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BW Businessworld

Blasts Take The Glitter Away

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The three serial blasts that rocked Mumbai on 13 July, leaving 21 dead and more than a hundred injured, failed to have any impact on the stockmarkets. The BSE Sensex, for instance, opened on 14 July at 18563.69 and closed higher at 18618.20 touching a high of 18803.05. But the diamond industry did not fare as well. One of the blasts was at Mumbai's jewellery and diamond hub of Zaveri Bazar. Some put the revenue loss at Rs 1,000 crore. The jewellery and diamond markets remained closed on Friday, 15 July. "But we will now work harder," says Sanjay Kothari, vice-chairman of trade body Gems & Jewellery Export Promotion Council. Another impact of the blasts could be many jewellers shifting shop to the new and more secure Bharat Diamond Bourse (BDB) at Bandra-Kurla complex.   

Despite The Odds
Unlike neighbour India, which is seeing a fall in economic growth, China reported a growth of 9.5 per cent for its second quarter despite the monetary tightening measures to control inflation. The GDP had grown 9.7 per cent in the previous three months. The country's industrial production figures, too, have risen — 15.1 per cent — even though interest rates were increased. What has not grown significantly is imports, which increased only 19.3 per cent from last year. These indicators may put minds at rest across the world as China's demand remains strong. How long this will last, however, is a moot point.

The New Managers
The Employees' Provident Fund Organisation's (EPFO's) financial advisory committee has approved four companies to manage its Rs 3.5 lakh crore corpus. The four are: SBI, which will handle 35 per cent of the funds; ICICI Securities, 25 per cent; Reliance Capital and HSBC Asset Management Company, both will manage 20 per cent each. A fifth shortlisted company,
ICICI Prudential, was not selected finally. EPFO has 47.2 million members. SBI was handling the corpus in the interim after the previous fund managers' term finished in March. EPFO has opted for professional fund managers to improve the returns on its massive corpus.











GROWTH & DE-GROWTH: China sees 9.5 per cent second quarter GDP growth. News Corp's Rupert Murdoch faces flak in the UK (Bloomberg)

Hot Seat
Facing political and public opposition in the UK, and a likelihood of investigations in the US, media giant News Corp has withdrawn its $12.6-billion bid for total ownership of British Sky Broadcasting (BSkyB) Group. It owns 39.1 per cent of the UK company. If the now cancelled deal had gone through, it would have earned investment advisors on both the sides about $45 million each. Summons have been issued to Rupert Murdoch and son James in the phone hacking scandal that led to the collapse of 168-year-old UK publication News Of The World. Many see this as the beginning of the end of the biggest media empire.

Strong Numbers
TCS reported better-than-expected net profit of Rs 2,415 crore (Indian GAAP) for the June-ended quarter, while revenue was Rs 10,797 crore. One of its strongest verticals was telecom, a sector that Infosys has faltered in. TCS also expects its profit margins to improve in this fiscal, and for foreign clients to increase their IT spend. It announced that it plans to hire 17,000-20,000 people in the second quarter of the year.

Down From The Top
After five days of rising continuously, gold prices fell by Rs 100 to Rs 23,120 per 10 gm on Friday due to slow demand and weak global cues. For similar reasons, gold futures, too, fell 0.37 per cent to Rs 23,197 per 10 gm. Meanwhile, silver fell by Rs 800 to Rs 56,500 per kg, also due to reduced demand. Another reason for the decline in the precious metals' prices was profit selling.

(This story was published in Businessworld Issue Dated 25-07-2011)