to be halted for the day.
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DLF raises Rs 3980 cr by selling 10% stake

The founders of fund-starved DLF Ltd on Wednesday raised $783 million through a share sale in India's top listed property firm. Two banking sources said the shares were sold to about 30 institutional investors.The company said its founders would use the proceeds from the sale of 168 million shares to inject capital into property trust DLF Assets Ltd (DAL) and also to buy private equity D.E. Shaw's stake in DAL.
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