Excess cash lying idle due to poor investment demand

Sep 11, 2016 0

New Delhi–Like elsewhere, India was currently witnessing too much cash sitting idle in the wake of poor demand for investment or aversion to further exposure to high risk financial markets, industry chamber Assocham said on Sunday.

“We are in a peculiar situation where the benchmark market indices -NIFTY and Sensex have reached levels, perceived to be high while gold cannot be safe haven option for too long as the yellow metal has seen quite a run in the past eight months,” said the Associated Chambers of Commerce and Industry in a report.

“Investment cannot go in the real estate and property markets which are in a state of a mess. So the cash would sit idle in banks, irrespective of higher or lower interest rates”, the report added.

Assocham said there was no investment appetite from industry, “which is not even operating at full capacity”.

Whatever investment is currently coming into Indian industry is from foreign direct investment (FDI) or for bidding in obligatory natural resources like telecom spectrum.

Noting that excessive liquidity is being generated in the absence of robust industrial growth or demand, the report said India has been one of the main recipients of large cash being printed by central banks of the developed countries without any takers there, even at the sub-zero interest rates.

Japan, for instance, is an example, where interest rates have turned negative earlier this year.

“So, when we look at the elevated levels of valuations in the stock market, we should see with a muted sense of excitement because a large part of it is driven by a global liquidity and absorbing it has its own issues, though in the short term, the trend has helped bring stability in the foreign exchange value of rupee,” Assocham Secretary General D.S.Rawat said.

“Equities had their run, so is the case with the gold. With several top notch builders in a messy situation of not being able to deliver the in-hand projects, there is a tremendous lack of confidence of investors or actual users in the property market. So, that leaves cash idle”, the report said.

According to the industry chamber, while increased rural demand would boost certain industrial segments, “it would not be to the extent of causing investment in fresh capacity”.

Moreover, the commodity cycle remains muted, while export demand would too remain muted, it said.

“Thus, the biggest trigger has to be demand for money for fresh investment, which is still far. On the other hand, the asset classes – equities, gold – have reached saturation while real estate is in a nursing ward,” it added.

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12th Indo-US economic conclave to open in Delhi on Sep 14

Sep 11, 2016 0

New Delhi– The 12th edition of the Indo-US Economic Summit will get underway here from September 14, to be inaugurated by Union Urban Development Minister Venkaiah Naidu, the organisers Indo-American Chamber of Commerce (IACC) said in a statement.

The two-day conference will have a special address by US Ambassador to India Richard Verma, a keynote address on agriculture by Food Processing Minister Harsimrat Kaur Badal, and the valedictory address by Minister of State for Law and IT P.P. Chaudhary, the statement said.

“Being organised for the 12th consecutive year, the Indo-US Economic Summit is the one-stop platform for all Indo-US policy, business and trade deliberations,” the IACC said.

Leaders from business, government and academia “will deliberate on augmenting the existing two-way trade to $500 billion and will focus on sectors that foster growth,” it added.

“As the Indian economy further globalises and expands, the summit will provide a valuable opportunity to assess developments across India-US trade relationship, economy and society,” IACC Regional President Lalit Bhasin said.

According to the organisers, the conclave will bring together more than 250 people, who are thought leaders from business, government, civil society and academia.

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Ratan Tata Twitter account hacked, later restored

Sep 10, 2016 0
Ratan Tata

Ratan Tata

New Delhi–Tata Sons Chairman Emeritus Ratan Tata’s Twitter account was hacked but later restored, the industrialist said in a tweet.

“Shocked my account was hacked yesterday and spurious tweet sent with malicious intent. Tweet deleted, account restored,” Tata tweeted.

The post mentioned a link that said: “Shocked that my Twitter account was hacked yesterday and a spurious malicious tweet was wrongly attributed to me. This spurious tweet has now been deleted any my Twitter account restored. I regret the inconvenience that this malicious and wrongful action may have caused.”

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Brazilian Embraer sets aside $200 million for possible fines, as India seeks details of bribes on deal

Sep 10, 2016 0

New Delhi/Sao Paulo–Even as the Defence Ministry in India sought information from Brazil’s Embraer aerospace company over alleged payment of bribes in a three-aircraft deal, the company is said to have set aside $200 million to pay for any fine following investigation by US authorities.

According to media reports in Sao Paulo, Embraer is being probed by prosecutors in Brazil and the US Justice Department over commissions allegedly paid to a UK-based defence agent for clinching the 2008 deal.

In Delhi, the principal spokesperson of the Defence Ministry tweeted: “DRDO (Defence Research and Development Organisation) to seek explanation and details from manufacturers of Embraer aircraft on media reports on deal for the aircraft signed in 2008,”

“On receipt of information by DRDO further steps may be initiated,” the spokesperson said in another tweet.

The deal, inked by the United Progressive Alliance (UPA) government, involved the purchase of three EMB-145 planes for $208 million. The first aircraft was delivered in 2011, and the other two were delivered later.

The DRDO is fabricating the indigenous AEW&C (Airborne Early Warning and Control)systems that are being mounted on the Embraers, which the Indian Air Force (IAF) will operate. The system is still not ready as the DRDO has missed several deadlines. It is now scheduled to be completed by December.

The DRDO has said it is not aware of any commissions being paid for the deal.

According to Brazilian daily Folha de S.Paulo report, Embraer is cooperating with the investigations and announced in July that it was expecting to reach a deal soon with American authorities. The report said $200 million had been set aside by the company to pay for any eventual fines.

“The company has not released details regarding the state of the investigations, but three people who have been following the case have confirmed to Folha that the deals concluded in Saudi Arabia and India are being examined,” said the report.

“In both cases, suspicions were underlined in May of this year when an employee with more than 30 years at the company reached a plea-bargain agreement in investigations being conducted by the Federal Public Prosecutor’s Office here in Brazil,” it added.

The news report in Brazil also said that Albert Phillip Close, Manager of Embraer’s defence section, told Prosecutor Marcello Miller that he had heard a former sales director who worked in Europe admit to American investigators the payment of commissions to facilitate the sale of aircraft to the Saudis.

According to the Brazilian daily, in India’s case, the plea bargainer said that Embraer had contracted a representative to assist in the sale of a surveillance system to the government.

This is the second major allegation of graft in a defence deal signed during the UPA regime. A few months ago, there were allegations of commissions and middlemen in what has come to be known as the VVIP chopper scam.

Responding to queries, BJP spokesperson Shahnawaz Hussain said: “Whatever corruption happened during 10 years of the UPA government, we are acting firmly on it and will continue to do so.” (IANS)

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Indian foreign exchange reserves at $367 billion

Sep 10, 2016 0

Chennai–India’s foreign exchange reserves went up to $367.76 billion as on September 2, the Reserve Bank of India (RBI) announced.

According to data released by the RBI, the reserves stood at $367.76 billion as on September 2, as against $366.77 billion as on Aug 26.

On September 2, the foreign currency assets stood at $342.23 billion, gold at $21.62 billion, special drawing rights at $1.48 billion and the reserve position in the International Monetary Fund (IMF) at $2.39 billion.

The reserves as on Augt 26 comprised of foreign currency assets at $341.28 billion, gold at $21.58 billion, special drawing rights at $1.49 billion and the reserve position with the IMF at $2.41 billion.

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Assocham delegation visits Silicon Valley to spur business

Sep 10, 2016 0

New Delhi– A delegation of leaders and experts in business, education and economic development recently visited Silicon Valley for scouting business opportunities for Indian tech companies, a top industry body said Saturday.

The Associated Chambers of Commerce and Industry of India (Assocham) delegation visited the Silicon Valley from August 31 to September 8, a statement from the industry body said.

“The Assocham delegation visited various technology companies and universities including Google, Facebook, Stanford University and Singularity University to interact with various officials, think-tanks and industrial houses with a focus on marketing, investment and joint ventures in India,” the statement said.

Discussions were held on a series of issues, ranging from exponential thinking and possibilities that can transform workplace practices to collaboration of academia, non-profits and industry to make huge strides in sectors like education, finance and livelihood, it said.

The delegation was headed by Assocham President Sunil Kanoria.

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Weekly Market Review: Markets remain bullish on value buying, foreign funds inflow

Sep 10, 2016 0

By Porisma P. Gogoi

Mumbai- Indian equity markets remained bullish, witnessing a good rally during the abbreviated trading week ended Friday, prompted by a healthy inflow of foreign funds and value buying by investors.

The key indices maintained their upward trajectory by rising more than half a percentage each, although some gains were capped as investors turned picky on their investments and chose to book profits on the last day of trade.

The 30-scrip sensitive index (Sensex) of the BSE, which had touched a new 17-month closing high on Thursday, ended the week’s trade with an appreciable gain of 265.14 points or 0.93 per cent at 28,797.25 points.

Similarly, the 51-scrip Nifty of the National Stock Exchange (NSE) edged up 57.05 points or 0.65 per cent to close at 8,866.70 points. The Nifty had touched its new 18-month closing high last week.

“Good inflows continued to push benchmark indices to fresh 18-month peaks, with several stocks hitting new 52-week highs,” Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

“Reduced chances of a September US rate hike also formed a good backdrop, though the ECB (European Central Bank) decision to not extend easing measures kept global vibes under check.”

The equity indices started off the trading week on a higher note, with both touching their 52-week highs in almost 18 months.

Dismal US non-farm payroll data released last Friday, which reduced the potential for a September rate-hike, increased the risk-taking appetite of investors.

Besides, positive cues such as value buying at lower levels, substantial inflow of foreign funds, healthy quarterly results and a rise in global crude oil prices aided the equity markets in paring their losses.

“Global stock markets witnessed volatile movements after soft US economic data reinforced concerns over the recovery in the world’s largest economy,” said D.K. Aggarwal, Chairman and Managing Director, SMC Investments and Advisors.

“On the domestic market front, active participation of the market participants, healthy quarterly results, inflow of foreign funds and a rise in global crude oil prices supported the domestic market in the week gone by.”

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the equity markets traded with volatile sentiments during the week mainly due to profit booking at higher levels by traders.

“Investors got some peace of mind from Chief Economic Advisor Arvind Subramanian’s statement that India has the potential to sustain 8-10 per cent GDP (gross domestic product) growth during the next two to three years, despite April-June GDP growth coming in below expectations at 7.1 per cent,” Desai said.

“Some support also came with an International Monetary Fund (IMF) report saying that India has recently taken important steps towards a national goods and services tax which, when fully implemented, promises to boost tax buoyancy and growth, including by enhancing the efficiency of the internal goods and services market.”

Moreover, on the macro front, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) showed a sharp improvement in the health of the manufacturing sector in August, climbing to a 13-month high of 52.6, from July’s 51.8, adding to the positive momentum of the key indices.

However, disappointment over the ECB decision against extending the current bond buying programme led the global and domestic investors to book profits.

Besides, caution ahead of the release of major macro-economic data next week weighed heavy on the indices.

The factory output data — Index of Industrial Production (IIP) — for July and inflation figures for August are scheduled to be released on Monday.

“Traders took some encouragement with the report that the growth in India’s service industry accelerated to its fastest pace in more than 3-1/2 years in August, driven by a surge in domestic and foreign demand,” Desai added.

“However, there was some concern too with the report that the country-wide monsoon deficit stood at four per cent, with the northeastern and eastern states reporting 13 per cent less rains from June 1 to September 7, 2016.”

The Indian rupee showed firm movement during the week to close at 66.68 against a US dollar on Friday.

Provisional figures from the stock exchanges showed that the week witnessed an inflow of Rs 2,088.95 crore.

Figures from the National Securities Depository (NSDL) disclosed that foreign portfolio investors (FPIs) were net sellers of equities worth Rs 6,207.39 crore, or $933.17 million from September 6-9.

Among the individual Sensex stocks, ONGC was the top gainer (up 7.55 per cent at Rs 254.40), followed by Maruti Suzuki (up 6.78 per cent at Rs 5,401), Tata Steel (up 5.54 per cent at Rs 394.50), Tata Motors (up 5.40 per cent at Rs 573) and ICICI Bank (up 5.08 per cent at Rs 274.15).

The losers were led by Tata Consultancy Services (TCS)(down 6.19 per cent at Rs 2,352.50), Coal India (down 1.75 per cent at Rs 332.15), HDFC (down 0.78 per cent at Rs 1,410.85), ITC (down 0.73 per cent at Rs 258.70) and Wipro (down 0.63 per cent at Rs 480.65).

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Shipping in India to get status of infra sector: Minister

Sep 9, 2016 0

Mumbai–Minister of State for Road, Transport, Highways and Shipping M.L. Mandaviya on Friday said the government will consider giving the shipping industry the status of an infrastructure sector to improve its productivity.

Mandaviya also said there was need for the Shipping Corporation of India (SCI) to make special efforts to attract more cargo business from the government sector, which includes various ministries, departments, and PSUs under the central and the state governments.

Mandaviya added that the SCI has to play an important role in ensuring energy security of the country.

“SCI has to play an important role in the energy security of the country and all efforts would be made to further boost the capacity of SCI and the sector in this regard to ensure that national interests are fully safeguarded,” said Mandaviya while reviewing the SCI here.

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Tata Power, ICICI Venture to invest in power projects

Sep 9, 2016 0

Mumbai– Tata Power’s wholly-owned subsidiary Tata Power International Pvt Ltd and ICICI Venture on Friday announced creation of a platform company to invest in power projects in India in the coming two-three years.

“The platform targets acquisition of controlling stakes in power generating companies, both conventional thermal, hydroelectric and transmission assets in India,” a statement said.

Platform would invest in projects which are in advanced stages and near operational readiness or operating. It will raise an initial capital of up to $850 million to be contributed by the sponsors and partner investors either directly or through their affiliates.

“It has been our constant endeavour to leverage opportunities in the Indian power sector and create stake holder value through organic and inorganic means. This Platform is one such step in this direction for assets that would be win-win for all stakeholders,” said Tata Power CEO and Managing Director Anil Sardana.

In the platform company, there are also some global partner investors – Caisse de depot et placement du Quebec (CDPQ) of Canada, the Kuwait Investment Authority (KIA) and the State General Reserve Fund (SGRF) of Oman.

“Insightful understanding of the lndian infrastructure ecosystem supported by discerning long term global capital would provide a framework for investments with an optimum risk-return profile and also act as a catalyst for revitalization and growth of the Indian Power sector,” said Mohit Batra, Executive Director, ICICI Venture.

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Shristi invests Rs 180 crore in Mumbai housing project

Sep 9, 2016 0

Kolkata– City-based Shristi Infrastructure Development Corporation (SIDC) is investing Rs. 180 crore in its housing project in Mumbai, a top company official said on Friday.

“Shristi Sea View project is our first and major housing project beyond Eastern India. We took over the project from a Mumbai based developer in December 2015 as it was unable to develop it. Our investment for the project would be around Rs. 160-180 crore,” said the company’s Managing Director Sunil Jha.

The Mumbai based developer had invested Rs. 50-60 crore in the project.

Located near Shivaji Park in Mumbai, the 42 storey apartment complex has only 49 flats with a view of the Arabian Sea and the price for each flat is Rs. 8 crore. The project is expected to be completed by 2018.

“We have already sold 70 percent of the total inventory,” Jha said.

“We are exploring opportunities to develop similar projects in Mumbai, Bengaluru and Hyderabad. We are not looking at Delhi as there are many unsold inventories,” he said.

The realty company is also developing a township project, spread over 250 acres in Guwahati in Assam.

“We have a revenue-sharing joint venture with land owner for Guwahati project. It was a privately owned tea garden which was closed long before. The township would be built phase wise. In the first phase, the investment is around Rs. 125-150 crore,”said Jha adding that 90 residential villas have been built and 400 apartments will be launched soon in the first phase.

Of the 90 villas, 26 have already been booked, he said.

When completed, the township which is at Khargul Hills extension, along the Brahmaputra, will house 6,000 families.

The developer is set to commission the Westin hotel in Kolkata in November, he said. (IANS)

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