No takers for bargains on stock markets

There could be a lot of stocks that look attractive as their prices had fallen steeply from their peak prices, as the Sensex hit a lowest closing since May 2007.

But no one is rushing in to buy. Even funds, that are flush with money, seem to be in a mood to wait as the issues that haunt the market are going to threaten investor sentiment for a while.

Crude oil, at an all time high of $141, continues to be a major concern for global markets. Dow Jones Index fell by 358 points when the trading ended on Thursday. "Domestic issues like higher inflation at 11.42 per cent, more monetary action from Reserve Bank of India in its next monetary review meet on 29 July and political instability also added to the weakness," said Amitabh Chakraborty, president, Religare Securities.

There was not a single Sensex stock in green as the benchmark index fell by 619.6 points to close at 13,802.2.

State Bank of India, which hit Rs 2,540 in January is today quoting at Rs 1,158 with a forward price to earnings (PE) ratio down to 7.8 times. ICICI Bank is available at Rs 653, at a PE of 13.8. Infosys, the IT major continues to grow at 25 per cent but its PE is down to 17.5 on estimated 2009 earnings.

The story of emerging markets and India as an investment destination does not change, but short-term worries are going to keep investors away, says Bryce Johns, chief investment officer, Kotak Life Insurance. "Probably little more of unwinding to happen before people come back," Johns said.

Oil subsidies that the government is sitting on, the fiscal condition and election year are causes for concern that are likely to push the markets further down. “Investors should enter only if they have a three to five year investment horizon,” said Johns.

A day after State Bank of India and Union Bank of India hiked their lending rates, their shares fell by 4.6 per cent and 2 per cent respectively. Bank stocks continue to reel under the interest rate effect, while interest rate sensitive sectors like realty and auto took a hit. Unitech, the Delhi based developer on Friday declared 52 per cent fall in its fourth quarter profits. The stock is already down by 63 per cent this year.

He lived a wonderful life, says Manekshaw’s daughter

Wellington: “My father was lucky to have had a wonderful life especially his retired life and last days in Coonoor, where he was given good medical care at the Military Hospital,” said Maja Dharuwala, daughter of Field Marshal Manekshaw.

A composed but emotional daughter, Ms. Dharuwala offered to speak a few words following persistent requests from the media.

“My father liked and decided to settle down in Coonoor because my mother loved the place so much,” she said.

Field Marshal Manekshaw’s grandson Jehan, who stepped in to speak to the media on behalf of his emotional mother, said “We had been visiting Coonoor to spend time with my grandpa for the last two years. Wherever I was seen in and around Coonoor shopkeepers and public used to enquire about my grandpa and his health and used to convey their regards.”

“My grandpa had a great love for this people and place and the affection of the people of this hill district towards him had always been amazing.” Gently and softly avoiding further queries from the battery of media personnel, Jehan said, “Please nothing more to say.”

‘Humorous despite age’

“It was a great honour to treat a great hero who was brilliant, witty, humorous, charming despite his age and health,” this is what pulmonologist BNBM Prasad, Head of the Department of Respiratory Medicine, Army Hospital, New Delhi, said while briefing newspersons at the Madras Regimental Centre Quadrangle.

Sam Manekshaw, who was in and out of the hospital for the last two years, was sinking for the last four days and Army Hospital expert doctors were rushed to the Military Hospital, Coonoor.

Describing the last days and last moments of Field Marshal Manekshaw, Dr. Col. Prasad said “he found a strange will power even when he was critically ill and Manekshaw largely and greatly remained composed.”

Peaceful death

“He had a peaceful death with both his daughters holding his hand at the bedside.” A warrior who fought battles even while battling for his life “always proved to be a companion to the other ailing patients at the hospital,” Dr. Prasad noted.

Close aide’s account

Mann Bahadhur Thappa, a close aide of Field Marshal Manekshaw for more than a decade, said, “Saab just looked into my eyes when I visited him at the Military Hospital once during his last four days.”

Mann Bahadhur, trying to come to grips with the reality of the loss, said, “I knew that Saab was trying to tell me something but I understood that he was not able to speak, hence his attempt to convey something through the eyes.”

The former Army Chief always had a big heart for personnel from the Gurkha Regiment and had chosen to have all his personal aides from the Gurkha community.

Sam Manekshaw’s death : How he and his men won those wars

‘Sam’ Maneskhaw backed his men through and through. And, his self-belief rubbed on to his men.

He would back officers even if some of them developed a fondness for the bottle that made them anathema in the eyes of some of his more punctilious colleagues. ‘Sam’ felt that the indiscretions of youth could be overlooked if the officer was courageous and a brilliant tactician, one whom soldiers would follow unquestioningly.

Thus, when the 1971 war came about, the General had around him officers who were not afraid to speak out their mind but when ordered to do so, would fulfil their missions with the dedication of evangelists. Like Major General Ian Cordozo who cut off his leg without anaesthesia after gangrene had set in during the battle at Sylhet in Bangladesh. Manekshaw conveyed to his Eastern Command chief Lt. Gen. J.F.R. Jacob, Prime Minister Indira Gandhi’s wish to move quickly into East Pakistan in 1971. On being asked by General Jacob to wait till the end of monsoons, ‘Sam’ accepted his commander’s advice and did not budge when requested by the political leadership to launch operations immediately.

Asked by Indira Gandhi whether “he was ready [for the war],” Sam replied, “Sweety, I am always ready.” But he stood solidly by the assessment of his field commanders, who felt that a military campaign which began in summer would not be concluded successfully because of the monsoon. This lead to the famous four words from Jagjivan Ram, then Defence Minister: Sam, ab maan bhi jao (Sam, please do agree).

Manekshaw was proved right. By the time war was declared, the army had over eight lakh men, about 300 fighter planes, 1,500 tanks and 3,000 artillery pieces. The Pakistan Army had less than half that number of men, fighter jets, tanks and artillery pieces.

‘Sam’ had mentored many of the officers serving under him. Pakistani military historian Shuja Nawaz recalls that the war gaming models by an Indian officer about Pakistan’s likely offensive in Jammu during the 1965 war were so accurate. It was as if he had read the Pakistan commander’s mind. The Indian army officer later revealed that he had developed these ideas while serving under a certain Brigadier Manekshaw in an infantry school.

The sterling display by the army in 1971 under Manekshaw could not have happened without a combination of factors. Having noted Foreign Minister Swaran Singh’s advice to not venture into the war without an influential international friend, Indira Gandhi signed the 20-year friendship treaty with the Soviet Union which instantly increased the availability of weapons. Foreign journalists expelled from East Pakistan were smuggled back by India to write on the Mukti Bahini’s successes and the Pakistan Army’s excesses. This put Pakistan on the backfoot as far as the liberal international opinion was concerned.

The 1971 war saw several instances of jointsmanship among the armed forces. Naval jets accompanied IAF fighters to pound Chittagong. The navy made innovative use of high-speed short distance missile boats by towing them towards the Pakistan coast at night and launching a lightning attack on ships in the Karachi port from the southern side even as IAF fighters appeared from the eastern side. Indeed this thread of all the three forces chipping in their might made the 1971 war a delight to execute for its Generals, Admirals and Air Marshals.

While Manekshaw was adamant about delaying the military campaign till the monsoon had receded, he was flexible on many occasions. A firm believer in the Clausewetzian theory of that war is continuation of politics by other means, Manekshaw accepted the creation of a joint military command in which the head of the Mukti Bahini (a retired colonel) was given the title of a general and made the East Pakistan’s counterpart of Eastern Command chief Lt. Gen. Jagjit Singh. This was essentially a political arrangement and Manekshaw saw sense in accepting this gesture aimed at respecting Bangladesh’s status as an independent nation and its sensibilities. And as result, the Indian Army’s Eastern Command received a steady flow of priceless intelligence about the Pakistan Army.

And then there was Manekshaw’s attitude of not pulling rank if the advice was sensible. The Eastern Command wanted Dhaka as the final objective but the East Pakistan capital was missing from Manekshaw’s battle plans. An intense debate ensued at Fort William in Calcutta, the army’s Eastern Command headquarters, and battle plans were modified to include the capture of Dhaka as a key objective of the attack on East Pakistan. No debate of this kind was conducted at the Pakistan Army’s central headquarters in Rawalpindi, rues Shuja Nawaz.

All these combined to give a decisive victory for the Indian armed forces and helped create a nation that gave the lie to the two-nation theory.

1% rate hike may up housing EMI by 7%

Interest rates are all set to go up by 50-100 basis points, following the RBI's decision to increase the lending rate on funds to banks by half a percentage point. Punjab National Bank (PNB) CMD K C Chakrabarty said the step taken by RBI will lead to a minimum increase of 50 basis points in interest rate. Some banks might increase the rate even to 75 basis points, he added.

However, a senior official of a private sector bank said increase in the lending rate might go up to one percentage point (100 basis points). As the interest rates are going upward for last quite some time and not likely to come down in the near future due to inflationary pressure , many banks will increase the rates by one percentage point from July 1, 2008.

CMD of Union Bank MV Nair said the present round of increase in the policy rates will force them to raise their prime lending rates by 50 basis points to 13.25% from the present 12.75%.

He said the present tight money policy pursued by RBI to contain inflation will affect more those banks which normally borrow in the overnight money market to meet their lending requirements. Because of rise in the repo rate by 50 basis points to 8.50%, the interest rates on short term funds has gone up immediately.

In fact, many banks had not increased their lending rates, when RBI had increased its repo rate any cash reserve ratio in April.

A senior banker said that banks had absorbed them thinking that interest rate will come down. But as inflationary pressure aggravated, and RBI tighten the money supply further, he said, banks have no choice but to increase the rates.

According to a senior banker, the cash reserve ratio has been increased by 1.25 percentage point in the last three months to 8.75%. This alone has increased the cost on funds by 45 basis points. Besides this, because of repo rate hike, banks will be forced to hike the rate by 50 to 100 basis points.

The worst hit by this would be the home loan borrowers. A senior bank official said that as the rates are increasing, default rates would also go up.

This will increase the cost of funds, forcing banks to further hike the rate. At the same time, as interest rates are going up, the value of the government securities will also fall. To minimize these effects, CMD of a bank, who does not want to be quoted, said that banks will have no choice to lend at much higher than the prime lending rates, which might be increased by only 50 basis points.
That means, the difference between real rates that a customer will have to pay will be higher than the rate that the bank will fix for its best of the customers.

As shown in the chart, increase in the interest rate by 100 basis points on a 20-year loan leads to increase in EMI by almost 7%. On the other consumer loan also, the increase in the rate will be higher than one percentage points.

At the same time, RBI is likely to sell dollar to contain the depreciation of rupee. The rupee's depreciation has led to increase in the import cost, which has also contributed in the rise in the domestic prices. But, this will further tighten the liquidity. A senior banker said that such majors will only worsen the condition for borrowers.

Bill Gates to step down as chairman of Microsoft today

The world’s richest man, Bill Gates, is all set to step down as the chairman of Microsoft on Friday.

The God of geeks, an inspiration to many a wannabe millionaires and a shrewd businessman, Mr Gates would always be remembered for the huge contribution that Microsoft did for spreading the IT revolution in the world.

Over 90% of the world’s desktops work on Microsoft Windows and almost all of the world’s word processing documents, spreadsheets, are created on Microsoft software.

All started in Albuquerque, US, in 1975, when Bill Gates dropped out of Harvard and started ‘Microsoft’ with buddy Paul Allen at age 20. Paul was two years older to Bill. Both wrote the BASIC programming language for the Altair 8800 microcomputer. Within three years, Bill and Paul earned their first million dollars via sales of BASIC and two other software.

Bill Gates became CEO for Microsoft in 1975, a title he handed over to his Harvard mate Steve Ballmer in 2000. Bill Gates went on to become the richest man in America with a fortune of $9.35 billion in 1994. He married Melinda French from Dallas, the same year.

The next year he was crowned the world’s richest man with a worth of over $12.9 billion. He visited India in 2005, and announced an $1.7-billion investment.

In June 2006, he announced his intention to step down as Microsoft chairman by July 2008. Mr Gates expressed his intention to focus more on Global Health & Development Program run by the Bill & Melinda Gates Foundation. The foundation has an endowment of $34.6 billion. The donations from the foundation each year amount to over $1.5 billion at minimum, largely from Bill Gates’ own fortune.

Even though Microsoft’s monopoly may erode over the years as open source and web technologies gain momentum, nobody can forget the enormous contribution of Bill Gates to the world both in terms of a software revolution and his philanthropic efforts.

Quake in Andaman, jolts felt in Chennai

An earthquake measuring 6.7 on the Richter scale shook the Andaman and Nicobar Islands and parts of Chennai on Friday triggering panic among residents.

With its epicentre near Andaman and Nicobar Islands, the quake occurring at around 1700 hrs lasted a few seconds and rocked several parts of Chennai including the busy T Nagar, Nugambakkam and Koyambedu areas, Met office sources and the police said.

Employees working in a multi-storied building in Venkatnarayana Road in T Nagar rushed out of office as they experienced the tremor, police said.

However, there is no immediate report about any loss of life or property due to the quake.

Ash-Abhi not so happily married?

Be it award functions, film promotions or press conferences, the gorgeous Bachchan bahu is evidently quite happy whenever seen with family. Recently, Ashs usual over the top behaviour became a cause for embarrassment for hubby Abhishek. The couple lately had a heated argument, on their way to attend the IIFA ceremony, when the actress was getting a little too loud and Abhi wanted her to just be soft in her expression.

As the couple was proceeding to attend the award function, with actor Kunal Kapoor, Ash got too loud and vocal, while Abhishek subtly asked her to keep her voice low. Understanding the need of the situation, Kunal promptly left the place in order to stay out of their marital spat.

However, reports reveal that the actress in spite of being warned by hubby couldn't maintain a low profile. Abhishek then took wife to the hotel lobby, made her sit peacefully and had a word with her to make himself clearly understood.

According to sources, things did not work out for them and Ash continued auguring at the top of her voice, and which is when Abhi completely lost his temper and ended up telling his personal security guards to escort his wife to her room.

Now, does that imply that the couple has finally outgrown the so very happy-happy beat of their marriage? We definitely hope not.