Financial focus Weekly Newsletter InFineeti ISSUE 1
VOLUME 1
2014
TOP STORIES…………. 1 MARKET ACTIVITY ……2 ECONOMICS …………… 3 TERM OF THE WEEK … 4 POLICY RATES AND
MARKET UPDATES…….5
Financial focus
A one stop guide to know about all the recent happenings in the finance world
TOP STORIES : INDIA
RAJAN QUESTIONS RISE IN LPG CAP, TERMS IT MISDIRECTED SUBSIDY Reserve Bank of India Governor Raghuram Rajan questioned the decision of raising the cap on subsidised LPG cylinder cap from 9 to 12 calling it a 'misdirected subsidy', minutes after it was passed by the Union cabinet. Speaking to Karan Thapar of Devil's Advocate, which was telecast on CNBC TV 18 on Thursday evening, Rajan said, "What one should be careful about is expanding the misdirected subsidies in the system. We have to be very careful because we need to spend on very important things we are not spending on."
RBI
ACTS
SWIFTLY
TO
COUNTER
BAD
LOANS
In an effort to ease the financial stress on lenders as the economy slows, India’s central bank released a framework to help banks recover bad debts. Stressed loans in India - those categorised as bad and restructured - total $100 billion, or about 10% of all loans. The Reserve Bank of India wants to improve early identification and timely restructuring of assets and, amongst other measures, proposed reforming the restructuring process by mandating independent evaluation of large value restructurings.
I-T DEPARTMENT ISSUES FRESH TRANSFER PRICING ORDER AGAINST VODAFONE A fresh order has been passed against the Indian arm of Vodafone Group Plc., by the transfer pricing wing of the income-tax (I-T) department. The case stems from the issuance of shares by Vodafone India Services Pvt. Ltd (VISPL) to an offshore entity.
Financial focus Weekly Newsletter InFineeti
TOP STORIES : WORLD
IN BEN BERNANKE'S FINAL ACT, US FEDERAL RESERVE CUTS STIMULUS DESPITE MARKET TURMOIL The Federal Reserve decided to continue with tapering, to trim its bond purchase by another $10 billion, to $65 billion, as Fed Chairman Ben Bernanke hands the reins to Vice Chair Janet Yellen. Some investors speculated that the U.S. central bank might put its plan on hold given the jitters in emerging markets. Apart from this the Fed made no changes to its other main policies and stuck with keeping the interest rates low serving the interest of external markets.
GOOGLE SELLING MOTOROLA SMARTPHONE BUSINESS TO LENOVO FOR $2.9 BN Google is selling Motorola's smartphone business to Lenovo for $2.9 billion, a price that makes Google's biggest acquisition look like its most expensive mistake, having brought it for $12.4 billion in 2012. Google Chief Executive Officer Larry Page said that Google would be best served by focusing on smartphone software rather than devices
CHINA
INTRODUCES
FIVE
NEW
PRIVATE
BANKS
In an attempt to boost competition and boost the overall economy, China announced the creation of five privately financed banks this year. The move is part of an effort by China Banking Regulatory Commission (CBRC) to ease the flow of foreign capital into the Chinese banking sector. It is a direct result of the lower growth rates experienced over the past two years, after decades of uninhibited growth, which called into question China’s overreliance on foreign trade.
MARKET ACTIVITY
MARUTI SKIDS 8% 0N GUJARAT PLAN The stock of Maruti Suzuki India Ltd (MSIL) hit a new low after the board decided to set up a subsidiary in Gujarat which would be fully owned by Suzuki. The subsidiary would be a manufacturing company with Maruti as its only customer, which most analysts think could create an issue of corporate governance and relationship with the Parent. Maruti Suzuki has decided to pursue Gujarat expansion through a 100% Suzuki subsidiary.
JUST DIAL PLUNGES 13% AFTER EARNINGS DISAPPOINTMENT Shares fall after the company announced a 3.8% rise in profit and a 6.39% increase in income in December quarter, The company's stock tanked over 17% as its December quarter earnings disappointed with its operational performance on account of higher advertisement cost.
Financial focus Weekly Newsletter InFineeti
BHARTI AIRTEL Q3 NET UP 4.5%, HIT BY TAX PROVISION India's largest telecom operator's Net profit increased to Rs 610 crore from Rs 583.4 crore and Q-o-Q revenues climbed 2.8 percent. At the same time, Tax cost for the company jumped 91.9 percent to Rs 1,657 crore during December quarter as against Rs 863.4 crore in previous quarter.
ECONOMICS
RBI RAISES REPO RATE BY 25 BPS TO 8 PERCENT Reserve Bank of India Governor increased the repo rate on Tuesday 28 th January, reinforcing that the prime focus of RBI was to contain the inflation. "The gravest risk to the value of the rupee is from CPI (Consumer price index) inflation which remains elevated at close to double digits, despite the anticipated disinflation in vegetable and fruit prices," Rajan said. If RBI can bring inflation down, "that will give us some room on the monetary front which can then be passed through. But first let's fight the fight that needs to be fought", he said
INDIA RECEIVES $28 BN FDI IN 2013 : UNCTAD Despite the unexpected capital outflows in the middle of the year, FDI flows in India grew 17% in 2013 to $28 billion according to the United Nations Report. India’s rank was 16th among the top 20 global economies in terms of receiving the most FDI. According to the report the Global FDI increased by 11% in 2013 to an estimated $1.46 trillion. The UNCTAD forecasts that FDI flows will rise gradually in 2014 and 2015. However, uneven levels of growth, fragility and unpredictability in a number of economies and risks related to the tapering of quantitative easing could dampen the FDI recovery.
CAD TO DECLINE TO 2.5%, RAISES HOPE OF GOLD IMPORT DUTY CUT Reserve Bank of India said on Tuesday, 28th January, that Current Account Deficit (CAD) in the current fiscal year is expected to decline to below 2.5% of GDP from 4.8% of GDP a year ago.To check the CAD, the government had raised the customs duty on gold import from 4% to 10% (in phases) and also had enforced 80:20 rule to ensure that at least 20% of gold was exported before new quantities could be imported. Now that the CAD situation has improved, Finance Minister P. Chidambram said that government would review the restrictions put on gold imports by end of March.
DID YOU KNOW ?
India
is today one of the world’s fastest growing economies. By 2030, India will become the world’s third largest economy with projected GDP (PPP) at $13,716 bn.
Source:- http://www.rediff.com/money/slide-show/slide-show-1-special-25-interesting-facts-youmust-know-about-the-indian-economy-/20130808.htm#1
Financial focus Weekly Newsletter InFineeti
TERM OF THE WEEK ADR & GDR
AMERICAN DEPOSITORY RECEIPT A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction. This is an excellent way to buy shares in a foreign company while realizing any dividends and capital gains in U.S. dollars. However, ADRs do not eliminate the currency and economic risks for the underlying shares in another country. For example, dividend payments in euros would be converted to U.S. dollars, net of conversion expenses and foreign taxes and in accordance with the deposit agreement. ADRs are listed on either the NYSE, AMEX or Nasdaq as well as OTC. GLOBAL DEPOSITORY RECEIPT A bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares, but are offered for sale globally through the various bank branches. A financial instrument used by private markets to raise capital denominated in either U.S. dollars or euros.
Source:- www.investopedia.com
Financial focus Weekly Newsletter InFineeti
POLICY RATES AND MARKET UPDATES DATE :- 31/01/2014 BANK RATE
9.00
REPO RATE
8.00
REVERSE REPO RATE
7.00
MARGINAL STANDING FACILITY RATE
9.00 20,530.65
SENSEX
6050
NIFTY
InFINeeti Team
Ankit Tiwari | 9674650102 Ashutosh Deshpande | 9833657319 Sanket Tandon | 8697912131 Sobhit Agarwal | 8697912181