| |||||
We recommend
-
SMART WAYS TO SAVE TAX - Choose the tax-saving instrument that best suits your needs and financial goals Do-it-yourself tax planning can be rewarding and challenging. Rewardin...8 years ago
-
Sugar prices ease by Rs. 10 in a year, Rs 30 in a week - The retail price of sugar has dropped by Rs 2-3 per kg during the past week, bringing sweet relief to households burdened by the rising cost of living...8 years ago
-
Lok Sabha clears land bill, govt braces for battle in RS - Shiv Sena Refuses To Vote With Govt Lok Sabha on Tuesday passed the land acquisition bill after a marathon debate, with the government managing to keep...9 years ago
-
Alarm in K'taka, TN as Naidu 2.0 goes on biz hunt - Uses New State's Tax Breaks To Woo Tech, Mfg Investment For many years after he lost office in 2004, Chandrababu Naidu would flinch when complimented o...9 years ago
-
Rupee at over 2-mth low, IT stocks rally - Mumbai: Demand for dollars by oil companies, muted foreign fund activity as the year-end nears and the continuing political logjam in New Delhi combined to...11 years ago
Monday, December 31, 2012
Resolution No. 1: Make A Financial Plan This Year
Posted by Unknown at 10:31 PM 0 comments
ECONOMY WATCH 2013 Lower rates could boost economy in 2013
India Inc Likely To Fare Better On Falling Inflation, Reforms
New Delhi: After going through a gloomy phase in 2012, the Indian economy is poised to return to a healthy growth trajectory in the early part of 2013-14 on the back of some positive factors. While it may not be a smooth ride due to several risk factors going ahead, investors and economists say the worst may be over for the Indian economy."We recently met 80-plus institutional investors across asset classes in Europe. While the consensus was that the worst was over, key concerns were (1) execution of reforms to sustain interest, especially if the outlook on other emerging markets (China) improves and (2) economics could be overshadowed by political compulsions by the second quarter of 2013," Rohini Malkani, an economist at Citigroup India, said in a recent research note. In recent weeks, some positive signs have emerged that hold out hope for the future. Industrial growth rebounded in October although it is too early to predict whether it would be sustainable, given the volatility in data. However, other data such as the HSBC Purchasing Managers Index points to an improvement in the manufacturing sector, which should augur well for industrial growth in the months ahead.
Inflation, which has emerged as a major policy challenge for the past nearly three years, is also expected to moderate in the months ahead and there is a consensus that it may settle in the 6-7% range by end-March 2013. Perhaps the most crucial factor that should help jumpstart growth and boost investments as well as sentiment would be easing of interest rates. The Reserve Bank of India has signalled its intent to support growth and expectations are that the central bank may cut policy rates in January.
Economists say that the much anticipated interest rate reduction, along with the impact of the reform measures announced by the government, should help revive growth. Clearances to mega projects are also expected to be streamlined with the Cabinet Committee on Investments set to approve pending projects.
Another major factor that could help the growth momentum would be the 2013-14 Union Budget in February. It could contain some positive measures to bolster the economic recovery, while reiterating the government's commitment to fiscal consolidation. Firm timelines
about the implementation of the Goods and Services Tax could strengthen sentiment.
But skeptics say the Budget could contain populist measures given the spectre of general elections in 2014 and therefore this could pose a risk to the economy.
Moderation in global crude oil prices should also help in repairing the health of public finances. Much would also depend on the progress of the government's efforts to control unwieldy subsidies. Analysts and rating agencies will keep a hawk eye on how the cash transfer scheme pans out from January onwards.
So, despite many positives for Asia's third-largest economy, risks also loom large. Events in global economy will also have a huge impact on how the Indian economy fares in 2013. The situation in the United States and Europe would have a major bearing on prospects for the domestic economy.
Global rating agencies, which have cautioned India about its rating being downgraded to junk status, would be closely watched for any action. And finally, the progress of reforms would be the key to sustaining and accelerating the growth momentum. Any adverse developments on the political front could have a dampening effect on the economy and may reverse the recovery.
Posted by Unknown at 10:27 PM 0 comments
Friday, December 28, 2012
They are small, pesky and crop up everywhere. Though some of them may be hidden, the bulk of arbitrary fees and charges are right under your nose. Find out how they are devouring your hard-earned wealth
Buy a car, pay exorbitant handling charges; dine at a restaurant, shell out a sizeable service charge; take a road trip, pay a toll tax after every 100-250 km. Every sphere of your life seems to have been overrun by some or the other capricious charge.
Every company, seller or dealer has come up with an innovative name for a novel fee, but a fee or charge by any other name is going to leave you poorer than you had accounted for. Nowhere is this more apparent than in school fees. As every parent will bemoan, a child's education will cost you at least 50% more than the advertised tuition fee. There is a sports facility fee, annual day fee, heritage festival fee, library charge, building development fee, laboratory fee…the list keeps getting longer each year. Most people have become resigned to it, if not entirely inured.
However, it's the prevalence of such arbitrary fees in other areas that has begun to pinch people. We've complained about it and a heated discussion and debate ensues every time someone comes up with a new charge, but, unfortunately, on the ground, there's no concrete action. Even before the dust has had time to settle, there's a new charge that has been tacked on to yet another service.
"The onus is on the consumers. You need to read the fine print carefully before you avail of a service. However, if you find that you've been charged for something that hadn't been disclosed to you beforehand, you have the right to question it," says consumer activist Jehnagir Gai.
For most customers it's a grin-and-pay situation, since few have the time or the patience to follow up, especially if they are dealing with a small amount. But, remember, even minor charges can add up to big costs. So, scrutinise all your bills and statements to know which holes you need to, and can, plug.
Cars
Whether you're buying a new car or getting your old one serviced, be prepared to pay more than you had intended to.
Logistics and handling charge
One of the biggest grey areas, the dealer can include anything under this heading. It could be warehouse charges, the fuel that has been put in the car the cost of the number plate the pollution control check and the insurance cost while the vehicle was in transit. Logistics fee is 2-5% of a car's value, and, unfortunately, all dealers now levy this charge, though you could try to bargain for it to be lowered. "The ex-showroom price is the cost of the car at the dealer's, so why should you have to pay for a transit fee or warehouse charge? If you consider that a dealer is levying 3,000-5,000 as handling fee on a car worth 4 lakh, then dealers are minting thousands of crores every year. Where is this money going?" asks Adil Jal Darukhanawala, editor-in-chief of Zigwheels.
Free servicing is not really free
If you're a new car owner, be prepared that your free servicing will come for a price. You may find that you're paying for tyre rotation or body polishing, even if you hadn't asked for it. However, the major money-spinner is the overhauling that needs to be done at 40,000 km. The service centre will begin pestering you when your odometer starts inching upwards of 37,000 km. As a conscientious owner, you'll agree to it. However, the service centre will insist on the same overhauling after you cross the 40,000 mark. So, you may end up paying twice for the same thing.
Travel Given the skyrocketing fares and arbitrary ancillary fees, the travel sector is rife with charges that can double your travel budget.
Split pricing
Most experienced travellers already know that airlines advertise a low base fare and that the additional taxes and surcharges add up to a sizeable amount. This pricing strategy now seems to have seeped into hotels too. Most hotels lure customers with a low room rate, but tack on various charges to the final bill that is presented to the traveller when he's vacating the hotel. "If the charges had not been disclosed to you while booking the hotel, you can refuse to pay them," advises Nikhil Ganju, country head, TripAdvisor India. However, he agrees that it can lead to a sticky situation. In fact, impatient not to miss their flights or trains, travellers grudgingly pay up.
Arbitrary airline charges
Domestic airlines often come under the scanner of the regulator if their fares skyrocket, which is why they keep a tight rein over their prices. However, they have carte blanche when it comes to fixing ancillary fees, so they keep hiking them arbitrarily (see Travel fee traps). Two of the latest are the seat preference charge, which ranges from 50-750, as well as the fee that you pay when you redeem frequent flyer miles.
"The airlines don't hide their fees. They just inform you about them at the last minute, when you don't want to go through the entire ticket
booking process again. I had to recently pay a Web convenience fee of 200 while booking a GoAir ticket on their website. The fee was tacked on just before I had to make the credit card payment," says Gai. Adds Ganju: "I was booking a flight from Singapore to Bali and opted for Air Asia since it was cheaper than Singapore Airlines. However, the final fare for Air Asia was S$450, which included a checked-in baggage fee and an airport check-in fee. Also, for an overweight baggage of 10 kg, I had to pay S$180 extra, which wasn't mentioned in the ticket."
Cancellation or rescheduling charge
Most travel portals, hotels and airlines will clearly state their cancellation policy and charges. This is another charge that has been recently hiked by 750-950 by airlines. If you've booked your flight or hotel through an online travel agent, you may have to pay the cancellation fee twiceto the hotel/airline and a service charge to the OTA. If you need to reschedule your reservation, you will be told that you need to cancel the original booking, and, of course, pay the hefty cancellation charge. Only then will you be allowed to make a fresh booking.
Entertainment
It's a free-for-all market when you shop or dine out, more for sellers than buyers. Every retailer seems to tack on any charge that he wants to.
Service charge
This charge imposed by a restaurant doubles as a variable pay, which is non-taxable, and is given to staffers over and above their contracted salaries. But most restaurants pass on only about 50% of the service charge to the staff and the rest is kept to by the establishment compensate for crockery breakage and damage to property.
Online convenience charge
When you book a movie ticket online, you have to pay a convenience charge of 10-150, depending on the cost of the ticket. What's convenient about wasting printer's ink and still having to stand in a queue to get physical tickets at a counter? Worse, the charge is levied on each ticket, so even if it's a one-time transaction, you pay a sizeable sum.
Parking at malls
Parking charges vary from 10-200 for an hour. Builders justify it as the cost of maintaining the parking space as well as paying the salary of the staff. Does the maintenance vary so much among malls, especially since in most cities the parking space is not part of the FSI and is not included while assessing the property tax? Some malls have tucked away the entry to the parking area in a small corner and insist on valet service, which comes for a premium.
Charity charge
'Would you like to donate for charity?' It's a question most shoppers have heard at the billing counter. While it is good to be generous, be wary of establishments that do not put the contribution on the bill. "There's no accountability for this money. The merchant could be collecting 5 lakh a month from customers, but only giving 50,000 as charitable contribution," says Gai.
Posted by Unknown at 9:05 PM 0 comments
Friday, December 21, 2012
CBI charges telcos, ex-telecom secy in ’02 spectrum scam
Says Favours To Voda, Airtel Led To 846Cr Loss
Neeraj Chauhan & Abhinav Garg TNN
New Delhi: Nearly two years after the CBI began probing spectrum allocation during the NDA regime, the agency on Friday filed a chargesheet in a case of corruption against telecom firms Airtel and Vodafone and ex-telecom secretary Shyamal Ghosh. The chargesheet claimed the allocation of airwaves during late BJP leader Pramod Mahajan's term as communications minister had caused a loss of Rs 846 crore.
The CBI estimate is 66% higher than the Rs 508-crore loss mentioned in the FIR and the agency's report to the JPC on telecom issues, including the 2G scam. The CBI said Ghosh, with Mahajan and the telecom firms, had abused his position to show undue favours to the companies, causing a loss of Rs 846.44 crore.
CBI'S CLAIMS
Then telecom secy Shyamal Ghosh, in conspiracy with Pramod Mahajan and telecom firms, gave undue favours to Airtel & Vodafone, causing a loss of 846cr
Ghosh 'deliberately' did not obtain comments of then member (finance) of DoT despite huge financial implications SPECTRUMPED CBI chargesheet gives clean chit to telco promoters
New Delhi: The CBI, in its chargesheet on spectrum allocation, has said former NDA minister Pramod Mahajan, former telecom secretary Shyamal Ghosh and telecom firms had colluded to cause a loss of Rs 846 crore to the exchequer. It said that there was an undue gain to telecom companies, including incidental benefit to other telecom firms, by charging an additional 1% of AGR (adjusted gross revenues) instead of charging the required additional 2% AGR for allocation of additional spectrum from 6.2 Mhz to 10 Mhz.
The chargesheet, accessed by TOI, added that former telecom secretary "Shyamal Ghosh 'deliberately' and with 'mala fide intention' did not obtain the comments of then member (finance) of DoT despite the issue involving huge financial implications. The wireless advisor, who was the custodian of the entire spectrum, was also intentionally bypassed on flimsy grounds that he was retiring on that very day i.e. on January 31, 2002".
In defence, Ghosh reportedly told the JPC that the issue of allocating spectrum was pending since 2000 and he could not, contrary to what CBI the has said, be accused of delaying the decision.
On the charge that the decision was rushed through in a single day, Ghosh reportedly said it was based on information developed over more than a year. Telecom regulator Trai had said that it would consider additional licences only if problems of existing operators were addressed.
Ghosh also argued that the extension of revenue sharing set at 2% for additional 5Mhz would be 4% for additional 10Mhz. The CBI named three telecom firms—Bharti Cellular Ltd, Hutchison Max Pvt Ltd (now Vodafone India Ltd) and Sterling Cellular Ltd (now Vodafone Mobile Service Ltd) —as accused.
Ghosh and the firms have been accused of criminal conspiracy and violating provisions of the Prevention of Corruption Act. Although the agency named the firms in the chargesheet, it said it could not find anything against their promoters. The agency accused Mahajan of conspiring with Ghosh to benefit the private players, but said no action was proposed as he is dead. Jagdish Rai Gupta, who was then deputy director general in-charge of value added services, has been made an approver in the case.
Posted by Unknown at 9:32 PM 0 comments
Thursday, December 20, 2012
Gold Price Lost $21.60 to Close at $1,644.90 it's Oversold but may Move Lower
Gold Price Close Today : 1644.90
Silver Price Close Today : 29.612
Change : -1.43 or -4.61%
Gold Silver Ratio Today : 55.548
Change : 1.863 or 3.47%
Silver Gold Ratio Today : 0.01800
Change : -0.000625 or -3.35%
Platinum Price Close Today : 1546.20
Change : -46.70 or -2.93%
Palladium Price Close Today : 679.25
Change : -18.10 or -2.60%
S&P 500 : 1,443.69
Change : 7.80 or 0.54%
Dow In GOLD$ : $167.29
Change : $ 7.50 or 4.69%
Dow in GOLD oz : 8.093
Change : 0.363 or 4.69%
Dow in SILVER oz : 449.54
Change : 22.63 or 5.30%
Dow Industrial : 13,311.72
Change : 59.75 or 0.45%
US Dollar Index : 79.25
Change : -0.089 or -0.11%
The GOLD PRICE lost $21.60 to close Comex at $1,644.90. Silver lost a bruising 4.6% today, 143.3 cents, to smash support at 3100 AND 3000c by closing at 2961.2c.
For both the gold and SILVER PRICE today's move complete a 61.8% correction of the rise that began last June. Both have oversold RSIs, both have MACDs that are scraping their last bottom, both are below the long term moving averages I watch (150 and 200 for gold, 300 and 200 for silver).
In short, they are oversold and ready to get oversold-er. Perverse, but when morale is broken in a market, it has to have its back completely broken before it reverses.
GOLD/SILVER RATIO also points to more deterioration in silver. Today it gapped up to 55.548. and appears headed to close an old gap between 57 and 57.5. Silver and gold are in the waterfall phase, so this spasm could end in a few days. Will certainly pause for Christmas in any event.
Since both metals cut through their uptrend line form the June 2012 low, underneath them now is only the Downtrend line from the 2011 highs, 2900 - 2850c for silver, $1635 - 1620 for gold.
Sounds like I've got it all scoped out, but if I did I wouldn't have gotten it so wrong till now. More than that, markets never do exactly what you expect them to. They move to support, and instead of stopping, pierce through before they reverse, or never quite reach support. It's as if they know what you are thinking, and dodge on purpose. Thus the proverb that "bull markets always to shake off as many riders as they can." Question is, can YOU hold on? Can you stand the heat?
Thus every day markets give you a highly concentrated dose of humility.
What we surely know is that silver and gold remain in a primary uptrend, and that every day brings us closer to the end of this correction. Just stand back and watch it a few days. There's time, it's not running away, and if it starts to climb, well, give it more time still. We need more certainty here like a dying man needs a drink of water.
Be patient. Still, I have to buy at least a little silver here somewhere. Whenever that gap in the gold silver ratio is filled, that'd be about the day.
Aww, shucks! Tomorrow's the end of the world, according to some interpreters of the Mayan Calendar. Say, I have an idea for all y'all who're convinced the world will end tomorrow: y'all send me your money. Probably better wire it, as there's not much time left. While you're at it, mail me your credit cards, too, and any jewelry you're not planning to take with you.
Dollar index fell 8.9 basis points to 79.245, nothing new there. Euro took advantage of that, hit $1.3300 as yesterday, but too spindly-armed to hold on there. Closed $1.3244, up 0.26%. Yen fell another tiny bit, to 118.49c/Y100. Got to be near the end of that fall.
Stocks suffered a bad beating this morning, but found "sponsorship" in the latter part of the day, and managed to close above 13,300 at 13,311.72, up 59.75. S&P500 rose 0.55% (7.88) to 1,443.69. Weak and wormy, but will climb more, I believe.
Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
The-MoneyChanger.com
1-888-218-9226
10:00am-5:00pm CST, Monday-Friday
© 2012, The Moneychanger. May not be republished in any form, including electronically, without our express permission.
To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down.
Posted by Unknown at 6:15 PM 0 comments
RIL’s Plea for Consent Order in ‘Insider Trading’ Case Rejected
| |||||
Posted by Unknown at 6:10 PM 0 comments
RIL May Get Approval for Voice Test on 4G Network
The telecom department (DoT) is set to approve Reliance Industries' (RIL) demand that it be allowed to test voice services on its upcoming fourth generation (4G) networks.
The DoT wing looking into this has recommended that RIL be allowed to test 10,000 connections (for 4G voice services) and the company be allotted these many mobile numbers. It has also said that the Mukesh Ambani-promoted Infotel Broadband, the only firm that holds fourth generation airwaves on a national basis, be allowed to connect its networks with other telcos for testing purposes, implying that these 10,000 people can make and receive calls from existing mobile customers.
The Telecommunication Engineering Centre (TEC), the body that draws up standards for telecom products, services and networks, has also suggested that testing be restricted to a geographic area at a time, and the same infrastructure be used at different circles as the testing progresses. It also wants the government to allot time period like six months for the testing purpose and added that the company must not offer commercial services during this phase.
Infotel Broadband's demands to test voice services is an indicator that the company intends to offer this facility when it launches high-end data services in the second half of 2013. Incidentally, RIL had sought permission to test voice facilities on its 4G networks despite existing regulations not allowing 4G spectrum winners to offer this service. But the new telecom policy, which is slated to come into effect from 2013, allows companies to offer all forms of communication services after migrating to a Unified Licence.
Infotel Broadband is expected to shake up the telecom market in the same way as it did about a decade ago when it rolled out low-cost mobile services.
At present, voice services are not available in the 2,300 MHz band, the frequency on which 4G or Long Term Evolution (LTE) services will be offered in the country. But voice facilities are available on other 4G bands like the 700 MHz that are used in the US and Europe.
Infotel had recently informed the government that it had indigenously developed what it termed VoLTE — voice over LTE — and said a trial would be helpful in maturing this technology platform. It also said that the trials would involve RIL employees, consultants and technology partners using these services, while adding that the company would pay interconnect charges to link its network to that of other mobile phone companies for testing purposes.
joji.philip@timesgroup.com
Posted by Unknown at 6:09 PM 0 comments
115 cos still to meet holding norm Promoters Of These Firms Need To Offload 26K Cr Shares By June ’13
There are some 115 companies where promoters are yet to pare their shareholding to 75% level, reveals New Delhi-based brokerage SMC Capital. Promoters of these companies will have to offload shares worth Rs 26,158 crore, according to current valuations. The rules have to be adhered to by June 2013, failing which action will be taken against the promoters by the market regulator.
In the last few months, Honeywell Automation, Blue Dart, JP Power, DB Corp, Reliance Power, Eros International, Hindustan Copper, ONGC and NMDC have taken the popular OFS route, while Adani Enterprises have announced OFS plans to increase public float.
So far, only the large companies have taken the OFS route, and this may not be the case for smaller companies, which may be forced to take the IPP route or other options, said Amitabh Malhotra, MD, Rothschild India, a UK-headquartered M&A advisory firm. "OFS is restricted to the top 100 companies based on average market cap of the previous quarter. Hence this method wouldn't be available for most of the companies, particularly small and mid cap companies," Malhotra said.
While private-sector firms have another six months to meet the deadline, state-owned units have more breathing time, which is August 2013. And unlike private sector firms, PSUs have to meet only 10% public shareholding level.
Some of the other options that companies could look at includes Follow-on Public Offer (FPO), rights issue and bonus shares. In case of rights and bonus issues, promoters have to let go of their entitlement. Market analysts argue that FPO makes sense for large issuances, while there are some who say a bonus issue scores over other methods as it is not dependent on market conditions. And a rights issue could be the preferred option for a company that requires capital, and since there is pricing flexibility, it becomes all the more attractive for non-promoting shareholders.
Sources said that a good number of companies have conveyed to Sebi that they would meet the changed shareholding norms. If companies fail to meet the June 30, 2013 deadline, then the possible legal consequences could be compulsory delisting, ban on promoters and companies from accessing the capital market and moving stocks to the trade-for-trade segment, which automatically bars day-trading in the counter.
Apart from the already listed ones, companies that have tapped the capital market for the first time, for instance, Bharti Infratel, will get three years from the time it gets listed to meet the new public shareholding norms.
Posted by Unknown at 6:03 PM 0 comments
Home NaMo Sweepaya Gujarat Wants Modi, But Does He Want Only Gujarat? His Big Hat-Trick In State Will Fuel Ambitions Of Going National. Will It Be Rahul Vs Modi In 2014?
"You should now get used to hearing me speak in Hindi," Narendra Modi told the adulatory droves, gathered to celebrate his emphatic victory, when they insisted that he speak in Gujarati.
The sudden switch to Hindi for someone who spoke in little else but Gujarati throughout the election campaign led to an obvious interpretation—Modi, having scored a hat-trick, was now flashing his fortified claim to be the BJP's choice for prime minister in 2014, setting the stage for a presidentialtype race with Rahul Gandhi in the Lok Sabha polls. Although Modi said he did not plan to camp in New Delhi and would visit the capital only for a day on December 27 for the National Development Council meet, his devotees were already serenading him with "desh ka neta kaisa ho, Narendra bhai jaisa ho" chants.
Modi won 115 seats, just a couple short of his previous tally of 117 seats in the 2007 election. Modi's victory came against the backdrop of indifference, even opposition, from a section of the RSS, hostility of an influential and tenacious faction of civil society and the Congress's tacit understanding with BJP rebel Keshubhai Patel who sought to rally his community against the chief minister.
DECODING THE WIN
Tireless Campaigner | Modi addressed 250 rallies and reached out to 180 more locations through 3D projections. Sonia Gandhi addressed 7 and Rahul Gandhi 8 election meetings
Sweeps Urban Seats | Delimitation increased urban seats. BJP won 12 of 16 seats in Ahmedabad, all 12 in Surat, and all 5 in Vadodara
Safely Home | Modi was perturbed by the surging crowds of women a few months back when the Congress started distributing lakhs of forms to the homeless, promising them subsidized housing. But the results in seats with mainly poor neighbourhoods show the Congress was building castles in the air
Sad-Bhavana | The last assembly had 5 Muslim MLAs, the new one will have only two, both from Cong. The BJP didn't give a ticket to any Muslim
Turnout Works | The unusually high voter turnout of 71.9% was the key to the BJP's big win. This was almost 10% higher than in the previous two assembly polls. Modi told voters to come out and vote for him, not the candidates. The personality cult worked
Caste Contours Change | Call it social engineering, Modi style. With Leuva Patels swinging away from the BJP, especially under Keshubhai's influence in Saurashtra, the OBCs consolidated around the BJP. This was seen as a reaction to the ganging up of the dominant Patels in the countryside
Exchange Programme | Cong, BJP wrested 30 seats from each other. Cong gained in Saurashtra & N Gujarat, conceded seats to BJP in central and S Gujarat. 5 ministers lost their seats, but so did Guj Cong president Arjun Modhwadia
Batting Failure | Armed with a 'bat' as an election symbol, 84-year-old Keshubhai padded up for a match with Modi but flattered to deceive. He retired hurt, scoring only two but managed to inflict some body blows in Saurashtra where the BJP slipped by nine seats
Bharuch Breached | The Congress won no seat in Bharuch district, home turf of Sonia's political secretary Ahmed Patel. Of the five seats, the BJP won four and the JD(U) one. Modi targeted Patel by calling him Ahmed 'Miyan' Patel and mischievously claiming he was the Congress' CM candidate
Pro-Incumbency | Modi's strategy every time he faced an election was to drop most of the candidates — a good way to fight anti-incumbency at the local level. As the rejects would have switched over to Keshubhai, he decided to repeat most of the candidates and coined the word pro-incumbency
Modi is the 13th politician to serve at least 3 consecutive terms as CM.
Including him, there are 6 such CMs serving at present, including Tarun Gogoi (Assam), Naveen Patnaik (Odisha), Okram Ibobi Singh (Manipur), Manik Sarkar (Tripura) & Sheila Dikshit (Delhi)
Gujarat is one of 7 states where Cong has been out of power for at least 20 years. The others are Bihar, Sikkim, Tripura, TN, UP and Bengal (barring a brief stint as junior coalition partner with Trinamool). These 7 states together account for 230 Lok Sabha seats
Posted by Unknown at 5:52 PM 0 comments
Wednesday, December 19, 2012
Maruti Readies Plan for LCV Foray
Co's new 2-cylinder, 800 cc diesel engine may be key to its successful entry into the pick-up truck space
KETAN THAKKAR MUMBAI
Maruti Suzuki, India's largest car manufacturer, is exploring a foray into India's fastgrowing small commercial vehicle space. The segment is currently dominated by Tata Motors Ace with over 50% market share.
Though the Japanese car manufacturer had the Omni Van, used as a cargo vehicle, it did not have a competitive offering in the loadcarrier segment, due to the lack of a small diesel engine. But with the development of the company's two-cylinder, 800 cc diesel engine for the passenger car shifting to India, it is actively exploring options to use the potential workhorse to enter the small pick-up truck market, ET learns.
The project is codenamed 'AP' and if the exercise fructifies into an actual investment, the possible entry into light commercial vehicle (LCV) space could happen "between 2015 and2017", according to informed sources. ET has learnt that the company is likely to develop an all-new platform, or may use the Suzuki carry pick-up truck platform which is sold in South East Asia and may tweak it to handle the overloading abuse in the country. When contacted, a Maruti Suzuki spokesperson replied that the company does not comment on product plans.
According to Frost & Sullivan, the Indian small and light commercial vehicle segment is likely to grow by a compounded annual growth rate (CAGR) of 18% over the next five years to 8,30,000 units by 2016.
With the development of infrastructure, the country is expected to shift to the 'hub-and-spoke' model of transporting goods. In the hub-andspoke model, heavy trucks ply on big highways, or hubs, and small commercial vehicles act as spokes in cities where the movement of heavy vehicles are restricted.
In the April-November period, the mini truck and the pick-up truck segment combined (i.e. vehicles with weight below 3.5 tonnes) posted a growth of 24% with sales of 2,75,900 units. In the period, market leader Tata Motors posted a growth of 22.9% selling 1,57,183 units.
ers in the small truck space, Tata Motors continues to enjoy over 50% of the market share and the others too are growing, that clearly shows that there is room for more players. Maruti Suzuki can certainly be a strong challenger to Tata Motors with the widest possible reach, but having a suitable diesel engine is the key," said Rathore.
Just like the passenger car space, even in the mini-truck category, the demand is getting upgraded from 0.5-1 tonne segment of Ace Zip to 2 tonne segment of Tata Motors Super Ace, Mahindra Genio and Ashok Leyland Dost category. The sub-two tonne segment of Ace, Maxximo and Ape grew just 2.70% in April to November period to 1,61,741 units versus 1,57,492 units sold in the same period in FY-12. While Mahindra & Mahindra and Piaggio fared well in the last fiscal with their Maxximo and Ape mini trucks, the two automobile companies have seen sales dipping over 20% and 70% respectively, in the current fiscal.
Experts say it will be interesting to watch, which space Maruti Suzuki would prefer to enter. "There is a clear upgrading happening from sub-one-tonne trucks to higher payload trucks of two tonnes and above and it is clearly seen in the numbers of Ashok Leyland Dost which has been a run away success," said an analyst with a leading broking firm.
ketan.thakkar@timesgroup.com
Despite the entry of major players like Mahindra & Mahindra, Piaggio and Ashok Leyland, Tata Motors continues to lead with a market share of around 57% this fiscal. Experts believe Maruti Suzuki may pose a major threat to Tata Motors as it has a wider reach in the country. Deepesh Rathore, managing director, IHS Automotive says, the technological entry barriers are limited in the mini truck space and the segment is one of the fastest growing segments in the Indian automotive industry with further potential to grow large volumes.
"Despite the entry of many play-
Posted by Unknown at 7:12 PM 0 comments
Sorry: Ratan Tata Apologises to PM
Says report in London's Financial Times completely untrue
London's Financial Times newspaper, which interviewed Tata earlier this month, cited him as being extremely critical of the government and the PM, sprinkling the article with words such as "lashed into the Prime Minister" and "rapped India" and "warned government of inaction".
But Tata, in a hand-signed personal letter to the PM whose purpose he said was aimed at clearing his position, denied using such language. The Tata group has already rejected the characterisation of comments attributed to its chairman in the interview, one of many he has given in recent weeks ahead of his retirement on December 28. "I have been one of your greatest admirers and supporters, publicly and privately," Tata wrote. "You have been someone I greatly respect and the last thing I would want would be a misunderstanding between us, created by an opportunistic journalist reflecting his personal views and that of his newspaper." "I can only apologise for any embarrassment that this media misrepresentation may have caused you or the government," he added. The December 10 letter also appended a full transcript of the interview with the Financial Times journalist. Replying to Tata, the Prime Minister appeared to make light of the episode, noting that people in public life should be open to constructive criticism. 'It will Make Us Introspect'
"Even as such criticism should persuade us to introspect about the path we are following, it is our conviction that should necessarily guide us forward," he said in the reply. The contents of both letters were described to ET by someone who had seen them. The PMO declined to comment, as did a spokesman for Tata Sons. The government came under criticism from industry luminaries in the past couple of years, many of whom bemoaned rampant corruption in the country, poor governance and a state of drift in policy-making. A group of 14 eminent citizens, which included Wipro chief Azim Premji, HDFC chairman Deepak Parekh and former RBI governor Bimal Jalan, even wrote a series of open letters addressed to the country's leaders lamenting the state of affairs in the country, in the process shaping and setting the discourse that over time defined the UPA government's second innings.
While Tata was not a signatory to these letters, he has in the past also heaped criticism on the government, most notably in 2010 when transcripts of his conversations with lobbyist Nira Radia, whose phones were being bugged by tax authorities, found its way to the media. In a television interview that year, Tata warned that India was sliding towards a banana republic. "I think these are bad times. I wish the government would take a stand . . . If what has happened in the last few weeks is an indication of what can happen at any time, then we are going down the route that would lead us into a banana republic," he said, referring to the 2G spectrum scandal.
In the latest interview with FT, he agrees that it is difficult to grow business in India given how the country is being governed. "Sometimes the issue is that different government agencies and different constituencies of the government, have contradictory interpretations of the law….You may have the PM saying one thing, and the ministers have a different view. This doesn't happen in most countries," he is quoted as saying.
Posted by Unknown at 7:08 PM 0 comments
Royalty fees to parent co earn investors’ ire
The recent high royalty outgo by ACC and Ambuja Cements to parent Holcim has again brought the issue into the spotlight. An analysis of the 25 highest royaltypaying companies reveals that these payments more than doubled over five years, while sales have grown by just over 70%. As against this, the BSE 100 companies have, by far, performed much better than these 25 companies.
Concerns have been raised by shareholder advisory firms on high royalty payouts, given the fact that their local competitors are growing faster and earning higher margins. The analysis done by shareholder advisory firm, Institutional Investor Advisory Services (IiAS), since 2007-2008, shows that three companies with the highest royalty remittance of Rs 2,495 crore had paid Rs 784 crore as these fees in 2007-08. While remittance has gone up 3.2 times, their revenues have gone up by only 1.8 times. The top 20 royalty-paying companies now remit Rs 3,601 crore as royalty payments, up from Rs 1,196 crore five years ago. Total royalty for the 25 companies in the study increased to Rs 3,635 crore in 2011-12, up from Rs 1,528 crore in 2007-08.
Interestingly, four (3M India, Timken India, Whirlpool of India and Asahi India Glass) of the 25 companies have not paid any dividend in the last five years, but have paid royalty of Rs 385 crore since 2007-2008 (excluding one-off dividend payments).
The 25 companies paid on an average about 25% of profits as royalty to foreign parents in FY12. ABB and Maruti Suzuki topped the list with this ratio at over 200% and 100% respectively. Other companies such as Nestle India, Procter and Gamble, Alstom T&D and BASF India paid royalty in the 30-40% range of net profits. A note from IiAS says, "Data indicates that foreign sponsors are less concerned about the impact royalty payments have on the bottom line of Indian subsidiaries."
Says Shriram Subramanian, MD of proxy firm In-Govern Research, "We recommend that institutional investors be very concerned when companies make high royalty payments to parents or group companies that cannot be justified."
Posted by Unknown at 6:15 PM 0 comments
Tuesday, December 18, 2012
NSE Brokers Told to Limit Orders within 10% of Prevailing Prices
The flash crash that happened on October 5 had halted trading for about 15 minutes, and wiped out nearly . 10 lakh crore of investor wealth.
"It is hereby notified that as per revised operating policy, the dynamic price bands shall be 10% for stocks on which derivatives products are available and on stocks included in indices on which derivatives products are available," NSE said in a circular.
NSE advised trading members not to place orders beyond the dynamic price bands in force. NSE said that in the event of a market trend in either direction, the dynamic price bands may be relaxed during the day in co-ordination with other exchanges.
Posted by Unknown at 9:50 PM 0 comments
RBI to Show its Interest in Rate Cuts Only in Jan
RILED FM SKIPS CUSTOMARY STATEMENT
Finance Minister P Chidambaram made no comment on the policy, possibly for the first time in years. In the past, he has publicly spoken of the need for lower interest rates.
But Chief Economic Adviser Raghuram Rajan said it is good that RBI sees room for rate cut. "I think it's good that RBI sees there is room to ease. And clearly, they are taking a decision keeping in mind that their main job is combating inflation. I look forward to good news in policy (January)," he said, adding, "But they (RBI) also have some incentive to seek growth in the country."
Subbarao left the key repo rate — the rate at which RBI lends to banks —at 8%, and CRR — the proportion of deposits banks need to keep with the central bank — at 4.25% as inflation remains elevated despite signs of moderation. "There is little doubt that RBI is readying to cut the policy rate in the first quarter of 2013, the only question is the timing — whether to cut in January or in March," said Ravneet Gill, chief executive at Deutsche Bank India. "On the evidence of today's guidance, the likelihood of a January rate cut has increased."
Thirteen of the 15 economists and traders polled by ET forecast status quo on repo rate. But seven of them forecast a cut in cash reserve ratio. In fact, Goldman Sachs economist Tushar Poddar, in a daring forecast a day before the policy, bet on a 25-basis-point cut in repo rate, citing easing inflationary pressures. Tone Shifts to Supporting Growth
This comes even as the price rise of manufactured products is slowing. But Subbarao reiterated his promise of a possible reduction in January. "Headline inflation has been below the Reserve Bank's projected levels over the past two months," he said in his midquarter monetary policy statement.
"The decline in core inflation has also been comforting. These emerging patterns reinforce the likelihood of steady moderation in inflation going into 2013-14, though inflation may edge higher over the next two months."
The benchmark Sensex, after a kneejerk fall, rose 0.63% to 19,364.75. The rupee, after breaching 55 to the dollar in volatile trade, ended unchanged at 54.85. The 10-year bond yield was flat at 8.1491% after a brief climb.
This is the fifth straight policy rate pause by RBI after it lowered repo rate by 0.5 percentage points in April 2012, anticipating reform measures that would have contained fiscal deficit. Although fiscal deficit may eventually breach the upwardly revised target set at 5.3% of GDP, the situation has improved with the government managing to raise funds from sale of shares in state-run companies such as miner NMDC.
"RBI danced to its own tune and kept the policy rate on hold in light of the persistence of inflation and lingering upside risks to inflation," said Leif Eskesen, economist for India and the Asean region at HSBC. "However, it is gearing up for potential policy rate cuts early next year, assuming inflation risks recede and policy progress on other fronts is sufficient."
Wholesale price rise eased to 7.24% in November from 7.45% in October, but is still above RBI's comfort level of 4-5% in the medium term. But consumer prices gained 9.9% in November from 9.75% in October. Indeed, the core inflation of manufactured products, which the central bank watches keenly, has fallen to 4.5% in November after remaining above 5% for months. Even the economy seems to be on the mend, with higher-than-forecast factory output and business sentiment improving. The Index of Industrial Production gained 8.2% in October, compared with 0.7% in September, even though it could have been due to the buildup of inventory for the festival season.
"Expansion in new business and order book volumes suggests positive sentiment about increasing activity in the months ahead," said Subbarao.
RBI's tone shifted significantly to supporting growth even though it did not even reduce CRR. The tightness in the money market, which has led to borrowings of more than . 1 lakh crore from RBI, was due to high government balances.
To address any tightening, the central bank will conduct open market operations where it would buy bonds, releasing funds into the market. Traders expect another . 50,000 crore of bond buyback before April. "RBI is expected to limit its action on CRR cuts, given that the 175-basis-point reduction in 2012 has led to the money multiplier rising to near-17-year high, which could worsen the inflationary pressure the moment domestic demand revives," said Upasana Bharadwaj, economist at ING Vysya Bank.
Posted by Unknown at 9:20 PM 0 comments
RBI leaves rate cut for new year
Mumbai:The Reserve Bank of India disappointed markets on Tuesday leaving all rates unchanged in its midterm policy review but reaffirmed its commitment to support growth in the January policy by when inflation is expected to ease further.
Several statements by the central bank in its review are being seen by the market as a definite pointer to a rate cut in January which was indicated by RBI earlier. The comments include a lower growth projection, optimism on government measures boosting sentiment and an expectation that prices would ease in coming weeks. What this means for borrowers is that banks are unlikely to reduce lending rates before January. Pointing out that GDP growth is evolving along the baseline projection of 5.8% for 2012-13, RBI said that the government's recent policy initiatives should boost sentiment and improve the investment climate. "Headline inflation has been below RBI's projected levels over the past two months," the central bank said in its policy statement as it left cash reserve ratio (CRR) unchanged at 4.25% and the repo rate at 8%. CRR is the percentage of deposits that banks are required to park with RBI while the repo rate is the rate at which banks borrow overnight funds from the central bank.
"While disappointing, the status quo is as was widely expected. The recent moderation in inflation numbers, particularly non-food manufacturing at 4.5% in November 2012, a 32-month low, should provide the central bank comfort to begin to consider a rate cut early in the year 2013, as also imported inflation which reveals a decline to 6.5% in November 2012," said Naina Lal Kidwai, Ficci president , who is also country head, HSBC India.
"Liquidity has been tight. Given that there has not been any action on the cash reserve ratio front, RBI may infuse liquidity through open market operations," said Shikha Sharma, MD & CEO, Axis Bank. The tightness in the money market is reflected in the extent of bank borrowings from RBI which crossed Rs 1.5 lakh crore on Tuesday.
According to Harihar Krishnamurthy, head of treasury at First Rand Bank, RBI may have desisted from a CRR cut because it would have been inadequate to meet the current shortfall. "Liquidity levels have reduced substantially after the advance tax outflows have exited the system, and the system has been running short to the extent of Rs 1.45 lakh crore per day. It is in this context that the RBI may have desisted from a 25-basis point cut in CRR, as that would have released only around Rs 17,000 crore which would have been insufficient. The markets are thus betting on announcement of open market operations by RBI to infuse liquidity into the system," said Krishnamurthy.
RBI to infuse 8,000cr via OMO on Friday
Mumbai: The Reserve Bank on Tuesday said it will infuse Rs 8,000 crore into the system by purchasing government securities on Friday as part of liquidity injection measure.
As part of the OMO operation, the RBI will auction three government securities with maturity in 2018, 2020 and 2026. AGENCIES
Posted by Unknown at 9:10 PM 0 comments
Monday, December 17, 2012
Sebi on Alert as Stocks Hit Position Limits Frequently
REGULATOR SUSPECTS SOME PEOPLE ACTING IN CONCERT
The MWPL has been devised to curb excessive speculation, but brokers say the current structure leaves a lot of scope to influence prices in certain cases. While there are broker and client-wise limits, analysts say it is not that difficult to get around these, which could be evident from the large movement in a stock's price after the position limits are hit.
CORNERING COUNTERS
Sources said the regulator is concerned as it has found that several clients have been hitting the 5% limit applicable to them in single stock futures. "If several people do this with a common objective, it is like persons acting in concert and results in cornering of the open interest," said a senior Sebi official.
"It is fair as long as it is based on fundamental developments, but if it is artificially cornered, subsequent contracts may go up in price much more than they should," the official said not wanting to be named.
Incidentally, there are growing instances of unusual rise in spot prices when a counter is under the F&O market limit. For instance, recently Pantaloon gained 36% in 20 days while it was in MWPL ban.
In November, shares of Suzlon gained 20% while it was trading under the ban period. Similarly, shares of Welspun, United Spirits and IVRCL gained significantly in just a matter of days during the ban period. "We are seeing a lot of stocks hitting the MWPL limit. Many of these aggressive positions are built up when the market has some knowledge of developments. The underlying also has to move in a favourable direction if the trader has to benefit from securities in the ban period," said Rikesh Parikh, vicepresident, equities, at Motilal Oswal Securities.
Brokers say it is not impossible for a few people to corner stocks with low free float. "While there are safeguards in terms of broker-wise and client-wise limits, it is not difficult to get around these restrictions," said a derivatives trader at domestic brokerage.
Breaching Limits
Large number of stocks hitting market wide position limits, or MWPL
Sebi concerned as it feels a few are cornering most of the open interest
MWPL calculated on 20% of non-promoter holding and includes F&O positions
Outstanding positions
in security should not exceed 95% f this 20% limit
300 crore
The revised minimum MWPL requirement
200 crore
Scrips failing to maintain this minimum requirement cease to be in F&O Low-Float Stocks Vulnerable
THE MECHANICS
MWPL is calculated on 20% of the non-promoter holding in a stock and includes positions taken in futures and options. For instance, if the equity base of a company consists of 1 crore shares with non-promoter holding at 40% (40 lakh shares), the number of shares considered for MWPL will be 8 lakh shares (20% of the 40 lakh shares).
At the end of the trading session, the outstanding positions in that security should not exceed 95% of this 20% limit. So in this case, the outstanding positions should not be more than 7.6 lakh shares (95% of 8 lakh shares). If that limit is exceeded, the exchange bans traders from taking fresh positions till some of the existing positions are unwound.
Brokers say if the floating stock in a certain stock futures is low, it is vulnerable to manipulation. For instance, if the value of MWPL in a certain stock is around . 300 crore, theoretically it is possible for a group of operators to corner this quantity by paying a margin of 25%, ie . 75 crore.
However, the exclusion of many stocks from F&O have gone down after the regulator tightened the norms, making some stocks ineligible for the derivatives segment. In July, it revised the minimum MWPL requirement to . 300 crore from . 100 crore earlier. It also said that scrips which fail to maintain a minimum MWPL requirement of . 200 crore would cease to be in the F&O segment; earlier the limit was . 60 crore.
THE OPTIONS GAME
Brokers say there is a need to review the process to calculate MWPL so that the stock does not hit the limit too often. Some also suggest that the weightage of an options contract should be lower while calculating MWPL if the contracts are deep out of the money. Yogesh Radke, head of quantitative research, Edelweiss Securities, says that one of the ways could be to keep separate limits for futures and option for calculation of positions. "Many instances have been seen where the stock goes in ban due to open interest being created in deep-out-of-themoney option with a very low premium."
Exchanges also provide the list of clients that have more than 3% positions in stocks on an individual basis. However, it is not difficult to sidestep this. Further, market participants say that friendly brokers enter into bulk contracts of deep-outof-the-money options contracts due to which the market-wide position limit is hit.
This is because having a position in options, especially deep-out-ofthe-money option, is comparatively cheaper as compared to buying in futures. Once manipulators manage to corner the derivatives contracts of a certain stock and push it into the curb list, new players keep away from it.
Posted by Unknown at 6:35 PM 0 comments
Govt Thumbs RBI for a Lift on Road to Growth GDP growth seen at decade-low of 5.7-5.9%, but govt expects rebound in H2
| |||||
Posted by Unknown at 6:31 PM 0 comments