Intellectual Thoughts by Sanjay Panda: 2008

Hovione buys Pfizer's Pharma site

Portuguese contract manufacturer Hovione has emerged as the buyer for Pfizer’s production plant in Cork, Ireland, which was put on the block last year. The site manufactures intermediates for atorvastatin.The deal includes a contract for Hovione to carry out manufacturing for Pfizer when it takes over the site. Hovione said it would retain 70-80 of the 230-odd workers at the facility.

Hovione Cork, as it will be known, will manufacture a range of Hovione’s portfolio and over the next 24 months the company will transfer products from its Loures, Portugal site. It will also validate processes for new compounds in expectation of drug approval.

It offers a third pillar to Hovione’s manufacturing network, adding 427 sq. m. to the company’s facilities in Loures and China, with around 400 sq. m. apiece. The plant can handle a large number of specialised chemistries such as hydrogenation and low temperature chemistry, and also boasts a new, €70m spray-dried formulations unit.
The deal is scheduled to be completed by early April 2009.

Hexion's $6.5B takeover of Huntsman terminated

Chemicals maker Huntsman Corp. has ended its $6.5 billion agreement to be taken over by Hexion Specialty Chemicals Inc. and agreed to a $1 billion legal settlement with Hexion's private equity owner, Apollo Global Management.

Apollo-owned Hexion agreed to buy Salt Lake City-based Huntsman in July 2007 for $6.5 billion but then tried to back out, citing Huntsman's deteriorating finances. The $1 billion settlement includes a $325 million breakup fee to be paid as provided in the merger agreement -- which Hexion expects will be funded by Credit Suisse and Deutsche Bank -- and $425 million cash payments made by certain affiliates of Apollo.

Huntsman also will receive another $250 million in exchange for 10-year convertible notes which can be repaid in cash when they mature or in common stock. Huntsman said it expects to receive at least $500 million before the end of the year, with the rest paid by March 31.

India's Industrial Output Dips For the First Time In 15 Years

Indian industry saw its output shrink for the first time in 15 years with a 0.4 per cent year-on-year decline in October, as the impact of the global economic downturn deepened in the country.
From a dazzling 12.2 per cent growth in October last year, industry recorded a negative growth of 0.4 per cent in October this year, partly due to a dip of over 12 per cent in India's exports.

The fall was bigger than expected and lets hope that the December 7 stimulus package would arrest any further decline though looks unlikely. Industrial output had last fallen in April 1993.

Manufacturing, comprising around 80 per cent of the Index of Industrial Production, (IIP) clocked a negative 1.2 per cent growth in the month from a whopping 13.8 per cent a year ago.
In fact, output in two of the four sectors that make up the index -- intermediate goods and consumer goods -- contracted to 3.7 per cent and 2.3 per cent, respectively, from a growth of 13.9 per cent and 13.7 per cent, respectively. Within consumer durable goods, both segments -- consumer durables and consumer non-durables -- shrank by three per cent and two per cent, respectively.

Of the total 17 industries, captured in the IIP figure, as many as 10 recorded a negative growth and could have a similar bearing on economic growth, given the fact that industry accounts for 29.4 per cent of GDP. Besides manufacturing, mining growth fell by 2.8 per cent, from 5.1 per cent in October, 2007. Electricity, however, proved to be a consolation with growth rate rising to 4.4 per cent from 4.2 per cent.

Of the industry segments, leather and fur products shrunk the maximum by 18.1 per cent, followed by food and wood, furniture and fixtures by 14.4 per cent and cotton textiles by 9.6 per cent. Seven industry which registered a growth, included beverages, tobacco, paper and paper products, printing and publishing, rubber and plastics and basic metals.

For the first seven months of this fiscal, industrial growth rate more than halved to 4.1 per cent from 9.9 per cent in the corresponding period a year ago.

The slowdown follows the impact of global financial crisis which has pushed economies of developed countries like the US, the UK, Euro zones nations and Japan into recession.

In fact, Asian Development Bank has already scaled down India's growth projection to 7 per cent for 2008 from the earlier estimate of 7.4 per cent. For 2009, the economy is likely to grow at 6.5 per cent, ADB said.

Facing the truth by Irfan Husain ( from The Dawn, news paper of pakistan)

Even in my remote bit of paradise, news of distant disasters filters through: above the steady sound of waves breaking on the sandy beach in Sri Lanka, I was informed by several news channels about the sickening attacks on Mumbai. My Internet connection is erratic and slow, but nevertheless, I have been bombarded with emails, asking me for my take on this latest atrocity.

Over the last few years, I have travelled to several countries across four continents. Everywhere I go, I am asked why Pakistan is now the focal point of Islamic extremism and terrorism, and why successive governments have allowed this cancer to fester and grow. As a Pakistani, it is obviously embarrassing to be put on the spot, but I can see why people everywhere are concerned. In virtually every Islamic terrorist plot, whether it is successful or not, there is a Pakistani angle. Often, foreign terrorists have trained at camps in the tribal areas; others have been brainwashed in madressahs; and many more have been radicalised by the poisonous teachings of so-called religious leaders.

Madeline Albright, the ex-US secretary of state, has called Pakistan ‘an international migraine’, saying it was a cause for global concern as it had nuclear weapons, terrorism, religious extremists, corruption, extreme poverty, and was located in a very important part of the world. While none of this makes pleasant reading for a Pakistani, Ms Albright’s summation is hard to refute. Often, the truth is painful, but most Pakistanis refuse to see it. Instead of confronting reality, we are in a permanent state of denial. This ostrich-like posture has made things even worse.

Most Pakistanis, when presented with the fact that our country is now the breeding ground for the most violent ideologies, and the most vicious gangs of thugs who kill in the name of religion, go back in history to explain and justify their presence in our country. They refer to the Afghan war, and the creation of an army of holy warriors to fight the Soviets in Afghanistan. Then they go on to complain that the Americans quit the region soon after the Soviets did, leaving us saddled with the problem of jihadi fighters from all over the Muslim world camped on our soil.

What we conveniently forget is that for most of the last two decades, the army and the ISI used these very jihadis to further their agenda in Kashmir and Afghanistan. This long official link has given various terror groups legitimacy and a domestic base that has now come to haunt us. Another aspect to this problem is the support these extremists enjoy among conservative Pakistani and Arab donors. Claiming they are fighting for Islamic causes, they attract significant amounts from Muslim businessmen here and abroad. And almost certainly, they also benefited from official Saudi largesse until 9/11.

Now that government policy is to distance itself from these jihadis, we find that many retired army officers have continued to train them in camps being run in many parts of Pakistan. A few weeks ago, Sheikh Rashid Ahmed, a prominent (and very loud) minister under both Nawaz Sharif and Musharraf, openly boasted on TV of running a camp for Kashmiri fighters on his own land just outside Rawalpindi a few years ago. If such camps can be set up a few miles from army headquarters, what’s to stop them from operating in remote areas?

Many foreign and local journalists have exposed aspects of the terror network that has long flourished in Pakistan. Names, dates and addresses have been published and broadcast. But each allegation has been met with a brazen denial from every level of officialdom. Just as we denied the existence of our nuclear weapons programme for years, so too do we refuse to accept the presence of extremist terrorists.

For years, it suited the army and the ISI to secretly harbour and support these groups in Pakistan, Kashmir and Afghanistan. While officially denying that they had anything to do with these jihadis, money and arms from secret sources would reach them regularly. Despite our spooks maintaining plausible deniability, enough information about this covert support for jihadis has emerged for the fig-leaf to slip. And even if the intelligence community has now cut its links with these terrorists, the genie is out of the bottle.

Each time an atrocity like Mumbai occurs, and Pakistan is accused of being involved, the defensive mantra chanted by the chorus of official spokesmen is: “Show us the proof.” The reality is that in terrorist operations planned in secret, there is not much of a paper trail left behind. Nine times out of ten, the perpetrators do not survive to give evidence before a court. But in this case, one terrorist did survive, and Ajmal Amir Kamal’s story points to Lashkar-e-Tayyaba. The sophistication of the attack is testimony to careful planning and rigorous training.
This was no hit-and-run operation, but was intended to cause the maximum loss of life.

Pakistan’s foreign minister said that Pakistan, too, is a victim of terrorism. While this is certainly true, the rest of the world wants to know whey we aren’t doing more to root out the training camps, and lock up those involved. Given the vast un-audited amounts from the exchequer sundry intelligence agencies lay claim to, their failure to be more effective against internal terrorism is either a sign of incompetence, or of criminal collusion. Benazir Bhutto’s murder, after an earlier attempt and many warnings, is a reminder of how poorly we are served by our intelligence agencies.
And while the diplomatic fallout from the Mumbai attack spreads and threatens to escalate into an armed confrontation, the biggest winners are those who carried out the butchery of so many innocent people. It is to their advantage to prevent India and Pakistan from coordinating their fight against terrorism. Tension between the two neighbours suits them, while peace and cooperation threatens their very existence.

The world is naturally concerned about the danger posed by these terror groups to other countries. However, the biggest threat they pose is to Pakistan itself. Until Pakistanis grasp this brutal reality and muster up the resolve necessary to crush them, these killers will tear the country apart.

( I wish all the responsible citizens of pakstan understand this, they should come out openly to stop the designs of ISI and Army which is affecting not only others but their own life, If not then pakistan is not a failed state but for the young citizens it might be non existent Pakistan ( a self destruction)

the link of the article:

How many more?????????- Terror in India

A terrorist attack every month through 2008. The scale gets bigger, and bolder. The response from the security agencies so far..??????. The country needs to see much more being done. A demand of an anti-terror law was pushed to a corner under the pretext that laws have been misused. A home minister who has been in a state of denial all these years has now found his government announcing yesterday the creation of a federal investigation agency.

LeT, whose cadres are known to be funded and trained by the Pakistan army's ISI are found to be involved once again , it means that India should not harbour any illusions about Pakistan's intentions. The induction of a civilian government in Pakistan has changed nothing. India must act with this knowledge, and put the maximum international pressure to make Pakistan pay the price for its misadventures.

Will Indian politician will rise to this occasion or its business usual. ( I hope all of them are not carrying the several sets of prepared speech in their pocket and waiting for the next round of such tragic terror to happen. If it happens then they are ready to deliver the instantaneous speech to address the nation with their crocodile tears. ( Politicians should be the best Actors. AB, SRK et al, Are you all wondering why it is not happening so far?????)

So far its clear, winning of the trust vote by Mr. Singh in the parliaments seems to be mandate for militants/ terrorists winning the trust & confidence of striking any where with in India with out any obstacle and fear. ( If you follow the stats)

Energy CTL Technology - Tough Choice

Companies are sparring for the maiden coal to liquids (CTL) project, which is expected to produce 80,000 barrels of oil a day . As the government is zeroing in on a private player who would offer the best technology, the Tatas have written to the government about “technology risks” associated with the technology adopted by Mukesh Ambani’s Reliance Industries (RIL).

RIL has technological partnership with US-based Headwaters Energy services, while Tatas have a tie up with Sasol, the South African company that pioneered the CTL concept way back in 1955.

While Headwaters uses its proprietary direct coal liquefaction process, Sasol adopts the indirect coal liquefaction method using the ‘Fischer-Tropsch’ process. In the former approach, the coal is dissolved in a solvent at high temperature and pressure, the latter gasifies the coal and then condenses it to form petroleum products. Nothing is clear though about which is the best and proven method.

CTL technology is still not proven on a large scale, but there is vigorous R&D going on globally in this area. India is considering using Headwaters’ technology, but Sasol seems to have an edge after Tatas mentioned in their letter that China has recently pulled out of a deal with Headwaters.


Euro economy to barely grow in 2009

The European Commission said the region's economy probably entered a recession this year and will stagnate in 2009.Economic growth in the euro area will slump to 0.1 percent next year, the worst performance since 1993, It also estimated that gross domestic product will shrink for three consecutive quarters this year and cut its forecast for full-year 2008 growth to 1.2 percent from 1.3 percent previously. Manufacturing contracted at a record pace in October and faster than initially estimated.

In addition to flooding markets with cash, central banks across the world have also begun slashing interest rates to limit the economic impact of the financial crisis. The European Central Bank is set to cut its benchmark rate this week for the second time in less than a month after the U.S. Federal Reserve lowered its rate to match the lowest level in a half-century. Policy makers in Japan, India and Norway have also cut borrowing costs.

The Irish, Spanish and U.K. economies will all contract next year, while Germany, Europe's largest economy, France and Italy will stagnate. For 2010, the EU sees the overall euro-area economy expanding by 0.9 percent.

Tough time awaits for Indian INC - debt burden

Indian companies have to redeem around $44.57 billion of overseas debt between now and December 2009 in an economic environment where money has become scarce and costly. This debt funded for their domestic expansion and overseas acquisitions.

This is a pretty big issue, as the cost of borrowing could remain high for some time to come.To be sure, some of the companies, such as Hindustan Zinc, say they have repaid their loans ahead of schedule.Most companies, however, usually pay their debts only when they are due or, if the foreign currency is appreciating, replace foreign debt with local borrowings. This means Indian firms will find it difficult to roll over their old debt and raise new debt. This will affect their expansion plans as bankers do not expect the scenario to change anytime soon. Apart from the cost of borrowings, Indian firms also need to take forward cover for their overseas loans to hedge the currency fluctuation risk when they pay back their loans by buying dollars from the market. The local currency has lost at least 20% against the greenback this year.

When the Libor rose sharply—reflecting the rise in credit risk in London—the rates at which the Indian firms had borrowed went up. Beyond the rise in debt servicing, Indian firms and banks also saw the cost of rolling over their maturity debt rise sharply as the money market in London dried up. As the costs of rolling over debt rose sharply, Indian firms borrowing in London found themselves structurally short of dollars. They responded by borrowing in the Indian short-term money market, converting the funds into dollars, using the proceeds to meet external debt obligations.

Indian Pharma - Clouds on ...

Indian Pharmaceutical industry has been one of the high performing sectors of the Indian economy for the last some years mainly on account of its export oriented growth. Top companies like Ranbaxy, Dr. Reddy's, Cipla, Lupin, Sun Pharma, etc. have been exporting more than 50 per cent of their production to the developed countries for years with attractive margins despite competition from other generic players. Several medium and small scale pharma companies had also jumped to the export bandwagon later. A study of 75 listed Indian pharmaceutical companies during 2006-07 reported a 44.5 per cent growth in net profits and a 23.5 per cent growth in sales during 2006-07. Such excellent performance was possible for this industry because of the export oriented growth by way of acquisitions and marketing alliances in the overseas markets.

However, the generic competition in the US and European markets appeared to be growing tough for Indian exporters since last two years with a sudden drop in margins. In 2007-2008, the generic competition in the world markets has actually started hitting the Indian companies with a sharp fall in their profitability. The worst blow came when the US FDA took action against Ranbaxy, the largest Indian pharmaceutical company, for not maintaining quality norms in its two approved manufacturing facilities in India. The US FDA has imposed a ban on the import of 31 drugs of Ranbaxy in mid September. After the US action, regulatory authorities in Canada, UK and New Zealand are also contemplating stringent regulatory auditing of Ranbaxy's products.

The US action against Ranbaxy and the current financial crisis faced by the US economy are now seriously threatening the export led growth of the Indian pharmaceutical industry. India's exports of pharmaceutical products to the US account for almost 50 per cent of its total exports. With the US government putting pressure on FDA over imports of pharmaceuticals from India and China, inspections by the US FDA are going to be quite rigorous in the approved facilities of Indian companies in the months to come. There are nearly
100 US FDA approved manufacturing facilities of different companies in India at present. In the global pharmaceutical market, US FDA is held in high esteem and most countries depend largely on information from US FDA and European Medicine Evaluation Agency (EMEA) before registering or banning any medicinal products.

All the Gulf countries have US experts in their health ministries to advise them on drug imports. Now, the changed perception of India in the wake of Ranbaxy episode can tighten the regulatory watch on all Indian pharmaceutical products by the advanced countries. Large companies will take abundant caution in their manufacturing standards and practices now onwards even at extra costs. But, a good number of medium and small scale exporters are bound to falter and may lose business in coming days of extreme caution in importing Indian pharmaceuticals. Indian industry has to, therefore, rework its growth strategies in the wake of these new realities in the market place.


Uncle Sam's effect's

Even as the US economy grapples with a financial crisis, the developing Asian economies continue to be watched with growing apprehension. Last week, the Asian Development Bank (ADB) downscaled the growth expectations of many Asian economies — including India’s — in its half-yearly report, Asian Development Outlook 2008.

ADB attributes this to the worsening conditions in major industrial economies. “The myth of uncoupling has been exploded,” the report says. Among the other factors are the slowdown in Asia due to inflation; high borrowing costs; dampening investment and low consumer spending.

India’s gross domestic product (GDP) growth estimate for the current financial year (FY08-09) has been downgraded from 8 per cent to 7.4 per cent, and, for the next financial year (FY09-10), from 8.5 per cent to 7 per cent. ADB bluntly states that “Very large fiscal imbalance created by the current level of subsidisation of oil, fertiliser and food, as well as other off-budget items, sets a daunting task for economic management.”

Last month, a Citigroup research note had also revised its own estimates of India’s GDP from 7.7 per cent to 7.5 per cent for FY08-09 and from 7.9 per cent to 7.4 per cent for FY09-10.

Local economists, however, are not as pessimistic. “An 8 per cent GDP growth is possible thanks to growth in consumption (which will get a boost from the Sixth Pay Commission recommendations) as well as services and capital goods,

The debate continues.

Ranbaxy expresses disappointment over US FDA action

In response to the US Food and Drug Administration (US FDA)'s warning letters and import alert for drugs issued to Ranbaxy Laboratories Ltd regarding drug products produced in two Ranbaxy plants at Dewas and Paonta Sahib in India, the company said that it is very disappointed by the action taken by the US FDA.

In a press release, it said, "Ranbaxy is very disappointed in the action FDA has taken. The company has responded to each concern FDA has raised during the past two years and had thought that progress was being made. We are, however, pleased that FDA's testing and review led the agency to conclude that there is no reason to question the safety or effectiveness of Ranbaxy's drugs. The company has just received the warning letters that FDA has issued and has not had the opportunity to review those concerns that FDA has determined are unresolved. Once it has had an opportunity to review the issues, the company looks forward to continuing to cooperate with FDA to resolve the remaining issues."

According to the FDA announcement, the warning letters and import alert do not apply to Ranbaxy's other facilities including its three manufacturing facilities in the US, Ohm's Laboratories facilities in New Brunswick, North Brunswick, New Jersey, and Gloversville, New York, from which Ranbaxy delivers some 59 drug products to the US healthcare system, including: Simvastatin, Acyclovir, Minocycline, Clindamycin, Lorazepam, Loratadine-D, Cetirizine, Acetaminophen Extended release tablets, Lisinopril and Zolpidem.


Indian economy slowing down

For last years or three years from 2005-07, the Indian economy touched new highs. The gross domestic product (GDP) grew at an average rate of 9% during the period, with India becoming the second fastest-growing major economy of the world. This was the result of unprecedented growth in investments triggered by low interest rates, as well as high growth in demand. These low interest rates were, in turn, possible on account of a low inflation rate. However, the entire cycle seems to have turned.

India's growth engine is now showing signs of deceleration. The trouble started with the rise in inflation. The Indian economy, which was getting used to 5% inflation, is now having to deal with prices rising at the rate of more than 12%. The fact that the Reserve Bank of India (RBI) has started increasing the repo rate and cash reserve ratio (CRR) clearly indicates that the central bank can sacrifice a few basis points in GDP growth to contain inflation.

As a result of high inflation and a spate of interest rates hikes, there has been a slowdown in investment plans announced by industries. Analysis of data released by CMIE clearly indicates that the rate of implementation of corporate capital expenditure (capex) plan has slowed down. On an average, the rate of implementation for India Inc had come down to 44.8% as of end June '08, from 52.7% as of December '06. Simply put, Corporate India is implementing lesser investment plans these days.

The bigger worry is that as much as Rs 43,000 crore worth of investment plans (across industries) were shelved during the quarter ended June '08. The situation is unprecedented as this is the first time that the current bull run is witnessing such a colossal abandonment of investment plans. In fact, even capacity additions have been low, which is evident from the slowdown in completed projects. However, despite all this, what is astonishing is the pace at which India Inc is announcing its investment plans. This can be attributed to the fact that often, the stock market reacts positively to mega expansions plans by companies. But whether these plans materialise is another story. Nonetheless, even amidst concerns of an economic slowdown, corporates continue to announce new projects.

Broadly, the industry is divided into five categories - manufacturing, electricity, services, mining and construction. Of these, only manufacturing has not seen a slowdown in implementation of investment plans. Mining projects have seen one of the worst slowdown in implementation, with the rate crashing to 37% in June '08 from around 50% in December '06.

As for specific industries, ferrous metals, construction, electricity generation, transport services and petroleum products have been the highest gainers of investments that have been announced. However, in terms of implementation of these plans, some of them seem to have lost ground. Ferrous metals and organic chemicals have seen the highest rate of implementation vis-à-vis plans that were announced earlier. At a 52% rate of implementation, the organic chemicals sector was among the top few gainers. In case of ferrous metals, particularly steel, India has enough iron ore - a major raw material for steel. Steel prices - which are expected to remain bullish in the international market in the near term - are apparently providing a strong impetus for capacity expansion in the industry. As demand continues to outpace supply, the rate of implementation of steel projects remains high.

However, the list of losers is longer. Despite big announcements, many projects in the infrastructure sector, including petroleum, transport services (highways, rail projects, airports and ports) and electricity generation seem to have hit hurdles. For instance, the power sector saw a 720-basis point decline in project implementation: only 40% of the projects were under implementation at the end of June '08, against 47% in December '06. Similarly, transport services, which include roads and flyovers, have also fared poorly in terms of implementation of investment plans. The implementation rate in the sector has fallen to just 44.9% as on June '08 from 62.4% as of December '06.

However, a slowdown in infrastructure should not be surprising. Even when investments in other sectors were rising at a breathtaking pace till the end of FY08, infrastructure investment was rising at a much slower pace. For instance, private corporate investments rose to 16.1% of the GDP in FY08 from 5.4% of the GDP FY02. But infrastructure investments accounted for only 5.3% of the GDP in FY08. This shows that even when interest rates were low, enough money was not being invested in basic infrastructure like roads, ports and airports. Whatever little funds were flowing into the sector have further slowed down. Sectors like transport and power form the backbone of the economy and a slowdown in investments in these sectors will have a deeper impact on the entire economy.

Free Cash flow. Is it free after all?????????

The best things in life are said to be free and the same holds true for cash flow! Investors love companies that produce plenty of free cash flow (FCF). It signals a company's ability to repay debt, pay dividends, buy back stock and facilitate the growth of business all important undertakings from an investor's point of view.

How and what of FCF
The formula for calculating Free Cash Flow (FCF) is as:

Net Profit + Depreciation - Capital expenditure - Changes in working capital - Dividend

FCF takes into account not only the earnings of the company but also the past (depreciation) and present capital expenditures, capital inflows and investment in working capital. Growing free cash flows are frequently a prelude to increased earnings. Companies that experience surging FCF due to revenue growth, efficiency improvements, cost reductions, share buy backs, dividend distribution (from subsidiaries) or debt elimination can reward investors in the future. Better free cash flows are therefore a reason for the investment community to cherish. On the other hand, an insufficient FCF for earnings growth can force a company to boost its debt levels. Even worse, a company without enough FCF may not have the liquidity to stay in business

From a companys point of view
A better FCF definitely indicates better efficiency on the part of the company. But what is pertinent for investors to note is that simply assessing the FCF on the basis of its absolute value is not prudent. It is imperative to also assess as to what components have contributed to the same.

Let us take a hypothetical example of two companies, A and B, both of which have garnered the same FCF for the current financial year.

Estimated free cash flow
(Rs) Company A Company B
Net profit 75 120
Add: depreciation / amortisation 20 5
Less: Capital expenditure 5 15
Add/ (Less): Decrease /(Increase)
in wkg capital
10 (10)
Less: Dividend 20 20
Free cash flow 80 80

Prima facie although appearing similar, if you delve a little deeper there is a stark difference in their performances. While company A, despite having lower earnings has benefited by adding back depreciation and decrease in working capital, company B has invested in capex and working capital. This indicates that while company B is investing for future growth, company A is not sufficiently geared up for the impending challenges. This also means that investors in company B can expect rewards in future while those in company A should sit up and take notice of what is ailing it.

From a sectors point of view
As explained earlier, cash flows are dependant on the capital expenditure and working capital liabilities borne by the company. This however, differs as per the dynamics of the sector in which the company is operating and should be seen in that light. While sectors like banking require minimum expenditure on capex (as a % of their turnover) those in pharma, engineering, FMCG or commodity sectors require to invest a substantial amount in R&D and capacity expansions.
To conclude...
FCF is not only a mirror image of the present but also a sneak preview into the future. The implications of the components of cash flow may not be explained in the annual reports, but is left to the investors prudence to diligently scrutinize the same and try to read between the lines. The legendry investor Benjamin Graham once said, The individual investor should act consistently as an investor and not as a speculator. This means that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.

Free cash flow, is not free after all!

Googles. new browser : CHROME

Google has introduced a new Web browser, called Chrome, aimed at wresting dominance of the browser market from Microsoft’s Internet Explorer. The move takes the Google-Microsoft rivalry to a whole new level. If Google succeeds, it will be a big deal, with major ramifications for the future of the Web. But just how good is Chrome? How does it differ from IE and from less popular, but still important, browsers like Mozilla’s Firefox and Apple’s Safari?
Google’s Chrome browser displays thumbnails of a user’s most-visited pages when a new tab is opened, rather than a blank page.Chrome is a smart, innovative browser that, in many common scenarios, will make using the Web faster, easier and less frustrating. But this first version—which is just a beta, or test, release—is rough around the edges and lacks some common browser features Google plans to add later. These omissions include a way to manage bookmarks, a command for emailing links and pages directly from the browser, and even a progress bar to show how much of a Web page has loaded.

Chrome’s interface has some bold changes from the standard browser design. These new features enhance the Web experience, but they will require some adjustment on the part of users. For instance, Chrome does away with most menus and toolbar icons to give maximum screen space for the Web pages themselves. Also, Google has merged the address bar, where you type in Web addresses, with the search box, where you type in search terms. This unified feature is called the Omnibox.
One striking difference in Chrome is how it handles tabs, which display a single Web page. In Chrome, each tab behaves as a separate browser. The bookmarks bar, Omnibox, menus and toolbar icons are located inside the tab, rather than atop the entire browser. The tabs appear at the top of the computer screen. Chrome also groups related tabs. If you open a new tab from a link in a page that’s already open, that new tab appears next to the originating page, rather than at the end of the row of tabs.

Google’s claims that Chrome is fast. The second beta version of IE8 is the best edition of Internet Explorer in years. It is packed with new features of its own, some of which are similar to those in Chrome, and some of which, in my view, top Chrome’s features.
For example, while IE8 also groups related tabs, it assigns a different color to each such tab group and allows you to close them all with one click. It has a “smart” address box of its own, that drops down a list of suggestions as you type, though it retains a separate search box.

IE8 also has breakthrough privacy features that exceed Chrome’s, and includes a new technology called Accelerators, which allows you to take rapid action on any selected word or phrase on a Web page, such as generating a map for a place name, without switching to a new page.

Microsoft’s IE8 has an \”Accelerator\” feature that lets users select any Web text and then map, translate, search or email their selection without leaving the page.Chrome and IE8 are far more advanced than Apple’s Safari. Safari is speedy on both Mac and Windows platforms, but lacks many of the key intelligent features of its newer Google and Microsoft rivals.

Why is Google igniting a new browser war? There are two main reasons, and both involve competing with Microsoft. First, the search giant fears that because its search engine and other major products depend on the browser, Microsoft—with its rival online products—might be able to gain an advantage by altering the design of IE, which has roughly a 75% market share.

Second, and more important, Google sees the Web as a platform for the software programs, or applications, that currently run directly on computer operating systems, notably Microsoft’s Windows. It says current browsers lack the underlying architecture to enable future, more powerful Web applications that will rely more heavily on a common Web programming language called JavaScript. Chrome was designed to be the world’s speediest browser at handling JavaScript.

That move might one day make Chrome a sort of online operating system that competes with Windows. “Think of Chrome as more than a simple Web browser,” Google declares. “It’s a platform for running Web applications.”

Google claims that future, more sophisticated Web applications relying more heavily on JavaScript than today’s sites do would run faster on Chrome.
IE8 also has some compatibility issues, for different reasons. It’s the first version of Internet Explorer to hew closely to Web standards. Earlier versions used some nonstandard ways of rendering Web sites, prompting some site designers to adopt techniques that made their pages work in IE, but look odd in Firefox and Safari. Now, ironically, these pages also look strange in IE8. So Microsoft was forced to build in a special Compatibility View button that users must click to see the sites properly.

Chrome is built on three core design principles. The first is its spare user interface. There are only two menus and a handful of toolbar icons. Internet Explorer introduced a similar approach in its version 7, but with a difference. Microsoft allows users to restore a traditional menu bar; Google omits that option. And the only toolbar icon you can add in Chrome is a Home button.

The second big principle behind Chrome is that a user can type anything he or she wishes into a single place, the Omnibox, and instantly receive suggestions on where to go, gleaned from the user’s own browsing history and Google’s rankings of popular sites. Whether you type in a Web address or a search term, the Omnibox is very smart. In some cases, in my tests, it came up with the right destination after I had typed only one or two letters of the name of a site I frequently visited.

The Omnibox has another cool feature, called Tab-to-Search. If you type in the name of another site that includes its own search feature, like, the Omnibox allows you to simply press the tab key to search within just that site, without opening it first. Chrome, through its Options settings, also lets you change the default search engine used by the Omnibox. Instead of Google’s own search service, you can use Microsoft’s Live search, Yahoo search, or others.

The third big principle behind Chrome is that each tab runs, under the hood, as a separate browser. Tabs can be dragged off the main browser and turned into separate windows. If one tab crashes, the rest of the browser keeps running. But this doesn’t work perfectly. In my tests, all of Chrome died on me when I tried watching an Olympics video on the NBC site.

You can even turn any tab into a standalone application that can be run from the Start Menu, or the desktop, as if it was a separate program.

Chrome has a few other key features. When you open a new tab, you don’t get a blank page, but a set of thumbnails for your most-visited pages, plus lists of recent search engines you’ve used, recently used bookmarks and recently closed tabs.

Like other browsers, Chrome puts up a warning when you try to visit a malicious or phony Web site, and it has a private browsing mode, called Incognito, which allows you to browse without leaving any history on your computer—a feature popularized in Safari.

Chrome also has a pop-up blocker, but it’s annoying, because it flashes a notice that a pop-up has been blocked. IE also does this, but unlike in Chrome, it allows the warnings to be made much less intrusive.

Internet Explorer 8 has some new features Chrome lacks. Its private browsing mode, called InPrivate, is the first I’ve seen that not only leaves no traces on your own computer, but also bars Web sites from collecting some types of information on where you’ve previously been surfing.

While IE8’s address box and search box remain separate, each also offers rapid suggestions; and both are organized better than Chrome’s. For instance, the suggestions that drop down from its address bar are divided neatly into categories drawn from the browser’s own guess, your history and your favorites. One downside: For this to work in Windows XP, you must first install Microsoft’s desktop search product.

Like Chrome, IE8 lets you switch your default search provider, but it also allows you to switch search engines on the fly. When you type in a search term, icons for alternate search engines appear at the bottom of the suggestion list, and you need only click on these to see search results from, say, Google, instead of Microsoft’s own Live search engine.

IE8’s Accelerators feature presents a blue-arrow icon above any text on a Web page that you have selected. Clicking on the icon brings up a list of actions you can take using the selected text, such as posting it to a blog, emailing it, mapping it or searching it. While these actions are set by default to use Microsoft’s own Web services, you can change them to use Google’s, Yahoo’s, or those from other companies.

Microsoft has also built in a feature called Web Slices. These are portions of a Web site that a site developer can designate to appear in the IE8 Favorites bar and to constantly update themselves. An example might be the bidding for an item on Chrome, IE8 also displays useful information whenever you create a new tab, including a list of recently closed tabs and a list of Accelerators.

With the emergence of Chrome, consumers have a new and innovative browser choice, and with IE8, the new browser war is sure to be a worthy contest.

Olympic- Abhinav wins a gold

Abhinav Bindra won India's first-ever individual Olympic gold medal when he claimed the men's 10m Air Rifle shooting title here on Monday.The businessman from Chandigarh, followed his world championship title two years ago to finally win a landmark gold medal for his country.

India, winners of eight field hockey gold medals, had never won an individual Olympic title before Bindra's feat. The previous best was trap shooter Rajyavardhan Rathore's silver at Athens, while there were bronze medals for wrestler Khasaba Jadhav (1952), tennis star Leander Paes (1996) and woman weightlifter Karnam Malleswari (2000).

Indeed it s great achievement and we hope it will change the mindset of hundereds of Indian who are crazy after cricket as there is no alternate game. The craziness about cricket started after india's triumph in the world cup 1983. Hockey wld have a similar status but thanks to indifferent performance of National team for so many years.

Time will tell how Abhinav's acheivement will influence other sports including his very own sport "shooting".

U.S. Housing Slump End `Not Visible,' Credit to Worsen - IMF

The International Monetary Fund said there's no end in sight to the U.S. housing recession and warned that deteriorating credit conditions for consumers and banks may prolong a period of slow economic growth.

At the moment, a bottom for the housing market is not visible, the IMF said in its Global Financial Stability Report. Stemming the decline in the U.S. housing market is necessary for market stabilization as this would help both households and financial institutions to recover.

The IMF, which a year ago failed to foresee the depth of the subprime mortgage collapse, stood by its April forecast for about $1 trillion in losses stemming from the U.S. mortgage crisis. Worldwide asset writedowns and losses have totaled $469 billion in the past year and $345 billion has been raised.

The Washington-based lender in the report said the Federal Reserve's decisions to expand lending to Wall Street firms have succeeded in containing systemic risks.'' Still, weakness in housing threatens to extend the slump.The growing concern is that, with delinquencies and foreclosures in the U.S. housing market rising sharply, and house prices continuing to fall, loan deterioration is becoming more widespread,'' the IMF said.

As economic growth slows, banks will face continued headwinds in maintaining earnings due to falling credit quality, declining fee income, high funding costs, and exposures to monoline and mortgage insurers.

On July 17 the IMF said inflation in developing and emerging countries would average 9.1 percent in 2008, up from a forecast of 7.4 percent in April. Their prediction for inflation in advanced economies for this year was raised to 3.4 percent, compared with a forecast of 2.6 percent in April.


Our real challenges lie at home - Internal security concerns

The internal security situation in India continues to remain a cause of concern for the Central/ state governments and all the citizens alike. Out of the many challenges we face at home, the internal security challenge is one of the key one. Violent incidents continue in some states of the North-East, particularly in Assam, Manipur and Nagaland. The ethnic overtones of violent acts in Assam are particularly disturbing. While the situation in Jammu & Kashmir has shown some overall improvement, apart from the bombings by the terrorists which are happening in several areas throughout India in regular intervals.

To control/reduce them we need better security forces, better in all senses, be it training, be it skills, be it equipment, be it resources, be it mobility or be it attitudes and the police forces should not be in control of the politicians. We need superior intelligence capabilities which can alert us to the impending threats. We need greater discipline, lesser politicisation and zero corruption.

We need to work with greater commitment for eliminating the threats posed by Naxalism. In the past that there are many dimensions to the problems of Naxalism. Concerted efforts can be made on the development front to remove any feeling of alienation, the security forces need to redouble their efforts to control the spread of this phenomenon.

Terrorism has become a global phenomenon of our times. In terrorist organisations, we face determined, committed and highly motivated adversaries working with evil design and evil intent. We need to go far beyond conventional responses in facing the severe terrorist threats. The government should work on many fronts — through dialogue processes, through development activities and through improved communication links — to tackle these problems.

Trust vote- who won - Govt or ..???????

The week 21st to 26th of July was indeed dramatic. Govt ( UPA) own the trust vote and before the euphoria dies down there comes the serial blasts in Bangalore & Ahmedabad and the list of city seems to be expanding if we believe of unexploded bombs found in Surat.

So who won the trust vote? Is it the government or is it the militants????. May be the militants won the trust that nothing will happen to them because of continuous appeasement from Congress and now the unexpected power of SP . only time will tell how long and to what extent these militants will continue these serial blasts.

The Crisis of confidence

The old-fashioned financial system was like Old Maid, a parlour game once beloved of small children. The banks were like players, dealt hands from a pack of cards, which they swapped among each other. At the end, one player was left holding a lonely queen—a bad debt, if you will—and lost. Over the past few decades the game has changed. Securitisation has snipped the old maid into pieces; new faces, such as hedge funds, have joined the party, enabling the banks to distribute those pieces among a larger number of players.
When the game is over, lots of players are left holding small losses instead of one player holding a big one. During two exceedingly prosperous decades, that theory seemed to work just fine. But the swings in almost all financial markets this month have made dispersed risk suddenly morph into dispersed mistrust. The uncertainty has been magnified .Meanwhile, collateralised-debt obligations (CDOs), made up of clumps of those securities and laced with leverage, have become almost impossible to trade. So none of the players really knows how much he has lost. While this uncertainty lasts, investors are taking it out on the banks that peddled the securities by dumping their shares; and the banks are taking it out on those they sold them to by demanding more collateral on their loans.
The banks have even grown cagey about lending to each other. The doubts burst into the open on August 9th when central banks were forced to inject liquidity into the overnight money markets because banks were charging punitive rates to lend to each other. At first, the problems appeared more serious among European banks. The pain in America was concentrated in the largest hedge funds, including those run by Wall Street’s biggest name, Goldman Sachs. Increasingly, however, analysts worry about the exposure of American, Canadian and Asian banks.
On Wednesday August 15th shares in Countrywide Financial, a large American mortgage lender, fell 13% after an analyst gave warning of possible funding difficulties. Despite liquidity injections by the Federal Reserve on August 15th, the S&P 500 index fell 1.4%. The heavy selling spread to Asian and European stocks on August 16th. Every crisis begets finger-pointing, and the blame now is falling on the rating agencies that helped structure these exotic instruments. Currently, they are guided by a voluntary code that aims to tackle potential conflicts of interest. The biggest is that the agencies are paid by the firms they rate. Rating CDOs was a profitable business. If these securities are now downgraded, banks could be forced to offload lots of illiquid instruments into a falling market—one of the fastest ways to lose money yet devised. But if there are no buyers, banks may have to sell something else to shore up their balance sheets. Something like this indiscriminate selling has been affecting hedge funds over the past couple of weeks. Faced with more demanding standards from their banks and investors, some have been forced to unwind positions in order to realise cash. That has led to unusual movements in debt and equity markets, which have only got some funds deeper into trouble. Quantitative funds have been hardest hit, as investment models that had made money for ages briefly proved worse than useless. Since banks lend to hedge funds, any problems there quickly become their concern. On top of this, both Bear Stearns and Goldman Sachs have found that when funds bearing their name get into trouble the desire to preserve their reputations soon leads to a rescue. Sometimes risk is not as far away from the banks as it seems. At the end of Old Maid as banks used to play it, the loser would take a big write-off and then everyone could start playing again. In the new version, the use of leverage means the game is being played with hundreds of packs of cards and by thousands of different players. Working out who has won and who has lost in this round will take a long time.


Dow acquires Rohm and Haas

Dow has signed a definitive agreement to acquire all outstanding shares of Rohm and Haas, one of the largest manufacturers of specialty chemicals, for $78 per share in cash. This acquisition would transform Dow into the world's leading specialty chemicals and advanced materials company. The companies are targeting completion of the transaction by early 2009.

The acquisition would be financed through an equity investment by Berkshire Hathaway and the Kuwait Investment Authority in the form of convertible preferred securities for $3 billion and $1 billion, respectively. Citi, Merrill Lynch and Morgan Stanley have committed debt financing.

Rohm and Haas is expected to help Dow make a mark in a number of industry segments like electronic materials and coatings that are poised for significant growth in the long term. Besides, Rohm and Haas has a strong presence in a number of other attractive areas such as water solutions, adhesives, personal care, biocides and building and packaging materials. The acquisition will unlock value from Dow's existing portfolio by delivering a range of innovative new products and technologies to these high growth downstream sectors, while at the same time expanding the product offering for sale through Dow's own existing market channels. Dow also anticipates that the transaction will produce significant revenue synergies, through the application of each company's innovative technologies and as a consequence of the combined businesses' broader product portfolio in key industry segments with strong global growth rates.

Dow will establish an advanced materials business unit at Rohm and Haas' current headquarters in Philadelphia and intends to contribute complementary Dow businesses to Rohm and Haas' existing portfolio, such as coatings, biocides and personal care. The total revenue of this new unit will approach $13 billion. Dow will retain Rohm and Haas' corporate name for this advanced materials business unit in order to capitalise on the company's brand value.

China to suspend exports of all HAZ chemicals for 2 months from mid July

The Chinese government is likely to suspend the export of all the hazardous substances including pharmaceutical chemicals for the two months starting from mid July to mid September, in connection with Olympics 2008. The decision is likely to create a major crisis situation for the Indian pharmaceutical industry.

According to industry sources, the Chinese government's decision is to suspend the movement of any hazardous substance, including pharmaceutical chemicals, in the region from one month prior to the beginning of Olympics. The restriction is expected to last till 15 days after the Olympics. For the next two months, therefore, the companies in India would find it difficult to import any chemical substances including bulk drugs and intermediates from China.

"This will have a double effect on the Indian pharmaceutical industry, as almost 20 per cent of the bulk drugs and around 70 to 80 per cent of the intermediates in the country are imported from China. Most of the companies are now collecting stocks as much as they can with their financial and storage capacity to meet the situation. The price increase of Chinese raw materials is already posing a problem for those who have to buy large quantities.

However, the sources informed that the restriction is only around Beijing, where the Olympics 2008 is to be held, and the supplies from other parts of China will be continued though the prices will be very high. The prices are expected to shoot up with increase in demand as the companies from Beijing and its outskirts cannot supply products to its customers.

The prices of active pharmaceutical ingredients (APIs) and intermediates imported from China have already gone up from 50 per cent to 200 per cent in the last couple of months. Further, the Chinese government has ordered closure of several major API manufacturers as the environment rules were made stringent prior to organising Olympics

Daiichi acquires Ranbaxy

Daiichi Sankyo Co. will buy a controlling stake in India's Ranbaxy Laboratories Ltd. for up to $4.6 billion to enter the generic-drug market, where sales are growing twice as fast as branded medicines.

Daiichi Sankyo, Japan's third-largest drugmaker, will acquire more than 50.1 percent of Ranbaxy, India's biggest pharmaceutical company, for 737 rupees a share.The purchase propels Daiichi Sankyo into the top 10 companies in the $120 billion generic-pharmaceutical market, which grew 11 percent last year, compared with 6 percent for all drugs.

Daiichi Sankyo is paying about 4.7 times Ranbaxy's sales in the acquisition.That compares with 2.7 times that Mylan Inc. paid last year when it bought Merck KGaA's generic unit for 4.9 billion euros ($7.6 billion).

The acquisition will allow Daiichi Sankyo to have a better reach into emerging markets, including India, China and Eastern Europe,'' where the pharmaceutical market is growing at a rate of more than 10 percent, the company said in a statement.

The Japanese pharmaceutical market will grow 1 percent to 2 percent this year. Global industry growth will be 5 percent to 6 percent next year.India's pharmaceutical market may expand by more than 12 percent a year.

The Ranbaxy purchase gives Daiichi a company that manufactures and sells drugs in 56 countries from the current 21. It follows Daiichi's takeover of German biotechnology company U3 Pharma AG for 150 million euros on May 21 to gain cancer treatments.

Ranbaxy has purchased seven companies in the past two and a half years, including Romania's Terapia SA. The company has been built over the past three decades by copying blockbuster drugs such as Merck & Co.'s Zocor cholesterol treatment drug and selling them for a fraction of the price in countries including France, Germany and the U.S.

Medical costs will swell 70 percent to 56 trillion yen by 2025 from 33 trillion yen in 2005, the government estimates. Japan wants generics to account for 30 percent of prescriptions by 2012 from 17 percent to save about 500 billion yen.

Policies favoring the use of generic drugs are also luring foreign companies, including Teva and Mylan Inc. Petah Tikva, Israel-based Teva, the world's largest generic-drug maker, is hiring as many as 193 people in Japan this year.


Is it end of dream??? or still there is a light????

What looked like a turning point in the history of Indian pharmaceutical research has come a cropper. Dr. Reddy’s Laboratories’ iconic deal with two of India’s most prominent investors — ICICI Venture and Citigroup Venture Capital (CVC) International — in September 2005 to form Perlecan Pharma, a new company dedicated to new drug development, has fallen apart. After three failed molecules, ICICI Venture and CVC have exited Perlecan, selling their stake to Dr. Reddy’s for a combined sum of $18 million.

This represents a major setback for the Hyderabad-based company, which will now need to find a new partner to support its research efforts. The Perlecan failure has also cast a shadow over many other deals it spawned — Sun Pharmaceuticals (Sun Pharmaceutical Advanced Research Company or Sparc), Nicholas Piramal India (Piramal Life Sciences) and Ranbaxy Laboratories (Ranbaxy Life Science Research).

But Dr. Reddy’s had pioneered the concept of spinning off research in a bid to de-risk its core business of generics. This was touted as a novel way to separate the more predictable revenues of mainstay generic drugs, from the uncertainties of new drug research, and subsequently raise further funds for research. Soon after, Sun Pharma spun-off its entire discovery research programme into SPARC, which was listed in July 2007, and Nicholas Piramal, Ranbaxy and Wockhardt followed suit. While Piramal Life Sciences and Ranbaxy Life Science Research will be listed shortly, Wockhardt’s new research company should be listed on 1 January 2009.

Nicholas Piramal and Ranbaxy were reportedly in talks late last year with private equity firms to pick up a stake in their respective research companies. “Chances are that private equity funds won’t want to touch discovery research companies again for some time. Private equity firms in India still have a trading mentality and little appetite for risk.

While the exact reasons behind the ICICI-CVC pullout aren’t entirely clear, their withdrawal is being linked to slow progress in the molecules’ development. Perlecan is believed to have recently abandoned the development of two more molecules codenamed DRF 10945 and RUS 3108 targeted at metabolic and cardiovascular diseases, respectively.
This leaves Perlecan Pharma, which had started with four molecules from Dr. Reddy’s stable, with just one molecule, an anti-diabetic drug codenamed DRL 16536, still in pre-clinical development.

Analysts feel the company could have assessed that the molecules’ commercial value was too low. DRF 10945, Perlecan’s most promising molecule, belongs to the same drug category as GlaxoSmithKline’s Avandia, which has been in the news after studies showed that it increased risk of heart attacks. Any drug belonging to the PPAR category will go under intense scrutiny by the US Food and Drug Administration,
More importantly, Perlecan never got focused attention. “The absence of a dedicated separate management team for standalone research entities like Perlecan may also be partly to blame. Perlecan remained a paper entity with neither a dedicated management, nor its own office. These are lessons that its followers may not want to repeat.

When it was founded, Perlecan had received equity commitments of $52.5 million. While Dr. Reddy’s was to contribute $7.5 million towards the new company, ICICI Venture and CVC International committed $22.5 million each. Perlecan immediately received the first tranche of $26 million — but the second never came. According to a person close to the development, ICICI Venture and CVC contributed a combined sum of $22 million to the first tranche.

The current crisis is not specific to Dr. Reddy’s but may be symptom of larger ills plaguing Indian pharma R&D. Industry insiders point to a whole range of issues affecting the industry such as limited resources — financial and human — and a certain lack of direction in R&D programmes and coordination between scientists and managers.

Right from the beginning of a new drug’s development, one should know which pharma companies would be likely to in-license it and make the drug attractive. “Good science is not enough.”

Moreover, the number of drugs approved every year in the US, the world’s largest pharmaceutical market, has gone down drastically over the past few years. “The US FDA has raised the bar for approval of new drugs. There has been a lot of hype around new drug discovery research in India, which has led to unrealistic expectations. Today Big Pharma is focused more on defending their existing patents, rather than on new drug discovery. This leaves a lot of space for other companies to explore.” But a new drug out of Indian labs still seems a distant dream.


Alternate energy. A slow lane in India

India's failure to agree a biodiesel policy has forced firms to shelve expansions plans, putting it way behind energy-hungry rivals like China in the drive to greener fuels, a top industry representative said.

The delay has also left edible oil processing companies, which have built capacity to turn 1.2 million tonnes of jatropha into biodiesel, in the lurch -- and Rs 9 billion ($227 million) poorer. New Delhi is blending ethanol with petrol, but has been unable to forge a framework for biodiesel as ministers differ over subsidies needed to kickstart the sector. "It is a clear example of how an indecisive government can jeopardise plans to popularise jatropha to reduce dependence on fossil fuel and pollution. One tonne of jatropha seed can yield 300 kg of biodiesel it is estimated.

India consumes 40 million tonnes of diesel a year, way above annual petrol demand of 8-9 million tonnes, and in 2003 announced plans to replace around five per cent of its diesel consumption with biodiesel made from jatropha, a crop which thrives here.By not agreeing to a subsidy or on a policy, the government has dealt a blow to biodiesel which should have been treated at par with ethanol. Some countries believe biofuels hold out the promise of major cuts in greenhouse gas emissions and are an alternative to scarce and expensive fossil fuels.

India is a major polluter and is likely to rise up the world's league of dirty nations as Asia's third-largest economy purrs along at annual growth rates of over 8 per cent. It imports 70 per cent of its crude oil requirements, and heavily discounts fuel sales by state firms, although on Thursday raised the price of petrol and diesel for the first time in 20 months.

Domestic oil retailers are required to mix ethanol with petrol to 5 per cent of volume almost nationwide and India plans to double that to 10 per cent from October 2008, when the new sugarcane crushing season begins.

But other countries have gone much further. Brazil allows as much as 50 per cent ethanol to be blended with petrol while China has gone ahead with plans to build one of the world's first large-scale jatropha-based biodiesel plant.

The basic reason behind the delay in the biodiesel policy is subsidy. Some ministries favour subsidy for the sector as it is in nascent stage, while the Finance Ministry seems to be opposed to the idea. Some experts say jatropha is several years of intensive research away from being a commercially viable biofuel.

Hong Kong remains pricest retail space in Asia

Hong Kong's Central district is Asia's most expensive shopping area, with street-front retail space costing $775 per square foot a year to rent.Central beat Causeway Bay, Hong Kong's traditional shopping district and last year's number one, and Tokyo's Ginza, this year's second-most expensive shopping area in Asia.

The Central district ranked seventh worldwide after New York's Fifth Avenue, Paris's Champs Elysees, Moscow's Tverskaya, London's Bond Street and Oxford Street and Dublin's Grafton Street.

Since the arrival in Central last year of Swedish chain Hennes & Mauritz AB, overseas retailers have sought space in the area to boost brand awareness among affluent mainland Chinese visitors.

China to manufacture Jumbo jets

China has established a homegrown company to make passenger jumbo jets, state media reported Sunday -- a step forward in the country's quest to become less dependent on Boeing and Airbus.

China Commercial Aircraft Co. was established in Shanghai with registered capital of 19 billion yuan $2.7 billion, the official Xinhua News Agency said.It said the central government and the Shanghai government are among the major shareholders, as are China's two main aircraft manufacturing and servicing companies, China Aviation Industry Corp. I and China Aviation Industry Corp. II, which were split off from state-owned China Aviation Industry Corp. in 1999.

Europe's Airbus has forecast that China's domestic market will increase fivefold by 2026. Airbus and Chicago-based rival Boeing dominate the market for commercial airplanes carrying 100 or more people.Xinhua said Commercial Aircraft Co. will be able to make planes with more than 150 seats.

According to the development history of Airbus and Boeing, the development and success of civil planes cannot be realized by relying on one or two generations. Considering the past records lets see how sucessfull they are in this sort of venture where there is no scope on compromising quality.