panch-tattva talk…bharti and mtn


The idea of the merger of Bharti Telecom and MTN (of South Africa) is not understood by me for nobody is spelling out what benefits will flow to shareholders and what benefits will be flow to the respective companies. The politicking is further making the matter unworthy of being carried forward. As far as the Indian promoter group is concerned, it seems they have also come to enact it to save their company from the possible eventual rubs on the wrong side. The attempt at going outrightly international by every group that has aquired substantial size of operation is due to this very factor for the opportunities of investments and growth abound in India itself. Earlier Tatas, Birlas and a few others tried offshoring part of their base but suffered in process.

If there is so much love for each other, the Bharti and MTN many keep buying into each other in a creeping way, to the extent allowable by law. Why try for complicated excercise when the full benefits of scheme are difficult to understand and the there is allround skepticism. Further, Indian managements have still not aquired the status and clout which may be needed in case some developments affecting their interest on foeign soils take place and have to be dealt with.

Reliance has sold its own shares, held under a trust, worth Rs 3188 crs at a price of Rs2125/share. May be ‘reliance is also raising cash for aquisitions abroad. The company has cash kitty of Rs 22080 crs and debt of Rs 51840 crs. The company has already made known that it wants to hedge risks of investing in domestic market. The row over the gas has created discomfort for it. The dispute settlement machanism should be quick and efficient in India, it want to be a preferred destination for the world’s floating money.

Banks would be able to lend under ‘repo’ deals against ‘AA’ rated corporate bonds. Such bonds should not have less than one year till its maturity at the time of deal. There would be a bar on selling the security before the expiry of ‘repo’ period.

Rupee has become stronger at 48.11 against the dollar and the IT scrips have firmed up in line with market. There may be correction in IT scrips today.

The inflation number is now postive for the first time in 13 weeks. The former RBI Governor Mr Rangarajan thinks that the interest rates may firm up. I differ with him.

The Nifty closed modestly up at 4962 yesterday and may be that its rally is stalled for the time being. The Asian cues are no positive. If and when the Nifty nose dives in a single, please take it as an opportunity to come back in market with cash because the medium term is promising and if any threat is perceived in long run, it is a some distant point.


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