WORLD worries- US Fiscal Cliff !!

Why market worries about the US Fiscal Cliff?

If the Fiscal Cliff deal is not reached, then it can impact the global markets & economies

Jitendra Kumar Gupta / Mumbai Dec 22, 2012, 12:06 IST Indian equity markets have corrected almost 2% in last few days ahead of deadline of the US Fiscal Cliff. US Fiscal Cliff is considered to be the biggest road block for the global markets including India because if the Fiscal Cliff deal is not reached that could have a huge impact on the global markets and economies including India. "Markets are hoping for a solution to the US ‘fiscal cliff’ issue because if a solution is not reached, it can impact sentiments negatively. We expect the issue to be resolved and the same can provide relief in short term," says Dipen Shah, Head of Private Client Group Research, Kotak Securities Origin of Fiscal Cliff Ever since the global economic crisis hit in the year 2008-09 the world economy importantly the US economy has taken a severe beating. Globally to avert the crisis the central banks have relied on the deficit spending including the US. However the deficit spending also called as money printing and the quantitative easing by the economists came along with huge burden of debt. Similarly in the year 2011, when the US wanted to borrow more money it had to raise the debt ceiling because there is limit to its borrowing which can only be increased with a vote of congress. In the same year the US passed the bill and extended the debt ceiling to $14.3 trillion. This would not have been possible without the government’s promise of controlling the spending and restoring the tax cuts and other subsidies in the stipulated time so that the fiscal deficit could be controlled. Thus the Budget Control Act 2011 was passed, which said that if it fails to do so and achieve the desired economic growth than that will automatically trigger the restoration of the tax cuts and subsidies. Spending on different programmes like administrative and the defence spending will be cut automatically. Unfortunately the time has come when all these terms of Budget Control Act will expire by the end of December 2012, which is also known as Fiscal Cliff.  So the Fiscal Cliff was created due to the series of such actions including the approval of Bush era tax cuts in 2001 and 2003. Quantum of worry Including all the automatic tax increases and spending cuts the estimates suggests that the US economy could take a hit of about $500-600 billion, which is about 4% of its GDP and good enough to take the GDP back to recession. On an average about $2,200 extra in taxes will be paid by the average family. Link to India Although India does not have much dependence on the US, but a possible downturn in the US is going to hit the world economy particularly in the backdrop of fragile economic conditions in the Europe and China. This will certainly have its impact on the global markets as that will impact the sentiments and liquidity (foreign money flow), both so far have been supporting the Indian equity markets. Also there is risk averseness among the investors because of which there have been selling in the market. Investors are also seeking for more clarity on this issue before committing any fresh money. In the interim despite all the positive policy announcements, hopes of rate cut and economic news the bigger issue of Fiscal Cliff could keep the markets under pressure. “As of now fiscal cliff issues continue to overshadow any other economic news,” says Amar Ambani, Head of Research, IIFL. Good news is that some progress on this front is already made and the economists are saying that there is about 60-75% probability of the deal. So the probability is with the market, and if that actually materialise there is feeling that the Sensex could go back to 20,000 to 21000 levels. http://www.businessstandard.com/india/news/why-market-worries-aboutus-fiscal-cliff/200345/on

ArcelorMittal- $4.3 billion write down- Europe !!

ArcelorMittal takes $4.3 billion writedown on weak Europe 

ArcelorMittal says steel demand had fallen about 8% in Europe this year and there was no sign of a quick recovery Ben Deighton Published: Fri, Dec 21 2012. 02 20 PM IST Updated: Sat, Dec 22 2012. 12 06 AM IST

Brussels: ArcelorMittal, the world’s biggest steel maker, is writing down the value of its European business by $4.3 billion, underscoring its gloom about prospects for the region’s recession-hit manufacturers.The group, formed in 2006 when the steel business of India-born Lakshmi Mittal bought Europe’s Arcelor for about $33 billion, said on Friday steel demand had fallen about 8% in Europe this year and there was no sign of a quick recovery.As a result, it was writing down the goodwill—the value of intangible assets like a brand rather than physical assets like machinery—of its European operations by 87%.“It is negative, but it shouldn’t really be a big surprise that the book value of its European business was too high,” said a London-based analyst who asked not to be named.At 1045 GMT, ArcelorMittal shares were down 2.9% at ­€7.74, one of the biggest falls by a European blue chip stock and reversing gains made earlier this week.

The $500-billion-a-year steel industry, a gauge of the global economy, has slowed sharply this year from last as a moderation in China’s economic growth has compounded weak demand from austerity-ravaged Europe.The World Steel Association in October forecast steel demand would rise by 2.1% in 2012, down from 6.2% in 2011. It had forecast 3.6% growth in April. Other steel makers are hurting too. Earlier this month, Germany’s ThyssenKrupp posted an annual net loss of €4.7 billion.Weak point

Europe is a particular weak point, as austerity drives aimed at tackling a sovereign debt crisis have cut demand for construction and cars, the steel sector’s largest markets. The euro zone’s manufacturing sector has contracted for 17 straight months. ArcelorMittal, which makes about 6-7% of the world’s steel, said steel demand in Europe had fallen about 29% since 2007, when the financial crisis started.

But it highlighted better trends in the US, where it said demand was up almost 8% this year and is now about 10% lower than in 2007.ArcelorMittal, whose output is more than double that of its nearest rival, has already announced the closure of blast furnaces in France and Belgium, with other operations temporarily idled due to overcapacity.The writedown represents over a third of ArcelorMittal’s overall goodwill of $12.5 billion reported at the end of last year. The group, around 40% owned by the Mittal family, took on about $6.6 billion of goodwill when it bought Arcelor.It said the writedown would be a non-cash charge in its fourth quarter results and would not affect net debt or core profit. Before the writedown, analysts had on average forecast the group would make $529.5 million in net profit this year, and $7.1 billion in core profit, according to StarMine. Reuters Philip Blenkinsop contributed to this story.

http://www.livemint.com/Industry/d5WEVpPyBLnFP0cpYBmTiN/ArcelorMittal-takes-43-bn-writedown-on-European-operations.html

Sebi cancel's "Om Shares and Securities"

Sebi cancel's broker registration for illegal trading

AGENCIES: MUMBAI, DEC 07 2012, 22:19 IST 

Mumbai: Capital market regulator Sebi has cancelled the registration of a Samir K Chotai as a stock broker for allegedly indulging in illegal trading activities that were not in the interest of the investors. In its order, Sebi said Chotai failed to perform its duties as specified in the code of conduct for sub-brokers in the Broker Regulations. "...hereby cancel the certificate of registration of the sub broker namely Samir K Chotai (trade name Om Shares and Securities)," Sebi said in its order issued on December 6. Sebi said Chotai had executed trades outside the trading mechanism provided by BSE.

The regulator said it also observed that the enquiry report on the matter had noted that Chotai had attempted to persuade BSE officials for not reporting the findings of inspection to Sebi.

"Such attempts are unethical and unsuited to an intermediary who shares the responsibility of developing the securities market along with the regulator," Sebi said. Sebi on receipt of certain complaints regarding illegal trading activities at Porbandar (Gujarat) advised the BSE to probe the entities concerned.Accordingly, BSE carried out inspection of Chotai, a registered sub-broker operating under the trade name of Om Shares and Securities on June 28, 2004, the order said.

The inspection prima facie revealed that Chotai had indulged in illegal activities that were not in the interest of the investors. Pursuant to the findings by BSE, Sebi in an interim order prohibited Chotai from accessing the securities market till the probe is completed and appropriate action taken upon receipt of the enquiry report. The enquiry report submitted on March 8, 2011 recommended a penalty of cancellation of the Certificate of Registration of Chotai.

http://www.financialexpress.com/news/sebi-cancels-broker-registration-for-illegal-trading/1042000/0

Sebi BANS Indiabulls Securities official

Sebi imposes 5 yr market ban on Indiabulls Securities official

 

PTI: MUMBAI, DEC 21 2012, 16:07 IST Mumbai: Capital market regulator Sebi has barred an official of Indiabulls Securities from trading in stocks for five years over fraudulent dealings in Aurobindo Pharma shares.Sebi has restrained Indiabulls Securities Vice-President (Eastern Region) Sidharth Daga from accessing the securities market for a period of five years in violation of fraudulent trading norms.During a Sebi probe in shares of Aurobindo Pharma, it was found that a Relationship Manager of Indiabulls Securities, Abhijit Sen, had apparently confessed in a criminal case that he had given the password of trading account of one Arunava Chakraborty to Daga after the latter threatened him with dire consequences.

Daga had then fraudulently placed orders from the trading account of Chakaraborty in shares of Aurobindo Pharma.In an order dated December 20, Sebi said that Daga "has dealt in the securities of Aurobindo Pharma in fraudulent manner".Additionally, the regulator observed that the facts and circumstances of the case suggest that Daga was "directly or indirectly involved in fraudulently placing the orders from the trading account of Chakraborty and they are also corroborated by the statement of Sen".

http://www.financialexpress.com/news/sebi-imposes-5-yr-market-ban-on-indiabulls-securities-official/1048584

BUILD YOUR PORTFOLIO...

5 small steps for your equity portfolio

Published: Saturday, Dec 22, 2012, 2:18 IST 
By Arjun Parthasarathy | Place: Mumbai | Agency: DNA

Constructing and maintaining an equity portfolio the right way will go a long way in improving its performance.

There are five rules that can help optimise the performance of your portfolio. These are:

1. The purchase price does not matter. What matters is the current market price that gives you current weight of each stock in the portfolio and also gives you the current valuation. Hence, always look at your portfolio in relation to current market price.

2. Good stock analysis should reflect stock weights in the portfolio. For example, if you are positive on stock X but it forms only 1% of your portfolio, it will not do much for overall portfolio returns.Stocks that you are confident of performing should have enough weight in your portfolio to boost returns.

3. Sector weights, too, should reflect your analysis. Sectors you are positive on should have high weight in your portfolio while sectors you are negative on should have less or zero weight.

4.Stick to stocks and sectors that you are comfortable with and do not venture into unknown territory without doing enough due diligence. Many of you are familiar with a certain industry or sector(s) and you will automatically deviate towards such sectors when you are investing. It is the right method to follow as your expertise will tell you if a stock is worth investing in or not.On the other hand investing in stocks that you are not familiar with exposes you to much greater risk.

5. Adding stocks to the portfolio on the basis of the belief that equity markets will go up and all stocks will do well is a sure way of making your portfolio underperform. Positive views on the markets can be executed in fewer and more well analysed stocks and such stocks will outperform the rest. Add more weight to existing stocks in the portfolio rather than adding on more stocks.

http://www.dnaindia.com/money/report_5-small-steps-for-your-equity-portfolio_1780367

Facebook REVENUE INCREASING MODEL...

Facebook tests $1 fee for messages to non-friends, December 20, 2012 5:55 PM ET

SAN FRANCISCO (AP) - Facebook says it is testing a service that will charge users $1 to guarantee that messages they send to people they are not connected to arrive in users' inboxes, rather than in an often-ignored folder called "other." Launched in 2011, the "other" folder is where Facebook routes messages it deems less relevant. Not quite spam, these include messages from people you most likely don't know, based on Facebook's reading of your social connections. Many users ignore this folder.

Now, users will be able to pay $1 to route their messages to non-friends. Facebook said Thursday that it is testing the service with a small percentage of individuals — not businesses — in the U.S. "For example, if you want to send a message to someone you heard speak at an event but are not friends with, or if you want to message someone about a job opportunity, you can use this feature to reach their Inbox," Facebook said in an online post. "For the receiver, this test allows them to hear from people who have an important message to send them." The company says charging for messages could help discourage spammers. In October, Facebook unveiled another feature that lets users pay if they want more people to read their updates. For $7, users can promote a post to their friends, just as advertisers do.

http://money.msn.com/business-news/article.aspx?feed=AP&date=20121220&id=15927790

Internet share to TRIPPLE to $100 bn by 2015

Internet's share in GDP could touch $100 bn by 2015

The number of internet users in India will go up from 120 mn at present to 330 mn by 2015, according to a report by McKinsey

Piyali Mandal / New Delhi Dec 20, 2012, 00:12 IST With the number of internet connections and the usage of computing devices on the rise, India’s internet industry can contribute up to $100 billion (about Rs 5.5 lakh crore) to the country’s gross domestic product (GDP) and generate about 22 million jobs by 2015, according to a study.India will be second only to China in terms of citizens using internet by 2015, as more than 330 million Indians should be connected online by then, said the report, Online and Upcoming: The internet’s Impact on India, released by consulting firm McKinsey and Co. India has around 120 million internet users at present. Internet contributed to 1.6 per cent of Indian GDP, or about $30 billion (in real purchasing power parity terms), in 2011. At present, Internet-linked consumption and expenditure contribute to an estimated $1.7 billion or almost three per cent of the global economy.   ADDING FUEL Internet contributed to 1.6 % of Indian GDP, or about $30 billion, in 2011  Currently, internet-linked consumption and expenditure contribute to almost 3% of the global economy Three out of four new users from the country will be mobile-only users “The GDP impact of the internet could treble, as the user base and engagement levels grow, and the as yet untapped SMEs (small and medium enterprises) and individual consumer segments benefit from inclusion,” Chandra Gnanasambandam, partner at McKinsey and co-author of the report, said.“India will add more Internet users than any country in the world over the next three years, as average penetration rises from 10 per cent today to 28 per cent — still far lower than the projected global average of 43 per cent,” the report said. India will also have a unique feature—three out of four new users from the country will be mobile-only users. Mobile-based internet users will form 55 per cent of the total user base in 2015 in India, compared to just 15 per cent in other aspiring countries, it said. Besides, it is likely to create more jobs. With increased Internet penetration, 22 million jobs would be created by 2015.However, the report warned that for internet’s share in GDP to increase, India must follow an inclusive path of Internet expansion. The government must extend rural infrastructure investments in the hinterlands, reduce the cost of access to increase Internet usage, increase digital literacy and create favourable business environment for internet-based enterprises. http://www.businessstandard.com/india/news/internets-share-in-gdp-could-touch-100-bn-by-2015/496190/

One Person Company NOW POSSIBLE...

Now, one person can start a company

This will give a chance to the entrepreneurs to enter the corporate world, without adding a family member to venture

N Sundaresha Subramanian / New Delhi Dec 20, 2012, 00:46 IST Passage of the Companies Bill in Parliament will pave the way for a new concept of ‘one person’ company’ (OPC). Under the Companies Act, 1956, it required at least two people to form a company. The new concept will provide an opportunity to Indian entrepreneurs to enter the corporate world without even adding a family member to the venture, which they, at times, do just for the sake of a second name. “This will bring the unorganised sector of proprietorship into the organised version of a private limited company. The organised version of OPC will open the avenues for more favourable banking facilities, particularly loans to such proprietors,” saysPavan Kumar Vijay, managing director of Corporate Professionals, a corporate financial advisory firm. “Proprietors always have unlimited liability. If such a proprietor does business through an OPC, then liability of the member is limited. This will open all options for Indian entrepreneurs, with pros and cons, and leave it in the hands of such promoters to decide the best options. It will help many foreign companies, which just need to appoint nominees for the sake of a minimum two members, when they form a wholly-owned subsidiary (in India),” Vijay adds. Various small and medium enterprises, doing business as sole proprietors, might enter into the corporate domain. The concept would boost the flow of foreign funds into India, as the requirement for a nominee shareholder would be done away with. However, the mandatory clause that a resident indian director should be on the board could be a bottleneck, experts say. An OPC can be formed by subscribing the name of a person to the memorandum and complying with the requirements of the Act in respect of registration. As regards the name of an OPC, the Act provides that the words “one person company” shall be mentioned in brackets below the name of such a company, wherever its name is printed, affixed or engraved.The law comes with provisions that cover various situations arising in such a new format. For example, any business, which is required to be transacted at an annual general meeting or any other general meeting of a company by means of an ordinary or special resolution, shall be done in the case of an OPC by passing a resolution, which shoud be communicated by the member to the company and entered in the minutes book required to be maintained under law.It also provides that the memorandum of an OPC shall indicate the name another person as nominee, with his prior written consent in the prescribed form, who shall, in the event of the subscriber‘s death, become the member of the company, and the written consent of such person shall also be filed with the registrar at the time of incorporation along with its memorandum and articles.In countries like the US, and many countries of Europe, Singapore, etc the entrepreneurs have options to decide the constitution of company as per their need and the option of an OPC is available to them. The concept of OPC is prevalent in many countries and notably in China.Experts feel the key challenge for such a company will be to ensure that supporting legislations also recognise such a company as an entity and not just an extension of a sole proprietorship.

http://www.businessstandard.com/india/news/now-one-person-can-startcompany/496182/

Banking Bill passed -- MORE NEW BANKS....

Banking Bill passed, Reliance, Religare, others get set for foray 

PTI: NEW DELHI, DEC 19 2012, 17:31 IST

New Delhi: Corporate entities interested in setting up new banks, including Reliance and Religare, have begun doing the groundwork after a key Bill was passed in the Lok Sabha last evening.

In a major step to reform India's banking sector, the Lok Sabha had passed the Banking Laws (Amendment) Bill, 2011, paving the way for foreign investments in the sector and establishment of new private banks. The Bill will allows RBI to supersede boards of private sector banks and increase the cap on voting rights of private investors in PSBs to 10 per cent from 1 per cent.

RBI wanted the government to amend the banking laws before starting the process towards issuance of new banking licences. The major groups interested in seeking new banking licenses, whenever RBI decides to give them, include Anil Ambani-led Reliance Group, financial services conglomerate Religare group, Larsen & Toubro and Shriram group. Welcoming the passage of the bill in Lok Sabha, Religare Enterprises chief Shachindra Nath said that "it is important that new banks are brought in to contribute towards the overall financial inclusion and development agenda"."We are now waiting for the Bill to be passed in the Upper House and the RBI to come out with its final guidelines post which we would evaluate how we align our banking business model with the regulatory intent," Nath said."Given the under penetration of banking and financial services in a country as large as India, it is important that new banks are brought in to contribute towards the overall financial inclusion and development agenda," he said.

"Having said that, this will also pave way for more reforms and investments in the sector," Nath added.When contacted, a spokesperson for Reliance Capital, the financial services arm of Reliance group, also welcomed the passage of the bill in Lok Sabha, but did not comment further.Reliance Capital CEO Sam Ghosh has earlier said that the group is full-prepared from its side for banking foray."We are ready. We have been working on this for quite some time... for about one and half years," Ghosh had said.While the process of granting new banking licences have been underway for quite some time, the government has recently indicated that a framework could be put in place soon for allowing new players in this business.The RBI had issued draft guidelines in August 2011 for issuance of new banking licences, while in July 2012 it released the comments and suggestions received by it. Religare group and Reliance Capital have shown their interest in starting new banks ever since a proposal was floated to issue new licenses.

Addressing Reliance Capital shareholders last year, Chairman Anil Ambani had said that the group's banking entity could be called 'Reliance Bank'.

http://www.financialexpress.com/news/banking-bill-passed-reliance-religare-others-get-set-for-foray/1047622/0

First woman leader-Park wins South Korea presidency

Park wins South Korea presidency, to be first woman leader Opposition candidate concedes, Park makes acceptance speech Jane Chung  Jack Kim First Published: Wed, Dec 19 2012. 05 46 PM IST

Updated: Wed, Dec 19 2012. 09 19 PM IST

Seoul: The daughter of a former military ruler won South Korea’s presidential election on Wednesday and will become the country’s first female leader, saying she would work to heal a divided society.The 60-year old conservative, Park Geun-hye, will return to the presidential palace in Seoul where she served as her father’s first lady in the 1970s, after her mother was assassinated by a North Korean-backed gunman.With more than 88% of the votes counted, Park led with 51.6% to 48% for her left-wing challenger, human rights lawyer Moon Jae-in, giving her an unassailable lead that forced Moon to concede.Her raucous, jubilant supporters braved sub-zero temperatures to chant her name and wave South Korean flags outside her house. When she reached her party headquarters, Park was greeted with shouts of “President”.An elated Park reached into the crowd to grasp hands of supporters wearing red scarves, her party’s colour.“This is a victory brought by the people’s hope for overcoming crisis and for economic recovery,” she told supporters at a rally in central Seoul.Park will take office for a mandatory single, five-year term in February and will face an immediate challenge from a hostile North Korea and have to deal with an economy in which annual growth rates have fallen to about 2% from an average of 5.5% in its decades of hyper-charged growth.She is unmarried and has no children, saying that her life will be devoted to her country.The legacy of her father, Park Chung-hee, who ruled for 18 years and transformed the country from the ruins of the 1950-53 Korean War into an industrial power-house, still divides Koreans.For many conservatives, he is South Korea’s greatest President and the election of his daughter would vindicate his rule. His opponents dub him a “dictator” who trampled on human rights and stifled dissent.“I trust her. She will save our country,” said Park Hye-sook, 67, who voted in an affluent Seoul district, earlier in the day.“Her father... rescued the country,” said the housewife and grandmother, who is no relation to the candidate.

For younger people, the main concern is the economy and the creation of well-paid jobs in a country where income inequalities have grown in recent years.“Now a McDonald’s hamburger is over 5,000 Korean won ($4.66) so you can’t buy a McDonald’s burger with your hourly pay. Life is hard already for our two-member family but if there were kids, it would be much tougher,” said Cho Hae-ran, 41, who is married and works at a trading company.Park has spent 15 years in politics as a leading legislator in the ruling Saenuri party, although her policies are sketchy.She has a “Happiness Promotion Committee” and her campaign was launched as a “National Happiness Campaign”, a slogan she has since changed to “A Prepared Woman President”.She has cited former British Prime Minister Margaret Thatcher, a tough proponent of free markets, as her role model as well as Angela Merkel, the conservative German chancellor who is Europe’s most powerful leader.

Negotiate with North: One of those who voted on Wednesday was Shin Dong-hyuk, a defector from North Korea who is the only person known to have escaped from a slave labour camp there.He Tweeted that he was voting “for the first time in my life”, although he didn’t say for whom.Park has said she would negotiate with Kim Jong-un, the youthful leader of North Korea who recently celebrated a year in office, but wants the South’s isolated and impoverished neighbour to give up its nuclear weapons programme as a precondition for aid, something Pyongyang has refused to do.The two Koreas remain technically at war after an armistice ended their conflict. Kim Il Sung, the grandfather of the North’s current leader, ordered several assassination attempts on Park’s father, one of which resulted in her mother being shot to death in 1974.Park herself met Kim Jong-un’s father, the late leader Kim Jong-il, and declared he was “comfortable to talk to” and he seemed to be someone “who would keep his word”. The North successfully launched a long-range rocket last week in what critics said was a test of technology for an intercontinental ballistic missile and has recently stepped up its attacks on Park, describing her as holding a “grudge” and seeking “confrontation”, code for war.Park remains a firm supporter of a trade pact with the United States that and looks set to continue the free-market policies of her predecessor, although she has said she would seek to spread wealth more evenly.The biggest of all the chaebol, Samsung Group, which produces the world’s top selling smartphone as well as televisions, computer chips and ships, has sales equivalent to about a fifth of South Korea’s national output. REUTERS

http://www.livemint.com/Politics/jEKeevrI9xDIdNGXfxuh9N/South-Koreas-Park-seen-winning-tight-presidential-election.html

UBS rigging settlement - hit with a $1.5 billion bill !!!!!!

UBS admits fraud in $1.5 bn Libor rigging settlement

The penalty agreed is more than three times the $450 mn fine levied on Barclays in June

Katharina Bart  |  Tom Miles First Published: Wed, Dec 19 2012. 12 53 PM ISTpdated: Wed, Dec 19 2012. 02 22 PM IST

Zurich: Swiss bank UBS was hit with a $1.5 billion bill and admitted to fraud on Wednesday in order to settle charges of manipulating global benchmark interest rates.

The penalty agreed with US, UK and Swiss regulators is more than three times the $450 million fine levied on Britain’s Barclays in June for rigging the Libor benchmark rate used to price financial contracts around the globe.It is the second-largest fine paid by a bank and comes a week after Britain’s HSBC agreed to pay the biggest ever penalty — $1.92 billion — to settle a probe in the United States into laundering money for drug cartels.“We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity,” UBS chief executive Sergio Ermotti said in a statement disclosing the extent of the wrongdoing, which took place over six years from 2005 to 2010.UBS said it will pay $1.2 billion to the US Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC), 160 million pounds to the UK’s Financial Services Authority and 59 million Swiss francs from its estimated profit to Swiss regulator Finma.The FSA said at least 45 people were involved in the rigging, which took place across a range of Libor currencies.A similar admission by Barclays in June touched off a political firestorm that forced its chairman and chief executive to quit.The Libor benchmarks are used for trillions of dollars worth of loans around the world, ranging from home loans to credit cards to complex derivatives.Tiny shifts in the rate, compiled from daily polls of bankers, could benefit banks by millions of dollars. But every dollar a bank benefited meant an equal loss by a bank, hedge fund or other investor on the other side of the trade — raising the threat of a raft of civil lawsuits.

The steep fine for UBS is despite the bank, since 2011, cooperating with law-enforcement agencies in their probes. The bank said it received conditional immunity from some regulators.UBS has had a tough 18 months after suffering a $2.3 billion loss in a rogue trading scandal, management upheaval and thousands of job cuts. REUTERS

http://www.livemint.com/Industry/ltcntscVX1XZGdTA0K89bO/UBS-admits-fraud-in-15-bn-Libor-rigging-settlement.html

Fitch warns- US AAA rating-- HIDDEN DANGER!!

Wed, Dec 19, 2012 at 17:32

Fitch warns fiscal cliff could cost US its AAA rating

Ratings firm Fitch said on Wednesday it is more likely to strip the United States of its triple-A status if a political deal is not reached to halt USD 600 billion of spending cuts and tax hikes set for early next year.

Ratings firm Fitch said on Wednesday it is more likely to strip the United States of its triple-A status if a political deal is not reached to halt USD 600 billion of spending cuts and tax hikes set for early next year.

"Failure to avoid the fiscal cliff ... would exacerbate rather than diminish the uncertainty over fiscal policy, and tip the US into an avoidable and unnecessary recession," Fitch said in its 2013 global outlook, published on Wednesday.

"That could erode medium-term growth potential and financial stability. In such a scenario, there would be an increased likelihood that the US would lose its AAA status."

Fitch currently assigns the United States its highest rating but with a negative outlook. Peer Standard & Poor's has already downgraded the world's biggest economy, lowering the United States to AA+ in August 2011 - a move which appears to have done little to dull the attraction of U.S. bonds for investors.

Fitch added that an agreement on a multi-year deficit reduction plan to stabilise US debt and public finances was likely to see the country keep its triple-A rating.

However, it went on to say that: "failure to put in place a credible fiscal consolidation strategy during 2013 would be likely to result in the U.S. losing its AAA status."

http://www.moneycontrol.com/news/world-news/fitch-warns-fiscal-cliff-could-cost-us-its-aaa-rating_797317.html

Reliance to invest $ 10 billion in its LTE (4G)!!!

19 DEC, 2012, 07.07PM IST, PTI 

RIL plans to invest $ 10 bn on its 4G network: Spirit DSP

NEW DELHI: Mukesh Ambani led Reliance IndustriesBSE 1.01 % Limited has plans to invest $ 10 billion on 4G network of its subsidiary InfotelBSE -2.78 %Broadband (IBSL), one of its vendors 'Spirit DSP' said today.
The company said it has been selected for providing voice call and video technology by IBSL. "Reliance intends to invest $ 10 billion in its LTE (4G) network and has turned to SPIRIT's software products for voice and video calls over LTE instead of waiting for phone makers who are slow in offering handsets transmitting voice and video in 4G networks," Spirit DSP said in a statement. IBSL is the only company in the country to have 20 Mhz of pan-India airwaves that it can use for providing 4G services. No immediate comments were available from RIL on Spirit DSP's statement. Spirit DSP said, through its solution, Reliance will be able to offer its subscribers high-quality services as an alternative to Skype - an application for making voice calls using internet connection, over cellular networks. At present, most of the people are able to make free calls using Voice over Internet Protocol ( VoIP) application like Skype but in India such calls are allowed only between personal computers to personal computers. In October, IBSL has informed the Telecom Ministry that it is ready for trial runs of a technology that would enable voice calls service on its wireless broadband network and has sought allocation of number series to test its newly developed 'Voice over LTE (VoLTE) technology.
The telecom arm of RIL has told Ministry that it has developed a technology in preparation of a unified licensing regime recommended by the regulator TRAI under which consumers will be able to get voice, messaging and video using a single device. Sharing details of its plan, IBSL has said that VoLTE technology would enable it to work seamlessly with the existing 2G, 3G, NLD and ILD networks. It added that termination and receiving of calls from these networks to the IBSL network would be possible through the VoLTE technology.

http://economictimes.indiatimes.com/news/news-by-industry/telecom/ril-plans-to-invest-10-bn-on-its-4g-network-spirit-dsp/articleshow/17679859.cms

RETAIL LOSSES- A REALITY...!!!!!

19 DEC, 2012, 05.52PM IST, PTI 

Three big Indian retailers - Reliance Fresh, Bharti Retail and Aditya Birla Retail - post Rs 1,200 cr loss in 2011NEW DELHI: Domestic retail chain majors -- Reliance Fresh, Bharti Retail and Aditya Birla Retail -- have incurred a total loss of nearly Rs 1,200 crore in 2011 financial year, Parliament was told today.
In a written reply to the Rajya Sabha, Minister of State for Commerce and Industry S Jagathrakshakan said as per the financial statement filed by the Reliance Fresh, the company posted a net loss of Rs 345.82 crore during 2010-11. He further said Aditya Birla Retail too had a net loss of Rs 423.1 crore during 2010-11 fiscal.
"Bharti Retail Ltd had a net loss of Rs 394.32 crore during the period January 1, 2011 to December 12, 2011," Jagathrakshakan added. Defending the decision to allow 51 per cent FDI in multi-brand retail, while hiking the cap to 100 per cent in single-brand retail, he said: "The government was conscious of the livelihood concerns of the millions of small retailers."
Moreover, organised retail by domestic entities are already allowed and small retailers have "flourished in harmony with the large retail outlets", Jagathrakshakan said.

http://economictimes.indiatimes.com/news/news-by-industry/services/retail/three-big-indian-retailers--reliance-fresh-bharti-retail-and-aditya-birla-retail--post-rs-1200-cr-loss-in-2011/articleshow/17679098.cms

Walmart used bribes - in Mexico !!!

18 DEC, 2012, 08.52AM IST, NEW YORK TIMES 

How Walmart used bribes to get its way in Mexico

SAN JUAN TEOTIHUACAN (Mexico): Wal-Mart longed to build in Elda Pineda's alfalfa field. It was an ideal location, just off this town's bustling main entrance and barely a mile from its ancient pyramids, which draw tourists from around the world. With its usual precision, Wal-Mart calculated it would attract 250 customers an hour if only it could put a store in Pineda's field. 
One major obstacle stood in Wal-Mart's way. 
After years of study, the town's elected leaders had just approved a new zoning map. The leaders wanted to limit growth near the pyramids, and they considered the town's main entrance too congested already. As a result, the 2003 zoning map prohibited commercial development on Pineda's field, seemingly dooming Wal-Mart's hopes. 
But 30 miles away in Mexico City, at the headquarters of Wal-Mart de Mexico, executives were not about to be thwarted by an unfavorable zoning decision. Instead, records and interviews show, they decided to undo the damage with one well-placed $52,000 bribe. The plan was simple. The zoning map would not become law until it was published in a government newspaper. So Wal-Mart de Mexico arranged to bribe an official to change the map before it was sent to the newspaper, records and interviews show. Sure enough, when the map was published, the zoning for Pineda's field was redrawn to allow Wal-Mart's store. 
Problem solved. 
Wal-Mart de Mexico broke ground months later, provoking fierce opposition. Protesters decried the very idea of a Wal-Mart so close to a cultural treasure. They contended the town's traditional public markets would be decimated, its traffic mess made worse. Months of hunger strikes and sit-ins consumed Mexico's news media. Yet for all the scrutiny, the story of the altered map remained a secret. The store opened for Christmas 2004, affirming Wal-Mart's emerging dominance in Mexico. 
The secret held even after a former Wal-Mart de Mexico lawyer contacted Wal-Mart executives in Bentonville, Ark., and told them how Wal-Mart de Mexico routinely resorted to bribery, citing the altered map as but one example. His detailed account - he had been in charge of getting building permits throughout Mexico - raised alarms at the highest levels of Wal-Mart and prompted an internal investigation. 
But as The New York Times revealed in April, Wal-Mart's leaders shut down the investigation in 2006. They did so even though their investigators had found a wealth of evidence supporting the lawyer's allegations. The decision meant authorities were not notified. It also meant basic questions about the nature, extent and impact of Wal-Mart de Mexico's conduct were never asked, much less answered. The Times has now picked up where Wal-Mart's internal investigation was cut off, traveling to dozens of towns and cities in Mexico, gathering tens of thousands of documents related to Wal-Mart de Mexico permits, and interviewing scores of government officials and Wal-Mart employees, including 15 hours of interviews with the former lawyer, Sergio Cicero Zapata. 
The Times' examination reveals that Wal-Mart de Mexico was not the reluctant victim of a corrupt culture that insisted on bribes as the cost of doing business. Nor did it pay bribes merely to speed up routine approvals. Rather, Wal-Mart de Mexico was an aggressive and creative corrupter, offering large payoffs to get what the law otherwise prohibited. It used bribes to subvert democratic governance - public votes, open debates, transparent procedures. It used bribes to circumvent regulatory safeguards that protect Mexican citizens from unsafe construction. It used bribes to outflank rivals.