Leader of the Opposition Lal Krishna Advani has climbed one more step in fulfilling his ambition of becoming the Prime Minister when National Democratic Alliance endorsed his candidature. Earlier, the BJP had announced its intention to fight the next Lok Sabha elections under the leadership of the former Deputy Prime Minister. The NDA decision disproves fears in certain circles that the endorsement of his candidature would not be a smooth affair. With health preventing Mr. Atal Bihari Vajpayee from playing an active role in politics, BJP leaders did not have much of a choice when they opted for Mr. Advani. On his part, Mr. Advani also played his cards well by persuading his party to announce that he would be the prime ministerial, candidate just before the results in Gujarat were announced. It was a clever move to ward off any possible threat from Chief Minister Narendra Modi. It was Mr. Advani’s calculated attempt to make himself more ‘secular’ and thereby more endearing to the NDA allies that he made that statement about Mohammed Ali Jinnah while on a visit to Pakistan. He seems to have managed to win back the confidence of those sections of the Sangh Parivar who were upset with him on the Jinnah issue. Even so, he has a long way to go before achieving his ambition. It is true that the string of assembly elections in the recent past have been favourable to the BJP. But before the next general elections are due, Madhya Pradesh and Rajasthan – ruled by the BJP – will go to the polls. Rajasthan – ruled by the BJP – will go to the polls. By-election results from these states do not suggest that the voters are happy with these governments. Equally important, the BJP continues to be in bad shape in Uttar Pradesh which accounts for the largest number of seats in the Lok Sabha. The NDA is no longer as cohesive and large as it used to be when Mr. Vajpayee was its leader. Of course, its decision on Mr. Advani provides clarity to the political situation. This will force the Congress to announce its own candidate for the post of prime minister. Last time it contested the elections without any such candidate. It was Mrs. Sonia Gandhi who nominated Dr. Manmohan Singh for the post. It remains to be seen whether the party [...]
Archive for January 28th, 2008
WADING THE BUSY SEASON
January 28th, 2008
krishna The year has begun on a somewhat strange note for our stock market. It is neither running away nor breaking down, simply gyrating in a range. Sessions have been volatile, mid, and small-caps have sold off while large caps have taken turns to hold the Nifty up. Almost running to stand still. The Nifty seems in a broad range of 6,100-6,350 while the broader market skims off some of its recent excesses. Wire money online to India with Xoom.com for as low as $4.99. It is important to understand the backdrop for such a market. There is an overload of material information for the market at this point, information that is pulling it in all directions. Globally, the cues from the US are disastrous, yet the expectations from the US Fed have moved swiftly from 25 to 50 and now even a 75 basis point cut in January. The crashing Dow may be affecting sentiment may but the prospect of much more liquidity coming this way is balancing that negative trigger. Take the primary market. While the large IPOs of January and their runaway grey market quotes are bolstering investor sentiment, the fact that they have sucked away a lot of money from the secondary market is clearly visible in the stress on small-caps. Technically, the futures market is extended but the carrot of a good budget is keeping trader sentiment afloat. There is some discomfort among professional investors about the gay abandon with which lofty valuations are being ascribed to dreams and Excel sheets but a new breed of retail investors is neutralising this skepticism with the weight of money. Finally, there is the earnings season. The market has one eye on all these varied pulls and pressures even as it focuses on earnings that are tumbling out every day. Add to this global commodity swings, the dollar, local interest rate expectations and one can begin to understand why the market is not making a decisive dart in either direction. The triggers are mixed and finely balanced, there is almost a violent equilibrium almost a violent equilibrium that has been struck out. Also, the valuation aspect is important. Having reached where we are with stock prices, it may be becoming a struggle to climb to even higher PE platforms without the crutch of delivered earnings growth, probably the reason why the market could be pausing to see [...]
VIOLENCE IN KENYA-WHAT TO DO?
January 28th, 2008
krishna Violence, political or otherwise, is part of life in Kenya. The irony is that Kenya is also one of the mature democracies in Africa: Multiparty elections are held regularly and even though politics is based on tribal divisions, the judiciary, Parliament and the vibrant Press apply correctives on the executive. With tolerance of corruption and violence as part of society, Kenya has found its own brand of democracy. The current tribal warfare on account of alleged rigging of elections had begun long before the polls were held. Even the meetings held for determining party candidates were marred by bloodshed. Having had to fight incessantly with wild animals for survival, physical battle for political survival is a natural extension of Kenyan life. Human life is heavily discounted there. Political calculations, rather than fear of further loss of human life, will bring about a compromise in the end. As the High Commissioner of India to Kenya, Mr. T. P. Sreenivasan happened to be with the Kenyan Foreign Minister in his office on the morning after the severe beating of a handicapped opposition leader. The newspapers that morning had carried graphic pictures of the incident. He could not but mention the incident to the minister. Mr. T. P. Sreenivasan thought that he would describe the incident as an unfortunate one, which was being exaggerated by the Press. He shocked Mr. T. P. Sreenivasan when he said: “He will be killed one of these days!” He added in good measure that violence is part of politics in Kenya and that people joined politics with full knowledge of the t attendant risks. He offered no apology, not even regret. Kenyan elections of 1995 left Mr. T. P. Sreenivasan with broken limbs and ribs as the opposition to President Moi thought that the Indians in Kenya should be given a message that they were not safe without the patronage of the opposition. Mr. T. P. Sreenivasan had ignored messages that Indians should make financial contributions to the opposition parties also, not just to those in power. The best way to demonstrate this was to hit the Indian High Commissioner himself. After three assailants broke into their home and attacked his wife and Mr. T. P. Sreenivasan, President Moi said publicly that the Indian High Commissioner was the victim of political violence in the country. The opposition said promptly that Moi had done it to discredit [...]
DO WE HAVE A THIRD ALTERNATIVE?
January 28th, 2008
Tejinder The CPI (M)’s wish to form a third alternative at the Centre – minus the Congress and the BJP – is an effort aimed at preserving its separate identity. This effort, however, could end up strengthening the BJP and its allies because the public still sees the CPI (M) as a sympathiser of the Congress and the UPA, even though the Left party has opposed the Indo-US nuclear deal and some other decisions taken by the UPA. Prakash Karat, the CPI (M)’s General. Secretary; is desperate to convey the impression that his party has never supported the UPA but agreed to do so on the promise of a common minimum programme and also because it wanted to isolate the communal forces led by the BJP. But he and his colleagues know that it is important to maintain the CPI (M)’s ideological profile in order to motivate its cadres. Karat is accustomed to taking the high moral ground on issues and his detractors have often accused him of pursuing an agenda that ignores the practical realities of politics. The CPI (M) knows that the general elections may be round the corner and if it persists with its threat of withdrawing its support from the UPA on the nuclear issue, it will find it very difficult to align itself with either the UPA or the NDA after the poll results are out. Therefore, it has little choice – but to float the idea of a third alternative, comprising regional parties. In fact, apart from qualifying as a national party by down by the Election Commission, the CPI (M) has also been reduced to a regional outfit. It has limited presence outside West Bengal, Kerala and Tripura. Its objective is to cobble up an alliance of the TDP, DMK, Samajwadi Party and National Conference, with the hope that some others like Nitish Kumar’s Janata Dal, Sharad Pawar’s NCP and Ramvilas Paswan’s Janshakti Party would join it. But the question is whether such an alliance would provide the third alternative, which in electoral terms has never worked out in Indian politics as long-term option. Post-poll alliances are always fragile as V.P. Singh, H.D. Deve Gowda, I.K. Gujral and A.B. Vajpayee (during his 13-day stint) had discovered. It is unlikely that some of the parties that the CPI (M) maybe eyeing for a third alternative may join me hands before the elections are [...]
LET’S BEGIN A NEW WEEK
January 28th, 2008
Tejinder Last week proved as the most eventful week on the stock markets. What started as a bloodbath on the street ended with a solid recovery? The markets witnessed unprecedented volatility last week, with losses and recoveries of a 1,000 points becoming par for the course. The magnitude of the volatility could be gauged from the fact that the last week was witness to both the highest ever single-day loss as well as single-day gain on an absolute basis on the Sensex. Bears in the end triumphed, pulling the Sensex (18,361) down by a little more than 3 per cent and the Nifty (5,383) down by nearly 6 per cent. Wire money online to India with Xoom.com for as low as $4.99. Credit crisis in the US and fears of a US recession caused bloodbath on the domestic bourses at the onset of week with share prices falling like nine pins. Margin calls created havoc on the bourses in causing a steep decline in share prices that was initially triggered by a setback in global markets and selling by foreign institutional investors. Reserve Bank’s review of its monetary policy is due this Tuesday, which would set the tone for markets. After a surprise 75 basis point cut in Fed rate by the US central bank, market men expect a 25 basis point cut in repo rate by the RBI. Though the corporate results have been in line with expectation, any adverse news from overseas may further dampen the sentiment. OnMobile provides value added services (VAS) in the telecommunications space and software products in India with an expanding international presence, particularly in the emerging markets in Asia. It has a broad range of applications delivered by its carrier customers (telecom service providers) to their end-user subscribers. These products include ring-back tones, voice portals, ringtone downloads, subscription manager, contests, music messaging, on-device client software, mobile radio, dynamic voicemail, voice SMS, and missed call alerts. OnMobile was incorporated as Onscan Technologies India Pvt. Ltd. in September 2000 by its promoter OnMobile Systems Inc (OMSI) that is a startup firm of Infosys to develop telecommunications software platforms and applications or the mobile telecommunications industry. Subsequently, it was renamed as OnMobile Global Ltd (OMGL) in August 2007. Its customers include the major telecommunications carriers or operators in India such as Bharti Airtel, BSNL, Idea, R-com, Tata Teleservices and Vodafone Essar. Due to competitive [...]
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