VRITTAM (25 AUG 2013 - 31 AUG 2013)

THE WEEKLY FINANCIAL NEWS

US credit union regulator sues Morgan Stanley over mortgage losses

Morgan Stanley is being sued by a US credit union regulator to recover losses on more than $566 million of residential mortgage-backed securities sold to two corporate credit unions that later failed. The National Credit Union Administration said that Morgan Stanley made misrepresentations in offering documents for securities sold between 2004 and 2007 to the US Central Federal Credit Union, once the largest federally chartered corporate credit union, and the Western Corporate Federal Credit Union. 

Morgan Stanley is being sued by a US credit union regulator to recover losses on more than $566 million of residential mortgage-backed securities

FIPB clears US pharma major Mylan's Rs 5,168 crore FDI proposal

US-based Mylan Inc's Rs 5,168 crore proposal to acquire Agila Specialties Pvt Ltd - a subsidiary of pharma firm Strides Arcolab - was cleared by the Foreign Investment Promotion Board (FIPB).

Rupee slide to impact IOC, BPCL most: Fitch

Global rating agency Fitch has said rupee depreciation will have the highest impact on state-owned oil marketing companies, including Indian Oil Corporation (IOC) and Bharat Petroleum (BPCL). "The risks to standalone financial profiles are highest for state-controlled petroleum marketing companies among the Indian energy sector issuers currently rated by Fitch," it said in a statement.

Malaysian Airlines bullish on Indian market

Kuala Lumpur-headquartered Malaysian Airlines is still bullish on India despite the weakening Indian economy and will continue to seek growth opportunities here. 

Why foreign investors are pulling out of India, other Asian markets

From India to Indonesia, the currencies and stock markets of emerging economies have been roiled by speculation about when the US Federal Reserve will start scaling back monetary stimulus that has kept interest rates ultra-low and sent investors to developing markets in search of higher returns. Separately, Asian economies that had been star performers are now in the dumps and the ebbing investment tide has sparked fears the region will suffer a rerun of its 1997-98 financial crisis.

Rupee instability hampering signing of new contracts: Nasscom

IT-ITeS industry body Nasscom has said the continuing instability in the rupee, which breached the 68-mark against the US dollar on Wednesday, is affecting IT firms in signing new contracts with foreign clients.The rupee has declined over 20 per cent since April on concerns about the country's wideningcurrent account deficit (CAD), slowing economic growth and capital outflows.

Government allows premature withdrawal of 8% taxable bonds

Indian government has allowed premature withdrawal of investments in 8%taxable bonds which was a long time demand from tax savers. This relaxation is offered to senior citizens with maximum benefit to investors over 80 years.

Walmart India plans possibly at final stage: Govt official

Global retail giant Walmart is expected to soon firm up its plan to foray into India's multi-brand sector, a top government official on Friday said. Walmart Asia Chief Scot Price met top officials of the Department of Industrial Policy and Promotions (DIPP) and sought clarity on the recent changes government had made in the multi-brand retail FDI policy.

No proposal to convert idle gold into bullion: RBI

The Reserve Bank said it is not contemplating any proposal to buy idle gold and convert it into bullion. "The RBI clarifies that no such proposal is under its consideration at this juncture," the apex bank said in a statement. 

Why gold is making a comeback

Gold is having a summer revival.The price of gold touched $1,420 an ounce this week, a three-and-a-half month high, as escalating tensions in the Middle East, volatile currency markets and renewed demand for jewelry in China and India pushed prices higher.

When financial markets get jittery, investors often buy gold because it is considered one of the safest assets that can easily be converted to cash.

Diesel price may be hiked by Rs 3-5 a litre, LPG by Rs 50

Diesel prices may be hiked by Rs 3-5 per litre, kerosene by Rs 2 and LPG by Rs 50 per cylinder as Oil Minister M Veerappa Moily urged Prime MinisterManmohan Singh to take steps to tackle a record Rs 180,000 crore of losses arising from dipping rupee and surging oil rates. Moily, who had on Thursday met Finance Minister P Chidambaram on the issue, on August 30 wrote to Singh saying without a price increase the government will have to shell out a record Rs 97,500 crore to subsidise diesel and cooking fuel. 

DID YOU KNOW

Merits and Demerits of the Food Security Bill

The government will supply rice at Rs 3/kg, wheat at Rs 2 and coarse grain for Re 1 per kg for up to 75% of the rural population and up to 50% of the urban population. People will be entitled to 5 kg of subsidised grain every month. The poorest households will continue to receive 35 kg foodgrains per household per month under the Antyodaya Anna Yajna.

Merits:

 • Bill will lower spending on food grains by below poverty line households, and free up resources for spending on other goods and services, in particular health, education, and nutritious food.

• Right to Food.

Demerits:

•Key to accruing all these benefits is the proper implementation- corruption and inefficient distribution channel

• Many agriculture experts believe that Food Bill which proposes to provide grains to people at very cheap rates may discourage the agriculture production in the country. Hence it must make sure that farmers should not be burdened with the cost of subsidising the supply.

• Economists have raised concerns about the cost to the exchequer at a time when the government is struggling to bridge the fiscal and current account deficits.

• Insufficient storage capacity for the food grains that may lead to waste.

• Experts believe the rush to pass the bill implies the intent is nakedly political.

 

EXPERT VIEW

Markets cooled off digesting Syria events

By Vandana Hari, Asia Editorial Director, Platts.

A SNEAK PEAK INTO THE WORLD OF FINANCE

To know the four quick solutions for the rupee crisis click on the slideshow below.