|Vol. 918 - March 04, 2016|
Union Budget 2016-17: Spotlight on fiscal prudence
Sometimes, no bad news can be considered as good news. With none of the feared negatives making it in the Union Budget (no increase in time frame for long term capital gains or super-rich tax or hike in basic excise), it remained more of a neutral event in our view. We term it as neutral because in his second Budget presentation as FM, Jaitley had ample time to deliver a dream Budget one that would have simplified taxation, guided on GST, reduced corporate tax by 1% as promised and cut on non-Plan expenditure. However, hardly any relief was given on direct tax (in fact there were some roll-backs for corporates), possibly due to only 6.6% revenue growth, which was half of the budgeted growth. Plan expenditure spend rose only 2% whereas non-Plan expenditure grew by 7.8% and the FM proposed doing away with the bifurcation - which is actually a good indicator for the government to evaluate its spending on both fronts - so one sees little gain in doing away with it. Even subsidies, as a percentage of GDP, have risen from 1.7% to 1.9%, due to higher jump in food subsidy. Perhaps, the political need of the hour prompted many socialist measures. On the face of it, theres nothing fundamentally wrong about the FMs Budget that rests on not one, not two but nine pillars viz agriculture, rural populace, social welfare including healthcare, education, skill development & employment creation, infrastructure, financial reforms, fiscal prudence, tax reforms and ease of doing business. Several measures, announced in disparate areas, promise positive yield in the medium to long term. Farmers and budding entrepreneurs have handsome takeaways, so does the bottom-end of the salaried class, which are all great news. The rural and farm sector allocations including MGNREGA, irrigation, electrification, crop insurance, interest subvention and cooking gas subsidies are laudable as they would make a difference to countless BPL families across the length and breadth of the country. Commitment to no retrospective taxation and measures pertaining to FDI, voluntary disclosure of black money, national rural digital literacy mission were among the other positives...Read More
Union Budget 2016-2017: The FM Speech
I rise to present the Budget for the year 2016-17.
I am presenting this Budget when the global economy is in serious crisis. Global growth has slowed down from 3.4% in 2014 to 3.1% in 2015. Financial markets have been battered and global trade has contracted. Amidst all these global headwinds, the Indian economy has held its ground firmly. Thanks to our inherent strengths and the policies of this Government, a lot of confidence and hope continues to be built around India.
The International Monetary Fund has hailed India as a bright spot amidst a slowing global economy. The World Economic Forum has said that Indias growth is extraordinarily high. We accomplished this despite very unfavourable conditions and despite the fact that we inherited an economy of low growth, high inflation and zero investor confidence in Governments capability to govern. We converted these difficulties and challenges into opportunities.
Let us look at our achievements compared to the last three years of the previous Government when growth had decelerated to 6.3%. The growth of GDP has now accelerated to 7.6%. This was possible notwithstanding the contraction of global exports by 4.4% compared to 7.7% growth in world exports during the last three years of the previous Government. CPI inflation was at 9.4% during the last three years of the previous Government. Under our Government, CPI inflation has come down to 5.4%, providing big relief to the public. This was accomplished despite two consecutive years of monsoon shortfall of 13%, compared to normal rainfall in the last three years of the previous Government.
Our external situation is robust. The Current Account deficit has declined from 18.4 billion US dollars in the first half of last year to 14.4 billion this year. It is projected to be 1.4% of GDP at the end of this year. Our foreign exchange reserves are at the highest ever level of about 350 billion US dollars.
Union Budget 2016- Rocking or shocking for the stock market?
Union Budget 2016 turned out to be largely neutral for equity market, especially investors community. By keeping the fiscal deficit targets intact and not tinkering around with LTCG, Union Budget though managed to evade large disappointment, however the proposal of hiking STT on options trading and extra DTT pay hit the sentiment. Further, no further deferral to GAAR also led to some dismay.
Key takeaways from Union Budget 2016 for Stock Market:
No LTCG Rejig: Much against the fears, the government maintained a status quo stance on the time limit for the applicability of long-term capital gains tax in equities to one year.
Impact: Sentiment improved after Jaitley avoided any hike in the time frame on long-term capital gains tax in equities. Reports suggested of government mulling upon the investment for increasing the time limit on the applicability of the long-term capital gains tax from one year to three years. However, any change in long term capital gain tax would have a sharp impact on the market.
Hike in STT on options trading: The Finance Minister during Union Budget 2016 paying deaf ear to investors community went ahead and hiked securities transaction tax (STT) on options trading to 0.05% from 0.017% earlier. However, it has maintained (STT) at 0.12 per cent
Impact: Reports suggested that STT brings around Rs 5,000-7,000 crore annually to the government coffers and any hike in the STT rate from 0.1% at present to even around 0.123% could add Rs 1,000-1,800 crore to the government's kitty. Nevertheless, street was wishing for lowering of securities transaction tax (STT) or removal of dividend distribution tax- a demand which was unmet. However, present proposal could reduce the trading volumes as a consequence of the higher tax could mitigate the revenue upside anyway...Read More
Jan eight core industrial output climbs 2.9% YoY
The Eight Core Industries comprise nearly 38 % of the weight of items included in the Index of Industrial Production (IIP). The combined Index of Eight Core Industries stands at 180.7 in January, 2016, which was 2.9 % higher compared to the index of January, 2015. Its cumulative growth during April to January, 2015-16 was 2.0 %.
Coal production (weight: 4.38 %) increased by 9.1 % in January, 2016 over January, 2015. Its cumulative index during April to January, 2015-16 increased by 5.1 % over corresponding period of previous year.
Crude Oil production (weight: 5.22 %) decreased by 4.6 % in January, 2016 over January, 2015. Its cumulative index during April to January, 2015-16 decreased by 1.2 % over the corresponding period of previous year.
The Natural Gas production (weight: 1.71 %) declined by 15.3 % in January, 2016 over January, 2015. Its cumulative index during April to January, 2015-16 declined by 4.0 % over the corresponding period of previous year...Read More
Sustained growth: India Feb Manufacturing PMI at 51.1
At 51.1 in February, unchanged from Januarys reading, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers Index(PMI) a composite single-figure indicator of manufacturing performance pointed to a second consecutive monthly improvement in business conditions across the sector. Reflecting sustained growth of new work, Indian manufacturers raised their production volumes in February. That said, the rate of expansion eased since January and was marginal overall. Incoming new work increased for the second straight month and at the quickest rate since last September. According to survey members, underlying demand continued to improve. New business from abroad also rose, although February saw a loss of growth momentum. Manufacturing business conditions in India continued to improve, with new orders, exports, output and purchasing activity all rising in February.However, a faster expansion in new business inflows failed to lift growth of output and workforce numbers were left broadly unchanged again. PMI data also highlighted a weaker rise in costs and the first reduction in selling prices since September 2015...Read More
February 2016 Auto sales: Maruti sales decline; M&M registers double digit growth
February turned out to be a good month for the M&HCV and LCV segments of the auto industry, but passenger vehicles did not ignite the fireworks. Maruti's total sales remained flat on a year on year basis as it suffered production losses after Jat agitation, while Mahindra & Mahindra (M&M) registered double digit growth. In the two-wheelers segment, Hero MotoCorp registered 13.5% growth in sales.
Maruti's passenger car sales declined by 3.9% to 87,149 units as against 90,728 units in the Jan'15. Utility vehicles (Gypsy, Ertiga, S-Cross) registered a surge in sales volume of nearly 44% yoy, with sales clocking 8,484 units. Super compact Dzire Tour had impressive numbers with sales up by 38% yoy. Mahindra & Mahindra's PV segment sold 23,718 units and grew by 25% yoy in Feb 2016. Tata Motors did not have a good run in February, with PV sales declining by 20%. Cumulative sales of vehicles in this category remained flat.
Medium and Heavy Commercial Vehicles (M&HCV)
Perhaps the sole bright spot in the auto segment right now, M&HCV sales of Tata Motors rose by 22% in Feb 2016. Hinduja group's flagship company, Ashok Leyland saw 31% yoy growth clocking 10,798 units. M&M's segment sold 479 units registering a growth of 47%. Eicher branded trucks and buses have recorded total sales of 4936 units in February 2016 as compared to 3100 units in February 2015, representing a growth of 59.2%...Read More
Government looking Offshore to diversify its Largely Domestic Debt portfolio
For long, India has depended primarily on domestic debt for its borrowing needs. The low share of external debt might be the reason why India has been protected from uncertainties of global markets. But the approach taken by India is very different to what other emerging nations have done. Like most of those countries, India still does not have an international sovereign bond issuance program. But foreign investors are looking for high yield debts, in a world that is increasingly becoming a low-rate market. So it might actually be the right time for government to issue offshore sovereign bonds. Low interest rates in international markets indicate that it might be cost effective to borrow from abroad. Another benefit of this will be that it will add to the foreign exchange reserves of the country and more importantly, establish a benchmark for pricing rupee bonds offshore. But experts feel that the decision to launch such bonds cannot be made based solely on the cost-benefit and should also consider the impact on Balance of Payments of the country. The need to access low-cost international markets should be justified in the context of overall savings for the economy. Apart from that, just going for one-time issuance might not be sufficed. There is a need to put out a regular schedule for such issues as it will create and build up interest among investors and also bring in predictability about the schedule of redemptions in future...Read More
Three-month low! Muted activity dips India's February Nikkei Services PMI at 51.4
Falling to a three-month low of 51.4 in February,from 54.3 in January, the seasonally adjusted Nikkei Services Business Activity Index. highlighted a softer expansion of output that was only marginal. Where growth was seen, businesses reported higher levels of incoming new work. Data indicated that output rose in four of the six tracked categories, the exceptions being Post & Telecommunication and Transport & Storage. February data showed that services firms and goods producers alike registered weaker increases in activity. As a consequence, the Nikkei India Composite PMI Output Index dipped from Januarys 11-month high of 53.3 to 51.2, a reading that was well below the long-run series average(55.7). Although new orders at services firms continued to rise in February, the rate of expansion eased to the weakest since last November as firms reportedly faced strong competition for new work during themonth. A quicker increase in order book volumes inthe manufacturing economy was insufficient toprevent growth of private sector new orders from easing to a three-month low...Read More
Union Budget: FM pulls off a great balancing act, where did the money come from?
One surprising element of Finance Minister Arun Jaitleys Union Budget, unveiled on Monday, was that he managed to cater to all major needs of key sectors and the broader economy without putting too much of a tax burden on the taxpayers or swaying from the target for fiscal prudence as specified under the FRBM rules. Jaitley doled out big money to the rural and social sector, set aside huge capital for the public sector banks and also infrastructure sector and also meet other smaller needs of the economy. He did all of that without altering the personal income-tax slabs. Instead, he offered some extra incentives to the individual taxpayers on rent allowance and others. There was no tweaking of the long-term capital gains tax, something the market had widely feared. There was no hike in the service tax, neither did the list of areas under the service tax bracket grew. He didnt raise duties for too many goods or commodities also. He only taxed tobacco and tobacco-related products, slapped a green cess on both small cars and SUVs and put a luxury tax on high-end cars and other select goods. Yet, he managed to stick to fiscal discipline. The money set aside for banks was small. But the Finance Minister clarified that the amount mentioned is what he has frontloaded and that he would provide more as and when required. The market borrowing target was pegged at Rs 6,00,000 crore, which was less than last year and far below market projections. Higher government borrowing is considered bad for corporate India, as it tends to crowd out funds for the private sector. So, where will the money come from? There was no visible expenditure cut, but allocations rose across sectors. However, the government looked focused on the quality of spending...Read More
RBI to slash interest rates?
With the Government setting the fiscal deficit target of 3.5 percent of GDP in 2016-17, during the Union Budget 2016-17, chances of a rate cut have only increased. The sentiment in the stock market has improved with market participants now bracing up for a cut in the interest rate. Last year, the RBI cut the benchmark repo rate, within five days of the Budget being announced, stating that it was convinced about the governments fiscal consolidation plan. Experts note that they are looking forward to something similar this time as well. The Macro Economic Survey had suggested that the government stick to its fiscal prudence plan, and also called for an easier monetary policy from the RBI. Going by the current numbers, inflation too has remained within the Reserve Bank of Indias (RBI) indicated trajectory. Consumer Price Inflation or the CPI stands at 5.69 percent in February, lower than RBIs projected target of 6 percent for January 2016. The RBI had categorically stated in the run-up to the Budget that any slippage in the fiscal deficit target on part of the government would tie its hands as far as rate cuts were concerned. Analysts had noted that the RBI decided to maintain a status quo on its key policy rates, in its last monetary policy, as it was waiting to take a cue from the Government's annual budget statement to decide if they should cut interest rates further. As of now, if the RBI goes for a rate cut, off-cycle, it will only further lift the mood in the stock market. The repo rate stands at 6.75 per cent...Read More
Record farm funding, up 84%; Crises also record-breaking
Continuing the poetic trend seen in budget speeches, Finance Minister Arun Jaitley started with these lines, signalling the fiscal path of his government towards budget management during a global slowdown and farm distress at home. With agriculture growth contracting 1% in the October to December quarter of 2015 and growing only 1.1% in the financial year 2015-16 (advance estimate, obtained by extrapolation of latest available data); back-to-back droughts, the worst in 30 years; and winter (rabi) crop sowing dropping below 60 million hectares, the worst in four years; and a few thousand farmers committing suicide in 2015Jaitley, 63, kept his budget for 2016-17 focused on the 834 million people who live in rural India. In addition, rural workers wages (inflation adjusted) declined for the first time in half a century, Jawaharlal Nehru University economist Himanshu wrote in the Indian Express. Jaitleys budget has nine pillars: Agriculture, rural development, health, education and jobs, infrastructure, financial reforms, governance and ease of doing business, prudent fiscal management, and tax-administration reforms. With the rural-focus explicit, stockmarkets (BSE Sensex) tanked 2% during the speech and then recovered, as Jaitley laid out accelerated reforms in tax compliance and administration, especially for small and medium enterprises, and closed 0.66% below.
Jaitleys aimto double farmer income by 2020is very tough
Jaitley set aside the most money ever for agriculture and farmer welfare: Rs 47,912 crore ($7 billion), a rise of 84% from Rs 25,988 ($4 billion) last year. This includes Rs 6,000 crore for groundwater management, Rs 12,500 crore for irrigation and Rs 5,500 crore for crop insurance. Changing irrigation, insurance and groundwater-use patterns will not be easy...Read More
Before Ease, lets change Indias Way of Doing Business
Whilst our Prime Minister has rightfully stressed on the need to improve Indias Ease of Doing Business rankings, the country is yet way far from being a default destination for private investors who, quite obviously, play a crucial role in boosting economic growth. Its high time we moved from acronyms to action, and from intent to initiative. The 2016 budget, contrary to great expectations, didnt do anything substantial to boost Indias image as a hassle-free investment destination. A mere reassurance of opportunity of a one-time scheme of dispute resolution for firms affected by the retrospective amendment is certainly not synonymous with addressing the retrospective tax tangle. But its not just the ease of doing business, we must change the way we do business as well. And here the Indian promoters cant leave the hard work to the government. They must promote this cause themselves. The India story has an inherent value prop. Our exceptional human resource talent creates countless possibilities of innovation on a horizon that is vast and vague in the same breath. No wonder, both global and domestic PE players steer umpteen sector-specific fund raising rounds, betting big on the entrepreneurial architects of India, notwithstanding Indias regulatory constraints and its reputation of delayed exits. Its only imperative that these catalysts get some respite on the regulatory front, and more importantly, commensurate respect from Indian promoters. But whats imperative to the world is often reduced to an option in India...Read More
Will India see a rise in Tax-GDP ratio in the long term?
There is a growing debate that is it worthwhile to track an indicator like Tax-GDP Ratio? The debate is fueled by the fact that in India, this ratio is low when compared with any other historical benchmark or countries. Even then, the country can be said to be more or less macro-economically stable. Interestingly, the government claims that in last 60 years, Indias tax to GDP ratio has increased from 6% to 17%. But fact is that most of this growth has come pre-liberalization. Since 1991, the ratio has remained closer to 17% and hence, almost nothing has happened in last 25 years on this front. Some argue that low taxes are the reason why India is facing the problem of economic equality. But there is no data to back that argument. So is it true that tax to GDP ratio rises with increase in per capita income? India seems to be out of sync with the previous statement. Though per capita income has risen substantially in last 25 years, there has been zero increase in tax-GDP ratio. But its also possible that there is no link between the two. There is some logic in saying that states can tax more as GDP increases. Hereby allowing taxes (in absolute sense) to rise. But once the government has decided how much it wants to spend (funded through taxes), the tax-GDP will then be dependent on the spending mandate of the government and not growth in GDP...Read More
The Great Correction: How Flipkart lost $4 billion in one day
India's e-commerce has been growing at a fierce pace over the last couple of years, and leading the pack is the poster boy of online retail and early mover in the segment, Flipkart. With investors bullish on the 8-year old company, touted as India's largest e-commerce firm, Flipkart's valuation has surged over the years to nearly $15 billion. However, it took one decision of Morgan Stanley to make a noticable dent in the ballooning wealth of Flipkart and the overall market. Morgan Stanley marked down its stake in Flipkart to $103.97 per share, 27 per cent below the price of its last fundraising round. Last year, Morgan Stanley had valued Flipkarts per share little over $142 per share. As per new price, the company is now valued at $11 billion. The mark down does not come as a surprise for many investors and hedge funds, as there are growing concern regarding overvaluation of several "Unicorns" and start-ups. Several experts including the likes of ace investor Rakesh Jhunjhunwala and ex-Infy Board Member Mohandas Pai have raised speculation regarding the valuation of start-ups, saying that they don't have a sustainable business model. Jhunjhunwala, at a retail conference in Mumbai had opined that he will invest in Flipkart if its valuation is $100 million, while adding, "I will believe in it (the e-commerce model) when they (e-commerce firms) sell at an economical price."...Read More
Indian rupee: Calling for a review
Heading into 2016 there were high expectations that the Indian rupee (INR) would be one of the better performing currencies in Asia. So far, it has failed to deliver. Hopefully, the latest budget from India's government reinvigorates the appeal for the currency, even if indirectly.
The recent underperformance of the INR has been partly due to the market's concern with three main risks, including:
However, we believe it would be wrong to turn overly pessimistic on the currency. In our view, we believe there is little reason to be overly worried about the RBI's FX policy or India's current account position. Over the last few months, the RBI's intervention data show that the central bank has actually been leaning against portfolio outflows. Additionally, while the improvement in the current account and the FDI flows may have peaked, we believe the bulk of the progress should remain broadly supportive for the INR. On the other hand, we need to monitor FX hedging and debt repayments related to External Commercial Borrowing (ECB) activities; however, in our opinion, the RBI's push to reduce corporates' currency mismatch is positive for the INR in the longer term...Read More
How many Billionaires in India?
Knight Frank released its 10th edition of the Wealth Report. This yearly issue provides a unique insight into the attitudes of ultra-high-net-worth individuals (UHNWIs) towards property, investments and spending patterns across the globe and provides an annual analysis of wealth flow and property investment around the world.
Key Takeaways India
Setting up of Monetary Policy Committee to help improve policy rates related decision-making
India will soon have a committee that will be responsible for setting up of key policy rates. Till now, RBI was solely responsible for setting of these rates that have wide ranging impact on the depositors and borrowers. As and when the Monetary Policy Committee (MPC) is established, it will put India in the select group of countries that follow similar committee based system for deciding key policy rates. For setting up of the MPC, the Reserve Bank of India (RBI) Act needs to be amended. Once that is done, the MPC will decide on interest rates as against the current norm of RBI governor having complete control over the same. The MPC will have 6 members with 3 each representing the RBI and the government. Earlier there was a wide outcry against governments proposal to have the power to appoint 4 of the 6 members of the MPC. Most stakeholders were concerned that government was trying to take away the autonomy of central bank on countrys monetary policy. But it now being clear that committee will have equal number of members representing both sides, it seems that regulator will continue to have a significant say in setting of the policy rates. Though earlier, the advice from the government was taken, it was eventually the sole responsibility of RBI governor to take the final decision...Read More
Golden times in 2016: Yellow metal outperforms other asset classes
The current crisis in equities and commodities has staged a robust comeback for the safe haven, gold. In 2016 so far, investment in gold has been the highest among other investment / asset class such as equities and crude oil. The surge in gold inflows in 2016 is epitomized by the fact that SPDR Gold Shares, the worlds largest bullion exchange-traded fund, attracted US$ 4.55 billion of new money in 2016, the most among all US-listed ETFs. Thanks to the global as well as domestic market momentum, NSE Gold ETFs posted impressive gains. The scene last year was contrary when investors showed less interest in the yellow metal as the stock markets were offering hefty returns. But this year, Gold has offered the highest return in the current year, in sharp contrast to the rapidly prevailing pessimism in equities and other investment tools with recovery nowhere in sight.
Gold Vs Others
In the international markets price of gold at Commex has shop up 16.45% to US$ 1,234/ t oz in 2016 so far. Buoyed by the global cues and increasing demand as a safe mean of investment, gold price in domestic markets too have surged over 18% to nearly Rs. 29,535 per 10 gm for 24-carat gold, from about Rs. 24,950 per 10 gm on December 31, 2015. The equities, on the other hand, offer negative return with Sensex falling 7.17% in 2016 so far. Similarly, crude oil price have been reeling under pressure with worsening demand-supply equation. Crude oil price has fallen by 8.69% in 2016...Read More
Poor me! A lot of things will just get costlier after this Union Budget
What is the good for the budget, nation or environment may not be good for a few people who will have to shell out more money after Finance Minister Arun Jaitley raised the bar on a host of items. Driving around with the burden of pollution has got a little more taxing. Pollution cess of 1% on small petrol, LPG and CNG cars; 2.5% cess on diesel cars of certain specifications; 4 per cent on high-end models and tax to be deducted at source at the rate of 1 % on purchase of luxury cars exceeding value of Rs.10 lakh may well give a boost to the radio cab industry. Let me update my Uber app. Smoking is injurious to health and even more injurious to the wallet with additional duty of excise on cigarettes being increased. Yes the same holds true for cigar, tobacco, Paper-rolled beedis and gutka. Letting go of some of these would mean Health is wealth or vice versa. Dressing up also has got a notch costlier. The FM has proposed to increase the excise duty on branded readymade garments and made up articles of textiles with a retail sale price of Rs. 1,000 and above. Will have to look out for the Rs.999 stuff maybe. Precious little can be done if gold and silver; (jewelery articles excluding silver ) have an increase in excise rates but then the increase is also on imported imitation jewellery. A host of other services - hate to call them luxuries in this age - will get costlier. Industrial solar water heater is one. Air Travel, bill payments, eating out, water including mineral water, aerated water containing added sugar or sweetening matter and I hope not a lots more. The list that got expensive also includes plastic bags and sacks, ropeway, cable car rides, e-reading devices and instruments for VoIP (Voice over Internet Protocol). And if you thought taking packed lunch may be cheaper, the FM has made even the Aluminum foil expensive now...Read More
Jaitley sticks to fiscal deficit targets; passes the ball in RBIs court
Showing its government commitment towards fiscal consolidation, Finance Minister Arun Jaitley stuck to the fiscal deficit target of 3.5% of gross domestic product (GDP) for 2016-17, after achieving the 3.9% of GDP target in 2015-16. Arun jaitley while stating that prudence lies in adhering to fiscal targets also ensured no loss of development agenda, thereby dismissing general demand for digressing from his fiscal consolidation roadmap. The FM in the previous budget had delayed the fiscal consolidation roadmap in order to build infrastructure by boosting public investment. However as per the present roadmap, the fiscal deficit was estimated at 3.9% which would be brought down to 3.5% in next fiscal which is in line with the fiscal deficit target set earlier. The fiscal deficit for 2014-15 touched 4.1% of the Gross Domestic Product (GDP). In order to ensure that development agenda was not compromised, the Finance Minister proposed to set up a committee to review the Fiscal Responsibility and Budget Management (FRBM) Act in order to assess a need for a range of fiscal deficit target instead of absolute numbers. Hinting at the same, Economic Survey 2016 also noted credibility and optimality argued in favour of sticking to deficit target of 3.5% of GDP for 2016-17...Read More
PSU Banking space needs a budgetary boost to get over the NPA overhang
No economy can be called a stable economy unless its banking sector is stable. So even though, many people consider India to be a macro-economically safe country, the fact is that the Indian banking sector is facing existential crisis. The most recent example of this is the December quarter results of banks. Having been forced to make thousands of crores worth of provisions, the PSU banks need more than Rs. 1 trillion in next few quarters to recapitalize their balance sheets. But with government only willing to bring in 25% of this, there are questions about the remaining 75%. Problem is only expected get worse going forward as many banks still have stressed loans that have not been provided for and are equivalent of upto 200% of the banks capital. The government can reduce its stake to upto 51% in these banks to bring in the money. But with banking stocks already out of favour with investors and down more than 50% in last few months, the share sale is not expected to fetch the right price. Many experts believe that there is more than what meets the eye and government and RBI might be looking at alternative measures to bring in additional capital. One theory is that the next budget will have some big announcements for the PSU banking space. Government might be looking to increase its share in bringing in the new capital for these banks...Read More
Union Budget 2016-17: Below expectations; but there are some major positives
To give him due credit, the Finance Minister has definitely made a concerted attempt to manage expectations with a balanced budget. While three of the real estate sectors major expectations increased HRA deduction, removal of DDT from REITs and boost to affordable housing by allowing 100% deduction on profits made by entities constructing them have been addressed, the Budget offered no financial protection from project delays to home buyers. Most first-time home buyers in the major metros will be left out of the additional Rs. 50,000 tax exemption announced today, as it is applicable only on houses worth up to Rs. 50 lakh with loans of up to Rs. 35 lakh for houses. This announcement will mostly benefit first-time home buyers in tier-III and tier-II cities. The infrastructure sector was a major beneficiary today. The biggest announcement with implications for the real estate sector in India was removal of DDT from real estate investment trusts (REITs). REITs could become a reality soon The Dividend Distribution Tax (DDT) got exempted, clearing a final hurdle on the way of the successful listing of REITs in India. We expect a few listings to happen in the current year itself, either by financial institutions or developers. Currently, around 229 million sq ft of office space can be seen as REIT-compliant. If we assume that even 50% of these get listed, we are looking at a total REITs listing worth USD 18.5 bn...Read More
Liquidity & maturity of commodity markets to increase with new derivative products
After SEBI took over the regulatory responsibility of the commodities markets, it was felt that it would launch new products to improve the liquidity and depth of commodities market. Now the government has made it clear that it will give permission for launch of such products. Commodity traders expect that initially, most of the contracts would be similar to those available in equity markets. SEBI is working on the operational details of these products and it is expected that some basic products like derivatives for the core index, will be launched in few months time. Many people have accused SEBI of not being proactive with the launch of derivatives. But SEBI seems to have taken the cautious route and was busy strengthening the regulatory framework for the markets first. Now with that in place, its working to launch newer products that will help improve the liquidity of the markets. Currently only futures are available in the derivative category. Going forward, products related to options, index-related derivatives and even weather indices will be made available. There are also chances that government might look into the long-standing demand of allowing foreign investors and financial institutions like banks into the commodities market...Read More
Infrastructure and Investment! The Fifth Support Pillar of Budget to Transform India
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Arun Jaitley said that Infrastructure and Investment is the Fifth Support Pillar of Budget Theme Transform India. A total outlay of Rs. 2,18,000 crore will be spent on capital expenditure of roads and railways in 2016-17. For speeding-up of the process of road construction, an allocation of Rs. 27,000 crore has been purposed for Pradhan Mantri Gram Sadak Yojna (PMGSY) and Rs. 55,000 crore for Road Transport and Highways. Another Rs.15,000 crore are to be raised by NHAI through Bonds. An outlay towards capital expenditure of the Railways is proposed at Rs. 1,21,000 crore.Jaitley announced that nearly 10,000 KMs of National Highways are expected to be approved in 2016-17. In addition nearly 50,000 KMs of State Highways will also be taken-up for up-gradation as National Highways. The total outlay for infrastructure in budgetary estimates 2016-17 stands at Rs. 2,21,246 crore. He said that the Government will enact necessary amendments in the Motor Vehicles Act and open-up the road transport sector in the passenger segment. An enabling eco-system will be provided for the States which will have the choice of adopting the new legal framework. Entrepreneurs will be able to operate buses on various routes, subject to certain efficiency and safety norms. This will benefit the poor and middle class, encourage new investment, promote start up entrepreneurs and create new jobs. This is a major reform measure...Read More
Govt offset lack of private investment; testing times ahead for the economy though
The country has been growing at a solid 7% plus rate in recent quarters. But even then, there seems to be a general fatigue spreading across the economy. Some argue that government is doing financial engineering to report higher GDP growth numbers. But, there is no real evidence to back this theory. But, one thing is true that the government has been spending a lot on boosting capital expenditure in last one year. With private investments still not picking up due to lack of demand, the government has done well to make up for lack of private investments. But unfortunately, there is a worrying trend that most analysts are missing. The government has come good on all previous announcements. But, it is slowing down on making new capital expenditure related announcement. This might be an indication of governments inability to continue spending freely in near future. If this is true then it means that the economy is set to face some testing times in next few quarters. There is no hope for revival of private investments. The reason is that neither is the consumer demand coming back nor are the banks willing to pass on the benefit of policy rate cuts. Hence, the overall investment sentiment remains bearish. An objective assessment tells that even though government was able to spend on capex in previous year, its hands might be tied this year as savings from fall in commodity prices are not expected to increase much further. Oil prices dont have any further room to fall and hence, there will be no windfall gains on savings on import bills in 2016-17. Also, the implementation of pay commission and pension related recommendations are also expected to keep a cap on how much the government can spend...Read More
What has been done for Simplification and Rationalization of Taxation in Union Budget?
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Arun Jaitley said that the Government has already accepted many recommendations of Tax Administration Reform Committee. He further proposed to accept a number of recommendations of Justice Easwar Committee in Budget 2016-17. In order to reduce multiplicity of taxes, associated cascading and to reduce cost of collection, abolition 13 cesses, levied by various Ministries in which revenue collection is less than Rs.50 crore in a year, is proposed. Measures to rationalize TDS provisions for Income Tax have been proposed to improve cash flow position of small tax payers who get their funds blocked due to current TDS provisions. Also, Non-residents without PAN are currently subjected to a higher rate of TDS, however with amendment to relevant provision will allow that on furnishing of alternative documents, such higher rate will not apply. The facility for revision of return hitherto available to service tax assesses only will be extended to Central Excise assesses also. Additional options for reversal of input tax credits with respect to non-taxable services provided by banking companies and financial institutions, including NBFCs, by way of extending deposits, loans and advances are proposed in Budget 2016-17. Government of India has taken steps to reduce the cargo release time and transaction costs of EXIM trade. Shri Jaitley also proposed to amend the Customs Act so as to provide for deferred payment of customs duties for importers and exporters with proven track record...Read More
Bankruptcy, Insolvency code- a revival step for financial sector
To revive the financial sector in India currently plagued with stressed assets, FM Arun Jaitley in Union Budget 2016-17 vowed for comprehensive bankruptcy code, which will be enacted and brought in to deal with illicit deposit taking schemes. Declaring financial sector reforms as one of the "nine pillars" of Budget 2016-17 Jaitley stated that such code will provide a specialized resolution mechanism to tackle with bankruptcy situations in banks, insurance companies and financial sector entities. The Bankruptcy Code, along with Insolvency when enacted will deliver a comprehensive resolution mechanism for Indias economy. It would set deadlines for processing insolvency cases. According to World Bank data, India ranked an atrocious 136 of the 189 countries, in terms of rapid and efficient resolution of insolvencies, with creditors having limited power in case of default by a company. Once the bill enacted, it will significantly impact corporate governance in India, allowing creditors with more authority, so as to assure swift resolution of risen bad loans - a terrible issue haunting PSU banks. The bill was drafted by the Bankruptcy Law Reform Committee chaired by TK Viswanathan. As per the draft bill, in case of any corporate debtor who commits a default, a financial creditor (banks and finance firms), an operational creditor (trade creditors) or the corporate debtor may initiate corporate insolvency resolution process...Read More
Reliance Capital gets all approvals to up Nippon Life's stake in Co to 49%
Reliance Capital Asset Management (RCAM), a part of Reliance Capital, completed the regulatory approval process for increasing the stake of Nippon Life Insurance, a Fortune 500 company and one of the largest life insurer in the world, to 49%. In line with the new shareholding structure, the name of the company will also be changed from Reliance Capital Asset Management to Reliance Nippon Life Asset Management. Nippon Life Insurance would also become the co-sponsor in Reliance Mutual Fund, along with Reliance Capital, post the completion of stake sale. Read more
LIC hikes stake in Bharat Forge to 7.02%
State-owned Life Insurance Corporation of India (LIC) has increased its stake in components maker Bharat Forge Ltd by 2.02%, by buying 47.12 lakh shares in the open market. LIC, which earlier had 5% stake, increased its shareholding in the company (Bharat Forge) to 7.02% by buying shares between December 12, 2015, and March 1, 2016, in Bharat Forge said in a regulatory filing. Read more
New India Assurance, National Insurance, Oriental Insurance Company and United India Insurance to get listed: FM
FM, Arun Jaitley in Budget speech said that PSU insurance companies would be listed. The four general insurance companies fully owned by government includes New India Assurance, National Insurance, Oriental Insurance Company and United India Insurance. Read more
Insurance regulator sets up panel establish insurance service centres
Insurance Regulatory and Development Authority of India(IRDAI) set up a 7-member committee for establishment of insurance service centres with an aim to offer prompt servicing of policyholder in the most cost efficient manner, according to reports. The proposed company neutral centres will help insurers in reducing the costs which are involved in setting up brick and mortar offices to service policyholders. These service centres can accept requests from the policyholder of any insurance company and pass on the same to the respective insurance company in a cost efficient manner. Read more
Due focus is given to revive rural market - Canara HSBC OBC Life Insurance
Since nearly 70% of the population is in rural India, therefore, it is important that due focus is given to revive this market. This would enable long term and sustainable growth of the country's economic situations. Hence, the budget is a step in the right Read more
Reliance Capital gets all approvals to up Nippon Life's stake in Co to 49%
Reliance Capital Asset Management (RCAM), a part of Reliance Capital, today completed the regulatory approval process for increasing the stake of Nippon Life Insurance, a Fortune 500 company and one of the largest life insurer in the world, to 49%. In line with the new shareholding structure, the name of the company will also be changed from Reliance Capital Asset Management to Reliance Nippon Life Asset Management. Nippon Life Insurance would also become the co-sponsor in Reliance Mutual Fund, along with Reliance Capital, post the completion of stake sale. Read more
Service tax exemption to small mutual fund distributors
The government has proposed to exempt service tax levied on small mutual fund distributors earning a commission of less than Rs. 10 lakh annually. However, agents earning more than the threshold limit will have to pay a service tax of 14%. The move is aimed at increasing retail participation in the mutual fund industry, according to reports. As per Budget document for 2016-17, the services offered by MF agent/distributor to a MF or AMC are being made taxable under forward charge with effect from April 1, 2016 so as to enable the small sub-agents down the distribution chain to avail small-scale exemption having a threshold turnover of Rs. 10 lakh per year, subject to fulfilment of other conditions prescribed. Read more
Bootstrap! Startups will be allowed to register as companies in one day
While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Arun Jaitley said that startups generate employment, bring innovation and are expected to be key partners in Make in India programme. He proposed to assist their propagation through 100% deduction of profits for 3 out of 5 years for startups set-up during April 2016 to March 2019. MAT will apply in such cases. However, capital gains will not be taxed if invested in regulated/notified Fund of Funds and by individuals in notified startups, in which they hold majority shares. Jaitley also proposed a special patent regime with 10% rate of tax of income from worldwide exploitation of patents developed and registered in India. Jaitley also stated that Entrepreneurship, Education and training will be provided in 2200 colleges, 300 schools, 500 government ITIs and 50 Vocational Training Centres through Massive Open Online Courses. Aspiring entrepreneurs, particularly those from remote parts of the country, will be connected to mentors and credit markets...Read More
Lets Go! Maruti Suzuki Alto touches historic 30 lakh sales milestone
Alto, Indias top selling model for over 10 years in a row, has crossed the 30 lakh sales milestone in the Indian market. It took about 15 years and 6 months for Alto to achieve this historic figure. Alto is the only Indian auto brand to cross this milestone. Since its launch, Alto has found favour with its customers as an affordable car with good design, performance and high fuel efficiency. Customers, especially at the entry-level, have valued Alto as a win-win package of style and affordability. Commenting on this extraordinary landmark, RS Kalsi, Executive Director, Marketing & Sales, Maruti Suzuki said, "Alto has constantly evolved to reflect the changing India. While Altos true essence lies in its remarkable fuel efficiency, performance, attractive price and low maintenance, it has a zippy and sporty design that appeals to customers. Over the years, Maruti Suzuki has kept the brand rejuvenated with latest technology, features and design. Alto is being offered with features airbag and Auto Gear Shift at par with higher segment cars. These initiatives have helped enhance the brands connect with its customers and maintain its popularity." Additionally, over 3.8 lakh Alto have been exported to over 70 countries with Srilanka, Algeria, Chile, UK and Netherlands being its top markets. MSIL has regularly upgraded Alto with the latest technology and new features to meet the expectations of its buyers. Today Alto comes with a new improved exterior design, fresh interiors and superior powertrain. It comes with two engine options 800 cc and K10 and a CNG fuel variant. Keeping in mind the customers needs Alto K10 is offered with the clutch-less Auto Gear Shift Transmission (AGS) technology. AGS makes driving comfortable in heavy city traffic conditions, without compromising on fuel efficiency...Read More
Guj govt prohibits Tata Motors worker's protest, orders them to return to work
Gujarat government has prohibited the strike of Tata Motors' workers at Sanand plant and have directed them to resume work immediately. K O Shah, additional labour commissioner of Gandhinagar, said: "We have prohibited the strike under section 10(3) of the Industrial Disputes Act, and have referred the matter to the industrial tribunal in Ahmedabad.", as per news reports. Tata Motors' Sanand plant is facing heat over the issue of suspension of workers due to misconduct, as nearly 300 of their colleagues are now on a strike demaning their reinstatement. The company had suspended around 28 workmen on charges of serious misconduct. Now, the workers have gone on a strike and are demanding reversal of the order. Tata Motors' senior management is trying hard to negotiate with workers to douse the matter and resume production, as it is eyeing the launch of its new car Tiago by March end...Read More
Budget impact: Negative for Autos; Maruti, M&M to be affected
Levy of 1-4% infrastructure cess on cars to push up prices by 1.0-3.0%. M&M may be impacted the most, as the levy would warrant a price hike of ~3% on its UV portfolio. Maruti would require average price hike of about 1.5%. Read more...
Autos in Feb: Strong show by two-wheelers Hero Motocorp, Bajaj Auto, Royal Enfield
Hero Motocorp saw a growth of 13.7% yoy to 550,992 units, while Bajaj Auto saw a strong 33.2% yoy growth in its domestic sales. TVS Motors saw a good performance with 11.4% yoy increase in domestic two wheeler volumes. Read more...
Maruti Suzuki Domestic Sales marginally up; Jat agitation causes production loss
Maruti Suzuki sold a total of 1,17,451 units in February 2016, resulting in a de-growth of 0.9% yoy. Read more...
Tata Motors sales for February 2016 at 46,674 units
Tata Motors continued to witness year-on-year growth in the M&HCV segment in February 2016, with a growth of 22%. Read more...
Feb'16 auto sales: M &M total sales grow 15% YoY
Mahindra & Mahindra, one of country's top automobile manufacturers, announced its auto sales numbers which stood at 44,002 units in Feb 2016 as against 38,030 units in Feb 2015, representing a growth of 15%.read more...
Honda Cars sales down 23%
Honda Cars India Ltd. (HCIL), leading manufacturer of premium cars in India, registered monthly domestic sales of 13,020 units in February 2016 against 16,902 units in the corresponding month last year. Read more...
Feb'16 sales: Toyota Kirloskar Motor Sold 11,215 Units
TKM sold 10,312 units in the domestic market & exported 903 units of the Etios series clocking a total of 11,215 units in February 2016. Read more...
Feb'16 sales: Ford India sells 17,306 vehicles
Ford Indias combined domestic wholesales and export sales in February grew to 17,306 vehicles up from 12,576 vehicles in the corresponding month last year. Read more...
All the Auto numbers you need to know about February 2016 sales
Feb auto sales numbers are out. Take a look at how the top auto companies like Hero Motocorp, Bajaj Auto, TVS Motors, Maruti, M&M, Tata Motors, Ashok Leyland and Eicher Motors have fared during the month. Read more...
Feb'16 sales: Hero MotoCorp total sales grows 13.6% YoY
Hero MotoCorp Ltd. (HMCL), the worlds largest two-wheeler manufacturer, continues to further consolidate its leadership position in 2016 with a strong sales performance in February.read more...
Feb'16 Sales: TVS Motor records 7% YoY growth
TVS Motor Company has recorded 7% growth in sales during the month of February 2016, with total sales increasing from 204,565 units recorded in the month of February 2015 to 219,467 units in the month of February 2016. Read more...
India Yamaha Motor reports a Domestic Sales Growth of 50% in February 2016
India Yamaha Motor Pvt. Ltd. revealed a growth rate of 50% in domestic sales in February 2016, as compared to the corresponding period last year. Read more...
Bajaj Auto Feb sales at 272,719 units
Bajaj Auto Ltd sales stood at 272,719 units in February as against 243,319 YoY. Read more...
Eicher Motors two-wheeler sales in Feb rises 63%
For the month of February, the companys total sales of two-wheelers rose by 63% to 49,146 units as against 30,240 units sold in February 2015. Read more...
Feb'16 sales: Mahindra Tractors clocks 12,702 units in India
Total tractor sales (domestic + exports) during February 2016 stood at 13,574 units, as against 11,437 units for the same period last year. Read more...
Ashok Leyland Feb'16 sales rises 25% YoY
Hinduja group's flagship company, Ashok Leyland's total sales for Feb'16 total rose 25% yoy to 13,403 units as against 10,762 units of Jan'15. M&HCV sales were up 31% yoy at 10,798 units. LCV sales were up 3% at 2,605 units as against 2,532 units.
VE Commercial Vehicles sells 5032 units in February 2016, recording a robust growth of 57.3%
VE Commercial Vehicles Ltd. (A Volvo Group and Eicher Motors joint venture) has sold 5032 units in February 2016 as compared to 3200 units in February 2015 recording a growth of 57.3%. Read more...
Autos in Feb: M&HCVs grow; Ashok Leyland, M&M, Eicher clock gains
Ashok Leyland reported 31.2% yoy growth and Eicher Motors 70.6% growth. M&M registered 46.9% yoy growth and Tata Motors reported 22% yoy growth. Read more...
Feb'16 sales: Atul Auto clocks 3.17% YoY growth
Atul Auto announced the sales figures for the month of February 2016. The company sold 3,510 units with a growth of 3.17% YoY as against 3,402 units in last year corresponding period.
Lets Go! Maruti Suzuki Alto touches historic 30 lakh sales milestone
Alto, Indias top selling model for over 10 years in a row, has crossed the 30 lakh sales milestone in the Indian market. Read more...
Additional cess on diesel cars was unexpected: RC Bhargava, Maruti Suzuki
Raising of cess on vehicles that run on diesel by 2.5% was not expected. There is some disappointment because the additional cess also includes small cars. Read more...
Budget effect: Tata Motors hikes PV prices up to Rs. 35,000
Tata Motors, in a bid to offset the impact of Infra Cess of 1-4% announced in the recently conclude Budget, has hiked the prices of passenger vehicles up to Rs. 35,000, says news reports. Read more...
Infrastructure cess...Car makers start hiking prices
Auto makers on Tuesday announced a hike in car prices after the Government announced an infrastructure cess of up to 4% on cars of varying sizes in the Union Budget for FY17. Read more...
For automobile sector, it appears to be balanced budget - Minda Corporation
At one end, additional taxes on luxury cars and infrastructure cess imposed; on the other hand, significant focus and budget allocation has been provided for roads, infrastructure and highways which would in turn support demand of vehicles going forward. Read more...
Budget definitely generates substantial amount of positive sentiments: Raghupati Singhania
Structurally sorted budget with adequate emphasis on agriculture, rural India, infrastructure and health which will reap benefits in the long run. Read more...
Ban on Diesel Cars
There is no ban on sale of diesel cars in Delhi and NCR. However, Supreme Court vide its order dated 16.12.2015 passed in the case of M. C. Mehta V/S Union of India has directed that the registration of SUVs and private cars of the capacity of 2000 CC and using above diesel fuel shall stand banned in the NCR up to 31st March 2016. Implementation of the said order is to be carried out by the State Governments/Union territories Administrations. Read more
Govt has no proposal to revive HMT units
The Government has no proposal to reopen/revive the loss making closed HMT unit in the country particularly, Ranibagh at Nainital. Read more...
Guj govt prohibits Tata Motors worker's protest, orders them to return to work
Gujarat government has prohibited the strike of Tata Motors' workers at Sanand plant and have directed them to resume work immediately. Read more...
Tata Motors joins RE100 in Drive for 100% Renewable Power
The company, which manufactures a range of commercial and passenger vehicles as well as defence and homeland security vehicles, has set itself the goal of using 100% renewable energy. Read more...
UNO MINDA acquires global lighting business of Europe based Rinder Group
The acquisition includes 100% equity holding in Rinder India Pvt. Ltd. and Light Systems and Technical Center, Spain along with 50% equity holding in Rinder Riducu, Colombia. The deal will be financed through internal accruals and the debts. Read more...
ATF price up 12%; non-subsidised LPG rate reduced by Rs 61.5
Aviation Turbine Fuel (ATF), or jet fuel, price was hiked by 12%, while non-subsidised cooking gas LPG was slashed by Rs. 61.5 per cylinder. ATF price in Delhi was increased by Rs 4,174.49 per kilolitre (kl), or 11.88 per cent, to Rs 39,301.31 per kl, oil companies reportedly said. Read More
Former SpiceJet COO Sanjiv Kapoor joins Vistara
Sanjiv Kapoor, SpiceJet's former chief operating officer, joined Vistara as its chief strategy and commercial officer, according to reports. Report says that Sanjiv will be responsible for managing a wide portfolio of Vistara's commercial and planning functions. Read More
Jet Airways looking to maximise aircraft utilisation
Jet Airways has decided to consolidate its existing position by maximising aircraft utilisation instead of adding more new planes, reports a financial newspaper. The carrier has decided to expand at a prudent pace on profitable routes while increasing revenues from international operations by code-sharing with Etihad and other foreign airlines, says the paper. Read More
India to be the fastest growing air travel market
A recent IATA report mentions India to be the fastest growing air travel market exhibiting a double digit growth. In light of this, the governments consideration to develop 160 non-functional airports and 10 defunct airstrips as a part of its low-cost airport plan is a strong move that should boost regional aviation and tourism industries.Read More
Indian Hotels sells 1.24% stake in Belmond
Indian Hotels Company Ltd has announced that Samsara Properties Limited, Company's indirect overseas wholly owned subsidiary, has sold, through market transactions, 1,270,715 (One million two hundred seventy thousand seven hundred fifteen only) Class A Common Shares of the face value of US$ 0.01 each of Belmond Limited, representing 1.24% of the total outstanding Class A Common Shares for a net consideration of US$ 11.96 million. The sale proceeds are being utilized for retirement of debt. Read More
Travel and Tourism industry in India was projected to grow 7.5% in 2015
According to the World Travel and Trade Council, travel and tourism industry in India was projected to grow 7.5% in 2015. Several measures including focus on improving infrastructure, introduction of e-Visa services have contributed significantly to this growth. Read More
Ministry of Railways signs MoU for formation of JV cos with six State Govt
Ministry of Railways (MoR) has signed Memorandum of Understanding (MoU) for formation of Joint Venture Companies with six State Governments viz. Odisha, Maharashtra, Andhra Pradesh, Kerala, Chhattisgarh and Telangana. Read More
Govt to build web-based application system for monitoring highway projects
Ministry of Road Transport & Highways is developing a web based application system for monitoring of all projects and will put it to operation after its development. Read More
Budget impact: Capital goods stocks to benefit with increased spend on roads, railways
The Spend on roads & highways, railways (20% increase at Rs1,210 bn), power T&D, renewable (65% increase in NRE to Rs102bn), urban infra - metro projects (19% increase at Rs100bn) & smart cities (20% higher at Rs72bn) and water continue. Read More
NHAI ties up with Indian School of Business for skill development of its technical and managerial manpower
NHAI has taken a significant step in ensuring development of management competencies of its technical and managerial manpower, with a tie up with Indian School of Business (ISB), Hyderabad. Read More
FM assures unwavering support to ICT hardware industry for 'Make in India'
Manufacturers' Association for Information Technology (MAIT), India's apex body representing IT manufacturers, has welcomed the new duty provisions recently announced in the Union Budget 2016 to boost manufacturing of Customer Premise Equipment (CPE) in India. Read More
Prime Minister to launch Setubharatam project
The Government has decided to launch Setubharatam project to make all National Highways railway crossing free by 2019. The Prime Minister will launch the project at a function on 4th March, 2016 in New Delhi. Read More
CCEA gives approval for the procedure and mechanism for strategic disinvestment
The Government of India has approved the proposal of Department of Investment and Public Asset Management for laying down the procedure and mechanism for strategic disinvestment of Central Public Sector Enterprises (CPSEs) The Cabinet Committee on Economic Affairs(CCEA), chaired by the Prime Minister Narendra Modi, has given its approval for the procedure and mechanism for strategic disinvestment. This has also been announced by the Finance Minister in his Budget Speech yesterday. Ministry of Finance has issued instructions on procedures and processes for strategic disinvestment. In the past strategic disinvestment would start with the recommendation of the Disinvestment Commission. In a major departure, in the approved process the NITI Aayog would perform the role of erstwhile Disinvestment Commission. In fact, the role of NITI Aayog is larger as it would also identify CPSEs for strategic disinvestment and suggest methods for valuation of the CPSE apart from advising the Government on mode and percentage of shares to be sold in a CPSE. Government has also approved the constitution of Core Group of Secretaries on Disinvestment (CGD) headed by the Cabinet Secretary to Supervise and monitor the process of implementation of CCEA decisions on strategic disinvestment...Read More
Infrastructure companies will take two years before they make any investment: Vinayak Chatterjee
Vinayak Chatterjee in an interview with The Economic Times gave his view of investments in the infrastructure sector. Chatterjee spoke on why there are no investments in the infrastructure sector. He stated that the investments in infrastructure take place through infrastructure projects and through firms that manufacture capital goods. He stated that capacity utilization for most companies in the capital goods sector is at most 60% meaning these firms will probably not invest in new capacity. Chatterjee believes that it will take roughly two years before they consider investing again. Most of these companies are firms that make universal intermediates such as steel and cement. Chatterjee believes that the situation will be somewhat different for infrastructure projects in various sectors especially roads because sales of trucks catering to the sector have been on the rise. A similar outlook also applies to the railways sector considering that plans are underway to expand the rail network in the North East and J&K setting up bypasses. The industry has also laid down plans to decongest the railway station of Mughal Sarai, which is currently operating at more than its full capacity...Read More
Infosys will in no way become a product company: Vishal Sikka
Despite rapid progress by Infosys Ltd in bringing innovations powered by automation, artificial intelligence (AI), products and platforms, there is no way it would become a product company, CEO & MD Vishal Sikka said on Wednesday. This is because of the fact that the world itself is moving the services way with disruption happening in every segment, Sikka said, while addressing the Morgan Stanley TMT conference held at San Francisco Read More
Wipro ditches 'bell curve' appraisal to implement new evaluating system
After rolling out pilot exercise to go past its traditional bell curve appraisal system last year, the third largest IT firm of the country, Wipro is now in process of implementing a new evaluation system, according to reports. The evaluation process will involve a quarterly feedback as against the one-time annual process Read More
FM has delivered a fiscally responsible budget: N Chandrasekaran, TCS
N. Chandrasekaran, Chief Executive Officer and Managing Director of Tata Consultancy Services said, "The FM has delivered a fiscally responsible budget. The extension of SEZ scheme till 2020 and reduced tax at 10% for global revenues generated by India-registered IPR will further energise entrepreneurship Read More
Robust budget amidst rough global times: Anand Agarwal, Sterlite Tech
Commenting on the budget, Dr. Anand Agarwal, CEO, Sterlite Technologies said, "Overall, it is a robust Budget amidst rough global times, with bold moves that will enable rural development Read More
HCL Infosystems partners with Avaya
HCL Infosystems, one of Indias premier IT Services, Distribution and Digital Solutions Company, today announced a strategic alliance with Avaya, a global leader in business communications software, systems and services, to help businesses and organizations in India accelerate their digital transformation strategies Read More
Environment Ministry gives go-ahead to Tata Steels expansion project
Based on the recommendations of the Expert Appraisal Committee (Industry-I), the Ministry of Environment has decided to give environment clearance (EC) to Tata Steels Rs. 1,877 crore expansion project at Jamshedpur Steel Works in Jharkhand. Read more
Coal India to enhance production of coal to 1bn tonnes of Coal by 2019-20
A roadmap has been prepared by Coal India Limited (CIL) to substantially enhance production of coal to 1 Billion Tonnes of Coal by 2019-20 from the production level of 494.23 Mte. achieved in 2014-15. This was stated by Piyush Goyal, Minister of State (IC) for Power, Coal & New and Renewable Energy in a written reply to a question in the Lok Sabha today. Read more
Govt to build web-based application system for monitoring highway projects
Ministry of Road Transport & Highways is developing a web based application system for monitoring of all projects and will put it to operation after its development. Regular Meetings of Infrastructure Committee headed by Minister of Shipping, Road Transport & Highways are being taken for monitoring of projects. Apart from this, regular review meetings are held with project developers, state governments and contractors in head quarter as well as in field offices with the implementing agencies for removing hurdles in timely completion of projects. The details of Highway projects which were cleared by the government in the current year 2015-16 are given below and their completion period have been kept about three years...Read More
Dr. Reddys Labs: bleeding at home, bleeding abroad
We all know when theres fire on the mountain, we should run... run... run... But, what if the fires spread downhill too? Shareholders of Dr. Reddys Laboratories face a similar predicament, with the stock continuing to bleed at home and overseas as well. Last year in November, the Director of the Food and Drug Administrations Center for Drug Evaluation and Research had issued a Warning Letter . Ever since the USFDA warning - about inadequate quality controls in A.P and Telangana - was issued to the Indias second largest drug maker on November 4 last year, the sharp fall in the stock price has wiped off nearly US$ 7 billion from the drug majors market capitalization (Mcap), on both the Bombay Stock Exchange (US$3.11 billion) and the New York Stock Exchange (US$7.5 billion). G V Prasad, CEO of Dr. Reddys had remarked on the receipt of the USFDA warning, "We take quality and compliance matters seriously and stand by our commitment to fully comply with the cGMP quality standards across all of our facilities. We will respond with a comprehensive plan to address these observations within the stipulated time-frame of 15 days." In the 3rd week of February 2016, the company announced that it has completed its comprehensive corrective and preventive action plan (CAPA) with regards to the FDA Warning Letter is awaiting a response from the US drug regulator...Read More
Cheaper oil prices reason for Indian economic stability
Fall in oil prices is a big concern for oil-producing nations, whose biggest source of revenue is oil exports. But for countries like India, which depend on oil imports for satisfying a major part of their energy needs, its like a god-sent blessing. The money India is saving on oil imports is giving the government a lot of room to spend on countrys infrastructure and improve the fiscal position. Another indirect benefit of cheaper oil is that inflation has come under RBIs control after many years. Lower import bills and foreign exchange savings have helped increase Indias forex reserves to all-time highs. The government is also getting a shot at reducing fiscal deficit as it can continue to increase its revenues by not passing on the full benefits of fall in crude oil prices to retail customers. This low oil price scenario becomes all the more important as the investment cycle in India is not picking up. With private investment not showing any signs of revival, the challenge for India is to sustain its 7% plus growth momentum. In absence of private sectors investments, this is only possible with an increase in public investments that will help improve sectorial sentiments. Once the sentiments improve, it will have a positive-pull effect on private investments. Also with global economy facing a slowdown, India will have to depend mainly on its domestic demand as a key driver of economic growth...Read More
Govt to incentivize gas production from difficult deep-sea areas
India is a large importer of oil and gas and hence, its always dependent on economic vagaries of rising and falling commodity prices. This is the reason that the government is paying a lot of attention on improving countrys energy security. The domestic production of oil and gas has almost stagnated. So the government is now looking to incentivize gas production from difficult terrains like deep-water, ultra deep-water and high-pressure areas. The oil exploration companies generally avoid these areas due to higher costs, risks and because the current rates are not enough to incentivize such exploration. Currently, the domestically-produced gas is priced at an average of rates in gas-surplus countries. Now to improve these rates and also to keep a hands distance from the issue of controlled-gas-pricing, the government plans to price the undeveloped gas discoveries in difficult areas using average of landed price of naphtha, fuel oil and LNG. Experts feel that such a calculation methodology will lead to increase in natural gas prices by about 60%. It is true that inspite of being an oil rich nation, India has to depend on imports for satisfying most of its needs. This shows that exploration and commercialization of this resource has not been optimal. To address this, government is also planning to go in for a 2-stage gas pricing freedom. At first calibrated marketing freedom will be given. This will be followed by putting up a pre-determined ceiling price to be discovered on the principle of landed price of alternative fuels...Read More
RIL Billionares: Not just Mukesh Ambani, key shareholders too
Mukesh Ambani, Indias richest man, jumped 20 positions in the Hurun Global Rich List announced on February 24, 2016. With nearly 30% rise in his net worth to US$ 26 billion, the Owner of Reliance Industries Ltd (RIL) now ranks 21st in the coveted list. His net worth was US$ 20 billion when the previous list was announced on February 3, 2015. During the period - from Feb-3-2015 to Feb-26-2016 - key RIL investors too turned richer along with the refinery baron. During the review period, shares of RIL increased by Rs. 13.05 or 1.39% to Rs. 950.50 (as of February 26). The companys market capitalization (Mcap) also went up by nearly Rs. 12,000 crore to touch Rs. 3,07,928 crore. A close observation of the share holding pattern (SHP) reveals substantial growth in the shareholding value of some of the key public investors (excluding promotor and promotor group) like mutual funds, Central/State Governments and insurance companies. In fact, they have outperformed Mukesh Amabni in terms of percentage growth.Read more
IOC cuts Petrol Price by Rs 3.02/L; hikes Diesel by Rs 1.47/L
Indian Oil Corporation Ltd. has decided to effect the following price changes w.e.f midnight of 29th February 2016 / 1st March 2016
Decrease in Retail Selling Price of Petrol by Rs. 3.02/litre at Delhi (including State levies) with corresponding price revision in other States. With this change, the price of Petrol in Delhi will become Rs. 56.61/litre.
Increase in Retail Selling Price of Diesel by Rs. 1.47/litre at Delhi (including State levies) with corresponding price revision in other States. With this change, the price of Diesel in Delhi will become Rs. 46.43/litre.
Reliance Industries set to expand Jio tag; to launch fashion e-commerce site AJIO.com
The Mukesh Ambani-led Reliance Industries is all set to extend the Jio brand name to its latest venture, a fashion ecommerce site christened AJIO.com. The company has already name its telecom unit as Reliance Jio and its upcoming digital wallet as Jio money. The AJIO.com is already being discussed and tested with some of the employees and would now be made available to all through an official communication. This venture by Reliance Industries is cited as an attempt to adopt a dual e-commerce model, similar to Flipkart, since it involves a higher margin as compared to marketplace ventures when it comes to fashion business. Reliance is also ready to deploy a e-commerce platform for electronic products, while it plans to roll out an online grocery marketplace in the fourth quarter of the fiscal. According to reports, Reliance has planned to enroll more that 150,000 small and medium vendors for its e-commerce platform. AJIO.com has already lined up brands from countries like US, Russia, Turkey, Singapore, and Australia besides other countries.Some of the brands include Holster of Australia, Gizia of Turkey and mds of Singapore which will distinguish it from its peers...Read More
Dr. Reddys Labs: bleeding at home, bleeding abroad
We all know when theres fire on the mountain, we should run... run... Run... But, what if the fires spread downhill too? Shareholders of Dr. Reddys Laboratories face a similar predicament, with the stock continuing to bleed at home and overseas as well. Read more
Is Ajay Piramal too in the race to buy Lafarges India operations?
If reports are to be believed, billionaire Ajay Piramal is the latest name in the list of buyers interested in Lafarges India operations. Read more
Union Budget 2016-17: Impact on Pharmaceuticals Sector
Weighted tax deduction on R&D will be reduced from current 200% to 150% from FY18 and to 100% from FY21. The reduction of benefits on account of R&D was anticipated to kick in from current year (FY17). Although a delay in phasing out is better than anticipated, this is still a long-term negative for the sector. Read more
Lupin to set up plant in Japan
Lupin Ltd, one of Indias leading drug makers, plans to set up a manufacturing plant in Japan through its wholly-owned Japanese subsidiary. Read more
Zydus receives FDA final nod for anti-diabetic drug
Zydus Cadila has received a final approval from the US Food and Drug Administration (USFDA) to market Glyburide and Metformin Hcl Tablets USP in strengths of 1.25/250, 2.5/500 and 5/500 mg. Read more
Ratan Tata inaugurates hospital by Niira Radia's Nayati Healthcare
Niira Radia has ventured into the healthcare business through a new entity called Nayati Healthcare and Research Pvt Ltd, whose first hospital was inaugurated in Mathura on Sunday by Ratan Tata. Read more
Aurobindo Pharma gets FDA nod for non-aspirin pain reliever drug
Aurobindo Pharma has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Acetylcysteine Injection, 6g/30 mL (200 mg/mL) single-dose vials. The product is expected to be launched in Q1 FY16-17. Read more
Piramal Realty to invest Rs. 16,000 Cr in 4 years
Piramal Realty plans to invest Rs.16,000 crore in the development of real estate projects and acquisition of land over the next four years, reports a financial newspaper. Read More
Indiabulls Housing Finance to raise Rs. 400 crore
Indiabulls Housing Finance Ltd has announced that the Company proposes to issue 4,000 Secured Non-Convertible Redeemable Debentures with a face value of Rs. 10 lakh each aggregating to Rs. 400 crores, on Private Placement basis. Read More
JLL launches E-commerce Platform for Residential Real Estate
Leading international property consultancy JLL India announced that it will foray into E-commerce to market residential real estate. Read More
Sheth Creators launches Beaumonte, a deluxe domestic landmark destination at Sion
Sheth Creators, a leading real estate company catering to the luxury and ultra luxury segment, launches Beaumonte, a new age iconic residential development based in the heart of central suburbs, Sion. Read More
Brigade Enterprises enters into agreement with Reco Caspia
Brigade Enterprises Ltd has announced that the Company has entered in to a Shareholders' Agreement and Securities Subscription agreement on March 03, 2016 with Reco Caspia Private Limited. Read More
Making specialty Malls work in India
India is famous for its traditional markets and shopping streets that offer speciality products, entertainment and leisure interface. Read More
Hinduja Group acquires the Iconic Old War Office building in London
Hinduja announced that they acquired the legendary heritage building, Old War Office that was once inhabited by the Britain's war-time Prime Minister Winston Churchill from the British Ministry of Defence. Read More
Lenovo may locally make 50% of its smartphones it sells in India by 2017: Sudhin Mathur
Sudhin Mathur, the director of Lenovo Mobile Groups Smartphone Business in India talked about the companys prospects in India during an interview with Business Today. According to Mr. Mathur, the company's current market share in the Indian smartphone market is 11.6% as indicated in the latest IDC report for Q4 in 2015. He stated that Lenovo is increasing its focus on the market by launching value offerings using the dual-band offering, and this has helped the company register 10.8% growth in shipment. The director also talked about how the company managed to jump into the third position as a player in the Indian market in only a few years after previously not being able to make the cut for the top 5 positions. He stated that the company pulled it off by focusing on introducing products in the country ahead of the competition as well as offering innovative products. Its Vibe and Moto sub-brands have been perfectly positioned for the market and Vibe offers the best blend of technology and pricing. Moto is geared towards the premium market. Mathur also talked about the companys top selling devices in the Indian market. He pointed out that Lenovos 4G lineup has been very successful in the country with phones such as the Moto X Play, K3 Note, A6000, A6000 Plus, the second generation Moto E and 3rd generation of the Moto G.
TRAI asks telcos to submit compliance report on call drop compensation
After Delhi High Court upheld TRAI's call drop regulation, the regulator body has asked telecom operators to submit compliance report on compensation of call drops until Monday. As per reports, the Telecom Regulatory Authority of India is likely to take action if the telcos fail to provide satisfactory results. Telcos are, however, planning to challenge High Court's decision in the Supreme Court. "The initial drafts are ready for submission to the court," a senior executive with one of the major telcos has been quoted as saying. "The lawyers are giving them final look overs and deciding on the senior lawyers that will represent them in the case," he adds. The Delhi High Court on Monday dismissed telecom operators plea challening TRAI's decision of compensating call drops. A bench of Chief Justice G Rohini and Justice Jayant Nath upheld TRAI's regulation further stating that the court had not stayed the notification. The case was filed by the telecom operators against Telecom Regulatory Authority of India (TRAI), when the regulator mandated the telcos to compensate the consumers with Re.1 per call up to 3 dropped calls per day starting from January 2016, which was unanimously opposed by the telcos...Read More
Govt should revisit its revenue generation strategies from the telecom sector
The government has this bad habit of going after sectors, which are known to provide it with a sustained source of easy money. The sector in question is the telecom sector. Once again, the sector is getting ready to bear the brunt of governments ambitious revenue targets. If TRAI recommended prices are taken as approximates, then the next round of spectrum sale will result in revenue generation of about $80 billion. No doubt, this spectrum sale will increase the financial burden of all operators bidding for these airwaves. Most operators are already finding it tough to service the debt taken to acquire spectrum in 2015 and to rollout 4G services. Then the already strong competition has also crippled the profitability of most operators. One of the reasons for this is the less-than-expected growth in profits. The operators were overoptimistic about voice and data revenues and made irrational bids to acquire spectrum in previous auctions...Read More
FM Arun Jaitley proposed amendments to Finance Act, 1994
Spectrum trading deals are likely to attract service tax, as mentioned in Finance Minister Arun Jaitley's Union Budget speech. Clearing the air, FM said that service tax will be levied on the right to use spectrum and its subsequent trading. Jaitley, in his Budget speech, proposed to amend the Finance Act, 1994 in order to declare the right to use the radio-frequency spectrum and its subsequent transfers as a service, making it clear that assignment of right to use the spectrum is a service for which service tax can be levied and not sale of intangible goods Read More
Call drop case: Supreme Court to hear telcos plea challenging Delhi HC's decision
The Supreme Court on Thursday agreed to hear telecom operators' plea against TRAI's call drop compensation regulation. Telcos have challenged Delhi High Court's decision upholding TRAI's mandate. As per reports, the plea filed by two cellular operator associations was mentioned before a bench of Chief Justice TS Thakur seeking urgent hearing on the matter Read More
Lok Sabha takes up Aircel-Maxis scam for debate
Lok Sabha took up Aircel-Maxis issue for discussion amid loud protests from Congress MPs opposing the debate saying it was not on the agenda. AIADMK MPs stormed in protest against P. Chidambarams son Karti Chidambaram alleging his involved in the Aircel-Maxis scam Read More
Telecom sector had high expectations from FM: Vishal Malhotra
Telecom sector had high expectations from the Finance Minister, since several existing tax provisions were exerting additional burden on the industry and required urgent revamp. Proposals introduced in Finance Bill 2016 are a mixed bag for the telecom sector Read More
Smartphone Market: Apple remains on top among high end phones: IDC
According to International Data Corporations (IDC) Monthly City Level Smartphone Tracker, the leading 30 cities of India make up approximately 51% of the entire smartphone market in Q4 CY 2015 ; New Delhi generating the maximum demand, closely followed by Mumbai. With increasing appeal and penetration of the smartphones in smaller cities and towns, the tier 2 & 3 cities and beyond are expected to constitute a significant portion of the Indian smartphone market in the near future Read More
Why Oil Booms and Busts happen
What if I told you that there was a period in history where oil demand declined by 5 million barrels per day and non-OPEC supply increased by 5 million barrels per day, yet oil price rallied more than 50 percent? Would you believe me? If your answer is yes, then you guessed right. This was the period from 1979 to 1985; it was a period during which global oil demand declined from over 61 million barrels to 56 million barrels and non-OPEC supply increased from 32 million barrels to 37 million barrels. Yet prices rallied from $17 a barrel in 1979 to $26 a barrel in 1985, while reaching as high as $35 in 1981. This illogical world of rising prices, collapsing demand and expanding non-OPEC supply was made possible by a 15.5 million barrels reduction in OPECs supply between 1979 and 1985 as OPEC cut production from 30.5 million barrels in production in 1979 to 15 million barrels in 1985, and most of that reduction was voluntary. The maintenance of this artificially high price band by OPEC (at the expense of its production) led the oil majors to increase their capex from $24 billion in 1979 to as high as $44 billion by 1982, which naturally resulted in a drilling explosion with annual O&G wells drilled increasing from 66,000 in 1979 to a peak of 107,000 in 1984. This investment and drilling frenzy lead to more than a doubling in the Finding and Development (F&D) costs from $5 per barrel in 1979 to around $12 by the mid-1980s...Read More
China slashes banks reserve requirement ratio by 0.5%
Stepping up efforts to counter an economic slowdown amid plunging stock prices and a weakening currency, China has slashed banks reserve requirement ratio by 0.5%...Read More
Moody's: Asian steel producers will report lower earnings and high leverage in 2016
Moody's Investors Service says that steel producers in Asia will see their overall earnings in 2016 fall to levels even lower than the weak results reported in 2015 because production volumes and spreads will contract further, against the backdrop of oversupply and the resulting low prices. "Debt leverage for rated Asian steel producers in 2016 will remain high in 2016, after increasing significantly in 2015," says Jiming Zou, a Moody's Vice President and Senior Analyst. "Nevertheless, the levels in 2016 will likely fall year-over-year due to corporate austerity measures." Zou points out that such expectations for the steel sector led to Moody's taking negative rating actions on most steel companies in recent weeks. "As demand for steel in China declines further against the backdrop of slower Chinese economic growth the country's steel producers will continue to export their giant stockpiles of steel, pressuring prices in Asia," adds Zou. "Anti-dumping measures and safeguard duties will slow Chinese export growth, but overall volumes will remain high."...Read More
Fitch: January Air traffic should lift most US airports
US airports will likely see benefits from the continued increases in air traffic that were indicated by January's air traffic results, Fitch Ratings says. However, even with solid overall growth that follows 2015's impressive gains, a few air carriers are lagging the others, which may cause their shared hubs to underperform compared with other US airports. We expect some of the carriers' key airports to be at some near-term risk to maintain their recent growth given their relative tightness in expanding carrier capacity as well as capital development at their respective terminals and airfields. The five largest US airlines reported that their January traffic and capacity numbers rose despite a northeast blizzard that cancelled an estimated 10,000 flights and closed airports from the Carolinas through New England. The median traffic growth rate rose 3.7% compared with January 2015. In our view, January traffic numbers can be a leading indicator of annual momentum. Both economic conditions and carrier profitability can cause some deviation. Fitch expects 3.0%-3.5% passenger growth at US airports in 2016, following a nearly 5% gain in 2015. We expect major market airports to lead while performance at smaller airports and secondary hubs will see mixed results...Read More
43% of organizations to implement 'Internet of Things' in 2016: Gartner
The Internet of Things (IoT) will move toward mainstream adoption in 2016 for many industries, according to the findings of a recent survey by Gartner, Inc. The online survey was conducted in November 2015 among Gartner Research Circle Members and included responses from 465 IT and business professionals spanning 18 business sectors in North America, EMEA, Asia/Pacific and Latin America. Although less than a third (29 percent) of responding organizations are currently using IoT, an additional 14 percent are planning to implement IoT in the coming 12 months, with an additional 21 percent planning to implement after 2016. In other words, the number of organizations adopting IoT will grow 50 percent in 2016, reaching 43 percent of organizations overall. In aggregate, the majority of organizations (64 percent) plan to eventually implement IoT. However, it is also important to note that another 38 percent have no plans to implement IoT, including 9 percent that see no relevance whatsoever in the technologies. "While there is near universal acceptance of the importance of the IoT, less than a third of organizations surveyed were actively exploiting it," said Chet Geschickter, research director at Gartner. "This is largely because of two reasons. The first set of hurdles are business-related. Many organizations have yet to establish a clear picture of what benefits the IoT can deliver, or have not yet invested the time to develop ideas for how to apply IoT to their business. The second set of hurdles are the organizations themselves. Many of the survey participants have insufficient expertise and staffing for IoT and lack clear leadership."...Read More
Tata toys at Geneva Motor Show 2016: TIAGO, Hexa Tuff and the stylish compact sedan Kite 5
TIAGO, its new lifestyle SUV, Hexa Tuff and the stylish compact sedan, Kite 5 at the Geneva International Motor Show 2016. Read more...
Kia Motors reveals three new models for Europe at 2016 Geneva International Motor Show
The Optima Sportswagon was joined on the Kia stand by the all-new Optima Plug-in Hybrid sedan and Niro hybrid crossover, both making their European debuts following world premieres at the 2016 Chicago Auto Show in February. Read more...
Europe best for business! SMMT members reveal in new survey
Its a sentiment shared by 88% of large automotive companies1 who are SMMT members and 73% of SME members, with small and medium-sized businesses making up around three quarters of respondents (72%). Only a minority (9%) say leaving would be best, less than the proportion who are uncertain (14% dont know). Read more...
Fitch: January Air traffic should lift most US airports
US airports will likely see benefits from the continued increases in air traffic that were indicated by January's air traffic results, Fitch Ratings says. However, even with solid overall growth that follows 2015's impressive gains, a few air carriers are lagging the others, which may cause their shared hubs to underperform compared with other US airports. Read Moreregion. Read More
Turkish Airlines announces record high net profit in 2015
According to the consolidated financial statements reported to Borsa Istanbul, Turkish Airlines reported 1 billion 69 million USD net profit surpassing a billion dolar level for the first time in its history. Profit from main operations stood at 895 million USD with an increase of 32 percent from previous year. Read More
Singapore Airlines takes delivery of first Airbus A350-900
Singapore Airlines has taken delivery of its first Airbus A350-900 from the Airbus Delivery Centre in Toulouse. It is the first of 67 A350 aircraft on firm order, including seven of an ultra-long-range variant for which Singapore Airlines will be the launch customer. Read More
Amadeus and LATAM renew partnership to power international network expansion
Amadeus has reached an agreement with LATAM Airlines Group S.A. for global distribution services. Opening new routes and reaching partnership deals with other fellow carriers is a big part of a network expansion strategy, but it is just as crucial to ensure that new content is made available to the widest possible customer base. Read More
43% of organizations to implement 'Internet of Things' in 2016: Gartner
The Internet of Things (IoT) will move toward mainstream adoption in 2016 for many industries, according to the findings of a recent survey by Gartner, Inc. The online survey was conducted in November 2015 among Gartner Research Circle Members and included responses from 465 IT and business professionals spanning 18 business sectors in North America, EMEA, Asia/Pacific and Latin America Read More
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5 Weekly positional calls
The prophets of doom have been proved wrong temporarily and profits seem to be coming at least on paper to the harried investors. The run up has been fast and furious and a lot of shorts are being forced to run for cover. From the budget low of 6825, Nifty has surged ~10% this week. Strengthening Indian rupee against the US Dollar also added to the positive sentiment on the bourses.
The big event is now behind us and what lies ahead is hope that GST will sooner than later get passed and that the RBI may get into action and lower rates. With none of the feared negatives making it into the Union Budget (no increase in time frame for long term capital gains or super-rich tax or hike in basic excise), it remained more of a neutral event. The silver lining, however, was that the fiscal deficit target of 3.9% was met and target of 3.5% has been maintained for FY17. This raises expectations of a rate cut from the RBI.
But the market has to content with the fact that some selling pressure could be witnessed given the precarious situation. It would be prudent to remain cautious at this juncture and use the gains to reshuffle your portfolio instead of blindly adding positions.
The India Infoline Weekly Wrap keeps you abreast of the markets and arms you for the markets in the coming week. To access the India Infoline Weekly Wrap, just Click Here
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