Reliance Industries to Acquire Stake in Infotel- Pan India BWA Winner

Reliance Industries Limited (RIL) today announced that it has entered into an agreement to acquire a substantial stake in Infotel Broadband Services (P) Ltd, which has emerged as a successful bidder in all the 22 circles (Pan India) of the auction for Broadband Wireless Access (BWA) Spectrum conducted by the DoT.

RIL said that it will invest about Rs 4,800 crore by way of subscription to fresh equity capital at par to be issued by Infotel Broadband. Post this investment, RIL will own 95% of the equity and Infotel Broadband will be a subsidiary of Reliance Industries Limited.

RIL claims that the broadband opportunity as a new frontier of knowledge economy in which it can take a leadership position and provide India with an opportunity to be in the forefront among the countries providing world-class 4G network and services. A single 20 MHz TDD spectrum when used with LTE (Long Term Evolution) has the potential of providing greater capacity when compared to existing communication infrastructure in the country.

India has witnessed substantial growth in the mobile subscriber base over the last decade. This provides a ready platform for offering various data services which is currently at a very nascent stage. Diverse data services and rich contents have significantly boosted data traffic in developed and other emerging markets. Data communication volume per user has been growing exponentially in the last few years, with the spread of advanced services, and a richer line-up of contents.

Recession

Now there is chance of double dip recession. Eurozone is already in crisis. Several US States are also feared to face same problem in coming days. Economic uncertainty will be a global problem now. Formerly companies used to go bankrupt now will be the countries.

Except gold, all other commodities may be weak in this scenario. Some circumstances are similar to those of 1930s depression time. At that time US government tightened credit policy, the governments of different countries tried to solve the problem by throwing money. It surely will have inflationary consequences, but when and how dip is a big question.

There are few countries where big populations, namely China and India, transforming to consumer societies and creating good demand for metals and minerals which supports the demand and metal prices else which would have been very low in current recession. There are indications that in China , there have been over-speculation for stocks and Copper, and demand only from India may not be sufficient to hold the price.

Recent market recovery is delicate and will fall again and again when the markets get a small reason. 

Though the fundamentals of Gold are not so strong, investors will tend to buy Gold in this situation, which will keep prices of Gold higher. But if the tendency gets changed and people shift to silver, gold price may not sustain. Base metals will be weaker and silver also as it is used in industries may face less demand. Also coal, Iron ore and steel also will be weaker, too.

All these will be true only if there is a dip recession.

RIL plunges 20% in freak trade

The BSE index plunged over 600 points, when shares of the most valued firm RIL tanked 20 per cent due to a faux pas over ICICI Bank share quotation. Shares of RIL finally settled at Rs 1,011.55, down 3.21 per cent on the Bombay Stock Exchange. According to marketmen, the freak sale happened after some trader off-loaded the company's stocks at an unbelievable level of Rs 840.55 against yesterday's close of Rs 1,045.05. According to marketmen, a trader sold about 62,000 shares of RIL at Rs 840.55 per share, while the sale order was meant for ICICI Bank. The transaction pulled RIL down to its 52-week low. Looks like there has been a freak trade, Bombay Stock Exchange spokesperson Kalyan Bose said. However, trade in National Stock Exchange was free of this fluctuation. RIL closed at Rs 1,009.80, down 3.42 per cent on NSE. Since RIL carries the most weight among the Sensex stocks, the index had fallen over 600 points at one point of time. The BSE benchmark index today settled down 372.60 points or 2.20 per cent at 16,572.03.

Emirates Palace unveils gold dispensing ATM

Emirates Palace has raised the luxury stakes in the Gulf even higher by unveiling an ATM that dispenses gold.

The machine, which monitors the price of gold minute-by minute, offers small bars that weight up to 10 grammes engraved with the Emirates Palace logo, as well as a variety of coins.

Thomas Giessler, the inventor of the Gold to Go machine, chose Abu Dhabi because of its luxury atmosphere, and hopes it will tie in nicely with the region’s traditional ties in gold commerce.

“A gold machine should be made of gold,” said Thomas Geissler, the chief executive of Ex Oriente Lux AG. “This is now at a hotel made out of gold. It is the perfect place.”

Six coins of differing weights come engraved with a maple leaf, kangaroo and Krugerrand, symbols of the gold-producing nations South Africa, Canada and Australia.

Emirates Palace Hotel general manager Hans Olbertz said: “We seized upon this idea and, as one of the most exclusive hotels in the world, we wanted the Emirates Palace to play a pioneering role and be the first hotel in the world to offer its guests this golden service.”

The idea is aimed at both a souvenir and an investment. Gold is still one of the most sustainable forms of investment and is currently as a record high price due to volatility in the current global economic market.

The machine is armed with various security measures, including anti-money laundering software. If the machine develops a fault, it will automatically shut down.
A website that updates the price of gold every 10 seconds transmits the information to the ATM, which updates its rates every 10 minutes.

Emirates Palace is considered one of the most opulent hotels in the world. It picked up seven of the most coveted honours at last week’s prestigious World Travel Awards at a glittering gala held at The Address Dubai Marina.

Emirates Palace won “Middle East ‘s Leading Meetings & Conference Hotel”, “Middle East’s Leading Meetings ‘&’ Conference Resort 2010”, “UAE’s Leading Hotel”, “Abu Dhabi ‘s Leading Beach Resort 2010”, “Abu Dhabi ‘s Leading Hotel”, “Abu Dhabi ‘s Leading Meetings ‘&’ Conference Hotel” and “Abu Dhabi ‘s Leading Resort”

Commenting on the achievement, Janet Abrahams, Director of Sales and Marketing, Emirates Palace, said: ‘‘We are extremely delighted to win these high-class coveted titles in one strike which underpin our leadership and excellence in the region’s hospitality industry.

‘‘These prizes come as a vote of confidence in our hotel powerful brand,’‘she said.

According to her, the Emirates Palace has maintained its leading position despite the tremendous challenges the world tourism and travel industry has been experiencing over the past two years.

The World Travel Awards, now in its 17th year and the global travel and tourism industry equivalent of the Oscars, is helping to drive up standards of customer service and business excellence throughout the world.

Glittering Sunday...NSE, BSE to trade Gold ETF on May 16

The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) will hold a special session on Sunday, May 16, 2010 to trade Gold ETF on account of Akshaya Tritiya.

As Akshaya Tritiya is considered an auspicious day for the buying and wearing of gold. The National Stock Exchange has decided to hold a glittering session of trade on Sunday May 16, 2010 from 9:00am to 3:30pm (IST).

Globally, the Exchange traded funds (ETF) market is an important vehicle through which retail investors gain access to a broad range of assets. The ETF market in India is poised for strong growth driven by two critical growth drivers - new products and new investors. Compared to other geographies where ETFs are popular, India is unique in the sense that the ETF market till date has been driven by gold ETFs, both in terms of number of instruments and AUM (assets under management). Given the economic and cultural importance of gold to the average Indian family, gold ETFs will continue to serve as the catalyst to attract more retail investors to the ETF segment.

World Gold Council is all geared up for the most auspicious day in the Hindu calendar, ‘Akshaya Tritiya’ which falls on May 16th 2010 this year. The festival is all about prosperity and it is believed that buying and wearing new gold jewellery on Akshaya Tritiya brings luck and success to an individual and his family. As Akshaya Tritiya is considered an auspicious day for the buying and wearing of gold, there will be several promotions and offers around the festival time at leading jewellery retailers across the county

3G Auction...All-India price at Rs113.27bn

The Government is all set to pocket a cool Rs500bn from the auction of third-generation (3G) mobile spectrum if one includes the matching bids from state-owned Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL). At Thursday's close, the Centre is expected to garner about Rs456.90bn from 3G auction alone as against projection of Rs350bn from the combined 3G-BWA auction. So, quite clearly, the final figure from the 3G-BWA auction process could well be somewhere around Rs600bn. "The revenue from 3G auction alone may cross Rs400bn. Revenues from 3G and Broadband Wireless Access (BWA) spectrum put together may touch Rs500-550bn," Telecom Minister A Raja was quoted as saying last week.

Meanwhile, bids for one set of pan-India 3G mobile licences reached Rs113.27bn, more than double the base price of Rs35bn, on the 23rd day of the auction. As per the details given by the Department of Telecommunications (DoT), four more Clock Rounds were completed on Thursday. With this, the total number of Clock Rounds completed to date has come to 132. The 3G auction started on April 9. BWA bidding will start two days after the 3G auction concludes.

Proceeds from the two auctions would help the Government bridge the fiscal deficit. India's fiscal deficit may come down to 5.2% of GDP from the estimated 5.5% of GDP. The Government has pegged the fiscal deficit at Rs3.81 lakh crores for FY11. Mumbai and Delhi continued to be among the most sought-after circles with highest bids of Rs19.87bn and Rs19.20bn, respectively. The reserve price for both the Mega Metro circles is Rs3.2bn. Maharashtra's bid stood at Rs10.62bn while that for Andhra Pradesh was at Rs9.79bn, and Gujarat at Rs9.45bn.

According to the DoT, the bidding activity requirement was set at 100% on Thursday. The 3G auction would continue till the available number of slots is equal to number of bidders in all 22 circles simultaneously. Out of a total of 22 circles for the 3G spectrum, 17 have three slots, while in rest of the five circles, four blocks of spectrum are available. The successful bidders would be allotted air waves in September after the spectrum is vacated by the defence forces. The BWA auction is also expected to be equally competitive, as 11 players are in the fray for just two slots for each circle, while the reserve price for pan-India licence is Rs17.5bn.