Gold weakens on withdrawal of support

Snapping two day's gain, gold prices weakened on the bullion market on Thursday on reduced offtake by stockists amid new stocks arrival and closed with a loss of Rs 55 at Rs 9400 per 10 gram. Trading sentiment turned weak after reports of new arrival, which created adequate stocks position and discounted a firming overseas trend. In last two trading sessions, the gold price gained Rs 110 per 10 gram and silver by Rs 350 per kilo. Precious metal prices generally move in line with the international trend but new stock arrival this morning changed the trading sentiment, marksmen said. The activity in silver was also restricted and pulled down the prices. Standard gold and ornaments lost Rs 55 each at Rs 9,400 and Rs 9,250 per 10 grams respectively. Sovereign, on the other hand held unchanged at Rs 7,750 per piece of 8 gram. Silver ready fell by Rs 50 at Rs 19,900 per kilo and weekly-based delivery by a same margin at Rs 19,950 per kilo. Silver coins quoted lower by Rs. 100 at Rs 23,800 for buying and Rs 23,900 for selling of 100 coins.

The power of markets

James Carville, an advisor to President Clinton, once famously said that he would like to be reincarnated as the bond trader because of their ability to intimidate. That statement was an expression of resentment at the ability of financial markets to frustrate the political objectives of elected governments. At the start of his presidency, Clinton wanted to increase government spending in a big way, but was instead persuaded to opt for deficit cutting. Higher spending could have increased inflationary expectations and bond traders, known as inflation hawks, would respond by driving interest rates higher. That would hurt economic growth, blocking the President’s objectives. A textbook example of this sort of tension between markets and government was demonstrated by the Thai Central Bank’s botched attempt to impose capital controls last week. The central bank, which wanted to discourage foreign inflows because it was driving up the baht, said that 30% of deposits would have to be held in interest-free accounts. Premature withdrawal, i.e., in less than a year, would mean penalties. It was a spectacular mistake. Currency and stock markets crashed all over Asia at the imposition of capital controls, demonstrating that investors hate restrictions on their freedom to move money around. Faced with the prospect of being blamed for triggering a world-wide meltdown, the Thai government partially backtracked. It was a brutal display of the awesome power of financial markets — a kind of ‘shock and awe’ if you will. A similar episode, though not on such a scale, has taken place in India. In January 2005 a speech by RBI governor Y V Reddy at an academic forum, which seemed to contain a reference to taxing or more generally discouraging short-term portfolio inflows led to panic in the market, a denial from the finance ministry and eventually a late-evening clarification from Dr Reddy. The travails of the Thai central bank ought to serve as a salutary warning to Indian policymakers, who sometimes tend to muse in public on the desirability of banning P-notes or of scrapping the Indo-Mauritius tax treaty. The broader point is that markets are not passive recipients of policy. Instead, there is a dynamic interface, because of their ability to react rapidly.

Stock market in resilient mood

Benjamin Graham said that the market always surprise its participants. The market started its steep climb from November 2005 and reached the apex of 12,500 by May 2006. Suddenly, there was a downturn and market started falling, initially by 100-200 points. Then, there was panic all around and soon the market was trading at 8,900 levels by the middle of June 2006. Within a month the exuberance in the market had turned to extreme pessimism. Since then the market recovered and is making new highs. Often, it is correcting by a few hundred points but the market is showing a lot of resilience by bouncing back immediately. This shows the general mood is currently bullish and smart investors are willing to bet their money in the Indian economy. What moves the market? In the short term, behavioral irrationality of the market participants can take the market to extreme levels. But in the long run, the market valuation has to converge with the underlying fundamentals of the economy and the corporate performance. In May 2006, the market had reached excessive levels ignoring some deteriorating fundamentals. The crude price was ruling at an all-time high of $78 per barrel, inflation was rising and the Reserve Bank of India (RBI) was forced to increase interest rates. This would have been detrimental for corporate profits and there was a fear of slow down in the economy, which prompted the market to correct and reflect the changed fundamentals. Currently, the economy looks much healthier. The oil price has cooled down, the corporate profits were good for the first half of the year and they have given good guidance for the rest of the year. The economy has grown by nine percent in nominal terms in the first half of the year. This translates to a growth of 14 percent in real term. If the economy can maintain the same growth rate for the rest of the year, we can assume that the companies that are part of the Sensex will grow by at least 20 percent.

How to drive a good bargain

Looking to change your car? Now, is a good time if you want to get a good deal and save yourself a packet. Substantial end-of-year discounts are normally on offer at this time. But you do need to consider the impact purchasing a car at the end of the calendar year can have on its resale value. What’s on offer? Since the model year comes to an end in December, dealers and manufacturers are offering substantial discounts to achieve the lowest stock by the year-end before the new models hit the market in the new year. Manufacturers also put pressure on dealers to empty their stock as the lesser the stock, the easier it becomes to make way for new models. So you must drive a hard bargain. These discounts and schemes vary according to models, market perceptions and market demand. In general, greater the stock with a dealer, the higher is the discount. Traditionally, festive seasons like Dussera and Diwali are peak periods for discounts. According to analysts, December discounts could sometimes be better than Diwali offers but it all depends on the stock carried by them. Besides discounts, buyers can also claim depreciation for 180 days, giving them tax savings to that extent. In addition to regular discounts, most dealers dole out at least 3% discounts on the ex-showroom price. These differ from city to city. Hyundai, for example, is offering a discount of Rs 12,500 combined with free insurance and a gift amount of Rs 10,000 totalling up to Rs 34,800 on Santro. It is also offering similar schemes of up to Rs 41,600 and Rs 73,200 on Getz and Accent CRDi, respectively. Some companies like Honda do not offer discounts. “As a policy, we do not give discounts on our products because they reduce the resale value of the car. This is also one of the reasons for the best resale value of Honda cars in the market,” says Honda Siel Cars India assistant manager marketing Saba Khan. Maruti and Tata Motors have also not officially introduced any schemes this year but their dealers are offering various discounts. Some major discounts offered by Maruti dealers in Mumbai include free insurance, free extended third year warranty and a gift cheque of Rs 4,501 for Maruti 800; free extended third year warranty and gift cheque of Rs 15,000 for Alto, and gift cheque of Rs 12,000 on outright payment for Swift and free extended third year warranty and gift cheque of Rs 21,000 on finance schemes for Swift. Fiat Palio dealers in Mumbai are offering a hefty discount of Rs 75,000.

Bajaj Auto heads for split

BAJAJ Auto could be headed for a division between Rahul Bajaj’s sons-Rajiv and Sanjiv-with the demerger plan being put on the fast track. The demerger will be used as a succession plan to carve out the business between the two brothers. Sources close to the development say the brothers do not share a great personal chemistry. A source close to Rahul Bajaj, however, told ET: “There is no fight between the two brothers. They are two different individuals. Sanjiv, as the executive director of the company, reports to the MD, Rajiv. The company does not have two centres of power. The demerger plan is not linked to them.” The proposal to demerge Bajaj Auto was first mooted a few years ago by the company’s management, ostensibly on the suggestion of FIIs that felt the company had excessive cash on its books. As per a loose plan, a part of the company’s cash and investment assets, including its shareholding in its insurance joint ventures with Allianz, were to be spun off and the option of these being merged with Bajaj Auto Finance had also been considered. If and when the demerger goes through, Rajiv, 39, will continue to head the two-wheeler giant while the financial services company will be run by Sanjiv, 37, an MBA in finance from Harvard. The proposal was, however, never taken to the board and has been on the backburner for some time now. Sources close to the family say the demerger process has now been accelerated, and the frosty relations between the two brothers could be one reason for this. “The frostiness between the two brothers is not entirely a figment of people’s imagination,” says a source. Right now, Bajaj Auto’s motorcycles business is handled by Rajiv while the Rs 6,000-crore portfolio management function has historically been handled by Rahul Bajaj. “So it does get awkward for Sanjiv as he ends up being the co-pilot in both, which doesn’t give him the same satisfaction as doing something on his own.”

Nikkei advances 0.61 pc

The Nikkei average rose 0.61 per cent during the morning on Friday as Kawasaki Kisen Kaisha Ltd and other shipping firms recouped losses from the previous session, helped by investors' continuing appetite for stocks with attractive dividend yields.
Shares of Mazda Motor Corp declined after the auto maker on Thursday lowered its net profit forecast to account for lower-than-expected vehicle shipments and higher costs of launching new models.
The Nikkei finished the morning up 106.10 points at 17,398.58. The broad Topix index climbed 1.01 per cent to 1,737.56.

Cricket World Cup 2007 schedule

Based on the following groups (ranking in brackets):
Group ASt Kitts & Nevis
Group BTrinidad & Tobago
Group CSt. Lucia
Group DJamaica
1
Australia (1)
Sri Lanka (2)
New Zealand (3)
Pakistan (4)
2
South Africa (5)
India (8)
England (7)
West Indies (6)
3
Scotland (12)
Bangladesh (11)
Kenya (10)
Zimbabwe (9)
4
Holland (16)
Bermuda (15)
Canada (14)
Ireland (13)
Warm-up matches
Date
Group WAJamaica Trelawny
Group WBSt. Vincent
Group WCTrinidad, Brian Lara
Group WDBarbados, 3W's
Mon 05 Mar
WI v KEN
ENG v BER
SA v CAN
SL v SCO
Tue 06 Mar
IND v HOL
AUS v ZIM
PAK v IRE
NZ v BAN
Wed 07 Mar
Thu 08 Mar
KEN v HOL
ZIM v BER
IRE v CAN
SCO v BAN
Fri 09 Mar
IND v WI
AUS v ENG
PAK v SA
NZ v SL
Sun 11 Mar: Opening Ceremony (Montego Bay)
Group Stage
Date
Group ASt.Kitts & Nevis
Group BTrinidad & Tobago
Group CSt. Lucia
Group DJamaica
Tue 13 Mar
WI v PAK
Wed 14 Mar
AUS v SCO
KEN v CAN
reserve day
Thu 15 Mar
reserve day
SL v BER
reserve day
ZIM v IRE
Fri 16 Mar
SA v HOL
reserve day
ENG v NZ
reserve day
Sat 17 Mar
reserve day
IND v BAN
reserve day
PAK v IRE
Sun 18 Mar
AUS v HOL
reserve day
ENG v CAN
reserve day
Mon 19 Mar
reserve day
IND v BER
reserve day
WI v ZIM
Tue 20 Mar
SA v SCO
reserve day
NZ v KEN
reserve day
Wed 21 Mar
reserve day
SL v BAN
reserve day
ZIM v PAK
Thu 22 Mar
SCO v HOL
reserve day
NZ v CAN
reserve day
Fri 23 Mar
reserve day
IND v SL
reserve day
WI v IRE
Sat 24 Mar
AUS v SA
reserve day
ENG v KEN
reserve day
Sun 25 Mar
reserve day
BER v BAN
reserve day
Mon 26 Mar
reserve day
Second Stage - Super Eight Series
Date
Antigua & Barbuda
Grenada
Guyana
Barbados
Tue 27 Mar
D2 v A1 (WI v Aus)
Wed 28 Mar
reserve day
A2 v B1 (SA v SL)
Thu 29 Mar
D2 v C1 (WI v NZ)
reserve day
Fri 30 Mar
reserve day
D1 v C2 (Pak v Eng)
Sat 31 Mar
A1 v B2 (Aus v Ind)
reserve day
Sun 01 Apr
reserve day
D2 v B1 (WI v SL)
Mon 02 Apr
B2 v C1 (Ind v NZ)
reserve day
Tues 03 Apr
reserve day
D1 v A2 (PAK v SA)
Wed 04 Apr
C2 v B1 (Eng v SL)
reserve day
Thu 05 Apr
reserve day
Fri 06 Apr
Good Friday
Sat 07 Apr
B2 v A2 (Ind v SA)
Sun 08 Apr
A1 v C2 (Aus v Eng)
reserve day
Mon 09 Apr
reserve day
D1 v C1 (Pak v NZ)
Tue 10 Apr
D2 v A2 (WI v SA)
reserve day
Wed 11 Apr
reserve day
C2 v B2 (Eng v Ind)
Thu 12 Apr
B1 v C1 (SL v NZ)
reserve day
Fri 13 Apr
reserve day
A1 v D1 (Aus v Pak)
Sat 14 Apr
A2 v C1 (SA v NZ)
reserve day
Sun 15 Apr
reserve day
B2 v D1 (Ind v Pak)
Mon 16 Apr
A1 v B1 (Aus v SL)
reserve day
Tue 17 Apr
reserve day
A2 v C2 (SA v Eng)
Wed 18 Apr
D1 v B1 (Pak v SL)
reserve day
Thu 19 Apr
reserve day
D2 v B2 (WI v Ind)
Fri 20 Apr
A1 v C1 (Aus v NZ)
reserve day
Sat 21 Apr
reserve day
D2 v C2 (WI v Eng)
Sun 22 Apr
reserve day
Team names for the Super Eight stage are indicative based on the top two teams from the Group Stage qualifying.
Semi Finals
Date
Semi Final 1Jamaica
Semi Final 2St Lucia
Mon 23 Apr
Tues 24 Apr
Semi Final 1: 2 v 3
Wed 25 Apr
reserve day
Semi Final 2: 1 v 4
Thu 26 Apr
reserve day
Final
Date
Fri 27 Apr
Sat 28 Apr
FINAL (Barbados)
Sun 29 Apr
reserve day