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Short On Showers

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Till the week ended 25 July, the monsoon was 20 per cent below the long-term average, according to government data. India received 54.2 millimetres of rain between 19 July and 25 July, against a 50-year average of 67.5 millimetres. While several states in the eastern parts received good showers, states such as Karnataka, Maharashtra, Gujarat and Rajasthan have been hit hard. India gets more than 70 per cent of its rain from the monsoon. If the volume of showers continues to be low in the coming weeks, experts say it will hit the country's more than 235 million farmers who depend on the monsoon for crops such as rice, peanuts, soybean and cotton, and could emaciate an already ailing farming sector. A report by research firm Crisil said that the situation was similar to the drought of 2009. That said, the meteorological department says rain will improve in the days to come, shrinking the shortfall. A ministry panel of experts will review the situation in a few days, according to agriculture minister Sharad Pawar. He said the government has taken measures to cope with the lack of rain.












MELTDOWN: Arcelor Mittal's second quarter net profits fell 63 per cent.


(ARCELOR MITTAL)




Steel Slump
The world's biggest steel maker is weathering tough times. ArcelorMittal's second-quarter profits fell 28 per cent owing to declining demand and prices triggered by the ongoing euro zone debt crisis. Earnings before interest, tax, depreciation and amortisation fell to $2.4 billion from $3.4 billion a year ago. The net income fell 63 per cent during the six months to June. 

Blame It On R&D
Biotechnology firm Biocon's consolidated net profits for the first quarter fell 19 per cent on a sequential basis. But the Rs 79 crore profits were an increase of 12.4 per cent against the same period last year. Biocon CMD Kiran Mazumdar-Shaw said the fall was due to R&D spend. Revenues also fell 5 per cent to Rs 593 crore during this period.

Campaign Curbs
Indian companies slashed their advertisement budgets by about 45 per cent in 2011-12 due to high cost of credit, soaring raw material prices and weak local demand, says a survey by industry body Assocham. Sectors such as banking, telecom and insurance, which account for a lion's share of the ad spends in India, took the biggest hit. 

Chipping In
India's electronics industry is set to cross Rs 10,000 crore this fiscal, said minister of state for defence M.M. Pallam Raju. He said "modernisation plans of the defence forces coupled with an extraordinary budget allocation for the defence sector" fuelled the growth of the electronics industry, which grew from Rs 5,400 crore in 2007-08 to Rs 7,948 crore in 2011-12.

Deal Time
Jindal Steel and Power entered a merger agreement to buy Canadian coal firm CIC Energy for over Rs 600 crore. The acquisition comes over a year after CIC ended an agreement with JSW Energy. Meanwhile, Wipro will buy Lornamead's Yardley business in the UK and some European countries. Wipro already owns the Yardley portfolio for Asia, West Asia, North Africa and Australasia.

NPA Alert












PATENT WAR: Apple and Samsung lock horns again.


(BLOOMBERG)



Rating agency Standard & Poor's said Indian banks' bad loans may increase further due to sluggishness in the economy and high interest rates. Bad loans in India's public sector banks stood at about 3.3 per cent of assets in 2011-12, against 2.3 per cent a year ago. 

Clash Of Titans
The Apple-Samsung wrangle is getting dirtier. Apple this week said Samsung's demand for higher patent royalty from the iPhone maker is unfair and way above what it demands from other licensees. It also claimed it was entitled to $2.5 billion in damages from Samsung over patented technology used in its gadgets. However, Samsung says its demands are quite in line with the norms prevalent in the industry.



Barclays Effect
Japan's biggest investment bank Nomura Holdings ousted its CEO Kenichi Watanabe and one of his top lieutenants after allegations of insider trading spread. The company hinted that there could be more information leaks than those identified by authorities. Has Nomura gone the Barclays way? It seems so.

(This story was published in Businessworld Issue Dated 06-08-2012)


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