Rampant Germany oust Argentina

Germany are through to the semi-finals after producing another masterful performance to beat Argentina 4-0 at Cape Town’s Green Point Stadium. Diego Maradona’s Albiceleste came into this match with high hopes of avenging their quarter-final defeat in 2006 but they ultimately had no answer to a slick, powerful German side who will now face either Spain or Paraguay in the last four.

Games as eagerly-anticipated as this one often disappoint, but this particular encounter took just three minutes to catch fire as Joachim Low's side snatched an early advantage. Bastian Schweinsteiger provided the assist with a superbly judged inswinging free-kick, and with Sergio Romero caught in no man’s land, Thomas Muller applied the slightest of headed touches to flick the ball into the net. It was Germany’s 200th FIFA World Cup™ goal, their fastest in 32 years and the quickest so far at South Africa 2010. The only downside for Low’s side was that it left Argentina with 87 minutes to respond. BlackBerry Bold 9700 Phone (AT&T)

However, it was the Germans who continued to carve out the better chances, with Miroslav Klose - winning his 100th cap – firing wastefully over from the edge of the box after some outstanding, unselfish set-up play from Muller. Argentina attempted to grab a foothold, with Angel Di Maria and Gonzalo Higuain creating decent shooting positions, but on each occasion Manuel Neuer proved equal to their goal-bound efforts. 

Nevertheless, as the match wore on, La Albiceleste relied increasingly on speculative long-range efforts, with the subdued Lionel Messi firing over just before the break and Di Maria missing the left-hand post by a matter of inches with a ferociously-struck 25-yard drive. Germany also remained a constant threat on the break, and Podolski – who had earlier come close to scoring himself – was to lead the counter-attack that provided Low’s team with their all-important second goal. HTC Hero Android Phone (Sprint)

With the second half reaching its midway point, the Cologne forward broke clear on the left and, from a position where he would have been forgiven for shooting, he instead squared intelligently for Klose to tap home from inside the six yard box. The goal left Argentina with little option but to throw men forward, and with Diego Maradona’s side over-committed, Germany proceeded to pick them off on the break. HTC EVO 4G Android Phone (Sprint)

Within six minutes of Klose making it two, Arne Friedrich removed any lingering doubts over the outcome with another close-range finish, profiting on this occasion from a dazzling solo run from the excellent Schweinsteiger. There was even time for Klose to rub salt into Argentinian wounds, side-footing home Mesut Ozil's measured cross with a minute remaining to round off a memorable German win. 

What is base rate? How does it affect home loan borrowers?

Floating rate home loan borrowers, stuck on higher interest rates, can expect some relief from today (July 1).

The introduction of base rate will ensure that if they are linked to it, they will see automatic rise and fall in their existing rates.

And here's more good news: The Reserve Bank of India has asked banks not to charge any fee for shifting from prime lending rate to base rate.

Importantly, even though banks are going to charge a fee -- in excess of 1.5 per cent in most cases -- for renegotiating the loan, it could still make sense in doing so.

Once you have shifted to the latest rate, this along with the linkage with base rate will ensure that future costs are saved.

"The PLR regime was stickier. Banks took a longer time to align PLR with the interest rate movements," KVS Manian, head, retail banking, Kotak Mahindra Bank.

However, only home loan rates will be impacted by this. All other retail loans, like auto and personal, are given at fixed interest rate.

What is base rate?

From July 1, banks will move to a new, more transparent regime of loan pricing. They will jettison the Benchmark Prime Lending Rate (BPLR) and price loans off a 'base rate'.

Unlike the BPLR that was set somewhat arbitrarily by banks, the base rate will follow an explicit formula that factors in a bank's cost of deposits, operating costs (expenses of running its branches, for instance), the cost of statutory drafts on bank funds imposed by the Reserve Bank of India (the Cash Reserve Ratio and Statutory Liquidity Ratio) and the profit margin.

The base rate will help borrowers to compare interest rates offered by various banks and make the process of how banks arrive at interest rates for loans more transparent.

RBI has stipulated that banks cannot charge below the base rate for most loans. (There are a couple of exceptions like agricultural loans and export credit.) While the new model will ensure greater transparency, it need not mean lower lending rates for borrowers.

In fact, banks' blue-chip corporate borrowers could see some increase in their cost of borrowing. The reason is somewhat simple. RBI allowed banks to lend below their prime lending rates and the majority of banks did the bulk of their corporate lending at 'sub-PLR rates'.

The new reference rate for country's largest bank is 7.5 per cent. Most of the other public sector banks have the base rate at 8 per cent. These include, IDBI Bank, Indian Bank, Bank of Baroda, Allahabad Bank and Punjab National bank. HDFC Bank has set the rate at 7.25 per cent.

The best 'credits' for a bank could drive the hardest bargains. This led to peculiar situations in which a bank whose official BPLR was in the range of 14-16 per cent was found lending to its best customers way below its costs at 5-6 per cent.

The incentive for this 'irrational' pricing was to keep the ratio of non-performing assets low, particularly in the wake of the global financial crisis when banks' risk appetite waned and safety got precedence over margins. The base rate regime does away with this.

Not all home loan customers will benefit

But not all home loan customers would benefit linking their loans to the new benchmarking system. For example, if you have taken a teaser loan just few months back, it would still make sense to stick to it. Acase Leather Flip Book Jacket/folio for Apple Ipad 3g Tablet/wifi Model 16gb, 32gb, 64gb (Black)

And with SBI planning to continue its teaser rate of 8 per cent for the next three months, borrowers would continue to benefit.

"In dual rate (or teaser) loans, a borrower gets fixed rates for the initial years. This means, there is predictability of monthly outgo for this period and the borrower, in turn can plan his finance accordingly without bothering about interest rate fluctuation," said a certified financial planner. Canon CLI-221 4-Color Value Pack (Black/Cyan/Magenta/Yellow) (2946B004)

For an existing borrower, there are some situations in which they will benefit by shifting. In other cases, it may not make much difference.

Less than one year:  If you have taken the loan just a year back, around 90 per cent of the equated monthly instalment (EMI) goes towards repayment of interest and the rest towards principle.

If serving a floating rate loan for less than two years, financial planner said it makes sense to shift the loan - even if the lender is charging you an interest of 9-9.5 per cent.

When a person shifts to base rate, the interest is likely to remain the same. In addition, shifting is free. Shifting early to the new benchmark would only help to get the benefits earlier. And if the existing loan rate is around 1-2 per cent lower than your existing rate, it makes sense to renegotiate as well. Canon CLI-221 4-Color Value Pack (Black/Cyan/Magenta/Yellow) (2946B004)

Of course, there will be a charge. But you can easily get into a new regime which is completely new and more sensitive to changes.

2 to 5 years: There is a strong possibility that such borrowers are stuck at higher floating rates of 12-13 per cent. It certainly makes sense for them to shift from their existing rates to new ones. And by paying the renegotiating charges as well. Case Logic Compact Portable Hard Drive Case (Black)

Other customers should shift to the base rate as even in the fifth year, the interest portion is as over 40 per cent if the tenure is 15 years and more for loans with longer tenure.

There are customers who fixed their loan rate at 7.5-8 per cent in 2003-04 period, it makes less sense for them to shift. Especially, if their loan rate is fixed for the entire tenure.

5 to 10 years: This is a crucial period to decide whether to shift or not. For a 15-year loan, two-third of the loan is repaid. For 20-year loan, the interest portion in the tenth year is still   more than principle. Brother TN360 High Yield Black Toner Cartridge

"There are chances that a person has brought the tenure further down by prepaying a portion of the loan as and when possible," said a certified financial planner. A person can stick to the BPLR who has 15-year tenure. For loans over 15 years, base rate would make sense as there are still many years left to service the loan.

Over 10 years: If your loan tenure is of 20 years, almost 50 per cent of the time period is remaining. But the good part is that most of the interest payout has taken place.

During these years, the principle portion in the EMI accounts for 60 per cent or more, as you get closer to repaying the loan. Shifting to base rate is a tough call in such a situation. Leather Carrying Case Cover/Folio With Built-in Stand for Apple iPad 3G tablet / Wifi model 16GB, 32GB, 64GB (BLACK)

Do your math and compare the advantages of BPLR vis-a-vis base rate. If you have more than three years to repay the loan and you still saving money on the EMI, go for it.

What you must do: Shift to base rate anyway. Because it will ensure that you get the advantage of loan rate fluctuations.

As far as renegotiations go, it would be a decision based on the tenure that is remaining, and your finances.

If the blue-chips stand to lose in the new regime, who stands to gain? Some would argue that banks 'subsidised' the low-cost loans to their prime borrowers by charging hefty rates from smaller, riskier borrowers -- small and medium enterprises and households, for example.

Those who argue this claim that once banks are forced to price loans in line with their costs, these 'subsidies' are likely to disappear and the segments that arguably need the money the most are likely to get fairer rates.

The other thing that the base rate could prevent to a degree is what regulators term 'predation' -- the phenomenon of large banks dropping loan rates way below costs to grab market share.

There have been recent instances of predation in retail credit markets breeding the risk of credit bubbles building up on the back of these exceptionally cheap loans.

From a monetary policy perspective, a transparent basis for credit pricing should make the transmission of policy impulses to actual lending rates more efficient.

It would at least provide a better gauge of whether monetary policy changes are making a difference to borrowing and lending rates on the ground. There is a case to be made for some structural changes in the policy rates as well.

As the current liquidity crunch in the banking system has shown, the wide gap of one-and-half percentage points between the reverse repo and the repo rates drives large swings in short-term interest rates as the banking system goes from surplus to deficit and vice versa.

This volatility is perhaps undesirable and can be ironed out by reducing this gap. A hike in the reverse repo rate, keeping the repo rate unchanged in the RBI's July 27 Monetary Policy could do the trick.

Return gift: Infosys to give stocks to staff on its 30th birthday

All employees of India's second largest information technology services company, Infosys, will get a stock bonanza on its 30th birthday on July 2.

Infosys and its subsidiaries had 113,796 employees at the end of March. HDMI TO HDMI 6 foot cable

At Wednesday's closing price of Rs 2,788 a share on the Bombay Stock Exchange, the value of bonus for each employee will be Rs 13,940. At this price, the total value of the bonus works out to Rs 32 crore (Rs 320 million).

The largesse is being doled out by the Infy Employee Welfare Trust -- an independent trust within the company which holds the corpus of equity shares of Infosys.

A statement by the trust said all those on Infosys rolls as on March 31 this year, and who are not under notice period, will be eligible for a minimum of five equity shares, with an incremental allocation of one equity share for each completed year of service in the company. Kingston 4 GB Class 4 SDHC Flash Memory Card SD4/4GB

The distribution of shares will take place in August. The company, however, did not disclose the quantum of equity shares held by the trust.

Infosys created the welfare trust to allocate shares to its employees. The company makes contributions to the trust. The employee generally does not pay for these shares. At certain periods, employees are given the option of converting options to stock at pre-determined prices.3 Pack of Premium Crystal Clear Screen Protectors for Apple iPad

Infosys, which had seen it's attrition shooting up to 13.4 per cent in the quarter ended March 2010, from 11.6 per cent in the previous quarter, had given a raise of 14-17 per cent to all it's Indian employees with effect from April 1, 2010. Mediabridge Ultra Series - 6ft High Speed HDMI Cable - Category 2 Certified - Supports 3D - Audio Return Channel - 4Kx2K - 1440p - 1080p - Blu-Ray - PS3 - XBox 360

For overseas employees, the effective salary raise was in the range of 2-3 per cent, according to the company.

Chennai, the Detroit of Asia?

Chennai is home to global and Indian auto majors like BMW, Ford, Hyundai, Mitsubishi, Nissan, Ashok Leyland, TVS Group, et cetera. It also has almost 35 per cent of India's share of auto ancillary units.

So why has Chennai emerged as the Detroit of South Asia? There are many reasons, not the least of which is the Tamil Nadu government's investment-friendly industrial policy.

With an impressive growth of 26.42 per cent last year, India is the second fastest growing auto market in the world, next only to China that grew at a scorching 42 per cent.

There is a lot to cheer about for India if you look at what the Confederation of Indian Industry survey of auto ancillary companies (Q2FY2010) says: 'India is estimated to have the potential to become one of the top five auto component manufacturing economies by 2025.'

'The Indian auto component industry is moving rapidly towards grabbing the global auto component outsourcing market, which is expected to be worth $700 billion by 2015. With the spiralling demand from the domestic and international auto companies, the industry is emerging as one of the fastest growing manufacturing sectors in India and globally,' the survey notes.

The Society of Indian Automobile Manufacturers' statistics show that auto exports from India rose by 49.59 per cent last year. The CII survey also says that India's exports of auto components would grow to $4.5 billion this year, compared with $1.8 billion in 2005.The Girl with the Dragon Tattoo

Export of two-wheelers, which account for about 77 per cent of the total automobile production in India, grew at 49.11 per cent, while the export of passenger vehicles -- which account for over 15 per cent of the total auto sales in the country -- grew by 10.23 per cent in May as compared to the same month last year.

It is also interesting to note that the country's second-largest bike maker Bajaj Auto showed a 51.23 per cent increase in exports while TVS Motors' exports rose by 50.89 per cent.

Why India grew while the US and Europe suffered

Yezdi Nagporewala, head of automotive, KPMG India, cites reasons why the auto sector in India grew while the global automotive sector suffered. 'While developed countries have passenger vehicle penetration at 600-800 per 1,000 population, India is at an overall level of 10 per 1000 population. The low base combined with a growing middle class population has sustained India's growth.'

'In 2008-09, the Indian passenger vehicle market was growing at 15 per cent before the downturn hit in October 2008. The subsequent quarter saw a period of de-growth. Indian passenger vehicle market recovered in 2008-09 to have a growth of 3-4 per cent in 2008-09 over 2007-08. The pent up demand resurfaced in 2009-10 and each quarter saw significant jumps over previous quarters. The low base in 2008-09 has enabled a growth of 26.4 per cent.'

'The Government of India released a stimulus package in 2008-09 to counter the recessionary trends. This included providing excise benefits to Indian automotive OEMs (original equipment manufacturers), ensuring auto loan rates remained low. Auto OEM's managed to pass on the benefits to the end customers. This was coupled with a series of new models launched which created excitement in the market.'Kindle Wireless Reading Device, Free 3G, 6" Display, White, 3G Works Globally - Latest Generation

'Recessionary trends elsewhere enabled a low cost country like India to clock significant export numbers. India is primarily a hatchback (small car) market. There was increase in demand for hatchbacks during the previous two years in Europe and India benefited as it is emerging as a significant low cost manufacturing hub for hatchbacks. 30 per cent of all passenger vehicles manufactured in India were exported. This also added to the growth in production of Indian automotive OEM's.' Violet Dawn

Auto industry sets base in Chennai

There are 46 registered OEMs in India. Out of these 15 are located in the southern states of the country. This shows that one-third of the concentration of the auto industries in India is in the four southern states.

In the southern states of India, there are about 74 projects which are at different stages from planning, implementation, or deferred. Of these, Tamil Nadu has the maximum number of projects (38), followed by 24 in Karnataka, 10 in Andhra Pradesh, and 2 in Kerala.

Ford was the first global auto manufacturer to come to Chennai, and it was followed by many more. The latest to enter is Nissan. On being asked whether he was happy and satisfied with Chennai, the Ford India managing director, Michael Boneham, said, "Yes, we are satisfied. You have a very stable government and legislative environment. There is a transparent industrial policy no matter which political party is in power. You have governments very supportive of the industry. The second thing is the availability of labour. Educated reliable labour is the strength of Chennai. Overall, we are very happy with our experience in Tamil Nadu."

But he was not that excited about the state of infrastructure. "I wouldn't say I am happy. There are still significant challenges in power, in terms of road, rail, etc. The governments are trying to improve the infrastructure but we would like to see real evidence of them improving it on an ongoing basis, in a very sustainable and quick basis." Avatar (Two-Disc Blu-ray/DVD Combo) [Blu-ray]

Kiminobu Tokuyama, chief executive and managing director, Nissan Motor India Pvt Ltd, also expressed similar kind of views though his experience in Chennai is short.

"I don't think we chose Chennai because the other international players have been here for some time. Not just Chennai, but Bengaluru too has a good supplier base. In fact, the entire southern area has a good supplier and good technology base. The quality of labour also is quite good in this part. Also, there is a strong support from the state government. There is a good port and the Ennore Port is being improved."

Nissan is quite satisfied so far with the progress of the project as they could finish the plant in a record 21 months from the start. The managing director admitted that it was a record for even Nissan to build such a huge manufacturing plant in such a short period.

The company plans to export 110,000 cars in the first year, and it will go up to 180,000 the next year. And for the domestic market, they plan to hit 100,000 units per year.

"We had all the expertise but we would not have been able to achieve this without the support of Tamil Nadu government and the labour force." Garmin Portable Friction Mount

When the Nissan team met the Tamil Nadu Deputy Chief Minister M K Stalin, they appreciated the support the government of Tamil Nadu had given so far and then requested the government to improve the road conditions.

"The infrastructure has to improve. As you know, we will start shipping (new car) Micra, both, for the Indian market and for exports from our Oragadam plant. So we need good roads for speedy delivery. Infrastructure is one area that has to improve." 

Another auto company that is happy with Chennai is BMW that has set up base in the Mahindra City near Chennai.

Abhay Dange, general manager press and corporate affairs, BMW, says, "The first reason why BMW chose Chennai was because of the infrastructure provided by Mahindra City and Chennai. Then, the logistics like the facilities at the Chennai port. The single window clearance offered by the Tamil Nadu government attracted us and supported us. The experience in Chennai has been quite good so far. Mahindra World City is an excellent place. There may be power problems in other places but not in Mahindra World City."

Chennai, the Detroit of Asia?

Ford's Michael Boneham, however, does not agree with the observation that Chennai is the Detroit of Asia.

"I think it is very nice that people describe Chennai in this manner. But there are a number of automotive hubs in India, like Pune, and in Haryana and Gujarat, etc. My view is that it is good to have balanced development of the automotive sector across the country, not just in one area."

Yezdi Nagporewala observes, "Chennai has the potential to become one of the top three automobile hubs in the world. Today, Chennai accounts for 30 per cent of India's share of automobile industry and 35 percent of India's auto components segment. Garmin nüvi 265W/265WT 4.3-Inch Widescreen Bluetooth Portable GPS Navigator with Traffic

"However, despite being around 60 years old, the domestic auto industry lags behind other countries like South Korea, Brazil and Mexico in terms of production and sales. While it attracts lot of foreign direct investment due to its cost competitiveness, it is yet to match Chinese cost structure and the ease of conducting business."

"Further, while Chennai has catapulted itself to be a manufacturing hub, its research and technological spend is much lower than its Asian peers. Accordingly, we believe that the industrial belt will have to invest significantly in research and development," says Nagporewala.

"Also to maintain its global competitiveness, the government has to continuously work on developing infrastructure in the cluster. Infrastructure poses the most visible and obvious challenge for Chennai's development today. Considerable investment is required to improve the city's rail, road and port infrastructure," Nagporewala adds.

"As per the Eleventh Five-Year Plan report, in the next seven to eight years, the automotive sector in Chennai is expected to grow into a business of $15-20 billion with nearly 500,00 additional jobs. The sheer scale of operations will create availability of talent as a major constraint."

So, the question is, does that qualify Chennai to be the Detroit of Asia?

Future of the auto industry:

According to the CII survey, the Indian automotive industry is expected to grow at the rate of about 13 per cent per annum over the next decade to reach a size of around $165-175 billion by 2022. The size of the global auto component industry is also expected to grow at 12 per cent over the next decade to reach around $160 billion by 2016.

Nagporewala predicts a growth of 12-14 per cent over the next 5 years for the Indian passenger vehicle market. Export sales will grow at a rate higher than domestic sales.

According to Tokuyama, the Indian market will soon reach 3 million cars and in a few years' time, it will reach 5-6 million cars. "There is a huge potential for Indian growth. The total market will, anyway, be growing but if you compare segment by segment, the small car segment will grow faster than the other segments." SanDisk 16 GB Class 2 microSDHC Flash Memory Card SDSDQ-016G (Bulk Packaging)

Michael Boneham also agrees with the view that it will be the small car segment that will grow the most. "We expect the segment to grow by 20 per cent year over year. That is the growth that is sustainable. I expect double-digit growth for the next 4-5 years. Then, you have to wait and see. Whether the double-digit growth is 10-15% or 15-20% or beyond that, depends on a number of other factors. But I am quite confident that we will see substantial double-digit growth in that segment." Kingston 4 GB Class 4 SDHC Flash Memory Card SD4/4GB

"To be frank with you," adds Boneham, all other segments in the automobile industry in India are also growing. That is good news for manufacturers and customers because they are getting much more choice now." Transcend 8 GB Class 6 SDHC Flash Memory Card TS8GSDHC6E

He also said that "India will be one of the three countries that will have the highest growth. We see significant growth potential here provided infrastructure keeps up with the opportunity for growth and demand. I don't see any reason why India can't be the fastest growing market globally. But it has a long way to go."

Paraguay-Spain preview

Paraguay and Spain might share the same language but they have entirely different approaches to playing football. While the South Americans have made stoic defence one of their hallmarks, the reigning European champions are committed to a possession-based, attacking game. Those contrasting approaches will be set in even clearer focus when the two sides meet in Johannesburg on Saturday evening. The reward for the winners is a place in the semi-finals of the 2010 FIFA World Cup™. Avatar (Two-Disc Blu-ray/DVD Combo) [Blu-ray]

The team that comes out on top will be making history. In the last eight for the fifth time, Spain have never reached the semi-finals, although they did finish fourth at Brazil 1950 when the Trophy was decided by a four-team final group phase. As for La Albirroja they ave already broken new ground and are intent on venturing further. Violet Dawn

The match
Paraguay-Spain, Johannesburg (Ellis Park), 3 July, 20.30

Saturday's showdown is the fourth meeting between the countries. Two of their previous encounters ended in goalless draws, one a 2002 friendly and the other a first-round match at France 1998. Spain scored the only win by either side when prevailing 3-1 in another first-round meeting at Korea/Japan 2002.

La Roja have not lost to South American opposition in the FIFA World Cup since Mexico 1986 (a 1-0 reverse to Brazil) but are in no mood to rely on the record books after their surprise group setback against Switzerland. Coach Vicente del Bosque has no injury or suspension problems and is set to keep faith with the system and the side that got Spain out of a tight spot in Group H before they edged out Portugal in the Round of 16. As they showed in the second half of that match, the silky Spanish are working their way back to top form.

Del Bosque's opposite number, Gerardo Martino, has asked his players to pay special attention to Spain's quality and the speed with which they move the ball around. The Argentinian supremo has also vowed that his men will not sit back and let their opponents dictate the play, urging his midfielders to press hard and deny the likes of Andres Iniesta and Xavi Hernandez the space to thrive. With central midfielder Aureliano Torres an injury doubt, Martino’s other main concern is the fatigue his charges may be still feeling after their punishing last-16 tie against Japan.

Players to watch
Defence v attack

Having let in just the one goal to date, against Italy in their opening match, Los Guaraníes boast the tightest defence in the competition along with fellow quarter-finalists Uruguay. That record is sure to be put to the test against the enterprising Spanish, who have created more goalscoring opportunities at South Africa 2010 than anyone, though their finishing has not been up to the expected standard. That said, the in-form David Villa is the competition’s joint top-scorer on four goals with Gonzalo Higuain and Robert Vittek. Kindle Wireless Reading Device, Free 3G, 6" Display, White, 3G Works Globally - Latest Generation

The stat
3 - The number of times Paraguay have reached the Round of 16 and the number of times they have lost to European opposition there. At Mexico 1986 La Albirroja went down 3-0 to England and lost to a golden goal to the host nation at France 1998. Four years later Germany ended their hopes with a 1-0 win.

What they said
"They have players who can make all the difference, especially in midfield where we can't afford to even let them turn round. We are really up for this game and that's going to make up for any tiredness we might feel. The team can't wait for this game to get started. We're doing a great job but we still have more to give, and our best performances so far have been against the big sides," Nelson Valdez, Paraguay striker.

"Paraguay are not unlike Chile. As we all know they gave us a lot of problems, and it would be silly of us to underestimate them. I'm not worried about overconfidence because there's none of that in the squad. We have an awful lot of respect for Paraguay and they've been brilliant in getting this far, beating a strong Japan side the other day," Vicente del Bosque, Spain coach. Fraggle Rock: Complete Series Collection

Voice of the fans
"Grit and strength in the air (Paraguay) against touch and skill (Spain): those are the keys to the game. The first team to score will win, take my word for it," emi_ECU (Ecuador), FIFA.com user.

Have your say
Can Spain put an end to their quarter-final curse or will Paraguay continue to make history?