International Crude Oil Price of Indian Basket Decreases

The international crude oil price for Indian Basket as computed/published today by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas decreases to US$ 103.47/barrel (bbl) on 30.05.2012. This was lower than US$ 105.84 /bbl, on the previous trading day’s figures of 29.05.2012.



In rupee terms also, the crude oil price decreased to Rs 5795.35 on 30.5.2012 from Rs 5882.59 per bbl on 29.05.2012. This was with rupee-dollar exchange rate on 30.5.2012 at Rs 56.01/US$ against Rs 55.58//US$ on 29.05.2012.



The table below gives details in this regard:

Particulars	Unit	Price on 30 May, 2012 (previous trading day i.e. 29.5.2012)	Last Fortnight May 01-15, 2012 (previous fortnight April 16-30, 2012)
Crude Oil (Indian Basket)	($/bbl)	103.47    (105.84)	111.15     (116.20)
	(Rs/bbl)	5795.35      (5882.59)	5957.89  (6063.32)
Exchange Rate	(Rs/$)	56.01          (55.58)	53.41      (52.18)

India opens its debt market to foreign retail investors

Foreign retail investors can invest in Indian corporate bonds as well as debt schemes for up to USD 1 billion, in addition to the existing USD 20 billion limit, the head of capital markets division in the finance ministry said.


It would take about 6 to 18 months for the new capital flows into Indian debt to pick up

Hedge funds go short on Bankia

A rush by hedge funds to go short of troubled Bankia in recent months has been stymied by a shortage of stock, limiting their gains from the Spanish bank’s collapsing share price. Shortsellers borrow shares they expect to drop in price and then sell them in the market. If the bet works, they buy them back when the price has dropped, return them to their owners, and pocket the difference.




A little over 3.7 percent of Bankia's stock was out on loan as of May 25, up from 3.3 percent in late March, according to data from securities lending research house Data Explorers.



The percentage of shares available to short-sellers to borrow depends on the number of owners willing to lend their shares out for a fee, usually institutional fund managers.



As of May 25, 89 percent of Bankia stock which can be borrowed was out on loan - a key gauge of short-selling interest - up from 61 percent in late March.



In Bankia's case, the high rate means funds face being caught out by a so-called "short squeeze" - when shortsellers try to close their positions by buying back the stock because of a rising share price end up pushing the price even higher.




Bankia shares plunged to record lows on Monday after parent company BFA was forced to ask for 19 billion euros ($24 billion) in government aid to cover possible losses.



It has now lost 64 percent of its value since its initial public offering in July.

European regulators have banned shortselling of bank shares on occasion to try to reduce volatility and repair confidence. Investors claimed the bans often increase erratic trading rather than lessen it.
European regulators have banned shortselling of bank shares on occasion to try to reduce volatility and repair confidence. Investors claimed the bans often increase erratic trading rather than lessen it.

Dewey files for chapter 11 in record US law firm collapse

The crippled law firm Dewey & Leboeuf LLP filed for chapter 11 bankruptcy protection Monday night and will seek approval to liquidate its business after failing to find a merger partner, marking the biggest collapse of a law firm in U.S. history.




Once one of the largest law firms in the U.S., Dewey has been hit by the loss of the vast majority of its roughly 300 partners to other firms amid concerns about compensation and a heavy debt load.



Dewey had warned employees earlier this month of the possibility the firm may shut down, and a person familiar with the matter had told Reuters that the firm was considering a bankruptcy filing.

"Dewey's failure is rocking the industry in the sense that most firms are saying to themselves, if Dewey could go down, could we?" Kent Zimmermann, a legal consultant at the Zeughauser Group, said in an email Monday night.




Dewey said in a filing it had decided to wind down its business following unsuccessful negotiations with other law firms to strike a deal. It said it would ask about 90 employees to remain on staff to assist in the liquidation, which it expects to be completed in the next few months.



Negative economic conditions, along with the firm's partnership compensation arrangements, created a situation where its cash flow was insufficient to cover capital expenses and full compensation expectations, Dewey said.



"During the first quarter of 2012, the firm was confronted with liquidity constraints that led to the precipitous resignation of over 160 of the firm's 300 partners by May 11," the New-York based firm said.



Dewey listed liabilities in the range of $100 million to $500 million, according to the filing. It had already terminated 433 of its 533 New York employees earlier this month, according to the state's labor department.



MONTHS OF TURBULENCE



The firm's collapse is expected to be the subject of years of court proceedings, and a number of former partners have already retained lawyers to represent them.



Monday's filing follows months of turbulence, as wave after wave of partner defections shattered the high-profile firm from within. In April, the Manhattan District Attorney's office launched a criminal probe of former firm chairman Steven Davis. He has denied any wrongdoing.



The result of a 2007 merger between Dewey Ballantine and LeBoeuf, Lamb, Green & MacRae, Dewey & LeBoeuf had about 1,450 attorneys at its peak, according to The National Law Journal.



But the firm was eventually undone by a combination of the economic downturn, excessive compensation and governance problems, according to former partners and others in the industry. In particular, Dewey's management promised millions in packages to about 100 partners, according to the court filing, leaving it strapped for cash when revenues fell during the recession.



Dewey has retained Joff Mitchell of Zolfo Cooper LLC as Chief Restructuring Officer and Albert Togut of Togut Segal & Segal LLP as bankruptcy counsel.



"The full extent of the partner compensation arrangements is subject of continuing investigation," Mitchell said in the filing.



Dewey is one of a handful of major law firms to declare bankruptcy since the recession that began in 2007. They include Coudert Brothers, Heller Ehrman and Howrey.



PENSION PLANS



As of the petition date, Dewey's assets consisted of about $13 million in cash, accounts receivable of about $255 million, various pieces of artwork, and about $11 million invested in an insurance consortium, among other potential claims, according to the filing.



In the interim, Dewey said the firm will be operating on a budget to be determined by the court. The firm has petitioned the court for permission to continue to pay salaries, benefits and paid time-off for current employees.



Dewey said that the 401(k) plans and qualified pension plans of its current and former employees and partners are held in trust and cannot be accessed by the firm's creditors.



The U.S. Pension Benefit Guaranty Corporation filed suit this month to take control of three of the firm's pension plans, which the agency said were underfunded by $80 million.


The London and Paris offices of the firm are operated through a separately incorporated UK entity, which was placed into administration on Monday.



Administration is a UK legal process under court supervision, broadly similar to chapter 11. The UK partnership is following broadly the same approach as that of Dewey in the United States, the firm said.



The firm had two dozen offices worldwide, including in Washington, Los Angeles and London. Some of the firm’s biggest clients included General Motors Corp , eBay , Novartis , Ambac and Berkshire Hathaway Reinsurance Division.



The case is Dewey & LeBoeuf LLP, Case No. 12-12321, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

JPMorgan dips into cookie jar to offset "London Whale" losses

JPMorgan Chase & Co has sold an estimated $25 billion of profitable securities in an effort to prop up earnings after suffering trading losses tied to the bank's now-infamous "London Whale," compounding the cost of those trades.



CEO Jamie Dimon earlier this month said the bank sold corporate bonds and other securities, pocketing $1 billion in gains that will help offset more than $2 billion in losses. As a result, the bank will not have to report as big an earnings hit for the second quarter.



The sales of profitable securities from elsewhere in the bank's investment portfolio will increase its costs by triggering taxes on the gains and by eliminating future earnings from the securities.



Gains from the sales could provide about 16 cents a share of earnings, about one-fifth of the bank's second-quarter profit, analysts said. But rather than creating new value for investors, the transactions merely shift gains in securities from one part of the company's financial statements to another.



"They really made two stupid decisions," said Lynn Turner, a consultant and former chief accountant of the Securities and Exchange Commission. The first was taking risks with derivatives that they did not understand, Turner said.



"The second is selling assets with high income that they can't replace," Turner added. In a low interest-rate environment, the bank will struggle to generate as much income with the cash it received from selling the securities, he said.



Dimon first disclosed the sales on May 10 when he announced the derivatives losses generated from the bank's London office and trader Bruno Iksil -- dubbed the "London Whale" in credit markets due to the size of the trading positions he took. Dimon noted that the bank has another $8 billion of profit it could gain by selling an array of debt securities.



It remains unclear exactly when the bank sold the securities, and the bank has not detailed the value of securities it sold. Given the drawbacks of the sales, it also is unclear how many more the bank will sell to bolster second-quarter profits. To be sure, the bank may have additional reasons for making the sales, and the sales do not violate laws nor are they likely to hurt the bank’s stability.



A JPMorgan spokeswoman declined to comment beyond the company's public statements.





$380 MILLION TAX BILL



However, based on disclosures that show the bank has historically realized less than a 4 percent gain from selling these kinds of securities, JPMorgan would have to sell $25 billion in securities to generate $1 billion in gains, according to a Reuters analysis of the bank's practices.



Taxes on the gains, if calculated at the 38 percent tax rate that JPMorgan uses to illustrate its business to analysts, would mean a $380 million cost to realize the gains. That would leave a net gain to earnings of $620 million, or 16 cents a share.



Before the sale, the gains would have existed on the bank's books as so-called paper profits, and would have been included on its balance sheet. But when the bank sold and realized the gains, they moved to its income statement as profit.



Paul Miller, an analyst at FBR Capital Markets, said the bank should skip the asset sales and “just take the pain” of reporting lower profits.



Dimon, too, has said he is reluctant to cash in good investments. He highlighted the tax issues in selling these securities when he spoke to analysts May 10.



"We can take some of those gains and we can take them to offset this loss," he said. "But usually it's tax inefficient, so we're very careful about taking gains."



Yet the bank is under pressure to show strong profits. Its stock has fallen 18 percent since the day before it disclosed the losses. It closed Friday at $33.50.



The bank currently is expected to report earnings of 90 cents a share for the second quarter, according to analysts surveyed by Thomson Reuters I/B/E/S. That compares with $1.24 a share before the derivatives debacle was disclosed and $1.27 a share that the bank reported a year earlier.





LOSSES COULD INCREASE



Dimon has not said who at the bank decided to sell the securities. Nor has he said if the decision was made before he knew that the derivatives losses could top $3 billion and before he told analysts on April 13 that reports of trouble with derivatives trades were a "tempest in a teapot."



Meanwhile, the bank's losses could grow, which could increase pressure on the bank to continue securities sales. Some analysts have said the total losses could exceed $5 billion, since the credit derivative markets in which the trades were made are thinly traded and current prices are not favorable to JPMorgan.



The pool from which the securities were sold included, as of March 31, corporate debt securities with an average yield of 3.15 percent and mortgage-backed securities yielding 3.41 percent, according to a company filing. Using the cash to buy back similar securities would not produce yields as high, analysts said.



The financial industry has gone through periods in the past when banks cashed out good assets to cushion losses, said former SEC Chief Accountant Turner. It happened during the U.S. savings and loan crisis in the 1980s, abated during a period of tougher regulatory scrutiny and fewer losses, and then came back during the latest financial crisis.



But the costs are significant. In statements about the latest losses, Dimon has been careful to emphasize the disadvantage of paying more taxes, said Chris Kotowski, an analyst at Oppenheimer & Co.



"I think he was trying to tell you, 'Don't expect us to offset all of these losses,'" Kotowski said.

SEC eyes Nasdaq compliance in Facebook debacle

U.S. securities regulators are looking into whether Nasdaq violated any technical exchange rules when it botched Facebook Inc's market debut last week, according to people familiar with the matter.



The review of potential technical violations is part of the Securities and Exchange Commission's broader look at how Nasdaq handled its part of the initial public offering, including its decision to proceed with trading despite glitches, these people said. The SEC is also reviewing Nasdaq's communications with market participants, one of those people added.



While the violation of technical exchange rules may be minor compared to larger issues surrounding the IPO, the SEC can sometimes more easily bring enforcement cases against exchanges by using technical rule violations as a hook.



"There are probably numerous rule violations that occurred,” said one of the people familiar with the matter.



A spokeswoman for Nasdaq, part of Nasdaq OMX Group Inc , declined to comment.



Federal securities laws require the rules governing exchanges to be transparent and disclosed to the public. A violation can occur if an exchange decides to change it rules or act contrary to its rules without first seeking approval from the SEC.



The SEC has been looking into what happened on May 18 as Nasdaq grappled with problems over Facebook's initial public trading. In an addition to a 30-minute delay in the market debut, there was a 2-1/2 hour period in which many brokers were in the dark about whether their orders translated into trades.



The problems with the Facebook launch, the biggest ever in terms of volume, has been an embarrassment for Nasdaq, which is now facing lawsuits from brokerages that suffered losses that they claim stem from the exchange's technology woes. Four of Wall Street's major market makers expect their losses to be around $115 million. [ID:nL1E8GPGJ9]



Nasdaq has previously said it thought it had fixed all of its problems before proceeding with the IPO.



The decision by Nasdaq not to halt or cancel the market debut, despite its systems problems, is at the center of the SEC's review, these people said.



The agency is also reviewing Nasdaq's problems with its opening cross, or Facebook's first public price; the extent of which it knew about the technology problems; and how it communicated with market participants.



The SEC is not yet done reviewing the matter, and has not made any conclusions about whether there was wrongdoing.



However, there are some similarities emerging between what happened at Nasdaq and what happened with its exchange competitor Direct Edge, which was sanctioned by the SEC in October for rule violations associated with a systems outage.



Like with Nasdaq, a computer code glitch at Direct Edge ultimately led to trading errors and millions of dollars in losses.



To deal with the losses, Direct Edge's affiliated brokerage traded out of the error positions on its customers behalf through its so-called "error account," which the exchange uses to rectify problems.



That action was not allowed by the exchange's rules, and the exchange never sought the SEC's permission.



As a result of the Direct Edge case, exchanges and the SEC have worked together to develop rules that govern how such error accounts can be used.



With Nasdaq, the exchange also resorted to using its error account to trade out of error positions through a third-party broker. There may be a legal distinction between Nasdaq's attempt to fix the error that led to unmatched positions, and Direct Edge's decision to assume positions of customers.



Although Nasdaq filed a rule change with the SEC on May 10 to allow for such an action, the rule has still not been approved.



In addition, the SEC is also likely to look and see if the exchange complied with other technical rules, such as those governing its opening cross, one person said.

India facing key structural risk of stagflation

India faces numerous headwinds to growth, and the Reserve Bank of India (RBI) and the central government are at odds over economic policy. While RBI has room to stimulate the economy by cutting rates, we fear that profligate government spending will make it very hard for RBI to act decisively. Further, India remains closely tied to the problems in Europe and the continued deleveraging in the US because India's stagnant domestic savings make it reliant on capital from abroad, which could dry up.

Capital expenditure has slowed to nearly zero and savings have stagnated in India recently. As such, India has been unable to generate the efficiency gains necessary to provide growth while avoiding inflation. Inflation in India is primarily supply-side driven, as businesses are reluctant or unable to make investments in increased capacity and/or efficiency. Conditions are ripe for stagflation. Any attempt to stimulate demand will drive up inflation, without providing compensating economic growth. This is a key structural risk at this time. While the cyclical elements of inflation could recede and provide some relief (lower crude prices, for instance) these structural inflationary pressures must be addressed before India can get back on its prior growth trajectory.

It is evident that the crisis in the Eurozone has already impacted emerging markets in general and India in particular. As global investors seek safe havens (such as US Treasuries), liquidity has been removed from emerging markets. Many emerging markets, and especially India, are dependent on this liquidity to finance the current account deficit and provide capital for investment. India is particularly vulnerable due to its large current account deficit, which is financed to a large degree by shorter-term portfolio flows. As these have dried up, the equity markets have struggled and the rupee has depreciated sharply. Given abysmal government policy, limited action by RBI and high dependence on foreign capital, India has revealed itself as a weaker link than many investors suspected.


It is evident that the crisis in the Eurozone has already impacted emerging markets in general and India in particular. As global investors seek safe havens (such as US Treasuries), liquidity has been removed from emerging markets. Many emerging markets, and especially India, are dependent on this liquidity to finance the current account deficit and provide capital for investment. India is particularly vulnerable due to its large current account deficit, which is financed to a large degree by shorter-term portfolio flows. As these have dried up, the equity markets have struggled and the rupee has depreciated sharply. Given abysmal government policy, limited action by RBI and high dependence on foreign capital, India has revealed itself as a weaker link than many investors suspected.


The government has implemented a number of capital account actions that should provide some support to the rupee. However, a spike in oil prices or a continued slowdown in growth could undermine this support. Also, the recent RBI regulations forcing exporters to convert half of their dollar holdings into rupees could well backfire, as it will be perceived as a last-ditch effort to support the rupee. The rupee will also continue to be buffeted by global risk sentiment and developments in Europe.

Islamic banking : An overview

The first modern experiment with Islamic banking was undertaken in Egypt without proj


jecting an Islamic image for fear of being seen as a manifestation of Islamic ftndamentalism

that was anathema to thepolitical regime. The Pioneering effort, led by Ahmad Elnaggar, took

the form of a savings bank based on profit-sharing in the Egyptiantown of Mit Ghamr in 1963.

This experiment lasted until 1967.

Islamic banking is a banking system that is consistent with the Sharia'a (Islamic law)

and, as such, an important part of the system is the prohibition on collecting riba (intere

est or usury). The Sharia'a also prohibits trading in financial risk because this is seen as

a form of gambling, something forbidden in Islam. Another prohibition under the Sharia'a

is that Musiims cannot invest in businesses that are considered haram (forbidden or sin-

ful) such as those that sell alcohol, pork engage in gambling or produce un-Islamic

media

The central religious Precept driving the Islamic finance industry is the idea that riba is

haram. At first glance, this appears to rule out most aspects of modern finance. But although

the Qur 'an bans the creation of money, by money, it does allow money to be used for trading

tangible assets and businesses — which can then generate a profit.
 
Mudaraba Model


Under the Mudaraba model, any surplus is shared between the policyholders and the Takaful

operator. The sharing of such profit (surplus) may be in a ratio of 50:50, 60:40, 70:30 or

whatever is mutually agreed between the contracting parties. Generally, these risk sharing

arrangements allow the Takaful operator to share in the underwriting profits from operations

as well as any favourable performance returns on invested premiums.

Wakala Model

Under the Wakala model, the cooperative risk sharing occurs among participants with a

Takaful operator who earns a fee for services (as would a lawyer (Wakeel) or agent) and does

not participate or share in any underwriting profits, because these belong to the participants.

Under the Wakala model the operator may also charge a fund munagement fee and a

performance incentive fee.
 


A mixed model of Wakala and Mudaraba is the dominant model in the Middle East market and

it is widely practised by Takaful operators worldwide. Under this model the Wakala structure

is adopted for underwriting activities while the Mudaraba contract is adopted for investment

activities. Consequently the Takaful operator has two funds, one for the shareholders and the

other for participunts (policyholders). With regard to underwriting activities, the shareholders

act as the Wakeel (agent) on behalf of participants when managing their funds, whereby the

Takaful operator (shareholders) receives contributions, pays claims, and arranges Re Takaful

 and all other necessary actions related to Takafiulbusiness.

In exchange for performing these tasks, the operator charges each participant a fee known

as the Wakala fee, which is usually a percentage of the contribution paid by each participant.

On the investment side, the operator invests the surplus contributions in different Islamic

instruments based on the Mudaraba contract, whereby the operator acts as Mudarib on behalf

of participants the Rab ul Mall and capital provider(s). In order to satisfy the Sharia'a

requirements, the profit-sharing ratio is fixed and agreed upon between the two parties at the

inception of the contract.

Dubai Islamic Bank P.J.S.C. 16


Notes to the consolidated financial statements

for the year ended 31 December 2011 (continued)

 Definitions

The following terms are used in the consolidated financial statements with the meaning specified:

Murabahat

An agreement whereby the Bank sells to a customer a commodity or asset, which the Bank has purchased

and acquired based on a promise received from the customer to buy the item purchased according to

specific terms and conditions. The selling price comprises the cost of the commodity and an agreed profit

margin.

Salam finance

An agreement whereby the Bank purchases specified commodity and pays full price of a commodity in

advance, whereas the customer delivers the goods with certain specifications and certain quantity on the

agreed future date(s). i.e. purchase of commodity for deferred delivery by the customer in exchange for

upfront payment of the full purchase price by the purchaser (the Bank).

Istisna’a

An agreement between the Bank and a customer whereby the Bank would sell to the customer a

developed property according to agreed upon specifications. The Bank would develop the property either

on its own or through a subcontractor and then hand it over to the customer against an agreed price.

Ijarah

An agreement whereby the Bank (lessor) leases an asset or usufruct to the customer (lessee) according to

the customer‘s request and based on his promise to lease the asset or the usufruct for a specific period and

against certain rent installments. Ijarah could end by transferring the ownership of the asset to the lessee.

Musharaka

An agreement between the Bank and a customer contribute to a certain investment enterprise, whether

existing or new, or the ownership of a certain property either permanently or according to a diminishing

arrangement ending up with the acquisition by the customer of the full ownership. The profit is shared as

per the agreement set between both parties while the loss is shared in proportion to their shares of capital

in the enterprise.

Mudaraba

An agreement between the Bank and a third party whereby one party would provide a certain amount of

funds, which the other party (Mudarib) would then invest in a specific enterprise or activity against a

specific share in the profit. The Mudarib would bear the loss in case of default, negligence or violation of

any of the terms and conditions of the Mudaraba.

Wakala

An agreement whereby the Bank provides a certain sum of money to an agent, who invests in a Sharia

compliant manner and according to specific conditions in return for a certain fee (a lump sum of money or

a percentage of the amount invested). The agent is obliged to return the invested amount in case of

default, negligence or violation of any of the terms and conditions of the Wakala.

 Sukuk

These comprise asset backed, Sharia’a compliant trust certificates. 
 

International Crude Oil Price of Indian Basket increase

The international crude oil price for Indian Basket as computed/published today by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas increased to US$ 106.95/barrel (bbl) on 22.05.2012. This was slightly higher than US$ 106.43//bbl, the previous trading day’s figures of 21.05.2012. 

 

In rupee terms, however, the crude oil price increased to Rs 5869.42 on 22.5.2012 from Rs 5819.59 per bbl on 21.05.2012. This was due to increase in the price in dollar terms despite rupee depreciation with rupee-dollar exchange rate on 22.5.2012 at Rs 54.88/US$ against Rs 54.68//US$ on 21.05.2012. 

 

            The table below gives details in this regard

 

Particulars	Unit	Price on 22 May, 2012 (previous trading day i.e. 21.5.2012)	Last Fortnight May 01-15, 2012 (previous fortnight April 16-30, 2012)
Crude Oil (Indian Basket)	($/bbl)	106.95     (106.43)	111.15     (116.20)
	(Rs/bbl)	5869.42    (5819.59)	5957.89  (6063.32)
Exchange Rate	(Rs/$)	54.88        (54.68)	53.41      (52.18)

Rakesh Jhunjhunwala’s on a shopping spree

During April-May, Jhunjhunwala has increased stake in visual entertainment services firm Prime Focus; computer education company Aptech; Viceroy Hotels and IT services provider Geometric through open market transactions.
These scrips have surged from 3-39 per cent on the bourses despite subdued market. Viceroy Hotels was the biggest gainer as its scrip swelled 39 percent on the BSE, followed by Geometric (16 percent), Aptech (12 percent) and Prime Focus (3 percent).


These scrips have surged from 3-39 per cent on the bourses despite subdued market. Viceroy Hotels was the biggest gainer as its scrip swelled 39 percent on the BSE, followed by Geometric (16 percent), Aptech (12 percent) and Prime Focus (3 percent).
 
He has bought additional 10 lakh shares, or 1.6 percent stake, in Geometric for Rs 6.25 crore this month. Prior to the acquisition, he and his wife held 8.46 per cent stake in Geometric.
 
Jhunjhunwala also acquired 2.24 per cent stake in Aptech for nearly Rs 8 crore. Together, Jhunjhunwalas already held over 32 percent stake in the company. Last month, the ace investor had increased stake in Viceroy Hotels to 13.45 per cent with the acquisition of an additional 3.45 percent for Rs 2.19 crore.

Overall, Jhunjhunwala holds stake in more than two dozen listed companies including Lupin, Orchid Chemicals & Pharmaceuticals, Reliance Broadcast Network, Titan Industries and Hindustan Oil Exploration Company.

Download the white paper on black money by Ministry of finance

White Paper on Black Money



Placed below is a link for White Paper on Black Money:


Click here to see details

International Crude Oil Price of Indian Basket Decreases to USD 105.79/BBL

The international crude oil price for Indian Basket as computed/published today by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas declined by over two dollar to US$ 105.79/barrel (bbl) on 18.05.2012. This was lower than US$ 107.87/bbl on the previous trading day’s figures of 17.05.2012.

In rupee terms, also, the crude oil price decreased to Rs 5805.76 on 18.5.2012 from Rs 5867.05 per bbl on 17.05.2012. This was due to fall in the price in dollar terms. The gains were restricted by further rupee depreciation with rupee-dollar exchange rate on 18.5.2012 at Rs 54.88/US$ against Rs 54.39//US$ on 17.05.2012.

The table below gives details in this regard:

Particulars	Unit	Price on 18 May, 2012 (previous trading day i.e. 17.5.2012)	Last Fortnight May 01-15, 2012 (previous fortnight April 16-30, 2012)
Crude Oil (Indian Basket)	($/bbl)	105.79 (107.87)	111.15 (116.20)
	(Rs/bbl)	5805.76 (5867.05)	5957.89 (6063.32)
Exchange Rate	(Rs/$)	54.88 (54.39)	53.41 (52.18)

International Crude oil Price of Indian Basket Decreases

The international crude oil price for Indian Basket as computed/published today by the Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas declined to US$ 107.87/barrel (bbl) on 17.05.2012. This was lower than US$ 108.90/bbl on the previous trading day’s figures of 16.05.2012.

In rupee terms, also, the crude oil price decreased to Rs 5867.05 on 17.5.2012 from Rs 5912.18 per bbl on 16.05.2012. This was due to fall in the prices in dollar terma despite further rupee depreciation with rupee-dollar exchange rate on 17.5.2012 at Rs 54.39/US$ against Rs 54.29//US$ on 16.05.2012.

The table below gives details in this regard:

Particulars	Unit	Price on 17 May, 2012 (previous trading day i.e. 16.5.2012)	Last Fortnight May 01-15, 2012 (previous fortnight April 16-30, 2012 )
Crude Oil (Indian Basket)	($/bbl)	107.87 (108.90)	111.15 (116.20 )
	(Rs/bbl)	5867.05 (5912.18)	5957.89 (6063.32)
Exchange Rate	(Rs/$)	54.39 (54.29)	53.41 (52.18 )

RCJ/RKS –Daily Crude oil price- 18.05.2012

Rakesh Jhunjhunwala porfolio changes

Since May 2, the Sensex has fallen over 1,000 points, breaching the psychological 16,000 mark in intraday trade Wednesday. The rupee, too, hit an all-time low in intraday trade today.Amid all the selling, billionaire investors Rakesh Jhunjhunwala has been restructuring his portfolio, increasing stake in promising companies and cutting down losses in others.

Over the last week, Jhunjhunwala has bought shares in three companies and sold his stake in one.
1) Prime Focus: Jhunjhunwala has bought 1.71 per cent stake in the company, taking his total stake to 7.64 per cent. Prime Focus is India's largest visual effects and post-production company. The stock has gained 7 per cent today.

2) Geometric: Jhunjhunwala has bought 1.61 per cent stake in this engineering solutions, services and technologies firm, taking his stake to 10.7 per cent. The stock traded lower today, though it has gained over 10 per cent over the last week (since May 9).

3) Aptech: Jhunjhunwala has bought 2.4 per cent stake in the company, taking his stake to 12.96 per cent. Aptech is a global retail and corporate training company. The stock traded lower today but has gained over 8 per cent over the last week.


4) Orchid Chemicals and Pharma: Rakesh Jhunjhunwala has sold his stake in the company. Jhunjhunwala sold the entire 3.2 per cent stake over the last two-three sessions, sources said. The stock has fallen over 25 per cent over the last week.

LPG subsidy to be withdrawn

The central government will phase out subsidies for LPG. To begin with, the government will first withdraw all LPG cylinder subsidy to members of Parliament, state Legislative Assemblies, and all gazette officers.

In the second phase, subsidies to families earning at least Rs50,000 a month will be withdrawn. They will now have to pay full price for LPG cylinder. Additionally, MPs and MLAs and Class-I government officers will be allowed to buy 19 kilogramme cylinders at full price, which is currently about Rs1200.


The two-stage move is expected to save an estimated Rs 5,000 crore in LPG subsidies. In 2011-12, the subsidy on LPG is estimated to be about Rs.25,000 crore.


 Rs 5000 crore cut will not make much of  a dent in the Rs5.13 trillion deficit -- about 5.1 per cent of GDP -- projected for fiscal 2012-13.Govt will use the unique national identity card project, known as Aadhaar, to implement the partial deregulation process.

There are about 12.5 crore domestic LPG connections in the country. Finance Ministry calculations show that each household uses an average of 8 cylinders annually.


Currently, state-owned oil marketing companies report under-recoveries of Rs 480.50 per cylinder of LPG. The central government offers an additional Rs22.58 subsidy on each cylinder.

Facebook IPO tommorrow !! To start trading from friday !

On Friday, Facebook will begin trading on the Nasdaq Stock Market under the symbol ``FB.'' Zuckerberg will remain the company's largest shareholder. His personal stake in Facebook will be worth around $19 billion.
Facebook has increased the price range for its initial public offering (IPO) to between $34 and $38 per share, which could value the company at up to $104bn.


Facebook will sell 337.4 million shares at its IPO, expected tomorrow, that will make it the highest flotation value to date for an internet firm, far outstripping Google's of just over $23bn in 2004.


The value of the company is expected to surge even higher when it begins trading on the Nasdaq stock exchange on Friday, according to the Telegraph.

Under-Recoveries on Diesel, PDS Kerosene and Domestic LPG

The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas have reviewed international prices of crude oil and petroleum products during the last fortnight of April 2012. Accordingly, the under-recoveries on HSD (High Speed Diesel) applicable for 2^nd fortnight of May effective 16.05.2012 has remained high at Rs 13.64/litre effective May 16, 2012. This was, though, marginally lower than Rs 13.91/litre in the previous fortnight. In case of PDS Kerosene and Domestic LPG the under-recoveries remain same at Rs 31.49/Litre and Rs 480.50/cylinder respectively. The under-recoveries are computed on monthly basis in respect of PDS Kerosene and Domestic LPG. The overall impact of the prices prevailing at the fortnight ending on 15/5/2012 is provided in below:

2. Product-wise Under-recovery of Public Sector Oil Marketing Companies (OMCs);

Product	Unit	Under-recoveries effective 16th May 2012 (Effective 01.5.2012 to 15.5.2012)
Diesel	Rs/Litre	13.64 (13.91)
PDS Kerosene*	Rs/Litre	31.49 (31.49)
Domestic LPG*	Rs/Cylinder	480.50 (480.50)

* Additionally, a subsidy of Rs 0.82/Litre on PDS Kerosene and Rs 22.58/Cylinder on Domestic LPG is provided by the Government.

OMCs are currently (effective 16^th May, 2012) incurring daily under-recovery of about Rs 509 crore on the sale of Diesel, PDS Kerosene and Domestic LPG.

The OMC’s have reported the following under-recovery during 2011-12:

Product	Under Recovery (Rs/Crore)
	2011-12	April-December 2011	2010-11
Diesel	81,192	56,732	34,706
PDS Kerosene	27,352	20,065	19,484
Domestic LPG	29,997	20,516	21,772
Petrol	--	--	2,227**
Total	138,541	97,313	78,190

** Under-recoveries on petrol is only up to 25^th Jun’10

3. Average International FOB price and Exchange rates:

Particulars	Unit	Price on last trading day i.e., 15 May, 2012 (Previous trading day i.e.,14.05.2012)	Fortnight May 01-15, 2012 (previous fortnight 16 - 30/04/ 2012)
Crude Oil (Indian Basket)	($/bbl)	109.53 (108.90)	111.55 (116.20)
	(Rs /bbl)	5897.10 (5849.02)	5957.89 (6063.32)
Exchange Rate	(Rs/$)	53.84 (53-71)	53.41 (52.18)

RCJ /RKS – Under-recovery 16-05-2012