What is liquidity risk?

The easiest way to define `liquidity risk` is risk that arises from the difficulty of selling an asset.

An investment may sometimes need to be sold quickly. The reasons can be different for individuals and different for an investment manager.

Unfortunately, an insufficient secondary market may prevent the liquidation or limit the funds that can be generated from the asset. And in a market with very high transparency and poor liquidity the problem is increased - like a set of brokers who know you are trying to sell a house.

Some assets are highly liquid and have low liquidity risk (such as shares of a listed A group company), while other assets are highly illiquid and have high liquidity risk (such as a house).

A humorous definition of liquidity is - the moisture in your eyes when you look at your portfolio!

pv.subramanyam@irisindia.net

Sanofi-Aventis leads the race to buy Piramal

French drug major Sanofi-Aventis (SNY) has emerged as the lead bidder to buy a sizeable stake in Piramal Healthcare at over 50% premium to the Indian company`s current share price,

Matrix Lab receives WHO approval for Lopinavir and Ritonavir Tablets

Matrix Laboratories announced that it has received the first and only World Health Organization (WHO) approval for Lopinavir and Ritonavir Tabletsin strenghts of 200 mg and 50 mg respectively. Matrix`s version of this product is heat-stable and affordable, making it practical for distribution and use in warm climates

L&T bags new orders worth Rs 11.62 bn

Larsen & Toubro (L&T) Buildings & Factories Operating Company- part of its construction division has bagged new orders aggregating to around Rs 11.62 billion in the fourth quarter of 2008-09 for the construction of factories & residential projects.

Indian BPOs may distress by Obama`s tax plan

ndia`s BPO sector may see a slump with the US economic recovery plan not to translate into tax breaks for companies outsourcing jobs

According to India`s software industry body Nasscom, it is heartening to note that the US president has supported the need to avoid protectionism in his speech.

US companies have been the leaders in international trade, and in 2008 more than 50% of the revenues of the leading companies came from outside the US market

Petron Engineering bags 2 orders worth Rs 725.5 mn

Petron Engineering Construction bagged 2 orders worth Rs 725.5 million from HPCL - Mittal Energy (HMEL), Bathinda (Punjab)

The two orders include DHDT Heater Package for the lump sum contract value Rs 293 million and NHT CCR Heater Package for the lump sum contract value Rs 432.5 million for Guru Gobind Singh Refinery Project.

Everest Kanto arm bags 2 orders worth USD 13 mn

Everest Kanto Cylinder has announced that Cp Industries Holdings (CPI), step down wholly owned subsidiary of the company in USA has received orders totaling USD 5.8 million from National Oilwell Varco, Rig Solutions Group.

In addition, a letter of intent has also been received for supply of large pressure vessels for an additional USD 7.2 million.

TCS extends contract with Singapore Airlines

Tata Consultancy Services (TCS) announced that it has extended its contract with Singapore Airlines to provide IT services for three years for a suite of applications used by the Singapore Airlines Group of companies.

KEC Int`l bags orders worth Rs 2.27 bn from Power Grid

KEC International, a leader in the power transmission EPC business, has bagged two orders worth Rs 1.24 billion and 1.03 billion from the Power Grid Corporation of India.

Tata Motors` `Nano` to hit the roads on March 23

Nano`, the world`s cheapest car by Tata Motors will be commercially launched on March 23 in Mumbai and bookings will start from April this year.

Nano was originally to be launched in the second half of 2008, but was delayed after the company was forced to shift the manufacturing base from Singur in West Bengal to Sanand in Gujarat.

BSNL reduces tariffs on landline/WLL w.e.f March 1st

Bharat Sanchar Nigam (BSNL) has reduced the tariff on landline/ wireless local loop (WLL) plans effective from Mar. 1, 2009. The details for the revised tariifs are as follows:

Revised Tariff for Landline/WLL subscribers:

Calls originating from BSNL Fixed/WLL (except 10 digit numbers)

Particular	BSNL Network		Others Network
	Fixed/WLL (except 10 digit numbers)	Cellular/WLL (10 digit numbers)	Fixed/WLL (except 10 digit numbers)	Cellular/WLL (10 digit numbers)
Local & Intra Circle Calls
Pulse/Rs. Per Min.
Local	180/0.33	120/0.50	180/0.33	60/1.00
0.50 kms	180/0.33	120/0.50	180/0.33	60/1.00
> 50 kms	120/0.50	120/0.50	120/0.50	60/1.00
Inter Circle Calls
0.50 kms	120/0.50	60/1.00	120/0.50	60/1.00
> 50 kms	120/0.50	60/1.00	120/0.50	60/1.00

[Revised pulse rates are shown in BOLD Letters]
Note:- It is illustrative example considering unit rate of Re 1.

Under prepaid mobile service, a special plan named `India Golden 50` has been introduced effective from Mar. 1, 2009.

`India golden 50` under mobile service

Particulars	Tariff (in Rs.)
Cost of SIM inclusive service tax	67.00
Activation/First Recharge Coupon	333.75
Service Tax	41.25
MRP of Activation/First Recharge Coupon	375.00
Talk value	30.00
Call to any network anywhere in India ( per Min)	0.50
SMS to any network any where in India (per SMS)	0.50
Other charges	Prepaid General

Tariffs offered by BSNL and MTNL for the subscribers of landline and cellular phones are reviewed from time to time according to the prevailing market trends and to meet the competition from other telephone operators. This is in consonance with the policy, as laid down by Telecom Regulatory Authority of India (TRAI).

Piramal Healthcare clarifies news item

Pharmaceutical company, Piramal Healthcare has clarified that the promoter has no intention to dilute current ownership levels.

The clarification was made by the company with reference to news item appearing in leading financial daily titled `Sanofi seen ahead in Piramal race. ` The company has refused to comment further on the news.

Obama sees war costs totaling $140 billion this year

President Barack Obama expects that the cost to the United States of the Iraq and Afghanistan wars will total just over $140 billion this year, according to a senior administration official.

The costs for the two wars will decline to $130 billion in the 2010 fiscal year that begins October 1, said the official, who briefed reporters on Obama's budget, which is due to be released on Thursday.

Nokia considering entering laptop industry

The world's top cellphone maker Nokia is eyeing entering the laptop business, its Chief Executive Olli-Pekka Kallasvuo said in an interview to Finnish national broadcaster YLE on Wednesday.

"We are looking very actively also at this opportunity," Kallasvuo said, when asked whether Nokia plans to make laptops.

Industry has rumored about Nokia's possible plan to enter the PC industry since late last year, but Kallasvuo's comment was the first official admittance of such plans.

Obama forecasts $1.75 trillion deficit this year

President Barack Obama will forecast a 2009 deficit of $1.75 trillion in a budget proposal on Thursday that sets goals of overhauling the healthcare system and shoring up the U.S. economy.

The huge deficit would represent 12.3 percent of U.S. gross domestic product -- the largest share since World War II.

It also includes a 10-year, $634-billion reserve fund to help pay for the president's proposed healthcare reforms.

AIG mulls further government stakes as auction deadline looms

Beleaguered U.S. insurance giant American International Group may allow the U.S. government to take control of certain assets should the sale of stakes in various units fail to produce attractive offers, according to a source close to the matter.

Another option under discussion is for Washington to convert $40 billion worth of preferred stock into common shares, said the source, who was not authorized to speak on the record.

Obama to propose tax hikes to pay for health reform

President Barack Obama will propose $634 billion in tax hikes on upper-income taxpayers and cuts to government health spending to pay for health-care reform over the next 10 years

The cuts would affect managed-care companies, prescription drug manufacturers and hospitals

The spending cuts are aimed at curbing overall health-care spending while also raising money for the new president's plan to enact near-universal health care

Obama's budget will aim to pump money into energy, education and health care even as it seeks to save cash by cutting programs and halve the roughly $1 trillion deficit by the end of his first term.

RBS loses $34 billion, agrees deal to insure assets

The Royal Bank of Scotland said Thursday that the U.K. government has agreed to insure 325 billion pounds ($462 billion) of its assets as the bank unveiled a 24.1 billion pound net loss for 2008 -- the biggest ever by a British company.


The 2008 loss follows a net profit of 7.3 billion pounds for 2007, but is still significantly less than the 28 billion pounds that RBS warned it could lose in January