Sunday, 16 November 2014

VRITTAM (10 NOV 2014 - 16 NOV 2014)

VRITTAM  (10 NOV 2014 - 16 NOV 2014)


 WPI inflation in Oct falls to five-year low

Inflation based on the Wholesale Price Index (WPI) eased to a five-year low in October which, coming on the back of other positive data released this week, will put additional pressure on the Reserve Bank of India (RBI) to reduce borrowing costs to support a nascent economic recovery. Wholesale price inflation moderated to 1.77% in October from 2.38% in September. The decline for a fifth consecutive month was mainly on account of falling vegetable and fuel prices.

 DLF chalks out REIT plans

India’s largest developer by market value, DLF Ltd, plans to create one or more real estate investment trust (REIT) platforms either independently or in partnership with financial partners, to harness the growth in the market and to unlock and partly monetize its investment in rental yielding assets, the company said in an analyst presentation late on Thursday night.

 Germany just escapes recession, France beats low expectations

Germany narrowly avoided recession in the third quarter of the year and France exceeded low expectations, putting the euro zone on course for anaemic growth but no contraction. Europe's largest economy eked out 0.1 percent growth from the previous three months following a revised 0.1 percent fall in the second quarter, the German statistics office said on Friday. A strong rise in consumer spending and small boost from foreign trade prevented a worse result.

India would have the fastest economic expansion among Asian countries and its gross domestic product is expected to grow by 6.3 per cent in 2015, according to Morgan Stanley forecast of global economies. The Indian rupee’s exchange rate to US dollar would be at Rs. 62.20 by end of next year compared with Rs.62 in the current quarter (Q4 this year), according to a presentation made at the Morgan Stanley’s Annual Asia Pacific Summit held here from November 12-14.

The International Monetary Fund on Wednesday warned of downside risks to its growth projections for the euro zone, and urged the European Central Bank to act if prices in the currency bloc continue to drift lower. The IMF's warning echoes an increasing fear among global policymakers that Europe is not on track to spur economic growth, something that should be a key topic for discussion when leaders of the Group of 20 economies meet in Australia later this week.

The government's bid to implement the goods & services tax as early as possible got a significant boost with the empowered committee of state finance ministers endorsing the so-called 'place of supply' rules that form the backbone of the new regime that will replace a plethora of levies, create a common market and likely give GDP growth a lift of up to two percentage points.

India is considering curbs on gold imports by private trading firms after foreign purchases surged in the past two months, two sources with direct knowledge of the matter said.

India was one of the hardest hit of the emerging markets after the US Federal Reserve first hinted it would cut back its quantitative easing program in May 2013. There were three reasons for this. First, global markets over-reacted. Second, India had many macroeconomic weaknesses. Third, since its capital markets were deep and liquid enough, they offered an avenue for portfolio managers targeting reduced exposure to emerging markets.

Weak demand from China and increasing US shale production are set to transform the oil industry, making a quick rebound in prices unlikely. Global oil prices have been on a downward slide since June.

The Foreign Investment Promotion Board (FIPB) on Friday cleared the long-pending proposal of HDFC Bank to hike foreign holding in the bank to 74%. "FIPB today considered and approved HDFC Bank's proposal," officials said after the meeting of the board. The FIPB is of the view that HDFC Bank's parent HDFC's 22.5% holding in the bank is FDI and, hence, total foreign holding is 73.2%, which includes FII, FDI, ADR and GDR.


The recent abatement of the year-on-year Consumer Price Index (CPI) inflation rate to below 7 per cent has generated a chorus of pleas from India Inc for a reduction in Reserve Bank of India (RBI) policy interest rates. Adding grist to the mills is Finance Minister Arun Jaitley’s clarion call for a reduction in interest rates.
This is most unfortunate. So far, the NDA government’s stance had been that interest rate policy was the prerogative of the RBI.


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Sunday, 9 November 2014

VRITTAM (03 NOV 2014 - 09 NOV 2014)

VRITTAM  (03 NOV 2014 - 09 NOV 2014)


 Kingfisher Airlines faces trading suspension from 1 December
India’s two main stock exchanges will suspend trading of shares of grounded Kingfisher Airlines Ltd from 1 December for failing to comply with rules on reporting financial results, the bourses said in separate notices.

Aadhaar may be used to curb black money in real estate
Ahead of the new framework for non-banking finance companies (NBFCs) expected by the end of this month, the central bank has been slowly tweaking norms for them, signalling tighter regulation on cards. Analysts said the Reserve Bank of India (RBI) has quietly put in place small changes during the current fiscal year, creating a more level playing field between NBFCs and banks—which often do the same kind of business but are subjected to different regulations.

Read more at: of the new framework for non-banking finance companies (NBFCs) expected by the end of this month, the central bank has been slowly tweaking norms for them, signalling tighter regulation on cards. Analysts said the Reserve Bank of India (RBI) has quietly put in place small changes during the current fiscal year, creating a more level playing field between NBFCs and banks—which often do the same kind of business but are subjected to different regulations. 
In a move aimed at curbing the use of black money in property deals, the government is considering linking real estate transactions with Aadhaar, the unique identity number.

 Flipkart seeks valuation of over $10 billion in new financing

 US unemployment falls again in October

The US economy added 214,000 jobs in October, while the unemployment rate has fallen to 5.8%, official Labor Department figures show.

Inflation, IIP data, cabinet reshuffle key for markets: Experts 

Inflation data for October, industrial output numbers for September, quarterly earnings of blue-chips such as Tata Motors, ONGC and SBI, as also the first reshuffle of the Union Cabinet would dictate the stock markets trend this week, say experts.

 US Federal Reserve ends QE stimulus programme

The Fed said it was confident the US economic recovery would continue, despite a global economic slowdown.The targets for inflation and reduction in unemployment were on track, the Fed said in a statement.

The central bank, which also said it would not raise interest rates for a "considerable time", has gradually cut back QE since last year.

More pain ahead for Indian banks as bad loans pile up

India's state-owned banks warned growth in bad loans may continue into next year as they posted a rise in troubled loans for the September quarter with a weakening economy causing debt-laden sectors such as infrastructure to default on payments.

Hinting that amendments to the Goods and Services Tax (GST) may be introduced in the ensuing winter session of Parliament, Finance Minister Arun Jaitley today said that the government was in the final stages of talks with states on the issue.

“I am in the last stage of my discussion with the states on the eve of Parliament session before introducing the amendments to the GST law in Parliament,” Jaitley said at the India Global Forum meeting here.

India's inflation has a "long way" to go before it eases because of high input costs, while the reasons for elevated food price inflation remain "structural," Reserve Bank of India Deputy Governor H.R. Khan said on Friday.

World's second largest producer of cotton and silk is also the second largest textile manufacturer. India, the story that is waiting to be told on the world forum will soon turn into the biggest success India has even seen after IT, provided the 'Make in India' campaign gives it the much needed fillip.


On September 25, Prime Minister Narendra Modi kicked off the ‘Make in India’ campaign in the presence of a large number of business leaders.
   Clearly tax policy will play an important role if we want to attract big-ticket investments. After the not-so-happy experience of several large taxpayers in the last few years, the new government responded by announcing a number of positive measures (for example, use of inter-quartile range to calculate arm’s length pricing under transfer pricing provisions instead of arithmetic mean) in its first Budget.


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