|
FDI Policy
Mayaram panel recommends full foreign ownership in telecom & aviation, 74% FDI in multi-brand
19/06/2013
A government panel has recommended a dramatic liberalisation of India's foreign direct investment regime, including raising the FDI limit to 74% in multi-brand retail and allowing complete foreign ownership of telecom and aviation companies.It has also batted for raising or doing away with FDI caps in a number of sectors, including non-scheduled air transport, ground handling at airports, satellites, private security agencies and Internet Service Providers (ISPs) to attract capital flows that are needed to finance the current account deficit and bolster the rupee, which hit a new low on Tuesday
|
|
CORPORATE WATCH
Air travel picks up, IndiGo stays on top, Jet Airways & JetLite grab second slot
19/06/2013
The holiday season spurred a mild revival in demand for air travel and the month of May witnessed positive growth in air traffic after almost 15 months of decline.According to data furnished by aviation regulator DGCA, domestic airlines together carried 57.1 lakh passengers last month, recording a growth of 5%, compared with May 2012. It also reflects a sharp jump of seven lakh passengers from April.
|
|
Misc. Corporate Laws & Other Commercial Policies
Drug price control formula leaves companies shaky, cos approach pharma department
19/06/2013
The government's interpretation of 'brand' while fixing price caps of essential drugs has prompted leading domestic manufacturers to approach the pharma department and seek a halt to immediate implementation of the new drug price control order. The National Pharma Pricing Authority (NPPA) has calculated the price ceiling of the first 150 essential drugs in a manner that clubs all brands of one drug sold by a company to decide whether a firm commands more than 1% market share in a particular therapeutic category.
|
|
Finance & Money Markets
Investors ignore govt moves, sell shares; rupee at record low
19/06/2013
The rupee plummeted to an all-time closing low on Tuesday and foreign investors dumped shares, pulling money out of a market that has become the second-worst performer in Asia so far this year in dollar terms. The Indian currency, which is also the second-worst performer among emerging market currencies, fell to 58.77 at the end of the day, a historic closing low prompting Reserve Bank of India to announce steps to ease the pressure on the importer.
|
|
ECONOMY
FIPB clears 16 FDI proposals worth Rs 1,647 cr
19/06/2013
The government has approved 16 projects envisaging foreign investment worth Rs 1,647 crore, while deferring Punj Lloyd's proposals for lack of security clearance.
"Based on the recommendations of the Foreign Investment Promotion Board (FIPB) in its meeting held on May 10, 2013, Government has approved 16 proposals of Foreign Direct Investment (FDI) amounting to Rs 1,646.875 crore," an official statement said.
|
Urea import up 85% in April-May to 6.54 lakh tonne
19/06/2013
Urea import increased 85% in the first two months of the current fiscal at 6.54 lakh tonne and demand for the nutrient is expected to rise this year on normal monsoon.India had imported 3.51 lakh tonne in the year-ago period, said a senior fertiliser ministry official.Urea is imported by the government’s three canalising agency - Indian Potash Ltd (IPL), MMTC and STC. The country had imported 80.44 lakh tonne in the entire 2012-13 fiscal at an average cost of $ 417 per tonne.
The official said that 25-30 lakh tonne of urea import is estimated for the kharif season. The demand is expected to rise this year as India is likely to have normal monsoons.
|
|
Commodities
No takers for silver despite low prices, demand plunges 40% in a month
19/06/2013
Demand for silver jewellery and coins has dropped by almost 40% in the last one month although prices have fallen to 43,000 per kg from 55,000 per kg in June last year.
The metal has also lost its flavour as an investment product and the trade says this bearish trend will not be over soon. Suresh Hundia, a Mumbai-based bullion dealer, said: "There is no demand for silver in the market now. The industry can expect some demand only in August. There is a huge stock of silver with traders now. They will first have to offload this and then place fresh orders."
|
WTI Crude Trades Near Four-Month High on U.S. Stockpiles
19/06/2013
West Texas Intermediate crude traded near the highest price in more than four months before a government report that will probably show U.S. stockpiles declined as refinery processing increased.Futures were little changed in New York after slipping 8 cents yesterday from the highest settlement since January. U.S. crude supplies probably fell by 500,000 barrels last week, according to a Bloomberg survey before tomorrow’s report from the Energy Information Administration. Refineries typically boost output this time of year to meet summer demand for motor fuel. Syrian President Bashar al-Assad warned Europe will “pay the price” for arming rebels trying to topple him.
|
Gold Retreats a Second Day in London Before Fed Policy Meeting
19/06/2013
Gold fell for a second day in London before the U.S. Federal Reserve starts a policy meeting as investors weighed when the central bank will taper stimulus. Palladium declined to a five-week low. The U.S. central bank, which begins a two-day meeting today, currently buys $85 billion a month of Treasury and mortgage debt. Fed Chairman Ben S. Bernanke said last month the pace of monthly purchases could be reduced if the employment outlook shows sustained improvement. Data due today may show U.S. housing starts rose in May, economists said.
|
|
CORPORATE WATCH
Jet back in control to win over FIPB on Etihad deal
19/06/2013
The Naresh Goyal-promoted Jet Airways will shortly submit a reworked proposal to the Foreign Investment Promotion Board (FIPB), which will include the changes made in its share purchase agreement with Abu Dhabi-based Etihad Airways reflecting that effective control is in the Indian entity’s hands.
Sources in the know of the developments said that the airline will also submit an explanation detailing why it will have an office in Abu Dhabi for network planning and how it does not mean a shift in the airline’s place of business.
Last week the FIPB deferred a decision on Jet’s proposal wherein Etihad Airways would pick up a 24% stake in it for R2,058 crore on grounds of lack of clarity as to who would wield “effective control” in the company. According to the proposal submitted by Jet, it seemed that Etihad would have joint control over the company with its minority stake of 24%. Concerns were also expressed by the inter-ministerial body over Jet transferring some business operations to Abu Dhabi.
|
|
ECONOMY
PM & FM chart out 8-week revival plan
19/06/2013
Just days before the Cabinet reshuffle, Prime Minister Manmohan Singh along with finance minister P Chidambaram cleared an eight-week road map with over a dozen action points to give another booster dose to the economy.
The range of measures include coal pool pricing with assured 80% coal supply to close to 78,000 MW worth of power projects, regulators in the coal, railways and roads sectors, a new foreign direct investment policy with likely increase in the cap in telecom and aviation, and the creation of an infrastructure investment fund from the surplus being held by central public sector entities.
|
|
Misc. Corporate Laws & Other Commercial Policies
Foreign retailers may get 3 years for SME switch
19/06/2013
The government is likely to provide some relief to foreign multi-brand retail firms planning to set up shop in India on the clause mandating them to source 30% of their procurement of manufactured and processed items from small and medium enterprises (SMEs) with a total investment in plant and machinery not exceeding $1 million.A senior department of industrial policy and promotion (DIPP) officer told FE that retailers would be provided a buffer in cases where SMEs grow beyond the stipulated $1-million mark on the back of supplies to the retail chains. “Such retail chains may be given three years to make a move from such SMEs to new ones,” the official said. The logic is that retail firms would need time to spot and train new SMEs.
|
|
ECONOMY
CERC proposes new index for imported coal
19/06/2013
The Central Electricity Regulatory Commission (CERC) has proposed a modified composite index on payments for imported coal. It said this was necessary, as now, coal from Indonesia formed a significant part of steam coal imports into India and price index developers such as Platts were publishing an Indonesian coal price index (Platts-Indo Coal).
Currently, for payments for imported coal, CERC uses a composite index that considers Australian and South African coal.In a discussion paper, CERC said in 2010-11, 73 per cent of the imported coal was from Indonesia, while 24 per cent was from South Africa.
|
G-8 leaders see worst over for world economy after summit talks
19/06/2013
Leaders of the Group of Eight nations said the worst has passed for the global economy following summit talks on promoting employment and growth.While the economic outlook is subdued, risks have abated, the G-8 said in a statement early today, the halfway point of a two-day meeting in Enniskillen, Northern Ireland."Global economic prospects remain weak, though downside risks have reduced thanks in part to significant policy actions taken in the US, Euro area and Japan," according to the statement.
|
Ministry revives infra cell to push PPP mode in airport modernisation
19/06/2013
In a move to fast-track the modernisation of Chennai and Kolkata airports through the public-private partnership (PPP) route, the Ministry of Civil Aviation has re-established the Key Infrastructure Development (KID) cell.
KID was the nodal point in Airports Authority of India (AAI) for those interested in participating in the bidding process when the modernisation of Delhi and Mumbai airports was started in 2005. It was not only the data room providing details on traffic flows, projections and area of land available with the two airports, but also put out requests for proposals for the two metro airports.
|
CNN Economy Poll: Are you better or worse off than last year?
19/06/2013
They're still a minority, but an increasing number of Americans say economic conditions right now are good, according to a new national poll.But a CNN/ORC International survey released Wednesday morning also indicates that a plurality of the public says they are personally worse off than they were a year ago. Thirty-five percent of those questioned in the poll say that economic conditions in the country right now are "very" or "somewhat" good.
|
Canadian economy may see turn of fortunes in second half of 2013
19/06/2013
If there is going to be a significant and extended recovery in the global economy, it will need to continue forming in the second half of this year and solidify in 2014.Economists are recasting their forecasts upward for Canada and other countries after disappointing performances in 2012. Those turns of fortune hinge on a less crisis-challenged Europe and — critically — growing economic momentum in the United States.
|
Spanish Banks Risk Loan-Book Losses as Economy Shrinks, IMF Says
19/06/2013
The International Monetary Fund said Spain’s recession is putting the country’s lenders at risk of a further deterioration on their loans.
“The macro downsides could trigger a negative feedback loop between credit and the economy, with deteriorating loan books and pressure on profits,” the IMF said in a report today. Banks should continue to “reinforce the quality and quantity of capital, including by being very prudent on cash dividends.”
|
|
RBI
Bond sales to be uniform-priced in near term: RBI officials
19/06/2013
The Reserve Bank of India's plans to auction government bonds with a "uniform-price" bidding system comes in anticipation of further bearishness in debts markets should the US Federal Reserve announce a rollback of its loose monetary policy at the conclusion of its two-day meeting on Wednesday. The RBI plans to stick to this method for at least the next 2-3 auctions to generate more aggressive bids, and lower cut-off yields, Reuters reported earlier. While government bond prices had rallied on Monday when the central bank had announced the uniform price auction, the recent sell-off by foreign investors have caught the RBI by surprise.
|
West Bengal's saving scheme may face RBI opposition
19/06/2013
About two months ago, the West Bengal government decided to start its own savings scheme to protect thousands of small investors from unscrupulous deposit-raising entities. However, the plan is likely to be watered down by RBIs opposition to non-banking entities raising deposits.Two months after the announcement, the government has not yet been able to make any headway in preparing even the blueprint for the scheme. The biggest hurdle for the government comes from the Reserve Bank of India, which has already communicated the West Bengal government to convert two of its existing deposit-taking non-banking finance companies into non-deposit taking entities.“The small saving scheme has not yet been finalized. No blueprint has been prepared, neither the bottlenecks have been evaluated,” said a state government official.
|
|