VRITTAM (10 NOV 2014 - 16 NOV 2014)

VRITTAM  (10 NOV 2014 - 16 NOV 2014)

THE WEEKLY FINANCIAL NEWS

 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.

 Morgan Stanley estimates India's economic growth at 6.3% next year

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.

 IMF says euro zone growth could be worse than expected

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.

 GST dream one step closer to reality

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 may review gold policy after surge in imports

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 Looking Beyond the end of QE in the U.S.

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.

  Oil prices expected to fall further in 2015

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.

FIPB clears HDFC Bank’s plan to hike foreign holding to 74%

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.

OPINION

Beating inflation is a tightrope walk

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.

SLIDESHOW

Click on the slideshow below to have a better view of A Rogues Gallery of Financial Crime