Alchemist Asked to Submit Investors' Details By Tribunal
Setting aside market regulator Sebi's order, Securities Appellate Tribunal (SAT) has granted two weeks to Alchemist Infra Realty to furnish details of investors to whom it has refunded the money.
However, if the company fails to furnish requisite particulars within stipulated time period, the order passed by Sebi last month "shall stand revived", SAT said.
The matter pertains to Alchemist raising Rs. 2,000 crore through public in violation of Sebi's collective investment scheme norms.
Alchemist claims to have paid Rs. 1,127.06 crore to investors, out of Rs. 1,916.39 crore refundable to them, by relying on bank statements, SAT said. The company counsel said the requisite particulars would be furnished within two weeks.
Securities and Exchange Board of India (Sebi), through an order dated May 27, directed prosecution proceedings against Alchemist and its directors as well as attachment of their properties to recover the money.
In an order dated June 15, SAT said: "In the interest of justice, we set aside the impugned order dated May 27 this year, subject to payment of cost of Rs. 1 lakh to be paid by appellant (Alchemist) to Sebi within a period of one week from today."
The tribunal has also directed the company to furnish registration number and address of the investors to whom the payments were made, as sought by Sebi, within two weeks.
"Appellant is further directed to furnish the particulars demanded by Sebi vide letters dated December 9, 2014, and March 20, 2015...within a period of two weeks from the order," SAT noted.
"If the requisite particulars are furnished within the time stipulated herein, then the WTM (Whole Time Member) of Sebi shall verify the same and pass appropriate order on the application filed by the appellant in accordance with law, after giving an opportunity of hearing to the appellant.
"If the appellant fails to furnish requisite particulars within the time stipulated herein, the order passed on May 27, this year shall stand revived," the Tribunal noted.
Sebi had also decided last month to refer the case to state government and local police to register a civil or criminal case against the company, its promoters, directors and other top officials "for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds".
The matter would also be referred to the Ministry of Corporate Affairs to initiate the process of winding up of the company, Sebi had said in its order.
The company had request for an extension of 24 months for making refunds to investors, which was rejected by Sebi saying Alchemist Infra and its promoters/directors have not repaid its investors within the time allowed.
Earlier, after finding that the company had raised funds from the public in violation of the collective investment scheme regulations, Sebi had passed the refund order against Alchemist on June 21, 2013.
The Sebi order was later upheld with some modifications, with regard to the time period for making refunds, by SAT.
Sebi had first asked the company to make the refund within three months, but SAT later gave it time of 18 months.
Besides, the company was asked to submit a report to Sebi every six months giving details regarding the progress made while executing the scheme of repayment.
However, if the company fails to furnish requisite particulars within stipulated time period, the order passed by Sebi last month "shall stand revived", SAT said.
The matter pertains to Alchemist raising Rs. 2,000 crore through public in violation of Sebi's collective investment scheme norms.
Alchemist claims to have paid Rs. 1,127.06 crore to investors, out of Rs. 1,916.39 crore refundable to them, by relying on bank statements, SAT said. The company counsel said the requisite particulars would be furnished within two weeks.
Securities and Exchange Board of India (Sebi), through an order dated May 27, directed prosecution proceedings against Alchemist and its directors as well as attachment of their properties to recover the money.
In an order dated June 15, SAT said: "In the interest of justice, we set aside the impugned order dated May 27 this year, subject to payment of cost of Rs. 1 lakh to be paid by appellant (Alchemist) to Sebi within a period of one week from today."
The tribunal has also directed the company to furnish registration number and address of the investors to whom the payments were made, as sought by Sebi, within two weeks.
"Appellant is further directed to furnish the particulars demanded by Sebi vide letters dated December 9, 2014, and March 20, 2015...within a period of two weeks from the order," SAT noted.
"If the requisite particulars are furnished within the time stipulated herein, then the WTM (Whole Time Member) of Sebi shall verify the same and pass appropriate order on the application filed by the appellant in accordance with law, after giving an opportunity of hearing to the appellant.
"If the appellant fails to furnish requisite particulars within the time stipulated herein, the order passed on May 27, this year shall stand revived," the Tribunal noted.
Sebi had also decided last month to refer the case to state government and local police to register a civil or criminal case against the company, its promoters, directors and other top officials "for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds".
The matter would also be referred to the Ministry of Corporate Affairs to initiate the process of winding up of the company, Sebi had said in its order.
The company had request for an extension of 24 months for making refunds to investors, which was rejected by Sebi saying Alchemist Infra and its promoters/directors have not repaid its investors within the time allowed.
Earlier, after finding that the company had raised funds from the public in violation of the collective investment scheme regulations, Sebi had passed the refund order against Alchemist on June 21, 2013.
The Sebi order was later upheld with some modifications, with regard to the time period for making refunds, by SAT.
Sebi had first asked the company to make the refund within three months, but SAT later gave it time of 18 months.
Besides, the company was asked to submit a report to Sebi every six months giving details regarding the progress made while executing the scheme of repayment.
Loan recovery eludes banks, even as growth rate beats China
A recovery in India's credit growth could elude the country's banks until early 2016, despite an economy that in the first three months of this year is expected to have outpaced China.
A 12.6 per cent growth rate in lending in the fiscal year that ended on March 31 was the lowest in almost two decades, and would have been lower but for a surge in the last two weeks. In the two weeks to May 1, it slowed to 10.5 per cent.
Reporting earnings for the quarter ending in March, country's top bankers said they had seen an increased level of inquiries from firms and indivuduals. But there was no substantial rise in loans, meaning a full recovery could still be months away, as India's debt-burdened firms battle to get back on track.
That lag contrasts with official growth figures that are expected to show this week that the economy grew 7.4 per cent last fiscal year-numbers likely to again confound economists and firms still suffering from slack demand.
"The project pipeline which was very, very thin even last quarter, we are now beginning to see more and more projects coming in," said Arundhati Bhattacharya, chairman of State Bank of India , the country's largest bank.
"My own anticipation is another two quarters down the line we should definitely begin to see this pick up happening, and the last quarter of the financial year... should be quite good."
Bhattacharya forecast loan growth of 14 per cent for the current financial year to March 2016 for SBI. That compares with an adjusted 10.5 per cent in the year just ended.
"People who meet us are all very hopeful and bullish on a recovery starting. Some queries have started coming for new proposals also, but not in a very big way," said Ashwani Kumar, chairman of state-owned Dena Bank .
"This was not the scenario four or five months back."
India's firms have seen debt levels nearly triple in the past five years and are struggling to digest debt already on their balance sheets after two years of weak economic expansion.
"I look at infrastructure, and in this industry there is not much change. Banks are a little wary of lending to infrastructure because there have been delays and other problems," said Issac George, chief financial officer of infrastructure firm GVK.
Although bank loans still account for bulk of the credit in India, another factor that has weighed on bank loans is cheaper availability of funds through commercial papers and bonds.
Commercial paper issuances jumped more than 80 percent last fiscal year, according to estimates from rating agency ICRA. Including commercial papers, bonds and overseas borrowing, total credit available in the system grew 14.5 per cent last year-outpacing growth in bank loans.
"What is really hitting the credit growth for banks is that investments are not really picking up," said Vibha Batra, group head of financial sector ratings at ICRA. "Even if this investment proposals start coming in, it won't be before the second half that you would see a meaningful credit growth."
United Bank of India says lost hope to recover money from Kingfisher Airlines
United Bank of India, the state-owned lender, has become the first of the 17 lenders to publicly admit that it no longer expects to recover its dues from the beleaguered Kingfisher Airlines.
Interestingly, the Kolkata-based lender was the first bank to attempt to get Vijay Mallya, the chairman of Kingfisher Airlines, tagged as a wilful defaulter.
Mallya and UB Group, however, challenged this tag in the court. The lenders have so far been able to recover just about Rs 1,000 crore from Kingfisher Airlines out of their over Rs 7,500 crore exposure (excluding penal interest), since they recalled the loan in February 2013, by selling pledged shares in group companies.
"Now, nothing is happening on the Kingfisher account and we are not getting any amount. We may ultimately get a few more crores by selling that building (Kingfisher House in Mumbai) and other collaterals", United Bank of India Managing Director and CEO P Srinivas told PTI.
"But when you look at the total loan amount, what we may ultimately recover is just equivalent to interest component. In last two years, we lost interest payment and we may be able to recover that much and the principal amount we may not", he said.
The bank had extended Rs 400 crore in a consortium lending when Kingfisher Airlines was still flying. The airline was grounded in October 2012. The airline, owned by flamboyant Vijay Mallya, owes Rs 6,500 crore now (after around Rs 1,000 crore recovery) to a 17-lender consortium led by State Bank of India, which has an exposure of Rs 1,600 crore to the grounded airline.
Other banks that have exposure to the airline include Punjab National Bank (PNB) and IDBI Bank (Rs 800 crore each), Bank of India (Rs 650 crore), Bank of Baroda (Rs 550 crore), Central Bank of India (Rs 410 crore).
Besides, UCO Bank has to recover Rs 320 crore, Corporation Bank (Rs 310 crore), State Bank of Mysore, (Rs 150 crore), Indian Overseas Bank (Rs 140 crore), Federal Bank (Rs 90 crore), Punjab & Sind Bank (Rs 60 crore) and Axis Bank (Rs 50 crore).
This February, SBI had taken over the possession of the airline's prime property Kingfisher House, near the city airport, after a protracted court battle. Over 17,000 sqft-property at Vile Parle near the domestic terminal is valued at around Rs 100 crore.
When the airline was flying smoothly, it had its loans restructured twice in three years, the latest being in November 2011. The problems of the lenders get further confounded from the fact that they have practically got nothing substantial in collaterals.
While the company pledged the Brand Kingfisher, valued at Rs 4,000 crore then, as collateral, the other collaterals include the Kingfisher Villa in Goa valued at around Rs 30 crore and the shares of UB group companies.
It could be noted that last September, United Bank had become the first lender to declare Kingfisher Airlines, Mallya and three other directors as wilful defaulters.
The three other directors were Subhash R Gupte, Ravi Nedungadi and Anil Kumar Ganguly. However, later in December a three-judge bench of the Calcutta High Court set aside the single-bench decision that allowed United Bank to tag them as wilful defaulters, on technical grounds.
SBI, PNB, and IDBI Bank had also declared them as wilful defaulters but have been challenged in various high courts by the company.
The airline hasn't flown since October 2012 and had accumulated losses of Rs 16,023 crore, while its networth fell to a negative Rs 12,919 crore at end of March 2013. Launched in May 2005 Kingfisher Airlines never made any profit.
SBI inks pact with Amazon to develop payment and commerce solutions
State Bank of India (SBI) signed a memorandum of understanding (MoU) with e-commerce giant Amazon on Wednesday to develop payment and commerce solutions for customers and small businesses.
"Amazon is a very large company in the digital commerce space. We have a very large group of customers who could benefit by getting connected with this platform," SBI chairperson Arundhati Bhattacharya told journalists in Mumbai.
"The bank is working on ways to enrich customers' payment experience and opening up the windows of e-commerce to its SME customers through this tie-up", she added.
Amazon India vice-president and country manager Amit Agarwal said, "In SBI, we have a fantastic partner whom customers and businesses trust through long standing relationships- sometimes over generations. Moreover, SBI shares Amazon's philosophy of building customer trust and investing for the long term."
SBI, the country's largest lender, will also provide loans to SME customers who supply products to Amazon to help them increase their operations.
"Amazon has lot of SMEs who sell products on its platform. Their products are very good but they are not able to scale because they don't have that kind of financing. Can we look at something like that to see how they can scale as we are into the business of financing" Bhattacharya said.
Direct tax collection falls short by Rs 19,028 crore in FY15
Initial numbers suggest that direct tax collection is short of the revised target by over Rs 19,028 crore, but the Income Tax Department is hopeful of meeting the target once figures from across the country come.
"The department has so far collected Rs 6,85,972 crore during the year gone by against the projected target of Rs 7,05,000 crore for fiscal 2015, thus falling short of Rs 19,028 crore as per the data internally released by the Department on April 4", a senior IT official told PTI in Mumbai on Tuesday.
"In FY14, the mop-up was Rs 5,83,000 cr. Officials believe that the figures are yet to come from some regions and once all the figures are in, which may take more than a week, the target would be met. So far only Delhi and Bangalore zones have been able to meet the targets", the official said.
New Delhi alone has collected Rs 1,02,083 crore in tax, up from Rs 86,619 crore in the previous fiscal, whereas Mumbai was able to mop up 2,26,305 crore, short of the Rs 2.30 trillion last fiscal.
The department revised the direct tax collection to Rs 7,05,000 crore for the fiscal 2014-15 against the initial projection of Rs 7,36,000 crore in view of the sluggish economic growth.
The official blamed the shortfall on sectors such as manufacturing which witnessed a slow growth. However, many large corporations paid higher advance tax this fiscal, especially in the fourth quarter.
While State Bank of India (SBI) reportedly paid 23 per cent more advance tax at about Rs 1,794 crore for the March quarter against around Rs 1,456 crore a year-ago, LIC paid Rs 1,470 crore, an increase of 15 per cent over Rs 1,280 last year.
For the full fiscal, the insurance behemoth has paid Rs 5,880 crore against Rs 5,100 crore in the last financial year, while mortgage lender HDFC paid 12.8 per cent more at Rs 2,435 crore this fiscal. Rural development lender Nabard paid about Rs 1,560 crore, up from Rs 1,490 crore.
Top-level changes at Honda Cars India, Katsushi Inoue to be CEO
Honda, the Japanese auto major, on Monday announced top management changes in its Indian cars business, with Katsushi Inoue slated to be President & CEO from April as the incumbent Hironori Kanayama is due to retire and return to Japan.
"As part of the other management changes, Hiroyuki Shimizu will be the new Senior Vice President & Director, Marketing & Sales, in Honda Cars India (HCIL), the company's wholly-owned subsidiary", the company said.
"Also, Yoshiyuki Matsumoto, Managing Officer, Honda Motor, who was the representative of development, purchasing and production in Asia and Oceania since April 2013 and was stationed in India, moves to Japan after completing his tenure", HCIL said in a statement.
"He will take over as the Chief Operating Officer (COO) of the Automobile Operation at Honda Motor. He is planned to be elevated to the position of Director on the Board of Directors in Honda Motor with the title of Senior Managing Officer and Director after approval at the General Meeting of Shareholders of the company scheduled to be held in June 2015", it added.
Inoue will take over from Kanayama who has served as HCIL President & CEO for the past three years since assuming this position in April 2012.
The company said, Inoue has been associated with Honda Motor Co for over 29 years and has served as General Manager in Marketing Planning office in Japan headquarters in his last assignment.
He has worked with Honda ventures in different markets, across the globe, including Japan, Thailand, Malaysia, the UK, Poland and Germany.
Kanayama moves back to Japan as he retires after successfully completing his career in Honda.
"During the three years of Kanayama's leadership in India, HCIL witnessed rapid growth in its business. Honda Amaze, Honda Mobilio and 4th generation Honda City were launched in the Indian market during this period", the company said.
In other changes, Shimizu takes over from the current Senior Vice-President & Director, Marketing & Sales, Shigeru Yamazaki, who was at this position since April 2012.
"Shimizu has been associated with Honda Motor for over 25 years and in his last assignment, he served as Director and Vice President in Honda Automobile (Thailand) Co", the company said.
He started his career with Honda in 1990 and has experience in product planning, marketing and sales. Yamazaki goes to Japan and will be responsible for Automobile Operations Business Planning in Honda Motor.
RBI tightens corporate group exposure limits
The Reserve Bank of India (RBI) is set to introduce new individual and corporate exposure limits that will tighten bank exposure to company promoters and their groups, RBI Deputy Governor R Gandhi told Business Today. He added the new norms will align Indian standards with new international norms.
Currently, Indian banks can lend up to 15 per cent of their capital funds to an individual and 40 per cent (which can be enhanced by the company board to 50 per cent) of capital funds to a group of companies owned by the promoter.
But the new group exposure limits have done away with the distinction between a promoter in his individual capacity and his group. Instead, banks will now have to cap the combined exposure to 25 per cent of its capital.
"Besides, the 25 per cent limit will only apply to Tier I capital and not total capital. Existing guidelines apply to total capital", Gandhi said.
The RBI has been concerned about the deteriorating asset quality of domestic banks, particularly the public sector banks, some of whose non-performing assets (NPAs) are now reaching alarming levels.
The new norms, likely to come into effect from April 1 of fiscal 2019-20, have since been opened up for discussion in a white paper by the Reserve Bank of India.
In an additional step to tighten banks' exposure to the corporate sector, banks will now have to consider any "economic inter-connect" in its exposure to the individual or group as against the previous norm of including only majority equity holding that gave a promoter or group absolute control over another entity.
"Economic dependence is the international norm," says Gandhi. Hence, if a firm is economically dependent, exposure to that firm would also fall under the group exposure limits.
The new norms will substantially reduce banks' exposure and risks in advances to any individual promoter or his group and will prevent any possible 'gaming' of the banking system by any individual or group. Banks are being allowed a three-year window to restructure their loan books in accordance with the proposed limits.
Weekly wrap: BSE Sensex poised to remain bearish
Throughout March 2015, the broad index of the Bombay Stock Exchange (BSE), Sensex was seen under pressure, having fallen 6.48 per cent during this period and cancelling out all gains made in the first two months of 2015.
Meanwhile, during the last week of March, the BSE Sensexfell 2.75 per cent and closed at 27,458.64 points.
Jayant Manglik, president, retail distribution, Religare Securities says, "After a sharp sell-off on Thursday, equity benchmarks managed to end on flat note on Friday amid excessive intraday volatility." Extending the prevailing negative bias, it slipped below the crucial support mark of 8,300 on intra-day basis in the first half, but rebound in banking and capital goods majors helped the index to close flat.
Alex Mathews, head research, Geojit BNP Paribas Financial Services says, "Major technical indicators still looks weak, but the RSI (relative Strength Index) is in the oversold region, helped the market to recover." Due to banking holidays and exchange holidays in the next week, participants seemed reluctant to create large open positions in the April series.
On the stocks' front, the major losers were telecom stocks - IDEA and Bharti Airtel - falling 5.12 per cent and 4.85 per cent, respectively during the week, whereas the gainers were IDFC and Hindalco rising 4.33 per cent and 3.40 per cent, respectively in the same period.
The FIIs were sellers in the cash markets segment, selling shares worth Rs 521.23 crore on Thursday. On the other hand, the DIIs were net buyers on the same day having bought shares worth Rs 687.09 crore as per the provisional data from the stock exchanges.
Of the total number of companies eligible for trading - 4,226 on the BSE as on March 27 - 123 remained unchanged, 1,070 stocks went up and 1,774 fell.
The best performing stocks as mentioned on the BSE website among group A stocks were: Tata Elxsi (+7.14 per cent), Hexaware (+6.65 per cent), Aurobindo Pharma (+6.04 per cent), Atul (+5.18 per cent) and Century Textiles & Industries (+5.08 per cent). Meanwhile, among the top losers were: Bhushan Steel (-7.98 per cent), Bharti Airtel (-5.64 per cent), Idea (-4.96 per cent), Rasoya Proteins (-4.69 per cent) and Cyient (-4.49 per cent).
Manglik believes that shorts are advisable on bounce but with strict stop losses. "Energy, Metal, Realty and PSU banking looks weakest amongst all the sectoral indices so traders may choose stocks from these segment for fresh short positions," he says.
The European markets rebounded from a two-day drop and the US index futures were trading lower.
Wilful tax defaulters owe Rs 500-crore to income tax department
The income tax (I-T) department has for the first time gone in for the name-and-shame strategy to get wiful tax defaulters cough up their dues. The Central Board of Direct Taxes (CBDT) posted on its website the names of 18 defaulters, of whom 11 are based in Gujarat, on Thursday. They defaulters owe Rs 500 crore.
A senior official said that the defaulters have a tax liability of Rs 10 crore and above, and in several cases the assessees are not traceable.
Defaulters are adivsed to pay tax arrears immediately, the notice said. "We have also provided the PAN number and the last-known address of these defaulters so that members of the public could also provide us some information about their whereabouts," the official added.
The companies in the list include Somani Cement with tax arrears of Rs 27.47 crore, Blue Information Technology (Rs 75.11 crore), Appletech Solutions (Rs 27.07 crore), Jupiter Business (Rs 21.31 crore) and Hirak Biotech (Rs 18.54 crore). The other Gujarat-based companies which figure in the list include Icon Bio Pharma & Healthcare Ltd (Rs 17.69 crore), Banyan & Berry Alloys (Rs 17.48 crore), Laxminarayan T Thakkar (Rs 12.49 crore), Virag Dyeing & Printing (Rs 18.57 crore), Poonam Industries (Rs 15.84 crore) and Kunvar Ajay Food (Rs 15 crore).
Besides, names of Jaipur-based Goldsukh Trade India (Rs 75.47 crore), Kolkata-based Victor Credit & Construction (Rs 13.81 crore) and Mumbai-based Noble Merchandise (Rs 11.93 crore) are in the list.
Sensex, Nifty drop for sixth straight day; PSU stocks witness losses
The Bombay Stock Exchange (BSE) Sensex fell for the sixth straight session on Wednesday, declining by about 50 points to end at over nine-week low of 28,111.83.
Losses were outsized in PSU bluechips including NTPC, GAIL, Coal India and SBI.
The 30-share index was pulled lower due to caution ahead of the expiry of March month Futures and Options (F&O) contracts and portfolio churning in the view of fiscal year ending next week, traders said.
The Sensex had risen to a day's high of 28,249.60 in early trade but profit-booking in capital goods, power, metal, oil & gas and banking stocks saw the index touch the session's low of 28,031.42.
The barometer closed with a fall of 49.89 points or 0.18 per cent at 28,111.83. The gauge has now lost 624.55 points in six consecutive sessions.
Wednesday's closing is its weakest since January 15 close of 28,075.55.
NTPC emerged as the worst performer among Sensex and Nifty stocks by closing over 3.5 per cent down, followed by GAIL, L&T, Coal India and SBI that fell between 2-3 per cent range.
In the 30-Sensex constituents, as many as 18 counters ended in the negative zone while 11 led by ICICI Bank, Wipro, Sesa Sterlite, M&M and Axis Bank rose.
On the other hand, shares of ITC ended flat.
Shares of Tata Motors gained 1.5 per cent after the auto major on Wednesday fixed price for proposed Rs 7,500 crore rights issue.
In the broader market, IPCA Laboratories slumped 12.55 per cent after import alerts were issued by the US drug regulator against two of its formulations manufacturing units.
Tracking Sensex, the 50-share National Stock Exchange (NSE) Nifty lost 12.15 points, or 0.14 per cent, to settle at 8,530.80 -- its lowest level since January 15.
In six days, the 50-share index has now lost over 190 points.
A better trend in other Asian markets and higher opening in Europe also failed to buoy sentiments in the Indian markets.
Sectorwise, the BSE Capital Goods index suffered the most by losing 1.65 per cent, Power (down 1.17 per cent), Metal (down 0.97 per cent), Oil&Gas (down 0.56 per cent), Banking (down 0.30 per cent) and Realty (down 0.20 per cent).
The BSE Smallcap index fell 0.67 per cent while the Mid-cap index ended 0.48 per cent lower.
Meanwhile, Foreign Portfolio Investors bought shares worth a net Rs 737.86 crore, while Domestic Institutional Investors sold shares worth net Rs 631.67 crore Tuesday.
Aarti Drugs stock tanks on FDA import alert, turning ex-bonus
Aarti Drugs shares on Tuesday came under heavy selling pressure on the National Stock Exchange (NSE) as the stock turned ex-bonus after the company received an import alert from US FDA (Food and Drug Administration).
Reacting to the said developments, the stock of the company opened on a bearish note at Rs 624 then touched an intra-day low of Rs 558.95 on the NSE.
"Two of the Aarti Drugs facilities in Tarapur have received an import alert dated March 23, 2015 as per the FDA website," the company said in a regulatory filing.
"However, only one of that is US FDA facility. Second one, we had already delisted from the US FDA website couple of years back", it added.
Moreover, the company had fixed March 25, 2015 as the record date for the purpose of allotment of bonus shares in proportion of 1:1.
One bonus equity share of Rs 10 each fully paid up for every one existing equity share of Rs 10 each fully paid up held in the company.
The company, however, noted that this import alert would not affect the company's earnings.
"For the current financial year 2014-15, the total US sales contributes to slightly less than 1 per cent of the total sales volume. Hence this shouldn't affect our top-line and bottom-line significantly," the company said.
Following which the stock recovered some lost ground and was quoted at Rs 617.50, down 8.05 per cent at 1247 hours on NSE.
Aarti Drugs further noted for the said E-22 facility, they had a re-inspection in August 2014 and had submitted four responses.
"We still have to receive an official communication from US FDA on the import alert after which we can take immediate actions to rectify the same," it added.
Shares of the company were trading at Rs 627.80 per share, down 43.75 points or 6.51% on NSE. On Bombay Stock Exchange (BSE) Aarti Drugs shares were down by 721.25 points at Rs 626.00 at 3:08 pm.
Platinum becomes cheaper than gold; demand up 40-50% in Indian markets in Feb-March
KOLKATA: As platinum becomes cheaper than gold, demand for platinum jewellery is zooming in the Indian market. Platinum jewellery retailers said that in February and March, demand shot up 40-50% and this trend is likely to continue in the upcoming wedding season that kicks off next month.
Platinum price is currently hovering around Rs 26,300 per 10 gm as compared to gold price of Rs 26,600 per 10 gm. In the international market, platinum was trading at $1,150 an ounce as compared to th ..
Platinum price is currently hovering around Rs 26,300 per 10 gm as compared to gold price of Rs 26,600 per 10 gm. In the international market, platinum was trading at $1,150 an ounce as compared to th ..
Choksi added: "The young crowd likes the natural colour of platinum. They largely belong to the upper middle and affluent sections of society. But as prices have fallen, even middle class people are looking at platinum now. Evara range was launched in November and since then, we have sold 20 platinum necklaces. Overall in the current fiscal, we are expecting platinum demand to go up by 20-25%."
Samir Sagar, director of Mumbai-based Manubhai Jewellers feels the price is not the lone fact ..
Samir Sagar, director of Mumbai-based Manubhai Jewellers feels the price is not the lone fact ..
Ordinance on Land Acquisition Bill set to lapse?
Facing a road block in Parliament and widespread protests, the government has now decided to go slow on the contentiousLand Acquisition Bill and may let the ordinance promulgated on the issue lapse.
Knowledgeable sources said the government is unlikely to discontinue either of the houses in the middle of the session, a constitutional necessity if the ordinance has to be reissued.
"We are not looking for proroguing either of the houses," a senior minister told IANS.
As per Article 123 of the constitution, an ordinance may be promulgated only in the inter-session period and it lapses six weeks after a parliament session begins.
If either of the houses is not in session, an ordinance can be brought, but not in a session break. The government, unable to pass in the Rajya Sabha the bill to replace the ordinance, had initially thought of proroguing one of the houses to reissue the measure. Proroguing a house means the budget session would end for that house and it would meet for a fresh session after the break.
The Rajya Sabha, which has no role in passing money bills, was the one whose session was likely to end. However, officials from the upper house said there is no such direction or indication so far. The government now appears to be trying to find a middle way.
"Proroguing the house and reissuing the ordinance could damage the government's image further," a senior BJP leader, speaking on condition of anonymity, told IANS, adding that a final decision on the fate of the bill is yet to be taken.
"With the session on, the ordinance in all likeliness may lapse, until some other way is found," the BJP leader said.
Former Lok Sabha secretary general Subhash C Kashyap, however, said that without proroguing one of the houses, the ordinance cannot be reissued during the break.
"The break period is a part of the session, so an ordinance cannot be re-promulgated in this period. If one of the houses is not prorogued, the government will have to wait till the end of session to re-promulgate the ordinance," Kashyap told IANS, adding that there is "no precedent" for this.
Another way would be that the ordinance can be re-promulgated after the session in "retrospect", or from a back date.
"The government can wait till the session ends and bring the ordinance in retrospect," he said.
This, he said, will maintain the continuity of the law. The third option would be getting the bill passed like regular legislation, an option which the government is also considering.
The government's cautious approach was also reflected when Parliamentary Affairs Minister M Venkaiah Naidu, in a press conference on the last day of the first half of the session, said the bill is not a "prestige issue" for the government.
Minister of State for Parliamentary Affairs Mukhtar Abbas Naqvi said the government will hold consultations with different parties and find a way out.
"We are talking to different parties, all channels are open," Naqvi told IANS, adding: "The government will find a way out."
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2015, seeks to replace an ordinance promulgated last December which had amended certain provisions of the 2013 land act passed during the previous United Progressive Alliance (UPA) rule.
The key points removed from the earlier law related to the consent clause and the social impact assessment study of land acquisition.
The consent clause provided for 70-80 per cent of those dependent on the land to agree to its acquisition. The other clause entailed carrying out a study to examine the environmental impact and ensure rehabilitation of displaced people.
The government agreed to nine amendments to the bill to get it passed in the Lok Sabha. These included removing social infrastructure as an exempted category and ensuring that the bare minimum of land required for a project is acquired.
RPT-INDIA WEEKAHEAD-Bonds await borrowing calendar, stocks seen volatile on derivatives
** Indian debt markets await first-half borrowing schedule due to be announced on Monday for cues
** Govt and RBI officials to meet on Monday at 3 p.m. to discuss borrowing plan.
** The benchmark 10-year bond yield is seen moving in a 7.65 to 7.80 pct range during the week
** The rupee is seen holding in a 62.30 to 62.95 per dollar range
** Benchmark NSE stock index seen in a range of 8,400 to 8,700 for the coming week
** Share trading may remain volatile due to expiry of March derivative contracts on Thursday
** New inclusions from India in FTSE Asia-Pacific ex-Japan index to be effective from start of trading next week
** Fund flows will remain a critical factor determining the direction while RBI will also be watched if rupee gains significantly
Govt will not take away any 'significant' power of RBI, says Arun Jaitley
The simmering differences between the finance ministry and the Reserve Bank of India (RBI) over the proposal to dilute the Central bank's role in managing sale and purchase of government bonds in the market came to the fore again on Friday even as Union finance minister Arun Jaitley said that the government will not take away any "significant" power of the RBI and a clarification on its role in the regulation of bond market will be provided next month.
"Concern was expressed by... I think the (RBI) Governor had told about it that the timing (of issuance of GSecs) and all related issues need to be examined. That's the only thing. Ultimately, there are reflections, implications of both of these things on the monetary policy," RBI deputy governor S.S. Mundra said on the sidelines of Skoch Summit in the national capital.
Govt bonds, Sebi
Govt bonds, Sebi
The differences relate to the proposal in the Finance Bill 2015, which seeks to shift the government's debt management from the RBI to the Securities and Exchange Board of India(Sebi).
At the same time Mundra said that it is a consultative process and a work in progress.
Further probed on any other differences, Mundra said, "There is nothing like this. I think it is more of what the media perceives about it. It is a consultative process and it is a work in progress."
In the Budget speech, Jaitley had said, "We have concluded a Monetary Policy Framework Agreement with the RBI as I had promised in my Budget Speech for 2014-15. This Framework clearly states the objective of keeping inflation below six per cent. We will move to amend the RBI Act this year to provide for a Monetary Policy Committee."
Asked about the Budget proposal, Jaitley later said that a clarification on RBI's power to regulate will be provided during the debate on Finance Bill 2015 when Parliament reconvenes on April 20. "Whatever steps we take will be in consultation with the RBI. The RBI governor has been in touch with me," Jaitley told CNBC TV18.
Indian economy to grow 7.7 per cent in 2015, says OECD
India is poised to grow 7.7 per cent this year and 8 per cent in 2016 to become the fastest growing major economy, according to think-tank OECD.
In its interim economic assessment report released on Wednesday, OECD said that over the next two years India is set to grow faster than China, where growth is slowing towards the official target of around 7 per cent.
However, the grouping cautioned that maintaining rapid growth would be a challenge for India despite the strong current momentum.
The Organisation for Economic Cooperation and Development's (OECD) bullish outlook for India comes close on the heels of IMF chief Christine Lagarde describing the country as a bright spot on cloudy global horizon.
"India will grow by 7.7 per cent in 2015 and 8 per cent in 2016... India is now expected to be the fastest-growing major economy in 2015-16, overtaking China", OECD said.
In November last, the grouping had projected Indian economy to expand 6.4 per cent and 6.6 per cent in 2015 and 2016, respectively.
OECD said that part of this relative improvement reflects significant revisions to past GDP data, which raise the base growth rate through 2014.
The projected acceleration in growth this year is actually smaller than foreseen in the November 2014 Economic Outlook, reflecting sluggish growth of investment and exports.
With obstacles emerging to the adoption of growth- friendly structural reforms, maintaining rapid growth will pose a difficult challenge, notwithstanding the strong current momentum, the report noted.
"China is anticipated to expand 7 per cent this year as well as next year. Brazil's economy is expected to shrink by 0.5 per cent in 2015 before returning to a 1.2 per cent growth rate in 2016", the report said.
According to OECD, low oil prices and monetary easing are boosting growth in the world's major economies, but the near-term pace of expansion remains modest, with abnormally low inflation and interest rates pointing to risks of financial instability.
The widespread easing of monetary policy over the past few months, affecting countries accounting for roughly half of global GDP, has resulted in improvements in global financial conditions.
"A number of the associated moves in exchange rates have been large, raising the question of overshooting in some cases", it said.
"Strong domestic demand is driving growth in the US, which, combined with dollar appreciation, is adding to demand in the rest of the world", OECD said.
The euro area should benefit from low oil prices, monetary stimulus and euro depreciation, which combine to offer the chance to escape from stagnation, it added.
Rupee rises to 62.67 on dollar selling by exporters
The rupee appreciated by three paise to 62.67 against the Greenback at the Interbank Foreign Exchange (Forex) market in early trade on Wednesday on sustained selling of the US dollar by exporters.
Besides, early gains in local equities and the dollar's weakness against other major currencies overseas also helped the rupee to log gains, forex dealers said.
The local unit had closed 11 paise higher against the American currency, at 62.70 on Tuesday amid a good show by stocks and on selling of dollars by banks and exporters.
Meanwhile, the benchmark Bombay Stock Exchange (BSE) index Sensex rose by 70.59 points (or 0.24 per cent), to 28,806.97 in early trade on Wednesday.
Current account deficit to be less than 1 per cent in FY16, says Arun Jaitley
Current account deficit (CAD) will "hopefully" be less than 1 per cent of gross domestic product (GDP) in the next fiscal year that begins in April, Finance Minister Arun Jaitley told lawmakers on Tuesday.
The deficit narrowed to 1.6 per cent in the October-December quarter from 2 per cent a quarter earlier on the back of slumping oil prices.
Analysts said it should move into surplus in early 2015 for the first time in eight years.
Rupee rises 9 paise to 62.72 on increased dollar selling
The rupee gained 9 paise to 62.72 against the Greenback in earlytrade on Tuesday at the Interbank Foreign Exchange (Forex) market on increased selling of the US dollar by banks and exporters amid lower dollar value overseas on tepid US manufacturing data.
Forex dealers said sustained capital inflows and a higher opening in the domestic stock market boosted the rupee sentiments.
The domestic unit had gained 16 paise to end at 62.81 against the dollar on Monday on fresh selling of the US currency.
Meanwhile, the benchmark Bombay Stock Exchange (BSE) index Sensex on Monday rose sharply by 202.96 points (or 0.71 per cent), to trade at 28,640.67.
Mutual fund equity folio count rose by 20 lakh during Apr-Feb FY15
Equity mutual funds witnessed an addition of 20 lakh investor accounts or folios during the April-February period of the current 2014-15 financial year on account of a sharp rally instock markets.
Folios are numbers designated to individual investor accounts, though one investor can have multiple folios.
According to latest data on investor accounts with 45 fund houses, the number of equity folios rose to 3.14 crore in February, from 2.94 crore during the full 2013-14 financial year, registering a gain of 20 lakh folios.
April saw the first rise in folio count in more than four years. Prior to that, the equity mutual fund (MF) sector had seen a continuous closure of folios since March 2009 after the market crashed in late 2008 due to the global financial crisis.
Since March 2009, the sector has seen a closure of 1.5 crore folios. The investor-base reached its peak of 4.11 crore in March 2009, while it stood at 3.77 crore in March 2008.
Industry experts said a strong rally in equity markets and the consequent rise in investors' interest led to a sharp increase in retail folios.
Since early 2014 , stock market sentiment took a positive turn, which generated significant interest from overseas investors. This was mainly on account of expectations from the new Prime Minister Narendra Modi-led government at the centre, leading to equity markets adopting a bullish tone.
"Besides, the growth in equity markets has been noticed by retail investors and since May 2014, we have seen month-on-month positive net sales in equity mutual funds ," an expert said.
Folio count has been increasing, especially in the country's smaller towns - known as beyond-15 cities (B15) - with total number of retail folios in such cities recently overtaking the number of folios from T-15 (top 15) cities for the first time, the expert added.
The addition in equity folios is in line with the benchmark Bombay Stock Exchange (BSE) index Sensex surging by 31 per cent in the 11-month period under review.
Moreover, the mutual fund industry reported net inflows of over Rs 61,000 crore in equity funds in April-February period, which helped the industry grow its folio count.
Overall, industry's retail folios surged to 4.2 crore at February-end 2015, from 4.05 crore at end of March.
BSE to auction govt bonds worth Rs 893 crore for FIIs on March 16
BSE, the leading stock exchange, will on Monday auction investment limits for government debt securities worth Rs 893 crore as over 99 per cent of permitted investment levels for overseas investors have been exhausted.
The auction would take place on the top stock exchange Bombay Stock Exchange (BSE's) 'ebidxchange' platform from 3.30 pm to 5.30 pm, after the close of normal market hours on March 16, the bourse said in a circular.
The earlier auctions for the government debt securities have always been over-subscribed multiple times, given the huge interest among foreign investors for these bonds.
Foreign investors are allowed to invest up to $25 billion (Rs 124,432 crore) in government debt securities through auction route, while an investment of up to $5 billion (Rs 29,137 crore) is permitted 'on tap'.
As per the latest data from depositories, the total investments, including limits acquired by foreign investors in the auction route, currently stand at Rs 1,23,539 crore, exhausting 99.28 per cent of the permitted levels.
Out of this, Rs 1,23,414 crore worth investments have been made already while foreign investors have got unutilised investment limits worth Rs 125 crore available with them.
This leaves available debt securities worth Rs 893 crore, limits for which would be auctioned tomorrow.
In the 'on-tap' category also, the total investments currently stands at Rs 29,069 crore, exhausting 99.77 per cent of the permitted levels.
The demand for corporate debt securities among foreign investors is less as compared to government bonds.
Foreign investors can invest up to $51 billion (Rs 244,323 crore) in corporate bonds, while their total investment in this category currently stands at Rs 1,79,426 crore (about 73 per cent).
Gold prices gain on steady buying amid strong overseas cues; silver prices slip
Gold prices climbed up at the bullion market in Mumbai on steady buying from stockists and retail consumers amid better international markets.
Prices of standard gold (99.5 purity) rose by Rs 95 to close at Rs 25,995 per 10 grams from Friday's closing level of Rs 25,900.
Pure gold (99.9 purity) prices also advanced by a similar margin to finish at Rs 26,145 per 10 grams from Rs 26,050.
Silver prices, however, slipped owing to speculative selling and reduced industrial demand.
Silver (.999 fineness) declined by Rs 65 per kg to conclude at Rs 36,140 as against Rs 36,205 previously.
In New York, gold prices edged slightly higher on somesupport as economic data of US producer price index cooled expectations of a Federal Reserve interest rate hike as early as June.
Gold for delivery in April climbed by 50 cents to settle at US $1,152.40 an ounce on Comex, while silver for May delivery fell 2.2 cents to US $15.494 an ounce.
Cutting edge
Though there is still some time left for the financial year to end, have you decided in which tax-saving mutual fund will you invest this year? If you haven't, and that too because of the difficulty in deciding which fund suits you best, here's a little help.
First Things First
Though most people choose a fund based on performance, there is much more to a fund than its past. One must, for instance, understand where it fits in the larger portfolio or if it suits one's risk appetite.
While most tax-saving funds invest big time in small-cap andmid-caps, some overload the portfolio with these stocks , making returns volatile. Some churn the portfolio more while some take aggressive cash calls, that is, hold a lot of cash if stocks are too expensive. We tell you why these parameters are important.
Exposure to mid-cap and small-cap stocks: Tax-saving funds typically buy shares of big as well as small companies. Though most invest over 50% money in large-caps, some prefer a very high exposure to mid-caps and small-caps. This matters because prices of mid-cap and small-cap stocks are very volatile, which is reflected in performance of funds that invest heavily in these stocks. Reliance Tax Saver Fund, for example, had 58% money in mid-cap and small-cap stocks on an average in the past three years . The figure for BNP Paribas Long Term Equity Fund was 27%.
Turnover ratio: This shows how fast the fund churns the portfolio. A 100% turnover means the portfolio is changed completely in one year. A 20% figure means this happens in five years. The higher the ratio, the more the churn. "We actively capture intra/inter sector valuation differences, which involves selling expensive stocks/sectors and buying relatively inexpensive ones," says Chintan Haria, fund manager, ICICI Prudential Tax Plan. A high churn means extra cost due to securities transaction tax, though there is a cap on the fee that mutual funds can charge from investors. Besides, we have seen that expenses are more a function of assets under management than the turnover ratio. However, a high turnover ratio certainly indicates aggressive fund management.
Cash holding: Funds hold some cash for liquidity or portfolio rebalancing. However, some take active cash calls, that is, hold a lot of cash, typically in markets where they think valuations are high and it is not prudent to be fully invested. This is aggressive fund management. The cash holding of Quantum Tax Saving Fund, for example, was 16% in the three years to January 2012. However, for most funds, the figure was below 5%. "The main reason for keeping so much cash is discipline. The scheme sells stocks after they cross pre-determined limits. Also, there may be few good investment ideas in the market due to high valuations. If markets correct, we may get an opportunity to deploy cash," says Atul Kumar, fund manager, Quantum Tax Saving Fund.
'We keep cash only to meet liquidity needs and for portfolio restructuring and rebalancing', says Anand Radhakrishnan Chief Investment Officer, Equity, Franklin Templeton Investments
Standard deviation shows how much returns deviate from the average. For example, if the average one-year return is 30% and standard deviation is 10%, the one-year return will be 20-40% at least 68% times. Nearly 95% times it will be 10-50%. The more the standard deviation, the higher the volatility.
Measuring Fund Management Style
Measuring Fund Management Style
In order to make it easier for you to select a tax-saver fund, we decided to divide these into three categories-aggressive, moderate and conservative-on the basis of parameters discussed earlier. Here we must make it clear that we have categorised funds as conservative/moderate despite the fact that their portfolio is 100% equity.
There are 38 open-ended tax-saving funds, also called Equity-linked Savings Schemes or ELSS. We pruned the list by excluding funds rated below three-star by Value Research, amutual fund tracking company. We were left with 25 funds. We measured their performance on following parameters-mid-cap and small-cap exposure, turnover ratio, standard deviation of return and cash holding-in the three years to 31 December 2014.
We gave different weights to each parameter-40% to mid-cap and small-cap exposure, 30% to portfolio turnover ratio, 20% to cash holding and 10% to volatility in returns. We got a score by multiplying the weight to the respective parameter and adding the weighted parameters.
Based on the (rounded off) score, we divided the 25 funds into three categories-the top eight funds (in descending order) as aggressive, the subsequent nine as moderate and the rest as conservative (See Style Quotient). As per our calculation, Edelweiss ELSS Fund, with a score of 113, is the most aggressive, followed by ICICI Prudential Tax Saver (71) and BNP Paribas Long Term Equity (62).
Both kept their mid-cap and small-cap exposure below 30%. "We do not sell stocks because of valuations but adverse changes in business environment such as rising competition and substantial slowdown in growth leading to deterioration in the sector's return profile. Change in quality of business is given more importance than high valuations," Shreyash Devalkar, fund manager, BNP Paribas LT Equity Fund, said when asked about the high churn rate.
BNP Paribas LT Equity and Reliance Tax Saver (ELSS) fund are two five-star funds in the category. Among the moderate ones are Canara Robeco Equity Tax Saver Fund (35), Axis Long Term Equity Fund (35) and HSBC Tax Saver Equity Fund (35). Franklin Templeton Tax Shield (24) also falls in this category.
UTI Equity Tax Saving Fund emerged as the most conservative with a score of 15, followed by HDFC Long Term Advantage Fund (16) and Quantum Tax Saving Fund (18). This category has no five-star fund and only one four-star fund.
Investment Call
One can easily reach the conclusion that picking funds from aggressive and moderate categories makes more sense. The conservative funds may be laggards going by their star ratings.
If you already have a fund from the aggressive category, you may want to buy one from the moderate category or vice versa. If you do not want to take extra risk and yet want a better performing fund, look for one in the moderate category.
"Usually in times like these when equity markets are doing well, funds with higher exposure to mid-cap and small-cap stocks tend to perform well and naturally investors get attracted to them. However, when markets crash, these see the sharpest drop in value," says Ankur Kapoor, director, investment advisory, Finqa, a financial advisory firm.
The best way to avoid such a situation is to choose a fund with relatively lower exposure to mid-caps and small-caps. Another option is to have a combination of aggressive and conservative funds.
Sensex falls 427 pts amid widespread selling
The Indian markets crumbled under renewed intense selling pressure as overnight pullback rally ran out of steam with benchmark Sensex tanking 427 points to 28,503.30 and Nifty index plunging 128 points to 8,647.75 - their lowest levels in one month.
The selling was indiscriminate as all sectoral indices bore the brunt of the intense sell-off even as mid-cap and small-cap too crumbled.
The passage of the much-awaited and long-delayed insurance bill allowing foreign investors to increase stakes in local insurers from 26 per cent to 49 per cent, the reform initiatives of Modi government and better-than-expected IIP growth out put failed to enthuse market players.
Extending its strong recovery momentum, market opened on a strong note with the benchmark BSE Sensex reclaiming the important psychological 29,000-mark on positive global cues.
But the initial enthusiasm proved shortlived as key benchmark indices lost ground in a sudden bout of implied volatility.
It succumbed to heavy unwinding as investors dumped blue-chips across the board ruthlessly even traders began to pare back longs literally wiping out all overnight gains.
The Sensex opened with a gap-up at 29,134.93 and swung between a wide range of 29,183.76 and 28,448.48 before concluding at 28,503.30, posting a massive loss of 427.11 points, or 1.48 per cent, over its last close . On weekly basis, it has stumbled by 945.65 points or 3.21 pct.
The 50-share broder NSE-Nifty also plummeted by a hefty 128.25 points, or 1.46 per cent to end at 8,647.75 after touching an intra-day high of 8,849.75 and low of 8,631.75.
Sensex reverses gains, falls over 100 points despite firm Asian cues
The benchmark Bombay Stock Exchange (BSE) index Sensex washed out initial gains on a sudden bout of selling and fell by 102 points in late morning trade despite firm Asian cues and fresh capital inflows.
The 30-issue BSE barometer resumed higher in early morning trade, at 29,134.93, and touched a high of 29,183.76, showing a rise of 253.35 points (or 0.86 per cent), on the back of passage of the Insurance Bill in Parliament on Thursday.
Later, it succumbed to heavy selling to hit a low of 28,809.07.
The Sensex had gained 271.24 points in Thursday's trade.
The broader 50-share National Stock Exchange (NSE) index Nifty also fell by 38.20 points (or 0.44 per cent), to quote at 8,737.80.
Major losers on the bourses were Axis Bank, Hindalco, Sun Pharma, BHEL, Bajaj Auto, Larsen, GAIL and Tata Steel.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 733.09 crore on Thursday, as per provisional data released by the domestic bourses.
Key indices in China, Hong Kong, Taiwan, South Korea and Japan rose by 0.25-1.44 per cent, while indices in Singapore and Indonesia fell by 0.09-0.27 per cent.
At the New York market, US stocks recorded one of the biggest gains in more than a month, bouncing back from two days of losses, as expectations of a rate hike were pushed back following disappointing retail sales data.
US household wealth touches record high: Nearly $83 trillion
WASHINGTON: Fueled by higher stock and home values, Americans' net worth reached a record high in the final three months of 2014.
Household wealth rose 1.9 percent during the October-December quarter to nearly $83 trillion, the Federal Reserve said Thursday. Stock and mutual fund portfolios gained $742 billion, while the value of Americans' homes rose $356 billion.
Household wealth rose 1.9 percent during the October-December quarter to nearly $83 trillion, the Federal Reserve said Thursday. Stock and mutual fund portfolios gained $742 billion, while the value of Americans' homes rose $356 billion.
The typical household didn't benefit much, though. Most of the wealth remains concentrated among richer families. The wealthiest 10 percent of U.S. households own about 80 percent of stocks .
Still, greater wealth could help lift spending and economic growth. Higher stock and home values can make people feel more financially secure and more willing to spend, and consumer spending fuels about 70 percent of the economy.
The Fed's figures aren't adjusted for population growth or inflation. Household wealth, or net worth, reflects the value of homes, stocks and other assets minus mortgages, credit cards and other debts
U.S. corporations are also seeing sharp improvements in their finances, the Fed report showed. Businesses amassed $2 trillion in cash by the end of last year_ a record high _ up from less than $1.9 trillion three months earlier.
Cash-rich corporations could spend more oninvestments in machinery, computers and other equipment. That would make workers more productive and accelerate economic growth.
They could also use some of their cash to raise pay at a time when many employees have been stuck with stagnant wages. Some economists have criticized publicly traded companies for spending heavily on repurchasing their own shares, which boosts profits and serves shareholders rather than employees.
Businesses are also taking advantage of low interest rates by taking on more debt, which typically signals confidence in the economy and future growth. Business debt rose 7.2 percent in the fourth quarter, the sharpest quarterly increase in more than six years.
During the Great Recession, which officially ended in June 2009, Americans' net worth plummeted as stock and home values sank. Household wealth tumbled to $55 trillion in the first quarter of 2009 from a pre-recession peak of $67.9 trillion. Wealth didn't surpass that peak until the third quarter of 2012.
Still, greater wealth could help lift spending and economic growth. Higher stock and home values can make people feel more financially secure and more willing to spend, and consumer spending fuels about 70 percent of the economy.
The Fed's figures aren't adjusted for population growth or inflation. Household wealth, or net worth, reflects the value of homes, stocks and other assets minus mortgages, credit cards and other debts
U.S. corporations are also seeing sharp improvements in their finances, the Fed report showed. Businesses amassed $2 trillion in cash by the end of last year_ a record high _ up from less than $1.9 trillion three months earlier.
Cash-rich corporations could spend more on
They could also use some of their cash to raise pay at a time when many employees have been stuck with stagnant wages. Some economists have criticized publicly traded companies for spending heavily on repurchasing their own shares, which boosts profits and serves shareholders rather than employees.
Businesses are also taking advantage of low interest rates by taking on more debt, which typically signals confidence in the economy and future growth. Business debt rose 7.2 percent in the fourth quarter, the sharpest quarterly increase in more than six years.
During the Great Recession, which officially ended in June 2009, Americans' net worth plummeted as stock and home values sank. Household wealth tumbled to $55 trillion in the first quarter of 2009 from a pre-recession peak of $67.9 trillion. Wealth didn't surpass that peak until the third quarter of 2012.
Adani, GVK win Australian state backing to expand coal port
MELBOURNE: Queensland's new state government on Wednesday cleared plans by two Indian companies to expand a port for coal projects that are opposed by green groups worried about pollution and damage to the Great Barrier Reef.
The approval, supporting separate mining projects planned by Indian conglomerates Adani Enterprises and GVK, came as a surprise. The new Labor government had been seen as less supportive of the coal industry than its predec ..
The approval, supporting separate mining projects planned by Indian conglomerates Adani Enterprises and GVK, came as a surprise. The new Labor government had been seen as less supportive of the coal industry than its predec ..
The previous government, toppled in January in a stunning election outcome, had proposed spending taxpayers' money to help fund the Abbot Point port expansion and a rail line for Adani's Carmichael project in the untapped Galilee Basin.
The port expansion was to have involved dumping 3 million cubic metres of soil dredged at the port of Abbot Point into the sea about 25 km (15 miles) from the Great Barrier Reef.
However, the Australian government moved earlier this year to ban ..
An alternative land dumping proposal near wetlands was rejected by the new Labor government. Instead it has approved plans to dump the dredge spoil at the port itself, on a site slated for another coal terminal that has been shelved.
"I've always said I support the responsible and sustainable development of the Galilee Basin and Abbot Point, and the agreement we've reached demonstrates that," Queensland Premier Annastacia Palaszczuk said in a statement.
Adani said the state gov ..
The port expansion was to have involved dumping 3 million cubic metres of soil dredged at the port of Abbot Point into the sea about 25 km (15 miles) from the Great Barrier Reef.
However, the Australian government moved earlier this year to ban ..
An alternative land dumping proposal near wetlands was rejected by the new Labor government. Instead it has approved plans to dump the dredge spoil at the port itself, on a site slated for another coal terminal that has been shelved.
"I've always said I support the responsible and sustainable development of the Galilee Basin and Abbot Point, and the agreement we've reached demonstrates that," Queensland Premier Annastacia Palaszczuk said in a statement.
Adani said the state gov ..
Pipavav deal: Reliance Infrastructure makes Rs 1,263-crore open offer
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MUMBAI: Taking forward its proposed takeover of Pipavav Defence, Reliance Infrastructure today made an open offer for acquisition of further 26 per cent stake from public shareholders for Rs 1,263 crore.
The open offer made by Reliance Defence Systems and Reliance Infrastructure, forpurchase of over 19.14 crore shares, has been made at a price of Rs 66 each, as per the offer documents filed with the markets regulator Sebi.
Pipavav shares today closed nearly 4 per cent down at Rs 61.3 at the BSE.
The public announcement for the open offer would bepublished in newspapers tomorrow, which is mandatory as per Sebi regulations.
Recently, Reliance Infra reached an agreement with the Pipavav promoters for acquisition of 13 crore shares, amounting to 17.66 per cent stake, for Rs 819 crore.
Besides, the sellers have also agreed to sell an additionalnumber of equity shares at the same price (for upto Rs 354 crore) to take the total stake of Reliance Infra to 25.10 per cent, after taking into account the acquisition made under the open offer.
Since Reliance Infra has entered into an agreement to acquire voting rights in excess of 25 per cent of the total voting rights of Pipavav, the Sebi norms mandate an open offer to be made for public shareholders to buy 26 per cent stake.
The open offer is subject to statutory approvals from fair trade watchdog CCI, Gujarat Maritime Board and other authorities.
The proposed acquisition of controlling stake in Pipavav is part of Anil Ambani-led Reliance Group's recently announced foray into defence sector. Ambani recently visited the Gujarat facilities of Pipavav and told its 4,000 employees that he would make it the country's biggest defence manufacturer.
The open offer price has been arrived at in accordance with the relevant Sebi Regulations.
Upon completion, the existing promoters will cease to be promoters and Reliance will become the new promoter of Pipavav DefenceBSE -3.99 % with sole control.
The offer is also subject to certain Conditions Precedent as per the Purchase Agreement between Reliance and the Promoters of Pipavav Defence. These include no material adverse event occuring till the completion date and no material change in the laws or threatened litigation relating to business of Pipavav Defence.
It would also require approval for change in Articles of Association by the shareholders of Pipavav Defence, receipt of consents from lenders, completion of CDR package, among others.
The open offer made by Reliance Defence Systems and Reliance Infrastructure, for
Pipavav shares today closed nearly 4 per cent down at Rs 61.3 at the BSE.
The public announcement for the open offer would be
Recently, Reliance Infra reached an agreement with the Pipavav promoters for acquisition of 13 crore shares, amounting to 17.66 per cent stake, for Rs 819 crore.
Besides, the sellers have also agreed to sell an additional
Since Reliance Infra has entered into an agreement to acquire voting rights in excess of 25 per cent of the total voting rights of Pipavav, the Sebi norms mandate an open offer to be made for public shareholders to buy 26 per cent stake.
The open offer is subject to statutory approvals from fair trade watchdog CCI, Gujarat Maritime Board and other authorities.
The proposed acquisition of controlling stake in Pipavav is part of Anil Ambani-led Reliance Group's recently announced foray into defence sector. Ambani recently visited the Gujarat facilities of Pipavav and told its 4,000 employees that he would make it the country's biggest defence manufacturer.
The open offer price has been arrived at in accordance with the relevant Sebi Regulations.
Upon completion, the existing promoters will cease to be promoters and Reliance will become the new promoter of Pipavav DefenceBSE -3.99 % with sole control.
The offer is also subject to certain Conditions Precedent as per the Purchase Agreement between Reliance and the Promoters of Pipavav Defence. These include no material adverse event occuring till the completion date and no material change in the laws or threatened litigation relating to business of Pipavav Defence.
It would also require approval for change in Articles of Association by the shareholders of Pipavav Defence, receipt of consents from lenders, completion of CDR package, among others.
BSE Sensex flat; IT stocks fall on outlook worries
The BSE Sensex was trading flat in afternoon trade on Tuesday as technology firms fell on worries about their outlook although auto makers gained after an industry body executive said it expected a revival in demand for vehicles.
The overall sentiment remained weak after a steep fall in the previous session, weighed down as Asian markets across the region remained under pressure over worries the US Federal Reserve would start raising interest rates from mid-year.
The BSE Sensex and Nifty had posted their biggest daily fallssince January 6 on Monday.
"Markets are likely to trade volatile for the near-term. People are waiting and are looking for fresh cues. However, overall outlook remains intact," said Suresh Parmar, head, institutional equities at KJMC Capital Markets.
While the 30-share Sensex was down 0.01 per cent in afternoon trade, the broader Nifty gained 0.01 per cent.
Software services exporters continued to fall with Tata Consultancy Services losing 0.7 per cent, adding to its 1.8 per cent fall in the previous session, after a weaker-than-expected guidance for the Dec-March quarter.
Wipro shares were trading 1.01 per cent lower.
Sunil Mittal to Mark Zuckerberg: Do philanthropy to make internet free
Taking on social networking giant Facebook 's ambitious 'free Internet' plans, telecom major Bharti Airtel's chief Sunil Mittal has said that companies should do philanthropy if they stop charging for mobile Internet.
Facebook
has launched an 'Internet. org' initiative under which users can access Internet free of charge for select websites if they come through a partner telecom operator. Incidentally, Airtel Africa is one such partner for
Facebook
while rival Reliance Communications has partnered Facebook in India for this initiative, which is based on assumption that bringing more people to the Internet fold by offering them free
Mittal, who met Facebook founder and chief executive officer Mark Zuckerberg at the Mobile World Congress in Barcelona, said that the social networking major is right in its thinking that such an initiative would expand the market, but telecom operators also need to get their revenues and charge for the services.
"I told him (Zuckerberg) that you are right that this (Internet.org) expands the market. At the end, you must understand that we (telecom operators) need to charge you for something. SMSs have gone more or less, voice is going down and they (Facebook) recognise that," Mittal told the media in the Spanish city. He added that telecom companies are as such not making large money.
The comments incidentally come at a time when a high-pitched spectrum auction is underway in India and committed bids worth about Rs 86,000 crore have come in within first fourdays of bidding crossing the minimum targeted amount of Rs 82,000 crore.
Telecom companies say they invest billions of dollars in spectrum, network and other operations, but they argue that Internet-based entities offering pseudo-telecom services are piggy-backing on the mobile operators' networks without bearing much investment on their own.
At the same event, UK-based telecom giant Vodafone's global CEO Vittorio Colao reportedly said about Facebook's Internet plan that it is almost like Zuckerberg does philanthropy, "but with my money". Mittal cautioned that investment in mobile networks by industry will go down as Internet-based messaging and calling services are "cannibalising" revenues of telecom firms.
"He (Zuckerberg) is saying that make Internet.org lite version of Facebook free of data charge so that people will upgrade. People will come to Internet for the first time. The point is that it is self-serving for them," Mittal said.
US crude prices to drop to $40 a barrel as inventories rise, says Goldman Sachs
S crude prices will likely drop as far as $40 a barrel in the near-term, reversing recent gains in oil prices as global crude inventories begin to increase again, Goldman Sachs said.
Oil prices rose by almost a third betweenJanuary and February on the back of supply disruptions in the Middle East, strong winter demand and high refinery margins. That followed a rout that had seen price falls of around 60 per cent between June 2014 and January 2015.
But Goldman said that "the activity pull is sequentially weakening" and that global crude inventories would therefore rise, pushing West Texas Intermediate (WTI) crude CLc1 to US $40 a barrel, levels last seen at the peak of the global financial crisis in late 2008, early 2009. The fuel's price stood at around $49.40 on Monday.
"While we continue to forecast a strong demand recovery in2015 , we believe that sequentially weaker activity, the end of winter and the end of potential restocking demand, will lead to a sequential deceleration in demand-growth as we enter the spring," the investment banking firm said.
Goldman said that Brent prices LCOc1 would also come under renewed pressure.
"As a result and absent further unexpected OPEC disruptions, we expect Brent oil prices and timespreads to reverse their recent strength, although the lack of a meaningful build in the past few months leaves risk to our forecast for (WTI) oil prices remaining at $40/barrel for two quarters skewed to the upside," Goldman said in a note dated March 8.
The global financial services major said that it expected "OECD Asia demand to decline in 2015 as stronger industrial production is offset by the continued switch to LNG (liquefied natural gas) for power generation and the impending start-up of the two Sendai nuclear reactors in Japan".
A two-thirds drop in Asian LNG prices is making the fuel cost competitive against oil in the industrial power sector.
In Japan, the regulator has given approval for several reactors to be restarted in 2015. All its 48 reactors were taken offline after the meltdowns at the Fukushima Daiichi plant following an earthquake and tsunami in 2011.
In the United States , Goldman said that "the build in US inventories has surprised to the upside, especially in Cushing".
The US-based bank said that its WTI price prices forecast of $65 a barrel for 2016 was "skewed to the downside" as currently idled assets could quickly be redeployed, especially as operating costs were falling.
Sensex down 400 points, but it won't trip bull run, say experts
NEW DELHI: The Sensex cracked over 400 points in trade on Monday following a sharp cut in the rupee against the US dollar. But the correction is more short-term in nature and the index is poised to bounce back to hit fresh record highs of 40-50K in the next 2 years.
Indian markets came under pressure after the rupee plummeted by 50 paise to 62.66 against the US dollar in early trade as the American currency strengthened overseas.
Forex deale said besides dollar's gains against other currencies overseas on an upbeat US jobs data, fresh demand from importers for the greenback and a weak opening in the domesticstock market put pressure on the rupee.
Tracking the momentum, the 50-share Nifty index also came under pressure and was trading around its crucial psychological level of 8800, weighed down by losses in banks, autos, power and metalstocks .
Indian markets came under pressure after the rupee plummeted by 50 paise to 62.66 against the US dollar in early trade as the American currency strengthened overseas.
Forex deale said besides dollar's gains against other currencies overseas on an upbeat US jobs data, fresh demand from importers for the greenback and a weak opening in the domestic
Tracking the momentum, the 50-share Nifty index also came under pressure and was trading around its crucial psychological level of 8800, weighed down by losses in banks, autos, power and metal
25,000 new houses to be made for policemen in MP: Chief Minister Shivraj Singh Chouhan
INDORE: Madhya Pradesh Chief Minister Shivraj Singh Chouhan has announced that 25,000 new houses would be constructed for policemen in the state.
The state government's endeavour is to ensure stress-free working environment to policemen for which they would be provided better facilities, Chouhan said after inaugurating a newly-constructed residential complex of 180 houses for policemen at Rau near here last evening.
The housing complex has been built at a cost of about Rs 17.65 cro ..
On the occasion, Chouhan said efforts were on to provide better facilities and working environment to the cops.
"The police personnel are also human beings, but their work hours are not definite. If we expect better services from the policemen, then we will also have to provide them better facilities," he said.
Three reasons Sensex fell from mount 30K to end 213 points down
MUMBAI: The S&P BSE Sensex plunged over 730 points from all-time high of 30,024.74 on Thursday. This, despite a surprise rate cut by the Reserve Bank of India. All the sectoral indices, barring healthcare, are in the red with oil & gas and rate-sensitive sectors leading the fall.
The Sensex ended the day at 29,380.73; down 213.00 points. The Nifty closed the day at 8,922.65; down 73.6 points.
While it's still on the move, here are the factors that could have triggered this sharp fall.
Profit booking: Nifty has been on an uptrend trajectory for the past four sessions. It rallied 5 per cent from 8,683.85 on February 26 to an all-time high of 9119.20 in trade today. According to analysts, it ran up sharply in a short period of time and some profit booking was anticipated.
The Nifty has corrected on the day of good news and that may lead to weakness, says Ashwani Gujral, fund Manager,ashwanigujral.com. Despite news ..
Mumbai HC to hear govt's case against FTIL board on Wednesday
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MUMBAI: The Bombay High Court (HC) has said it would on Wednesday hear the government's arguments to a motion filed by Financial Technologies (FTIL) against the ministry of corporate affairs moving theCompany Law Board (CLB) to supersede its board. In the interim, the government will have to hold back submission on its petition to CLB until after the Bombay HC hears the matter on Wednesday.
In its petition to the CLB, the ministry has sought ad interim relief to, among others, restrain all the current directors of FTIL from acting as directors or holding any other office in the company and to restrain them from creating third party rights on any propertiesassets owned by it. Further, CLB should allow the government to appoint nominee directors in place of the existing directors on FTIL.
FTIL's shares ended up almost 20 per cent to Rs 214.4 on Monday.The government petition was to be heard by CLB, Delhi on Tuesday. Now, before moving the CLB, the government will place its stand for petitioning the board before the HC on Wednesday.
In October last year, the government passed a draft order to amalgamate scam-hit NSELwith its holding company FTIL, which the latter challenged in the HC. The HC on February 4 vacated its status quo order in respect of the draft order with the rider that the government pass a final or der within two months after hearing objections of all the affected parties - FTIL and its shareholders, etc. The HC also restrained the government from implementing the final order for two weeks thereafter to allow FTIL to move the court.
FTIL's argument in court on Monday was that before the government passed a final order under Section 396, replacing its board would render any objection by the company to the same infructuous. Its petition has challenged the government's invocation of Section 396 for merging its subsidiary, scam-hit NSEL, with itself in public interest on the ground that the holding company would be rendered without an identity and that interests of its shareholders would be hurt.
But the government has blamed FTIL squarely for the Rs 5,600-crore loss caused to Rs 13,000 investors who traded on its subsidiary NSEL, in which it held 99.99 per cent, and had common directors and key management personnel.
The ministry has cited media reports to the effect that FTIL would "hive off its most popular automated trading software Odin into a separate business unit for selling it to prospective bidders."
Moves like this, it argues, would defeat the amalgamation exercise aimed at speeding up recovery efforts to NSEL's distressed investors.
In its petition to the CLB, the ministry has sought ad interim relief to, among others, restrain all the current directors of FTIL from acting as directors or holding any other office in the company and to restrain them from creating third party rights on any propertiesassets owned by it. Further, CLB should allow the government to appoint nominee directors in place of the existing directors on FTIL.
FTIL's shares ended up almost 20 per cent to Rs 214.4 on Monday.The government petition was to be heard by CLB, Delhi on Tuesday. Now, before moving the CLB, the government will place its stand for petitioning the board before the HC on Wednesday.
In October last year, the government passed a draft order to amalgamate scam-hit NSELwith its holding company FTIL, which the latter challenged in the HC. The HC on February 4 vacated its status quo order in respect of the draft order with the rider that the government pass a final or der within two months after hearing objections of all the affected parties - FTIL and its shareholders, etc. The HC also restrained the government from implementing the final order for two weeks thereafter to allow FTIL to move the court.
FTIL's argument in court on Monday was that before the government passed a final order under Section 396, replacing its board would render any objection by the company to the same infructuous. Its petition has challenged the government's invocation of Section 396 for merging its subsidiary, scam-hit NSEL, with itself in public interest on the ground that the holding company would be rendered without an identity and that interests of its shareholders would be hurt.
But the government has blamed FTIL squarely for the Rs 5,600-crore loss caused to Rs 13,000 investors who traded on its subsidiary NSEL, in which it held 99.99 per cent, and had common directors and key management personnel.
The ministry has cited media reports to the effect that FTIL would "hive off its most popular automated trading software Odin into a separate business unit for selling it to prospective bidders."
Moves like this, it argues, would defeat the amalgamation exercise aimed at speeding up recovery efforts to NSEL's distressed investors.
Axis Bank, ICICI, Federal Bank surge upto 5.6% on dilution of sub-limit for foreign investors
NEW DELHI: Stocks of private sector lenders such as Axis Bank, Yes Bank, ICICI Bank continued their rally for the second straight session on Monday, following the removal of distinction between FII and FDI limits.
The finance minister in his Budget speech on Saturday opened up doors for FIIs to buy up to 74 per cent stake in private banks. Earlier, while the foreign investors including FDI and FIIs were allowed to buy up to 74 per cent stake of pai ..
NEW DELHI: The 50-share Nifty index is expected to open with a huge gap up on Monday, following positive trend seen in SGX Nifty. Tracking the momentum, the index is expected to surpass its previous record high of 8996.60 and hit 9000 levels in trade today.
At 07:30 a.m., Nifty India stock futures in Singapore were trading 107 points higher at 9001 indicating a higher opening on the domestic market.
The BSE Sensex had ended at 29,361.50, logging a gain of 141.38 points or 0.48 per ..
Top 5 Sensex companies lose Rs 36,856 crore in market capitalisation; ITC takes big hit
NEW DELHI: The combined market valuation of top five Sensex companies tumbled by a whopping Rs 36,855.98 crore last week, with FMCG major ITCBSE -8.27 % taking the steepest hit.
While ITC, RIL, ONGCBSE 0.02 %, HDFC BankBSE 1.29 % and SBI suffered losses, others like TCS, Infosys, CIL, HDFC and ICICI BankBSE 3.15 % made gains.
The collective rise in m-cap made by the five gainers stood at Rs 17,275.46 crore.
The market capitalisation (m-cap) of ITC slumped Rs 27,728.9 crore t ..
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